Who: The Office of Communications (Ofcom)
Where: United Kingdom s
When: 15 July 2022
Law stated as at: 25 July 2022
What happened:
Ofcom has published a call for evidence on the quality and scheduling of advertising that is permitted on public service broadcasting (PSB) under its Code on the Scheduling of Television Advertising (COSTA).
Currently, the rules that apply to PSB channels (Channel 3 services (ITV and STV), Channel 4, Channel 5 and S4C) are more restrictive than the rules that apply to non-PSB channels.
However, significant changes in how television is distributed and consumed in recent years (including the expansion of non-PSB channels and the introduction of on-demand television and online streaming services) has led Ofcom to question whether the higher regulatory burden for PSB channels is still necessary.
Ofcom has identified the following reasons for potentially reducing the regulatory burden on advertising on PSB channels:
- Changes in viewing habits mean that it is no longer necessary to protect the quality of the viewing experience.
- It would help PSB channels to be more financially sustainable.
- The rules may currently be distorting competition, especially as non-PSB channels are now long-established in the UK.
Ofcom has emphasised that it has not seen any evidence that COSTA is no longer fit for purpose overall and, therefore, a broad review of all the rules is not being considered. Instead, Ofcom is considering specific changes to the stricter requirements on PSB channels, particularly in light of the market changes above.
In particular, Ofcom is seeking views from stakeholders on the following changes to COSTA:
- Updating Rules 3 and 4 so that PSB and non-PSB channels would be subject to the same limit of showing no more than an average of 12 minutes of television advertising and teleshopping spots for every hour of transmission across the broadcasting day, of which no more than nine minutes may be television advertising;
- Removing Rule 5 so that there would be no maximum duration for advertising breaks broadcast during programmes on PSB channels; and
- Amending Rule 16 so that PSB channels are subject to the same restrictions as non-PSB channels on the number of internal breaks permitted in programmes.
Ofcom is also interested in stakeholder’s views on the following:
- Rule 7 of Costa, which regulates that teleshopping windows can only be scheduled between 00:00 and 06:00 on PSB channels; and
- How broadcast television advertising is likely to develop over the next 5-10 years, with or without the above potential changes to Costa.
The deadline for responses to the call for evidence is Friday 7 October 2022.
Ofcom plans to publish responses to the call for evidence, and to set out its next steps, later in 2022.
Why this matters:
Ofcom’s call for evidence illustrates how the fast-paced nature of changes in the broadcasting and streaming industry in recent years has left regulation struggling to keep up.
This call for evidence illustrates that Ofcom has listened to complaints from PSB providers, many of whom see the higher regulatory burden they face in relation to advertising (in comparison to their non-PSB competitors), as outdated and unfair.
This review is an important opportunity for Ofcom to consider whether advertising rules for PSB channels remain effective and proportionate. In particular, it might lead to important ramifications for the financial sustainability of PSB channels.
When considering any regulatory changes, Ofcom will need to strike the right balance between protecting viewers’ interests and sustaining the UK’s traditional broadcasters, including helping them compete with the plethora of global streaming platforms which have become mainstream in recent years.
