New TV ad limits soon?

Topic:TV

Who:Ofcom

When:2010

Where:UK

Law stated as at: 31 October 2007

What happened:

Ofcom has recently announced that a review is now taking place on the amount and distribution of advertising for broadcasters. This follows the debate on the new Audiovisual Media Services Directive (AMS Directive), which is waiting for its approval by the European Parliament at the end of 2007.  The new directive is likely to amend and replace the limits currently in place implementing the restrictions on the permitted amount and scheduling of television advertisements set out in the Television Without Frontiers Directive (89/552/EEC) (TWF Directive).

Current UK situation

In the UK, the limits set out in the TWF Directive apply to non-public service channels, but stricter limits are in place for the public service broadcasters.

• Non-public service channels – Broadcasters must show up to 12 minutes of advertising in any one hour, subject to an overall average of 9 minutes an hour but individual member states may impose tighter restrictions if they wish.
• Public service channels – There are stricter limits for the public service channels.  ITV1, Channel 4, five, GMTV and S4C may show an average of only 7 minutes of advertising per hour each day with an average of 8 minutes per hour in peak time (7.00am-9.00am and 6.00pm-11.00pm) though there is still a maximum of 12 minutes in any one hour.

  (The BBC is not permitted to carry advertising or sponsorship on its public services to preserve their independency from commercial interests).

• Advertising minutes excludes sponsorship credits and programme and channel promotions –
  Audiovisual Media Services Directive (if approved)
• Broadcasters may still show no more than 12 minutes of advertising in any hour but there will be no restrictions as to the average time per single hour.

One of the aims of the new directive is to introduce relaxing rules on inserting advertising in TV programmes and daily advertising limits.  However, Member states will still be able to impose additional restrictions than the one set out by the Directive if they wish.

As the current regulations are stricter than the ones that will be imposed by the new Directive, Ofcom will have 2 options:

• Do not change the current rules on daily advertising limits
• Follow the more relaxed approach of the new Directive and increase the amount of the allowed advertising time on television.

In making this choice, Ofcom will consider the consequences for consumers, broadcasters and advertisers of possible changes of the rules.  It will take into consideration that there may be concerns amongst viewers about the intrusiveness of this much television advertising as well as considering how the impact of different options would vary across the broadcasting sector.  Ofcom is also going to consider the rules on the frequency of advertising and how much advertising can be scheduled during the day and in any one hour.  The Office of Fair Trading’s review of the Contracts Rights Renewal (CRR), which is expected to start at the beginning of 2008, will also be taken into consideration. 
Ofcom is aiming to reach decisions on the rules on advertising scheduling in time to allow any changes to come into effect on or before 1 January 2009.  For this reason, proposals for consultation will be published in the first quarter of 2008.  This process must be concluded in time to allow any changes to the rules on the amount of television advertising to be implemented with effect from 1 January 2010 – time for the new Directive to take effect.

Why this matters:

So far, industry reaction to the possibility of more permitted advertising minutage has been muted, given mounting competition from new advertising channels. Whilst some EU countries such as Spain have shown serial disregard for the current limits, the UK has not so far been this way inclined and our bet is that Ofcom will retain the status quo.