Review of Rules on the Amount and Distribution of Advertising

25 September 2007

Ofcom has decided to review rules on the permitted amount and scheduling of television advertising in the light of forthcoming changes to the European regulatory framework.

The current framework, set out in the Television without Frontiers (TWF) Directive permits broadcasters to show up to 12 minutes of advertising in any one hour, subject to an overall average of 9 minutes an hour but also allows Member States to impose additional restrictions if they wish. The TWF Directive's limits apply to non-public service channels but there are then stricter limits for the public service channels (ITV1, Channel 4, Five, GMTV and S4C).

While these channels may still show up to 12 minutes of advertising in any one hour, they are subject to an overall average of 7 minutes an hour, and a specific average of 8 minutes an hour between 6pm and 11pm. Particular rules apply to GMTV. Similar rules on scheduling apply to both public service and non-public service channels.

The relaxation of restrictions in the European framework, as envisaged in the latest draft of a new Audio Visual Media Service (AVMS) Directive, reflects the growing competition faced by commercial broadcasters for advertising revenue. Ofcom will want to take this into account when considering new rules applying to UK-licensed broadcasters, but will also recognise the possible concerns of viewers about the amount and intrusiveness of television advertising.

Ofcom’s review will look both at the rules on the frequency of advertising, and how much advertising can be scheduled across the day and in any one hour. However, as the draft AVMS Directive retains the current maximum of 12 minutes of advertising in any one hour, there will be no change to this rule, which already applies to all UK-licensed broadcasters.

In terms of the rules on the scheduling of advertising, Ofcom’s aim is 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. To this end, it plans to talk to stakeholders and publish proposals for consultation in the first quarter of 2008.

As regards the rules on the amount of advertising, Ofcom will be examining the implications for consumers, broadcasters and advertisers of possible changes to the rules on how much television advertising should be allowed. As part of this, Ofcom expects to assess how the impact of different options would vary across the broadcasting sector. It will also need to take account of the OFT’s review of the Contracts Rights Renewal remedy, which will start at the beginning of 2008.

Ofcom aims to conclude this process in time to allow any changes to the rules on the amount of television advertising to be implemented with effect from 1 January 2010. To this end, the document to be published by Ofcom in the first quarter of 2008 will invite views on possible options, with the aim of publishing proposals in late 2008.

The review will also look at other aspects of the rules on the amount and distribution of advertising to see if they remain appropriate.

Notes

The current rules on the permitted amount and scheduling of television advertising are set out in the Rules on the Amount and Distribution of Advertising.

The rules are set within the framework of the Television without Frontiers Directive, which is expected to be amended by the end of 2007 to become the Audio Visual Media Services Directive. Member states will be required to give effect to the revised Directive within two years of its adoption, but will retain the discretion to adopt stricter rules where they consider this appropriate.

The Office of Fair Trading (OFT) has announced that it will carry out a review of the Contract Rights Renewal (CRR) remedy in conjunction with Ofcom. The CRR remedy was established in November 2003 in acknowledgement of the potential for the newly-merged Carlton and Granada to exercise significant influence over the ability of advertisers and media buyers to negotiate contracts fairly and effectively. ITV plc has gave formal undertakings to comply with the CRR remedy as a condition of regulatory approval for the merger.