Revised CRR system expected for 2011

The Competition Commission is set to announce a revised contract rights renewal system as the best way of regulating advertising on ITV later this week, according to sources.

Revised CRR system expected for 2011

The independent body is expected to rule out ITV’s request to have the CRR mechanism completely abolished, but will allow for greater scope than the current system permits.

Speculation is rife that proposals to tweak CRR will pave the way for a new time-shifted digital channel – ITV1 +1 – that will allow the broadcaster to have more impacts in the marketplace.

If any new digital channel could then be included, it would increase ITV’s share of impacts by two to three percentage points.

The view is ITV 1+1 will be allowed to launch under the umbrella of ITV1 and be included in CRR share.

The CRR remedy was first applied to ITV’s ad sales in 2003 as a precondition for permitting the proposed merger of Carlton and Granada. It was designed to prevent ITV abusing its strong position in negotiations with advertisers.

Since its introduction, ITV’s dominance over commercial broadcasting in the UK has waned with the proliferation of competition from digital channels. Chairman Michael Grade has called the mechanism a straitjacket for current airtime negotiations.

The Commission’s provisional decision follows a series of submissions and follow-up discussions with broadcasters and advertisers to a panel led by the Commission’s deputy chairman, Diana Guy.

Any new tweaked hybrid model is widely accepted to be the most complex of possible outcomes and raises serious doubts that any such mechanism will be in place in time for the start of this autumn’s 2010 trading season.

It is more likely the revised CRR system will be implemented for the 2011 season, suggesting it could be a tough trading season for ITV as advertisers look elsewhere ahead of any potential upcoming cap.

One agency trader said: "It is unlikely ITV could get a benefit until 2011, as they couldn't ask for more for something that doesn't yet exist. 

"So 2010 would mean everyone would run out of ITV1/CRR to the max, knowing ITV would be looking at 2011 increases and also getting extra ITV1+1 tvrs for effectively, free."

ITV declined to comment.

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