Who: Office of Communications (Ofcom) and public service broadcasters (PSB)
Where: United Kingdom
When: 19 April 2023
Law stated as at: 4 May 2023
What happened:
Ofcom has opened a consultation on the television advertising rules relating to public service broadcasting (PSB) channels (including ITV, STV, Channel 4, S4C and Channel 5). Currently, PSB channels are regulated by tighter rules on the duration and frequency of advertising, contained in Ofcom’s Code on the Scheduling of Television Advertising (COSTA). Ofcom suggests that the stricter rules for PSB channels are no longer justifiable or proportionate for the fulfilment of Ofcom’s duties in securing the quality of television services. Instead, Ofcom has proposed two options with the aim of increasing sustainability of PSB channels and levelling competition between PSB and non-PSB channels without significantly affecting viewer experiences.
The options proposed by Ofcom are:
- make the COSTA rules between PSB and non-PSB channels the same; or
- make the COSTA rules the same, but retain the current difference in the number of internal breaks permitted in programmes.
How would these changes affect PSBs?
PSB channels are currently limited to a maximum average of 7 minutes of advertising or teleshopping per hour (and 8 minutes per hour between 18:00 and 23:00). Under option 1, this maximum would be increased to an average of 12 minutes per hour (but no more than 9 minutes for advertising) in harmonisation with the rules for non-PSB channels. However, Ofcom suggests retaining COSTA safeguards to limit the amount of advertising during news programmes.
In addition, advertising breaks on PSB channels cannot exceed three minutes 50 seconds under COSTA. Under both options this limit would be removed entirely.
Finally, COSTA imposes stricter limits on the number of breaks PSB channels can include during a programme, depending on its length. Option one would see PSB channels subject to the same limits as non-PSB channels. For example, two advert breaks would be permitted for a 30 minute programme rather than one. Under option two PSB channels would remain subject to the stricter limits permitting fewer advertising breaks.
As part of the consultation, Ofcom called for evidence and views from PSB and non-PSB channels about the proposed changes. Some PSB responses supported the changes, including as a means to help combat advertising inflationary pressures and competition with new global players in the industry. However, there was less support for the changes expressed by some individuals and non-PSB channels, including on the basis they might negatively impact audiences.
Ofcom’s preference
The consultation confirms Ofcom’s preference for option two. This reflects the greater concerns in audience responses to the consultation around the number of breaks during a programme. Viewers appeared to be less concerned about the length of advert breaks.
In addition, Ofcom believes the relaxation on the rules for PSB channels will increase their sustainability without affecting the quality of television services. However, Ofcom has also noted that, depending on the responses to the consultation, it may also leave the rules as they are.
The deadline for responding to the consultation is 31 May 2023.
Why this matters: This is another step towards reform and modernisation of television broadcasting rules, as highlighted in the recent draft Media Bill (see our Insight ). In particular, this consultation acknowledges the competition that many PSBs now face from both commercial channels and online streaming services, many of which are moving away from being purely subscription-funded to adopting a free ad-funded or hybrid ad-supported model, which potentially risks some of the advertising spend otherwise available to PSB channel operators. Ofcom suggests that these reforms may enable PSBs to remain competitive in the current TV ad market.
