Participation TV: how should it be regulated?

Introduction

Reasons for consulting on Participation TV

1.1 Ofcom intends to consult publicly and in detail in early 2007 on how Participation TV should best be regulated, with a view to finding the right balance between protecting viewers and protecting consumers, ensuring consistency with the legal framework and respecting broadcasters’ freedom of expression.

1.2 For the purposes of this Issues Paper, Participation TV refers to those television services (including but not limited to dedicated channels) that rely wholly or mainly on viewers paying for an opportunity to participate in the service. These services tend to be dominated by repeated messages to viewers – verbal or in on-screen graphics (usually both) – to call a premium rate number . This content may take a number of forms, including quiz services, adult chat, psychic readings and dating.

1.3 There are a number of drivers behind Ofcom’s decision to consult on Participation TV in 2007:

Public and viewer concerns

1.4 There is some growing public concern about Participation TV. Viewers are often repeatedly encouraged to spend money to interact with the television service; however, they may not always fully understand the charges involved or indeed what they are getting in return. Of the Participation TV genres, TV quiz services tend to generate the most concerns from viewers. In November 2006, quiz services were the subject of a Culture Media and Sport Select Committee inquiry. Ofcom, ICSTIS and the Gambling Commission were among the parties asked to provide submissions .

Appropriate level of consumer protection

1.5 Ofcom has a duty under the Communications Act 2003 to further the interests of citizens and consumers. Ofcom’s Broadcasting Code (which applies only to editorial and not to advertising) is concerned with editorial standards in programmes, for example, protection of under 18s and accuracy in news. This is in contrast with the BCAP Television Advertising Standards Code (“the BCAP Advertising Code”), which focuses on consumer protection; for example, to ensure that advertisements do not make misleading claims . It could be argued that it is in the interests of viewers that, where content contains repeated selling messages and commercial transactions are significantly involved, such content should be regulated as advertising, not editorial.

Separation of editorial content and advertising

1.6 A fundamental principle of European broadcasting legislation is that advertising and editorial must be kept separate (“the separation principle”) . However, Participation TV services often appear to have characteristics of both. This presents challenges in regulating the sector, both now and in the future. One key question we need to consider is whether Participation TV should be categorised as editorial, advertising or as a “hybrid” of the two, or indeed whether there is some other way forward.

Circumvention of advertising prohibitions

1.7 The BCAP Advertising Code prohibits advertisements for live adult chat services on unencrypted channels and for products or services concerned with the occult or psychic practices. However, there are a number of TV services, currently permitted as editorial services, offering adult chat or psychic readings. These services contain repeated invitations to viewers to call a premium rate line. It could therefore be argued that they are essentially commercial in nature and, in effect, a form of advertising. There is therefore also an argument that one of the consequences of broadcasting under the auspices of an editorial service is that these services are circumventing the advertising prohibitions.

Stakeholders’ desire for greater clarity and consistency

1.8 From time to time, we receive queries from broadcasters about certain Participation TV content which appears to exceed what is permitted under the Broadcasting Code. Parties interested in applying for a broadcast licence also need to know how the service they intend to provide will be categorised and therefore regulated.

Purpose of this Issues Paper

1.9 This Issues Paper is intended to:

• inform stakeholders and the wider public of the reasons for our interest in – and potential concerns regarding - Participation TV;
• provide an overview for relevant stakeholders, and other interested parties, of the proposed scope and purpose of the formal consultation in 2007; and
• elicit views and information – on a confidential basis where requested – that will help us with our early thinking, ensuring that we correctly identify the relevant issues and workable regulatory options to consider in the consultation.

1.10 This is not intended to be a consultation. Any views expressed or representations made in response to this Issues Paper will help inform the formal consultation in 2007 but will not be taken into account in assessing any policy options proposed in that consultation. Stakeholders will have the opportunity to make written submissions on those matters when the consultation document is issued in 2007.

Developments in the use of premium rate services on TV

1.11 Terrestrial channels have been using premium rate telephony for twenty years or so, essentially since premium rate charging mechanisms were introduced. For many years, such use was confined to phone-in competitions for viewers, typically in genres such as sports and magazine programming, including breakfast television. These viewer competitions were generally simply an element of programming, continuing a long tradition of draws and competitions offered by channels and intended to encourage viewer involvement and loyalty.

1.12 However, with the advent of multi-channel television in the early 1990s, premium rate competitions and other premium rate applications, such as viewer voting, started to become more common in programming. Since then, digital television, which has greatly increased the capacity for new channels, and declining revenues from traditional spot advertising have sharpened efforts to generate income in an increasingly competitive market and driven the development of new revenue models. Premium rate mechanisms have been prominent among these.

1.13 There are now entire programmes and indeed channels dedicated not only to premium rate-based quizzes of varying difficulty (“TV quiz services”), eg ITV Play which launched in April 2006, but also to other genres predicated on the use of premium rate services, for example adult chat and psychic readings. A key characteristic of these Participation TV services is frequent, and sometimes constant, messages to viewers to call (or text) one or more premium rate numbers.

1.14 Whilst Participation TV services currently tend to rely on premium rate telephony, there may be other payment mechanisms, eg via credit card, and it is possible that other models may emerge in the future.