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This section is laid out as follows:

• Proposed Code section 10
• Background to proposed Code section 10
• Proposed inclusions
• Proposed deletions
• Questions

Proposed Code, section 10, Commercial References and Other Matters

(section 319(2)(i) and 319(4)(f) of the Act, TWF Directive Articles 1(c) and (d) 10(1) and (4), and 18, and section 21(1) of the Financial Services and Markets Act 2000)

This section of the Code does not apply to the BBC

Principles

To ensure that the independence of editorial control over programme content is maintained.

To ensure that the advertising and programme elements of a service are clearly separated.

Rules

10.1 Broadcasters must maintain the independence of editorial control over programme content.

10.2 Broadcasters must ensure that the advertising and programme elements of a service are clearly separated.

Products or services in programmes

10.3 Products and services must not be promoted in programmes.

10.4 No undue prominence may be given in any programme to a product or service. Any reference to a product or service must be limited to what can be justified by the editorial requirements of the programme.

Meaning of "undue prominence":

Undue prominence may result from (but is not limited to) the recurring reference to or presence of a product or service (including company names, brand names, logos etc) in a programme, or from the manner in which a product or service is presented or appears in a programme.

10.5 Product placement is prohibited.

Meaning of "product placement":

Product placement is the inclusion of, or a reference to, a product or service within a programme in return for payment or other valuable consideration to the programme-maker or broadcaster (or any representative or associate of either).

Programme related material

10.6 Programme related material may only be promoted in programmes where editorially justified.

10.7 The broadcaster must retain responsibility for all programme related material.

10.8 Programme related material may be sponsored, and the sponsor may be credited when details of how to obtain the material is given. Any credit must be brief and secondary, and must be separate from any credit for the programme sponsor.

Meaning of "programme related material":

Programme related material is products or services that are both directly derived from a specific programme and intended to allow listeners or viewers to benefit fully from, or to interact with, that programme.

Premium rate numbers

10.9 Premium rate numbers will normally be regarded as products or services, and are only acceptable in programme time when they fall within the meaning of programme related material (see above).

10.10 Any use of premium rate numbers must comply with the Code of Practice issued by the Independent Committee for the Supervision of Standards of Telephone Information Services (ICSTIS).

Competitions

10.11 Competitions should be conducted fairly, prizes should be described accurately and rules should be clear and appropriately made known.

10.12 Competitions containing brand mentions may only take place within a programme, and cannot stand alone as programmes in their own right. Trailers for programmes may not include competitions with brand mentions.

Use of advertisements in programmes

10.13 Advertising must be clearly separated from programmes and advertisements are not normally allowed in programme time. There are limited exceptions where the inclusion of an advertisement, or extracts of an advertisement, is sufficiently justified by the editorial requirements of the programme.

Charity appeals

10.14 Charity appeals that are broadcast free of charge are allowed in programmes provided that the broadcaster is satisfied that:

1. the organisation concerned is either registered with the Charity Commissioners or can produce satisfactory evidence of charitable status, or, in the case of an emergency appeal, that a responsible public fund has been set up to deal with it; and
2. the organisation concerned is not prohibited from advertising.

10.15 Appeals should be allocated among as wide a range of charities as possible.

The issue of raising funds to support programmes and services is discussed in the RIA (section 14 of the consultation).

Community Service Announcements

10.16 Community service announcements, transmitted free of charge, may be broadcast in programme time.

Financial reporting and promotion of investment activity

10.17 Financial promotions and promotions of investment activity may not be broadcast unless they comply with the relevant provisions in Appendix 4 to this Code [Annex 9 of the consultation].

Meaning of "financial promotion"

A financial promotion is an invitation or inducement to engage in investment activity (in accordance with section 21(1) of the Financial Services and Markets Act 2000 (Restrictions on financial promotion)).

Television

Events

10.18 Visual or oral reference to advertising, signage or branding at an event must be limited to what can clearly be justified by the editorial needs of the programme itself.

Meaning of "event":

For the purpose of this rule, events are recognised sporting occasions or other legitimate events. Broadcast coverage must not be the principal purpose of the event and the event must be open to members of the public.

10.19 The use of electronic imaging systems during broadcast coverage of an event must comply with the following rules:

1. Broadcasters and viewers must be informed in advance of the presence of virtual images.
2. Virtual advertising may only replace existing on-site advertising. Virtual advertising messages must not be more visible or conspicuous than the actual advertising at the venue.
3. Rules relating to prohibited advertisers apply also to virtual advertising. (Please refer to the Advertising Code.)
4. The broadcaster may not trade in virtual advertising.

Meaning of "virtual advertising":

Virtual advertising normally takes place at sporting events, and involves altering the broadcast signal to replace existing venue advertising with other advertising in the television picture (potentially targeted at a particular geographical audience).

 

Background to proposed Code section 10 - Commercial References and Other Matters

1. Broadcasters operate in a commercial environment and are entitled to reflect this in their programmes. The regulation of commercial references in programmes seeks to ensure that there is no commercial influence on the editorial content of programmes and to maintain a clear separation between advertising and programmes.

2. The proposed Code section sets out rules that limit commercial references in programmes and maintain a clear separation between advertising and programmes. The proposed Code section also sets out rules that enable certain products or services, such as legitimate programme related material, to be promoted in programme time. It also sets out rules that enable other matters, including charity appeals and "financial promotions" to be included in programmes.

3. Legislation underpinning regulation of television in this area largely derives from the TWF Directive, and is underpinned, as is the regulation of radio in this area by the requirements relating to editorial control in section 319(4)(f) of the Act. In drawing up the new Code section we have aimed to simplify the number of principles and rules to the minimum necessary to safeguard the objectives of the legislation underpinning regulation in this area.

4. Rules 10.1-10.16 and 10.18-10.19 of the proposed Code section do not apply to the BBC because they are largely based on certain obligations in the TWF Directive which the UK government has decided not to apply to the BBC. The relevant sections of the TWF Directive would apply to the BBC only if the government was to issue a notification to that effect. Rule 10.17 does not apply to the BBC because those provisions are currently enforced through the BBC Producer's Guidelines. The BBC would fall under Ofcom's regulation in this area if the government amended the relevant Order to that effect.

5. The current regulation relating to commercial references on radio and television can be found in Part B of the ITC Code of Programme Sponsorship, section 8 of the ITC Programme Code and section 1 rule 2 of the RA Advertising and Sponsorship Code.

Proposed inclusions

Principles

6. The first principle mirrors the wording of section 319(4)(f) in the Act, and the second spells out the key distinction between advertising and programmes (TWF Directive, Article 10(1)). While the TWF Directive does not apply to radio, the distinction between programmes and advertising is fundamental to maintaining editorial control over programmes (section 319(4)(f)), and the second principle applies equally to radio.

Rules

7. Rules 10.1 and 10.2 translate the principles into rules.

8. Rules 10.3, 10.4, and 10.5 relating to references to products or services in programme time currently apply to radio and television, and no change is proposed. Rule 10.3 is fundamental to maintaining the distinction between programmes and advertising. Rules 10.4 and 10.5 support the principle of editorial independence. Product placement (10.5) is prohibited on television by the TWF Directive (Article 10(4)), and section 2.5 of the 2004 Interpretative Communication on certain aspects of the provisions on televised advertising In the Television Without Frontiers Directive from the European Commission underpins the use of the concept of 'undue prominence' (rule 10.4). These rules may equally be derived from the principle of editorial integrity, and apply also to radio.

9. Rules 10.6, 10.7 and 10.8 enable programme related material (products or services that are directly derived from a programme and intended to allow the audience to benefit fully from or interact with the programme) to be promoted in programme time. Similar rules already apply to television. For television, this is allowed as an exception to what is defined as advertising by the TWF Directive (Recital (34) and (35) to 97/36/EC and Article 18(3)), and we are not proposing to change the rules for television. However, Ofcom would consider allowing programme related material to be promoted whenever that is editorially relevant and justified, rather than only at the end of the programme.

10. On radio, there has not previously been any provision for the promotion of programme related material in programme time. While Ofcom recognises that radio programming is different in nature to television programmes, Ofcom proposes to include radio in this rule, which would allow the promotion of programme related material also on radio.

11. Rules 10.9 and 10.10 allow the use of premium rate numbers in programme time. Premium rate numbers are by their nature commercial, and can be used to raise revenue for broadcasters. Allowing their presence in programmes needs to be balanced by the need to ensure that programmes are not used to sell or promote products or services. There are currently rules that restrict the use of premium rate numbers both on radio and television. Rule 10.9 ensures that premium rate numbers are only used in programme time where that is intended to allow the viewer or listener to benefit from, or to interact with, a programme.

12. ule 10.10 is currently applied on both radio and television, and Ofcom is not proposing to change it. Many broadcasters now use premium rate numbers for a host of services. While premium rate service providers are, in any case, directly subject to the ICSTIS Code of Practice, it is important that broadcasters are responsible for all aspects of the service they provide, including premium rate numbers.

13. Rule 10.11 relates to how broadcasters conduct competitions. This rule is currently applied to radio only. However, this is an area that concerns many viewers as well as listeners, and Ofcom proposes to consider extending the rule to television. The Act obliges Ofcom to have regard to the degree of harm that a programme could cause viewers or listeners (319(4)(a)). It would be possible for members of the public to be mislead or lose money with no genuine hope of success (e.g. for premium rate calls) if this rule was not in place.

14. Rule 10.12 restricts the use of competitions with brand mentions. This rule supports the principle of separation between programmes and advertising, and ensures that competitions are not used primarily for promotional purposes for the prize donor. Ofcom is, however, proposing to omit the current rules for television which restrict the number of brand mentions within a competition.

15. Rule 10.13 allows the use of advertisements in programmes where that can be editorially justified. This rule currently applies to television, and the main rule is not proposed to be changed. In addition, there are specific rules for factual and entertainment programmes respectively. While it is important to retain a rule that ensures that advertisements are not used in programmes without sufficient editorial justification, Ofcom will consider whether the more detailed requirements are needed.

16. There is currently no rule allowing the use of advertisements in programme time on radio. Ofcom proposes including radio in rule 10.12 to enable radio programming to make use of advertisements where that can be editorially justified.

17. Rules 10.14, and 10.15 enable programmes to include charity appeals. On television, charity appeals are allowed in programme time by the TWF Directive (Article 18.3). There are no specific provisions in the Act for charity appeals on radio. Ofcom proposes to include radio in this rule to enable charity appeals in programme time on radio.

18. Rule 10.16 allows broadcasters to transmit community service announcements in programme time. This is enabled on television by the provision for "public service announcements" in the TWF Directive (Article 18.3). Ofcom proposes to include radio in this rule to enable community service announcements in programme time on radio. This provision would also allow for "public information programmes", and where relevant more detailed guidance would be issued by Ofcom.

19. Rule 10.17 (together with Annex 9) relate to financial reporting and promotion of investment activities. These rules provide an exemption for broadcasters from the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 for programmes that include elements that fall within "financial promotions" under this Act. In previous Codes, these rules were different for radio and television. The proposed Code would consolidate the rule to apply to both radio and television.

20. Rules 10.18 and 10.19 relate to broadcast coverage of events, and apply to television only. No significant change is proposed to the rules that currently apply. Rule 10.18 recognises that broadcasters have a difficult balance to maintain when covering high profile events, which will inevitably contain commercial branding, without appearing to give prominence to the branding rather than the event.

21. Specific rules apply to so-called 'virtual advertising'. Rule 10.19 corresponds to the rules on virtual advertising in the Interpretative Communication on certain aspects of the provisions on televised advertising in the Television Without Frontiers Directive from the European Commission.

Proposed deletions

22. The current Codes relating to commercial references on radio and television (Part B of the ITC Code of Programme Sponsorship, section 8 of the ITC Programme Code and section 1 and 2 of the RA Advertising and Sponsorship Code include a number of rules that do not appear in the draft Ofcom Broadcasting Code. Where it is useful to do so, some of this may be included in non-binding guidance which will be available separately to the Code. Significant omissions, i.e. omissions that imply that there could be a change in what is required from broadcasters and/or what the public can expect, are set out below.

Radio

23. Section 2 rule 24 of the RA Advertising and Sponsorship Code relates to the integrity of station presenters or news readers. This rule allows presenters or news readers to voice over advertisements, provided that does not appear to compromise their impartiality or programming role. Proposed rules 10.1, 10.4 and 10.5 of this section of the Code and the section of the Code which deals with due impartiality are arguably sufficient to ensure that separation between any presenters' advertising and programming activities is maintained. Ofcom therefore proposes not to include this rule in the proposed Code.

24. There are no other omissions from the RA Advertising and Sponsorship Code which imply a significant change.

Television

25. Ofcom proposes to retain the rules in section 8.1(i) of the ITC Programme Code prohibiting promotion of products or services in programme time and allowing programme related material to be promoted. However, this section of the ITC Programme Code also goes into some detail in setting out how programme related material may be promoted. While it may be useful to have detailed instructions, these matters are arguably covered by the main rule, and Ofcom will consider not including the remainder of this section in the Ofcom Code. To the extent that guidance is needed, that can be issued separately.

26. Section 8.1(ii) of the ITC Programme Code also currently contains special provisions for social action and education programmes that allow programme related material for such programmes to be promoted whenever appropriate in the programme. In other programmes, this is restricted to the end of the programme. If rule 10.6 of the draft Code section is implemented, it will allow the promotion of programme related material whenever editorially justified in all programmes, which would make the current exception for social action and education programmes superfluous.

27. Section 8.2 of the ITC Programme Code contains detailed rules for the use of premium rate numbers in programmes. The spirit of these rules remain and is intended to be covered by rules 10.9 and 10.10 in the draft Code section. Ofcom does not propose to include any more detailed rules on premium rate numbers.

28. Currently, there are specific rules for brand mentions and description of prizes in viewer competitions (section 8.6 of the ITC Programme Code and section 18 of the ITC Code of Programme Sponsorship). The rules in this area are detailed and specific, and set out the limits clearly. However, Ofcom proposes to consider whether these rules are necessary, as, arguably, the intention behind them will be covered by the other rules in the draft Code section (10.3, 10.4 and 10.5).

29. Section 8.7 of the ITC Programme Code contains rules relating to the use of video news releases in programmes. They are intended to ensure that programme time is not used to promote commercial (or other) interests. We think this is equally covered by the general rules on commercial references in the proposed Code section and propose to not include any specific rules on video news releases.

30. Products placement is, and will remain, prohibited. However, section 15 of the ITC Code of Programme Sponsorship also explains what is not considered to be product placement, such as where goods or services are provided to the broadcaster at no, or less than full cost, and how such arrangements can be credited. Ofcom proposes that these rules are better placed in guidance. Section 3 of the ITC Code of Programme Sponsorship also recognised that certain types of acquired programmes, in particular films made for the cinema and coverage of sporting events taking place outside the UK, may deviate from rules in the Code where that was unavoidable. Ofcom maintains this recognition, but considers that it is better placed in guidance.

31. Section 17.2 of the ITC Code of Programme Sponsorship states that close similarity between advertising and the content of a programme may constitute grounds for regarding the programme as having an unacceptable promotional purpose. This remains the case, however, the intention behind the rule is arguably covered by the rules on editorial integrity and separation (10.1 and 10.2). A separate rule would therefore not be necessary.

32. Section 20 of the ITC Code of Programme Sponsorship allows the crediting of timing and information service providers. While it may be helpful to provide guidance on these matters, Ofcom proposes not to include any specific rules in the proposed Code. Arguably, the crediting of information providers will be sufficiently covered by other rules in the proposed Code section (10.3, 10.4 and 10.5).

33. Section 18 of the ITC Code of Programme Sponsorship set out detailed rules relating to advertiser references in game shows and viewer competitions. These refer to how prizes may be described, the amount and placing of brand mentions in viewer competitions and the role of a programme sponsor in competitions. With the exception of the restriction on branded competitions appearing as programmes in their own right (rule 10.11 in the proposed Code) Ofcom proposes not to include these rules in the Ofcom Code. This would allow the broadcaster to judge how prizes should be described and the prize donor to be mentioned, provided this complied with the rule on products and services in programmes (rule 10.3) and the undue prominence rule (rule 10.4). It would also allow the programme sponsor to donate their branded products as prizes, subject to compliance with the undue prominence rule and the rules on the content of sponsored programmes (9.6 and 9.7 in the sponsorship section of this Code).

Questions

Question 13a:
Are the principles, rules and meanings necessary, consistent, proportionate and achievable? If not, can the wording be improved and if so how?

Question 13b:
Are there any principles, rules or meaning we have not put here which would achieve the intentions of the Communications Act and other applicable legislation and be necessary, consistent, proportionate and achievable?

Question 13c:
Should there be a rule for both radio and television relating to how viewer and listener competitions are conducted, and should there be a rule that limits the use of competitions with brand mentions to within programmes?

Question 13d:
Are the rules for charity appeals appropriate and should they be extended to include radio?

Question 13e:
Is the provision for community service announcements appropriate and should it be extended to include radio?

Question 13f:
Should broadcasters be allowed to promote programme related material wherever that is relevant and editorially justified in the programme?

Question 13g:
Should the rule prohibiting television services appealing for funds to make programmes and fund services be removed, kept or altered? If altered - then how should it be altered? Please see the RIA, section 14 of this consultation for further information.

Question 13h:
If the rule referred to in 13g is removed, will this provide a complimentary mechanism for raising funds or will it be a substitute mechanism?

Question 13i:
Given the substantial market share held by some channels, would this have a distorting effect, in which case should Ofcom use its competition powers?

Question 13j:
Should there be rules regarding merchandising or not? And if so what rules? Please see the RIA in section 14 of this consultation for relevant arguments.

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