Upbeat advertising prognosis delivered by ITV chief

THE outgoing chief executive of ITV believes the current rot in advertising income can be stopped, and hopes that talks with broadcasting regulators, Ofcom, will result in a new payment mechanism.

Speaking the morning after delivering the keynote speech at the festival – the MacTaggart Lecture, which was notable for its criticisms of Channel 4 – Charles Allen thinks major advertisers are prepared to start paying for the quality of programmes, not simply on the popularity of the show.

This is in stark contrast to the current system, known as Contract Rights Renewal (CRR), which provides a discount to advertisers as a counter to the monopsony power of a combined ad sales team formed when Granada and Calton merged to create ITV plc. It is calculated using audience share.

“It’s in the hands of the regulators, and I can’t say how long it will take,” said Allen of his efforts to get out of CRR. “But we are in talks with major advertisers and they are in agreement that they want quality programmes. We are looking at models like those in the US, where sponsors pay for programme production. Also, we are looking at offering multi-media advertising solutions, interactive ones, using our digital channels and web sites.”

Allen denied entering CRR was a mistake. He told the Edinburgh International TV Festival that it was essential at the time of the various English ITV channels merging into one. He added that a suggestion at the time of the merger – that one of ITV’s two sales houses should be floated off to the independent sector – would have only resulted in what he described as ‘destructive competition’ within the ITV structure.

An indication of the destructive tendency came when he referred to his time at Granada as “ten years undermining other parts of ITV”.