The Contract Rights Renewal jitters are notexclusive to ITV
By by Ian Darby, campaignlive.co.uk, Friday, 29 September 2006 12:00AM
The debate over ITV's fortunes rumbles on.
So while Stephen Carter, one of the favourites for the vacant chief executive job, is forced into gardening leave until at least the end of February - and ITV answers critics' demands that it find the next Prime Suspect or Cracker by making another episode of Cracker - it emerges that its ad revenues for the fourth quarter might be down by more than feared.
Media agencies are predicting a decline of up to 20 per cent for the quarter - on the back of ITV's forecast that its third-quarter revenues will be down by 13 per cent.
The problem for the TV industry is not simply that ITV1's performance is bad - and it has been - but that the TV market as a whole has had a tricky year. Early autumn audiences for its terrestrial rivals such as Channel 4 and five have declined, leading to a tough time for all broadcasters. Multichannel might be moving in the right direction, but it still represents a small percentage of TV revenues.
So all the talk among the TV sales chiefs at recent fishing and golf days has surrounded the million-dollar question: "What can we do to improve the market?"
The other question that many are now daring to ask is: "Is Contract Rights Renewal really such a good thing?"
These are broadcasters who were initially happy to see CRR used to keep ITV in its box, particularly since ITV1's share of the TV ad market remains in excess of 40 per cent. However, some of the broadcaster's rivals have become concerned that CRR is working against their interests as well as ITV's because it is simply leading to money leaving the television market, rather than benefiting them.
While it is clear that there is no consensus among broadcasters, the most likely outcome is that in the spring, following the conclusion of the next trading season, one, or possibly even two, broadcasters will take a lead and come out calling for an Office of Fair Trading-led review of CRR - something that ITV and some agencies and advertisers have wanted for months.
This could be significant. While broadcaster concerns have been described by one observer as "motivated by greed and self-interest", the potential volte-face on CRR shows how difficult the TV market has become, and the degree to which some believe it has changed since the ITV merger.
Nothing can happen quickly, though. Even if changes to CRR occur - scrapping it seems very unlikely - it will only be after a lengthy process involving the OFT and Ofcom. In which case, it may just be in time for the 2008 deal season (with some predicting that 2009 is more likely). Not exactly a timetable that ITV and other concerned opponents of CRR would applaud.
This article was first published on campaignlive.co.uk
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