22.09.2019

ITV’s McCall rules out challenge to CRR because it would be a ‘regulatory mire’

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Some industry experts have raised doubts about CRR, arguing that the 2003 legislation is anachronistic because it only covers the UK’s £4bn-a-year TV advertising sector and the market has become much broader with the rise of Google, Facebook and other online video services.

ITV Hub: Carolyn McCall is optimistic about ITV and other broadcasters creating a joint streaming platformHowever, McCall said on an earnings call where she unveiled a “strategic refresh” that challenging CRR was not a priority.

“There is a lot for us to implement in the next three years,” ITV’s new chief said, referring to her launch of a centre for data excellence, ramping up addressable advertising and investing in programming.

“There’s an awful lot to do. So to tie ourselves up in a regulatory mire on CRR would be very diversionary for us at the moment and that’s why we wouldn’t be going down that route right now, because we have too many other priorities.”

Enders Analysis said in a research note in June: “The time has come to review CRR again.”

The media analysis firm highlighted how CRR rewards an advertiser for maintaining its share of TV spend with ITV relative to other broadcasters, regardless of whether the volume of spend has changed.

“The challenge for all broadcasters is that CRR is acting as a drag-anchor on growth, and it is doing nothing to prevent Facebook and YouTube from hoovering up budgets that are either leaving TV, or bypassing it completely,” Enders said.

“CRR permits ITV advertisers to slash their budgets or move TV revenues out of the medium, but keep their discounts.

McCall pointed out on the call that “there are a lot of things that we can do for ourselves in the advertising market”, rather than challenge CRR.

ITV is “putting more resources into creative partnerships” and “client-facing” teams than can do “more direct” with brands, McCall said.

She was also optimistic about the prospect of ITV teaming up with other broadcasters to create a joint streaming platform for British TV content, such as box sets, to compete with the US tech giants.

“Sharon White from Ofcom has been very clear recently in her statement where she said that she believed the way ahead is for public-service broadcasters to collaborate and co-operate much more,” McCall said.

“She has given a clear indicator to the market that is how she will be viewing collaboration, so that’s encouraging.”

ITV, Channel 4 and BBC have been holding talks, a decade after regulators blocked a previous initiative, Project Kangaroo.

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