TV: Special Report - Play by the rules

Ofcom has relaxed the rules on sponsorship - cutting 30 pages of guidance to a mere three-and-a-half. What does the new regime mean for the industry, Maria Esposito asks.

Could five become the Ginsters' Cornish Pasty Channel? Or Channel 4 become the Vodafone Network? Currently, the food manufacturer sponsors five's Sunday- night comedy zone, while the mobile phone company sponsors much of Channel 4's youth strand T4.

However, the new Ofcom broadcasting codes have relaxed regulations on sponsorship and created new opportunities for broadcasters and advertisers alike, including the pos-sibility of sponsoring an entire channel. With the restrictions lifted, the question is how far commercial broadcasters will go to exploit this fresh revenue stream.

Launched on 25 July, the new codes on sponsorship should please environmentalists: the old codes have been reduced from more than 30 pages to just three-and-a-half. As well as saving on paper, the new regulations condense six previous codes into one. Although a ban on product placement and the sponsorship of news and current affairs continues, Ofcom has significantly liberalised other areas of programme sponsorship and commercial references.

Recognising commercial TV's dependence on advertising in an increasingly competitive market, the media regulator has dropped the time limit for sponsorship credits, which currently stands at a maximum of 15 seconds.

It has also allowed sponsorship credits to include information about the brand's values and attributes as long as they do not contain advertising messages or a call to action.

"Credit time length is the most significant change," Mark White, five's executive director of sales, says. "It may encourage people to use sponsorship because they couldn't previously get their brand message across in ten or 15 seconds."

Longer credits could open the door to new business sectors. "Financial services clients, who have more information to get across, or creative agencies that have shied away from the five-second spots could now be interested," Daliah Epstein, the head of sponsorship at Vizeum, says.

Telephony companies may also reap rewards. "Credits that provide mandatory price information open up a route to market for premium-rate telephone services," Chris Holdom, the broadcast sponsorship manager at SponsorCom, says.

Without a maximum time restriction, the challenge will be to find the optimum length for sponsorship credits. "You still have to make it engaging for the viewer," White says, adding that five has no plan to change its current sponsorship arrangements.

"It will find its level and we will always try to make it work for the client but also for five."

Ofcom also believes that the viewer will be the ultimate arbiter. "It is self-regulating," the regulator's head of standards, Chris Banatvala, says.

"Audiences will not accept incredibly long credits."

Contrary to earlier media reports, ITV will not be pushing new credits times to the maximum - so don't expect a commercial-length Cadbury's credit before Corrie just yet.

"I won't be doubling time lengths but I will be reviewing them," ITV's head of sponsorship and branded content, Gary Knight, says. He has been responsible for sponsorship deals including First Choice's tie-in with I'm a Celebrity ... Get Me Out of Here!, Tio Pepe's link-up with Hell's Kitchen, with The Bill and Cobra beer with ITV movies. Knight's review will affect sponsorship deals for 2006, which are due to be thrashed out in September.

While the changes for sponsorship credits are widely welcomed, there is one potential sticking-point. How will broadcasters find the time to accommodate them? "There is only a limited amount of time you've got, with break junctures and programme running- times," Knight says.

One option, which is likely to upset independent producers, could be to shave time off programming.

Ofcom's decision to drop the link between the sponsor and the programme has provoked even more questions. "Sponsorship is in itself about the association with the programme," White says. "Sponsors do want to have a connection with the values of the show."

Although the requirement for a particular connection has gone, Ofcom has allowed a more obvious one.

Betting and gaming companies are now permitted to sponsor sports and game shows. "There is a massive number of online betting companies that can now access the market," Epstein says. One of the first to take advantage may well be the betting business Tote, which will be backing Channel 4's horse-racing from next year.

Sponsors and their products can also be mentioned in programmes, but only if the mention is editorially justified and "incidental". "This allows sponsors to get closer to content than ever before, but it's not brand intrusion and it doesn't smack of commercialism," Holdom says.

The theory may be good but the practice isn't yet clear enough for White.

"Does this mean we can give away prizes from the sponsor in Fifth Gear or The Gadget Show?" he says. "Can you say in a drama 'I had a Coke last night?' When is a message not an advertising message?"

Broadcasters are not the only ones to have questions. Agencies would like to see more guidance from the channels. "We've had no information as to how they are going to interpret and implement the changes," Epstein says. "There's more that is missing than is actually there." While the broadcasters are still making up their minds, Ofcom is planning to update its guidance on the new codes to help clarify the regulations.

However, all of this is a prelude to far bigger changes for sponsorship.

While Ofcom reconsiders its ban on product placement later this year, the European Commission is due to overhaul the Television Without Frontiers Directive next year. "The new OfCom rules are not going to make a huge difference but they have done away with unnecessary restrictions," Giles Crown, a partner at Lewis Silkin solicitors, says. "This reduces the rules to the fundamentals but the real step-change will happen when the TWFD changes."

For the time being, Epstein believes the new emphasis on sponsorship can only be a good thing.

"It is becoming the launch platform for other activities, such as licensing and off-air events," she says. "Sponsorship is a lynchpin between different departments at a channel and there will potentially be more through-the-line deals."

ITV is also happy with the recent changes. "The balance is about right," Knight says, dismissing the idea that any but the smaller, niche channels would opt for complete sponsorship. "If Ofcom had gone any further, it would just all be advertising, and sponsorship would be redundant."

It might only account for around 4 per cent of ITV's advertising revenue but Knight believes it's a medium worth keeping: "It's the gatekeeper for life beyond the spot."