Keep Calm and Carry On!

You will have probably read or heard stories about TV airtime prices potentially rocketing this year as a result of a decision in the House of Lords.

The advice at mc&c is, in short, “don’t panic”. We are a long way away from seeing TV prices jump by 25% overnight.

So what’s all the fuss about?

The House of Lords Communication Committee has recently published its report on the TV advertising market-place after six months of research and interviews.

It is worth noting that all of its findings are only recommendations - the government now has two months to accept, reject or simply note them and continue as is. They may just be used to start the discussions on policy within parliament.

The Lords have recommended three things:-

1. Standardise the number of advertising minutes to an average of seven minutes across all channels. This is currently the case on ITV1, Channels 4 and Five but multi-channel stations can average nine minutes per hour. As a result this won't affect the pricing across the terrestrial channels - in fact they welcome it - but it could push pricing up across the rest. Currently, several channels don't open up all the minutage they have available anyway as a way of decreasing supply.

How will this affect us?

We expect, that with careful planning and negotiation this will have minimal impact on our pricing, if and when it is enforced.


2. The removal of CRR - when Granada and Carlton merged to sell ITV1 as one entity in 2004, a mechanism known as Contract Rights Renewal (CRR) was put into place - essentially this meant that all of the rules that prevented ITV having a monopoly over the UK TV advertising market had to continue to be observed - eg sales by region, pricing in line with share of impacts delivered. The Committee is recommending CRR be scrapped and replaced with binding agreements to increase UK originated programming funded by the increased a revenue.

How will this affect us?

Again minimal impact. Firstly, the removal of CRR is most unlikely to be implemented. Secondly, CRR has historically been most beneficial to agencies who tie clients into year long share deals which we don't do.


3. The final main recommendation is to convene a panel of independent experts to carry out a review of the trading system for television advertising airtime. It would run over six months and should be a good thing if it happens. This is the one that the broadcasters are saying least about - so it’s most likely to be against them. If however, agencies are allowed to have their say - I'll be the first in line!!


So in summary, don’t panic. It’s true TV airtime prices are rising this year, but in line with returning advertising budgets. These extraneous impacts on prices are very unlikely to impact the prices most advertisers are paying. If things change, we’ll update you but in the meantime, our recommendation would be to resume normal behaviour.


If you do have any questions or concerns relating to the Communication Committee’s report, please do not hesitate to contact Nicky Legg or any member of the broadcast team on 020-7307 6100.

Nicky Legg
Broadcast Director