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Review of Television Advertising and Teleshopping Regulation Proposals on Advertising Distribution, and Options for the Amount of Advertising and Teleshopping

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Review of Television Advertising and Teleshopping Regulation Proposals on Advertising Distribution, and Options for the Amount of Advertising and Teleshopping Review of television advertising and teleshopping regulation Proposals on advertising distribution, and options for the amount of advertising and teleshopping Issues paper Publication date: 19 March 2008 Closing Date for Responses: 28 May 2008 Review of television advertising and teleshopping regulation 1 Review of television advertising and teleshopping regulation Contents Section Page 1 Summary 3 2 Background 12 3 Legal considerations 16 4 The role of TV Advertising 23 5 The evolution of television advertising regulation 33 6 Consultation on proposed changes to the rules on the distribution of advertising 44 7 Rules on the amount of advertising and teleshopping: issues for consideration 60 Annex Page 1 Responding to this paper 72 2 European framework for advertising regulation 79 3 Rules on the Amount and Distribution of Advertising (current) 83 4 Impact Assessment 98 5 Draft Code on the Amount and Distribution of Advertising 141 2 Review of television advertising and teleshopping regulation Section 1 1 Summary Introduction 1.1 This document: a) explains the present rules on when advertising breaks can be taken, and when advertising should be banned from particular types of programme, and asks for your views on our suggestions for change. We will consider all the views expressed, and make decisions on whether the rules should be changed, and if so how, later this year; b) explains the present rules on how much advertising and teleshopping there can be on different kinds of channel, what would be the possible effects if we changed the rules in different ways, and asks for your views on whether the rules should be changed. We will consider all the views expressed, and make suggestions later this year if we think that the rule should be changed. We shall ask for views on the proposed changes from anyone who is interested then; and c) explains the matters we believe Ofcom should consider when deciding on any changes to the rules, and how these matters should be balanced. 1.2 We are asking interested people to tell us by 28 May 2008 what they think about these issues. 1.3 This summary explains: a) why Ofcom thinks that advertising is important to TV viewers; b) what the rules on TV advertising are now; c) why we are thinking about changing the rules; and d) what the new rules might say. 1.4 Our consultation principles (Annex 1) say that summaries intended for the general public should be no longer than two pages. However, given the complexity of the issues we are consulting on, we decided that it would be better to provide more information than could be provided within two pages. The importance of advertising to TV viewers 1.5 Television viewers in the UK now have more choice than ever before, whether they watch free-to-air television channels such as ITV1, Channel 4 and Virgin1, or pay TV channels such as Sky One, Nickelodeon and UKTV Gold. When digital switchover is complete in 2012, most households will be able to receive at least 20-40 channels, with many more available from pay TV providers. 1.6 The main reason why viewers have this choice is that television channels can earn money by showing advertising. Advertisers pay broadcasters to show adverts on their television channels. Most channels get some or all of their income from advertising. The exceptions are the BBC channels, which are funded through the 3 Review of television advertising and teleshopping regulation licence fee, and some pay TV channels (e.g. Disney’s channels), which are wholly funded by subscriptions. 1.7 Advertising is also important to the quality of television programmes. Those channels that earn most advertising revenue can afford to invest in higher quality programmes, with more of them made in the UK, and fewer repeats. By contrast, channels that don’t earn much advertising revenue must rely more heavily on imported programmes, or cheaply-made local programmes, and repeat their programmes more often. 1.8 But viewers have made clear that advertising is important to them in other ways. We sometimes get complaints that there is too much advertising on TV, or that programmes are interrupted by advertising too often, or both. Most of this concerns advertising on the commercial channels that have most viewers – ITV1, Channel 4 and Five. In particular, viewers notice changes in advertising patterns. When advertising patterns change, some viewers have complained that there is too much advertising on television (even if the amount has stayed the same), or that it interrupts programmes too often (even if there is no change to the number of advertising breaks). Usually these complaints die down, as people adjust to the new patterns. But regulators (and broadcasters) are well aware that advertising can be irritating to viewers. 1.9 Regulators take viewers’ interests seriously – Ofcom’s main job is to further the interests of consumers and citizens. For many years, there have been limits on both the amount of advertising, and how often there can advertising breaks during programmes. Some of the rules have been decided by the European Union, and others by Ofcom and its predecessors. 1.10 In making these rules, regulators have to balance the interests of viewers. On the one hand, viewers want the choice and quality of programmes paid for by advertising. On the other hand, viewers may be irritated if they think there is too much advertising, or that programmes are interrupted too often. Regulators also have to think about whether particular rules might be unfair or too expensive for broadcasters and advertisers. What the rules are now 1.11 The current European rules are set out in a law called the Television without Frontiers Directive, known for short as the TWF Directive. This limits the daily amount of advertising on television channels to an average of 9 minutes an hour (plus up to 3 minutes of teleshopping spots1), but no more than 12 minutes in any one hour. This means that a channel broadcasting for 24 hours a day could show up to 216 minutes of advertising spots (9 minutes x 24 hours), and up to 72 minutes of teleshopping spots, a combined total of 288 minutes. 1.12 In addition, there must be a break of 20 minutes between advertising within a programme. The effect of this rule is to allow two breaks within a half hour programme. This does not affect the advertising shown between programmes, however short the programme may be. Except in special cases, advertising must be taken during a ‘natural break’ in programming (e.g. at the end of a comedy sketch, rather than half way through). 1 Teleshopping means television advertising which includes direct offers to the public to supply goods or services, in return for payment. Teleshopping may appear in teleshopping features no less than 15 minutes, or in teleshopping spots alongside normal advertising. 4 Review of television advertising and teleshopping regulation 1.13 Ofcom applies these rules to most TV channels licensed in the UK. But, like its predecessor, the Independent Television Commission (ITC), Ofcom applies stricter rules to the public service channels (ITV1, GMTV1, Channel 4, Five, S4C). The daily amount of advertising on these channels is limited to an hourly average of 7 minutes (with no additional amount allowed for teleshopping spots), subject to a cap of 12 minutes in any one hour. During peak viewing times, there are further restrictions on the amount of advertising. From 7am to 9am, and from 6pm to 11pm, broadcasters may only show an average of 8 minutes an hour of advertising. PSB channels also have stricter rules on advertising breaks, which means that they can only have one break in a half-hour programme. 1.14 There are some more detailed rules (explained in detail in section 6 ) that: a) limit advertising in particular kinds of programme. There are restrictions on advertising in programmes with a religious theme, news and current affairs programmes, children’s programmes and others; and b) explain what is meant by ‘natural breaks’ and ‘special cases’ in different kinds of programming. 1.15 All the rules are set out in an Ofcom code called the ‘Rules on the Amount and Distribution of Advertising’, or RADA for short. The ‘Amount’ refers to the number of minutes of advertising allowed in any one day or in any one hour on a television channel. The ‘Distribution’ refers to the rules on when advertising breaks can be taken, and what restrictions apply to advertising in particular kinds of programmes. Annex 3 sets out all the current rules in full. Why we are considering changing the rules 1.16 When Ofcom took over regulating advertising on television from the ITC, we did not make many changes to RADA. One reason for this was that we knew there could be changes to the European Union rules. We thought that it would make sense to find out what changes might be made before we looked again at RADA. 1.17 The new European rules were published in December 2007. The rules set out in the TWF Directive have been changed, and the Directive is now called the Audiovisual Media Services Directive, or the AVMS Directive for short. The relevant parts of both Directives are shown in Annex 2. 1.18 The changes made to the European rules are explained in detail in section 6. In brief, they would allow Ofcom: a) to let any TV channel show up to 12 minutes an hour of advertising (including up to 3 minutes teleshopping) across the day (288 minutes a day for a 24 hour channel, or 4 hours 48 minutes); and b) to get rid of or relax many of the detailed rules banning or limiting advertising in certain types of programme.
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