Ofcom rules out full-scale TV advertising review
LONDON - Ofcom has rejected calls for a full-scale review of the UK television advertising market, but has left the door open for changes to the controversial Contract Renewal Rights scheme.
The media regulator had been asked to consider a wider review by the Competition Commission in approving the CRR, which was put in place when Granada and Carlton merged to form ITV plc two years ago.
However, media watchdog Ofcom ruled this out citing a lack of complaints from the TV advertising sales market and no evidence that consumers were losing out under the current structure.
Despite this rejection, Ofcom has not ruled out a future review of the CRR, although this would be a decision for the Office of Fair Trading.
The move has been welcomed by ITV, which, it is understood, wants to scrap the CRR, in particular a clause linking advertising rates to audience share.
An ITV insider said the firm believes this latest announcement could speed up a review of the CRR, because it is now no longer tied to a wider potentially lengthy review of the entire market.
A spokesman for ITV said: "We welcome this clarification from Ofcom and will be working closely with the OFT."
Charles Allen, the ITV chief executive, told the Broadcasting Press Guild in September: "No other comparable European broadcaster has to operate under such a system. It was never intended to punish us for the success of multichannel television but it has."
It has been estimated that the drop in audience share for ITV1 of 9% could cost the firm £150m in lost revenue.
Stephen Carter, Ofcom chief executive, said: "The airtime sales market is complex, with multiple players. Our priority is to continue to monitor the CRR remedy and to work with the OFT in the event of any subsequent review."
Meanwhile, Ofcom has also announced that David Connolly, the independent adjudicator responsible for handling disputes between broadcasters and advertisers, is to step down at the end of March next year. The search for a successor will start next month.
Connolly is a former executive director of Starcom Motive.
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