“It is time that CRR was disbanded and replaced with a trading of airtime based on absolute value”

In response to Jim Marshall’s TV Summit write-up John Billett, director and owner of Johnbillett.com, says the operation of agency deals means CRR acts as a barrier to entry for smaller buyers and as a protection for the larger agency…

“I am delighted to know that Jim Marshall found my seminar contribution ‘timely’, but naturally sad he found my comments ‘nonsense’. It’s sad to know that age is affecting both his hearing and understanding. I’m sure MediaTel Newsline readers are not similarly afflicted, but for those who missed the aural comments at the seminar, here are a few written observations…

The fundamental change since CRR is the polarization of media buying into five large entities. The CRR contracts are not with advertisers (with a few exceptions) but with the large media agencies, none of whom can exist without deals with ITV.

CRR underwrites their deals and allows those buyers to commit easily large tranches of money with a safety net price guarantee. Under CRR, ITV price premium has increased but the buyers trading on discount not absolute price are relaxed so it seems from their investment portfolio. This is despite the fact that the larger discounts and TV audiences on other channels can deliver valid high reach with more ratings at lower costs.

But the operation of the agency deals means CRR acts as a barrier to entry for smaller buyers and as a protection for the larger agency. Without CRR they would just have to work harder to get the same result.

That is why I assert that CRR remains in place because the large media agencies use it to their advantage. And for their representatives to claim that prices would rise without CRR is merely what would happen if large media agencies don’t buy and just allocate discounts around their client portfolios. CRR protects the large media agencies and their PRF discount based remuneration policies.

It is time that CRR was disbanded and replaced with a trading of airtime based on absolute value. (And apologies for the slip of the tongue over CRR’s introduction in 2003 not 1993).”