Ofcom shelves plans for TV trading review

Ofcom has dramatically shelved plans for a review of TV trading, while the man charged with policing ITV under contact rights renewal has announced his imminent departure.

Ofcom shelves plans for TV trading review
Ofcom shelves plans for TV trading review

Ofcom has dramatically shelved plans for a review of TV trading, while the man charged with policing ITV under contact rights renewal has announced his imminent departure.

The regulator had been due to launch a probe into the running of the £3bn plus market, with practices such as agency share deals and station average price set to come under scrutiny.

The review was suggested by the Competition Commission which raised concerns over business practices in TV advertising when it looked into the ITV merger.

Up until a week ago, Ofcom was insisting the review would be going ahead next year, despite rumours circulating in the industry that it had been shelved.

But today the regulator said that it had decided there was no case for a full review of TV advertising, claiming it had received no complaints from advertisers or broadcasters about the existing system.

In a statement, it said: "Ofcom has received no complaints regarding the operation of the television advertising sales market. There is no strong evidence of consumer detriment arising from the workings of the market as currently constituted."

One of the main reasons for Ofcom's decision appears to be the desire by advertisers, agencies and rival broadcasters to keep intact the Contract Rights Renewal mechanism, which was put in place to stop ITV abusing its power in the market, with a 40% plus share of sales. An end to agency share deals would effectively have meant CRR would have to have been scrapped or replaced

The CRR "policeman", Television Adjudicator and former Starcom Motive vice president, David Connolly, announced today he intended to step down next year, after three years in the role. Ofcom will begin looking for a replacement in January.

Some had expected Connolly's role to be widened to take into account the outcomes of Ofcom's now shelved review.

Ofcom chief executive, Stephen Carter, said: "The airtime sales market is complex, with multiple players. Our priority is to continue to monitor the CRR remedy and to work with the OFT in the event of any subsequent review."

He added: "I would like to thank David for his work over the last three years, The role of the Adjudicator is-and will remain-an important part of the remedy."

 

 

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