C4, C5 dismiss ITV's CRR complaints
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ThE MaStEr
2010-11-10
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C4, C5 dismiss ITV's CRR complaints
Channel 4 and Channel 5 have dismissed claims made by ITV that current advertising restrictions force the broadcaster to pursue "lowest common denominator" programmes.
Last week, ITV chief executive Adam Crozier and chairman Archie Norman told the Lords communications committee that ITV is stuck in a "ratings rat race" due to ad regulations.
They specifically claimed that the Contract Rights Renewal, which governs the sale of airtime on ITV1, is responsible for a "remarkable lack of diversity" in ITV1's schedule.
However, Channel 4 chief operating officer Anne Bulford told the committee that ITV's business model is all about attracting mass audiences and the CRR - introduced in 2003 when Carlton and Granada merged to form ITV plc - is merely a scapegoat.
"Some of the trends in [ITV's] schedule, such as more episodes of successful soaps, predates CRR," she said. "The trend toward schedules with more peaks in them has always been there."
Also speaking to the peers, Channel 5's sales director Kelly Williams said that "unashamedly allowing ITV to be unrestricted would have a detrimental effect on our ad revenue".
Williams added: "An unintended consequence of CRR has been to... effectively bind the industry to share deals, it is not good for the industry.
"We think CRR in its current format should change, but the market needs to be protected, as a small player we feel we need protection. We want to unshackle ourselves from share deals."
Williams said that ITV has a 48% share of the ad market compared with Channel 4's 28%, Sky's 16% and Channel 5's 8%. He told the peers that a full market review would "take too long", but suggested there could be alternatives to CRR "which will allow us to change the way we trade".
Martin Stott, head of regulatory affairs at Channel 5, said that ITV's argument about programming does not hold up, largely because all commercial broadcasters have been hit by increased competition from the multichannel world.
"That has had more impact on our programme decisions, and ITV's, than anything else," he said.
Scott said that there was no guarantee that ITV's management would invest more money in original programming if the CRR was removed.
Former ITV controller of arts Lord Bragg told the peers that it was "not a negligible argument" that ITV's programme investment had been affected.
However, Bragg - who was personally affected by ITV's cuts last year when his long-running culture programme The South Bank Show was cancelled - also accused ITV's rivals of being "very cosy" with the status quo.
"I wonder if it [CRR] needs to be opened up, looked at, made a bit rougher so the whole thing moves forward," he said.
Other issues that the committee is looking at include whether the rules should be changed so that digital and public service broadcaster channels can sell the same number of advertising minutes.
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