Ofcom consultation on participation TV and impact on advertising

Who: Ofcom

Where: UK

When: April 2008

Law stated as at: 22 May 2008

What happened:

The problems

At the start of 2007 the public were shocked by a serious of revelations about how broadcasters had mistreated their trusting viewers who were using premium rate telephone services ("PRS") to vote in or enter programme competitions.  Details emerged, seemingly on a daily basis, of broadcasters faking competition winners and selecting entrants unfairly, together with poor practices relating to the use of PRS.  Ofcom published adjudications by their Sanctions Committee on programmes as well known as "Deal or No Deal", "Richard & Judy", and even….(could it really be true?)….. family favourite, "Blue Peter"! 

Cue large fines all round – running to a total, by February 2008, of more than £3.5 million imposed by the regulators Ofcom, and £580,000 by PhonePayPlus.

The solution – Part 1

An Ofcom Inquiry was launched, and Ofcom promptly consulted on the results of the Inquiry's recommendations during July-October 2007.  On 19th February 2008 Ofcom issued a Statement which detailed the outcome of that consultation (Participation TV Part 1: protecting viewers and consumers – consumer protection measures to protect viewers participating in programmes).

The Statement said it would impose new licence conditions for television broadcasters who invited viewers to participate in programming, by making the broadcasters directly responsible for handling all viewer communications, through the entire supply chain, regardless of the means of communication (i.e. whether by phone, e-mail or post).  They also said they would require broadcasters to get independent third-party verification of their PRS voting systems and in-programme competitions, with Ofcom conducting spot checks for 12-18 months after the verification obligations came into force.

These changes addressed the results of the Inquiry, which found inadequate contractual arrangements between the parties involved in broadcast PRS, and that broadcasters didn't always understand the telephony supply issues and were failing to anticipate compliance problems.  Now, they would have to take more control or risk losing their licences. 

The teleshopping case

Just after the consultation closed, a timely decision of the European Court of Justice (Komm Austria v ORF: Case C-195/06, 18 October 2007) threw a spanner into the works.  It held that a quiz television show which allowed viewer participation via PRS could be classified as teleshopping if that broadcast (or part of it) "represented a real offer of services".  Relevant deciding factors were:

• the purpose of the broadcast of which the game forms part;
• the significance of the game within the broadcast in terms of (i) time and (ii) anticipated economic effects in relation to those expected in respect of the broadcast as a whole; and
• the type of questions which the candidates are asked. 

Ofcom took the view that although the final bullet point above only really applied to quiz shows, the other factors and the general principles of the ECJ case were actually broad enough to extend beyond just quiz shows.  This meant that other participation TV genres which provided services in return for payment, like physic TV and adult chat TV services, might also be classified as teleshopping in certain circumstances.  This prompted Ofcom to rethink its participation TV strategy. 

The solution – Part 2

Ofcom got even tougher.  Increasingly concerned that programmes/channels using PRS could get around advertising restrictions by using programming to promote goods and services that couldn't otherwise be advertised in that way, and spurred on by the ECJ case, they felt that they had to make it "absolutely clear" that programmes involving audience participation via PRS "must not in effect be vehicles for the promotion of PRS".

So, on 9th April 2008, Ofcom published a second consultation (Participation TV Part 2: keeping advertising separate from editorial) concluding that new rules were required to ensure that programmes only use PRS "where there is sufficient editorial justification".  That meant proposed new amendments to section 10 of the Broadcasting Code – stricter than those set out in the 2007 consultation – which state that:

• broadcasters can only charge for participation by viewers/listeners by means of PRS or other telephony services based on similar revenue sharing arrangements.  Ofcom said it was opposed to payment methods like cash, debit card or credit card, since these give the impression that the audience is buying services, rather than participating in the editorial content of a programme.  By contrast revenue-share telephony is an accepted exception to the general principle that editorial material should not promote products and services, and is seen by Ofcom as a means by which an audience can communicate with broadcasters, as well as having the advantage of already being tightly regulated.
• if a programme uses PRS as a means of audience participation the broadcaster has to ensure that the service enables viewers to participate directly in or contribute directly to editorial content.  The kind of off-air chat used in adult TV, where "babes at home" chat to callers would no longer be allowed, as that kind of PRS will be regarded as a product/service which should not appear in programmes.
• Where PRS is included in a programme to allow viewers/listeners to participate in or interact with the programme, broadcasters must ensure:
  • the PRS is directly derived from the particular programme;
  • the PRS enables viewers/listeners to participate directly in or contribute directly to the editorial content of the programme;
  • the PRS is not given undue prominence in the programme;
  • the programme consists primarily of content other than the promotion and use of the PRS;
  • the primary purpose of the programme is editorial, and any commercial activity associated with the PRS (including the generation of call revenues) is secondary to that purpose.

Draft Ofcom guidance on the new rules provides some considerations to take into account in assessing compliance with the new rules.  If the PRS promoted in the programme provides viewers with a "genuine opportunity to participate in, contribute to or otherwise influence editorial content" (like voting in a competition or on-air discussion); if the references to PRS are only occasional; and/or if the PRS is justified by its contribution to editorial content, then these are factors which suggest compliance with the new rules.  But if the PRS fails to contribute to editorial content (e.g. if callers are inaudible on-air), or if the programme is effectively a vehicle for the PRS (e.g. if most of the air-time is given over to promoting or featuring it) then this suggests a breach of the new rules.

Next steps

Ofcom have recently extended the deadline for responses to this consultation until 5pm on 3 June 2008.  Before implementing the new rules, Ofcom will allow licensees the chance to either amend their programming/services to meet the editorial content requirements of the amended Broadcasting Code, or they will have to reconfigure the programming to fall within the rules on teleshopping under the BCAP Code.  Failing that, they will be looking at enforcement action, which at the sharp end of the scale includes revocation of broadcasting licences. 

Why this matters:

What does this mean for programming if the rules are implemented as drafted?

Programmes that are currently editorial would continue to be regulated by the Broadcasting Code, but would have to ensure their PRS elements complied with the new rules, for example, on undue prominence.  Quiz TV, adult chat channels, and pyschic tv shows as they currently stand would be in breach of the new rules, and (depending on the programming) could also be regarded as teleshopping/advertising and subject to the relevant rules and codes on those issues. 

It's therefore essentially up to broadcasters and producers to decide if their programmes are truly editorial and therefore governed by the Broadcasting Code, or whether they are teleshopping/advertising and caught by the Advertising Standards Authority's BCAP Code – either they reformat their programmes to fit within the former category, or they accept that the latter category means their content is subject to minutage controls, which could potentially have a serious impact on their business models. 

If you have a view on this, there are still a few days left of the consultation period in which you can have your say.  As the TV presenters say: "vote now, before lines close…".