The Audiovisual Media Services Regulations are due to come into force on 19 December, bringing regulation of video-on-demand and internet-based broadcasting into line with regulation of traditional broadcasting. Jenny Reid discusses the impact of the new Regulations on advertising.
Who: HM Government
When: 10 November 2009 (coming into force on 19 December 2009)
Law stated as at: 30 November 2009
The Audiovisual Media Services Regulations 2009 ("the Regulations") have been adopted by Parliament in order to implement the EC's Audiovisual Media Services Directive ("the Directive") in the UK. The Regulations, which are due to come into force on 19 December 2009, amend the Communications Act 2003, the Wireless Telegraphy Act 2006 and the Copyright, Designs and Patents Act 1998.
The Directive extends regulation from scheduled television broadcasting services alone, as is the position under the current Television Without Frontiers Directive, to cover all "audiovisual media services" including online on-demand programme services which are increasingly popular with consumers.
The Directive extends the "country of origin" principle to all audiovisual media services. This means that broadcast service providers are generally only required to comply with the laws of the member state from which they are broadcasting; however, the Directive allows for member states to require broadcasters based in another member state to comply with their own, stricter rules. This is to prevent forum-shopping and the Regulations require Ofcom, upon receipt of a substantive request to do so from another member state, to ask UK broadcasters intending to broadcast in the other member state to comply with the rules of that country.
The Regulations introduce a definition of "on-demand programme services"; they provide minimum standards for programmes and advertising in on-demand services; and they allow product placement in limited circumstances. The product placement provisions are separately reported on marketinglaw.co.uk. Search under "Product Placement."
The Regulations prohibit the inclusion in on-demand programme services of any material likely to incite hatred based on race, sex, religion or nationality and also require service providers to ensure that material which could be harmful to children cannot be accessed by them.
Providers of on-demand programme services must ensure that any advertising content in such services complies with a set of qualitative rules set out in section 368F of the Regulations, which provide that:
1. Advertising of cigarettes or other tobacco products and of prescription-only medicine are prohibited.
2. Advertising of alcoholic drinks must not be aimed at persons under 18 or encourage excessive drinking.
3. Advertising must be easily recognisable as advertising and subliminal techniques must not be used.
4. Advertising must not: prejudice respect for human dignity; include or promote discrimination based on sex, racial or ethnic origin, nationality, religion or belief, disability, age or sexual orientation; encourage behaviour prejudicial to health and safety; or encourage behaviour grossly prejudicial to the protection of the environment.
5. In relation to persons under the age of 18, advertising must not: cause them physical or moral detriment; directly exhort them to buy or rent goods or services in a manner which exploits their inexperience or credulity; directly encourage them to persuade their parents or others to purchase or rent goods or services; exploit the trust that they have in parents, teachers or others; or unreasonably show them in dangerous situations.
The Regulations also contain a set of prohibitions relating specifically to the sponsorship of programmes and on-demand programme services:
1. Sponsorship must not be carried out for the purpose of promoting prescription only medicine, cigarettes or other tobacco products; or by an undertaking whose principal activity is the manufacture or sale of cigarettes or other tobacco products.
2. News programmes or current affairs programmes cannot be sponsored.
3. Content and scheduling of programmes must not be influenced by sponsorship in a way that affects the editorial influence of the service provider.
4. Sponsorship must not directly encourage the purchase or rental of the goods or services which are being promoted.
5. Sponsorship for the promotion of alcoholic drinks must not be carried out in relation to programmes aimed at minors nor must sponsorship announcements encourage the immoderate consumption of such drinks.
6. It must be clear to users that there is a sponsorship agreement in place and the name of the sponsor and its logo or other symbol must be displayed at the beginning or end of a sponsored programme.
7. Points 3-5 above relating to advertising also apply to sponsorship announcements.
Ofcom has amended its guidance relating to the length and number of advert breaks allowed in programmes, albeit to not as great an extent as allowed by the Directive. Ofcom's "Code on the Scheduling of Television Advertising" ("COSTA") has been updated as follows:
1. The number of advertising breaks that are permitted on programmes of longer than 60 minutes and aired on public service broadcasting ("PSB") channels (ITV1, Channel 4, Five and S4C1) has been increased to the same level as is allowed on non-PSB channels.
2. PSB channels are now permitted to air teleshopping for up to 6 hours a day, between midnight and 6am. Non-PSB channels are no longer subject to a maximum of 3 hours of teleshopping a day, the limit previously in place.
3. During live programmes, such as sporting events, more frequent breaks are now allowed where the timing of the events is not in the control of the programme provider.
4. The hours of 7am to 9am are no longer classed as "peak-time" on PSB channels, with the result that PSBs can broadcast slightly more advertising in this time.
For more information on COSTA, please go to: http://www.ofcom.org.uk/consult/condocs/rada08/statement/.
Who will enforce the new regime?
Ofcom has been granted powers to regulate all audiovisual media services, including services provided over the internet, previously excluded from their remit. Ofcom can also appoint co-regulators and, although not yet formalised, it is highly likely that the ASA will be designated as the co-regulator for video-on-demand advertising.
Ofcom will have the power to issue an enforcement notification to service providers in breach of the new rules. They may, for example, require a modification of the programme or advertising content. In the event of non-compliance with the notice, Ofcom can impose a financial penalty of up to a maximum of the greater of £250,000 or 5% of the service provider's qualifying revenue.
The co-regulatory approach has been seen as a compromise between a self-regulatory and wholly regulated system. The approach is expected to be relatively light-touch whilst at the same time providing consumers with the assurance that on-demand services will meet the minimum content standards set out in the Regulations.
Why this matters:
In the current economic climate and with increased competition in the market of broadcasting, revenue from advertising is increasingly important to service providers. Online on-demand services were previously treated as non-broadcast services and service providers will therefore need to be more careful in their approach, particularly as this is an increasingly popular method of broadcasting for both consumers and broadcasters.
What's more, the risk of a hefty fine for non-compliance is very likely to give service providers an incentive to pay attention to the new regulations.