Rules surrounding TV ads 'could be scrapped', reports Ofcom

LONDON - Ofcom has today launched a consultation on the rules governing the way TV broadcasters sell advertising, and has admitted current restrictions 'may no longer be appropriate' due to fragmenting audiences.

Ofcom: launched consultation on TV ad-selling
Ofcom: launched consultation on TV ad-selling

Ofcom has proposed scrapping the rules that force the commercial public service broadcasters to sell all their ad minutes and restrict the way broadcasters sell bundles of advertising airtime.

It could pave the way for broadcasters being able to generate tens of millions of pounds in additional advertising revenue each year.

The regulator has also proposed that the industry-wide ban on conditional selling should be removed, and that any anti-competitive effects be dealt with on a case-by-case basis.

Such a change would prove significant as broadcasters look to boost their digital channels.

In January, Ofcom said it was committed to "removing unnecessary burdens" from TV, and suggested that ITV, Channel 4 and Five could be allowed to limit the number of ad slots available.

Under rules devised in 2003, ITV, Channel 4 and Five are forced to sell all their advertising minutes, which prevents them from withholding ad airtime to drive up prices.

Today (29 March), Ofcom said the PSB broadcasters no longer had any incentive to withhold ad minutes as it would be unlikely to deliver more ad revenue and profits, and so the rule should be relaxed.

Ed Richards, chief executive of Ofcom, said: "In the last few years, the TV sector has moved on, with substantial increases in the take-up of digital services and in the number of available channels.

"We are proposing that these rules be removed in light of broader developments in the sector. Underpinning all of our work this year on advertising is a commitment to reduce and simplify regulation whenever there is no clear evidence of a public interest which requires regulation."

The 10-week consultation closes on 7 June. Ofcom has said it hopes to publish this autumn, in time for the TV ad trading season.

Any new rules will come into effect from 1 January 2011.

Ofcom also said it will publish proposals on whether to amend the rules that set the maximum amount of ad minutes and determine break patterns for commercial TV channels, in the spring.

Such changes could mean broadcasters including ITV could offer more ad slots during high-value shows, such as Saturday night primetime, or spread their ad minutes across a week rather than a day.

Broadcasters are also waiting on Ofcom's decision on whether Sky should be forced to wholesale its premium pay-TV content, such as sports and film, to its competitors.

A spokesman for Ofcom said the decision on pay TV should be announced "before the end of the month".

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