ITV told price controls on ad sales must stay

12th May 2010 08:34

ITV will not be allowed to increase the amount it charges advertisers after the Competition Commission (CC) decided the broadcaster was too big for price controls to be lifted."ITV's unrivalled ability to deliver large audiences on ITV1 means that the Contracts Rights Renewal (CRR) undertakings are still needed to prevent the channel from exploiting this position to the detriment of advertisers and other commercial broadcasters," the commission said Wednesday.Restrictions were first imposed when Carlton and Granada merged to form ITV in 2003, but the CC found that ITV1 can still attract audiences of up to 18m, and in 2009 accounted for 982 of the top 1,000 most-watched programmes on commercial television."Despite the many changes in this market over recent years, ITV1's relative position of strength compared with other commercial broadcasters is little changed since 2003," read today's statement.The company still has more than twice the market share than Channel 4, the next largest commercial channel, and its price premium over other commercial channels has also risen.ITV first asked for the CCR to be lifted back in January 2008 as competition from satellite and digital channels increased.Pre-tax profit was just £25m in 2009, although the group had lost £2.7bn the year before. Revenue fell 7% to £1.87bn as TV advertising revenue dropped 9% to £1.29bn.The Office of Fair Trading (OFT) backed ITV's request in May last year, but the CC warned four months later that it didn't share that view."ITV1 remains a 'must have' for certain advertisers and certain types of campaign. Despite all the changes in this market, no other channel or medium can come close to matching the size of audience that ITV regularly provides," said chairman of the CRR Review Group Diana Guy today."There has been virtual unanimity among the advertisers, media agencies, commercial broadcasters and trade bodies we have heard from that CRR should be retained in some form. We believe that ITV has overstated the cost and distortions imposed by CRR."