Media Forum: Is TV trading probe needed?

Should there be a wider review of how airtime is sold, Alasdair Reid asks.

]Presumably, the Competition Commission drafted two press releases about Contract Rights Renewal, the formula linked to ITV's ad sales revenue, ready to go out in the week following the election. One, written with the possibility of an outright Tory victory in mind, announcing the immediate repeal of an outmoded airtime remedy that had clearly run its course.

And the second, for any other eventuality, reminding everyone that the Competition Commission is no-one's poodle and is duty-bound to act in the interests of as broad a constituency as possible - and in that light, CRR is very much a living and breathing necessity.

Clearly, we got the "any-other-eventuality" release. David Cameron had pledged, at a stroke, to sweep away CRR, should he come to power. Now that he's part of a ventriloquist-style double act, the script has had to be rewritten.

Tellingly, though, the Competition Commission statement contained what is by now a familiar addendum. An admission that, if we were starting again, we most certainly wouldn't want to be starting from here; and the notion that, if we want to get to where we need to go, we really do need to have a bigger picture review of the way that television advertising is traded.

As the Competition Commission deputy chairman, Diana Guy, puts it: "Many participants have told us that the system of selling television airtime is far from perfect and we repeat our concerns, also raised in 2003, about the potential anti-competitive effects of 'share of broadcasting' and agency 'umbrella' deals between broadcasters and media agencies. We continue to believe it appropriate for there to be a wider review of the whole system for selling TV advertising."

This notion of the review to end all reviews has now, arguably, become the media industry's Maltese Falcon - an elusive ornament of almost mythological status. But even so, is such a review a desirable goal? And if so, who would be best placed (note Guy's use of a passive tense here) to undertake it?

Bob Wootton, ISBA's director of media and advertising, says there's no consensus among advertisers when it comes to this question - but he concedes that it's an issue that won't go away. He adds: "The Competition Commission announced something similar in 2003, so it clearly finds the workings of this market very curious indeed, despite the fact that there's an apparent working consensus among consenting parties in the market."

And yet, he's sceptical about whether any regulatory body will have the resource to take on such a mammoth project. "I think it's clear that the austerity measures being contemplated by the Government will be steep - and given the talk there was, pre-election, about the need to step down the scope of regulation, all of the regulatory bodies may well be a feeling a cold wind right now. So they may not be in the best shape to contemplate taking on further work - especially a job of this size."

Perhaps, Richard Oliver, the managing partner, investment, at Universal McCann, says - but he is keen to see someone attempt to grasp this nettle: "What we need are good, bright people who are not only well versed in business law and economics but who also have an understanding not just of how TV is traded but the whole advertising space. So here's a fashionable thought - perhaps we need a coalition of regulators to look at this."

There are some, though, like Simon Bevan, the head of broadcast at Vizeum, who can't see why there should be any rush. He is pleased that CRR is staying for now - and maintains that there's no need for a wider review until CRR has unarguably run its course. He says: "I'd suggest that the time will come after analogue switch-off. At the moment, ITV still has market dominance. Who's to say what will happen in a fully digital landscape?

"When the time comes, Ofcom will probably be the right people to do this. They have the capability - though it's also true that trading mechanisms are complex and it might be an idea to include people who have experience of trading."

And that's echoed wholeheartedly by Chris Hayward, the head of investment at ZenithOptimedia, who concludes: "Yes, it's time to look at the total market - because within the current trading structures, it's very difficult to address the whole CRR issue - but as to who might be best placed to do it, you have to take account of the fact that these things involve a huge political element. All I'd say is that it would be quite important to have somebody with a TV trading background and that all sides of the market should be involved."

MAYBE - Bob Wootton, media and advertising director, ISBA

"My feeling is that no part of the industry currently has the resource to respond to this sort of review. No-one has the luxury of regulatory-facing machinery."

MAYBE - Richard Oliver, managing partner, investment, UM

"Something will happen in the future - because we've had so many piecemeal reviews in the past. Having said that, though there might be things that need changing, I'm not of the view that, broadly, there's a significantly better way of trading airtime."

YES - Simon Bevan, head of broadcast, Vizeum

"We're pleased that CRR is staying for now. In the fullness of time, it will have run its course - and that's the point at which we'll need a wider review of the market. I'd suggest that time will be after analogue switch-off."

YES - Chris Hayward, head of investment, ZenithOptimedia

"Any market review is going to be incredibly complex. But I wouldn't underestimate the determination in the market for this to happen - though it's also true to say that, given the current economic situation, media legislation probably isn't going to be a government priority."

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