Ofcom's ad ban: Media owners face £40m revenue losses

Media owners will lose around £40 million following Ofcom's proposals on food and drink advertising, with dedicated children's channels set to be the hardest hit.

Satellite broadcasters such as Jetix, Turner Broadcasting and Viacom, which own dedicated children's channels, will suffer the most under the new Ofcom regulations.

According to media agency estimates, Viacom, which owns the Nickelodeon portfolio and a number of music channels such as MTV Flux, stands to lose up to £9 million.

Its rival Turner, the owner of the Cartoon Network and Boomerang, is expected to suffer a £3.5 million drop in spend by advertisers. Jetix has been predicted to experience a £1 million fall.

Media agency sources said BSkyB should emerge from the move relatively unscathed as the only show it broadcasts which is affected by the new measures is The Simpsons.

Ofcom has delayed enforcing the new legislation on satellite broadcasters until 1 January 2009 as a larger proportion of their revenues are based on dedicated channels. The rules come into force on terrestrial channels from 1 April 2007. Those set to suffer the most are ITV and five.

Five's chief executive, Jane Lighting, said the rules placed its commitment to its Milkshake strand of children's programming in jeopardy.

She said: "This is a tough decision and we are disappointed it is even more Draconian than the stringent measures Ofcom originally proposed. The long-term future of UK- produced children's programming outside of the BBC is bleak."

WHO LOSES MOST?
CHANNEL ESTIMATED
REVENUE LOSSES
ITV £12m
Viacom £7-9m
Five £5.5m
Turner £3.5m
Jetix £1m
CITV £1m
GMTV £1m
Based on viewing and revenue estimates.