Removing out-of-date rules on TV ad sales & ITV Networking Arrangements consultation
Ofcom has today announced it will remove a number of rules governing the way TV airtime is sold to media buyers and advertisers.
This is part of Ofcom's work of removing unnecessary regulations, and ensuring any remaining rules are fit for purpose.
The Airtime Sales Rules, which will be lifted ahead of the next TV airtime deal season in the autumn, require ITV1, Channel 4 and Five to sell all their advertising airtime, and restrict the way in which all broadcasters can sell bundles of advertising airtime across their portfolios of channels.
Since the rules were introduced, there have been significant developments in the TV sector and a substantial increase in the number of channels. This has led to increasingly fragmented TV audiences and enabled media buyers to purchase airtime across many more channels.
Advertising Market Review
Ofcom has also given careful consideration to whether it is appropriate to launch a broader market study of TV advertising. A market study is a considerable endeavour with significant resource implications, and given the information currently available Ofcom’s view is that an own-initiative market study is not justified at this time. Ofcom will keep this decision under review by monitoring any stakeholder concerns and wider market developments.
ITV Networking Arrangements
Separately, Ofcom has published a consultation examining the financial cost-sharing practices between the regional Channel 3 licensees that make up the ITV network.
The Networking Arrangements bring together the regional Channel 3 licensees to provide a national networked service. The ITV network comprises 15 different regional licences across the whole UK. ITV Plc owns 11 of these; STV two; Channel TV and UTV both have one.
The consultation considers whether the networking arrangements between the regional Channel 3 licensees deliver a competitive, nationwide TV service while at the same meeting their public service broadcasting and individual regional programme obligations.
Ofcom has identified the specific financial arrangements that underpin the cost of providing the ITV1 networked service. It has compared what the licensees currently contribute against alternative cost sharing approaches. Ofcom’s preliminary analysis suggests that ITV plc contributes more than it would do under those alternatives.
The consultation is seeking views as to what changes, if any, should be made to the cost sharing arrangements and lasts for 10 weeks.
Annual reviews of the networking arrangements are a statutory obligation, but any significant changes required by Ofcom to them can only be made within the existing legislative framework. As such, Ofcom would like to see the regulatory burden of mandatory annual reviews removed.
The Airtime Sales Rule Statement, which includes further information on the advertising market review can be found here: http://stakeholders.ofcom.org.uk/consultations/asr/statement
The ITV Networking Arrangements consultation can be found here: http://stakeholders.ofcom.org.uk/consultations/itv-networking/