Ofcom: let ITV and C4 run more ads to compete with streaming giants

Ofcom: let ITV and C4 run more ads to compete with streaming giants

Public-service broadcasters should no longer be subject to stricter advertising rules than other TV channels, Ofcom has concluded, as it begins a consultation into letting them increase advertising output to better compete with global streaming platforms.

Ofcom has launched a consultation into whether to remove some, or all, of the stricter 30-year-old advertising rules that apply to commercially-funded public service broadcasters.

“Audiences are moving away from primarily watching television on linear broadcast channels, and now enjoy a wide range of advertising-supported and subscription services over broadcast and online,” Ofcom said in its consultation proposal today. 

It went on: “Allowing the PSB channels slightly greater flexibility in the scheduling of advertising may strengthen their commercial position as they continue to manage their transition to digital-led organisations, and would afford them greater opportunity to monetise their content.”

The UK’s broadcasting regulator is considering softening rules introduced in 1991 by Ofcom’s predessor the Independent Television Commission, which saw ITV, STV, Channel 4, S4C and Channel 5 subject to tighter advertising restrictions than non-PSB commercial channels.

“Following a call for evidence last year, we have provisionally concluded that stricter advertising restrictions on PSB channels are no longer justified or proportionate,” Ofcom said in a statement today.

Coba, the industry body for multichannel TV broadcasters, warned that letting PSBs increase advertising volume by up to 850 hours per year was not wanted by viewers and accused Ofcom of lacking evidence to justify the move.

Adam Minns, Coba’s executive director, said: “It is hard not to draw the conclusion that Ofcom has asked audiences for their views and then, when it did not like the answer, gone out of its way to try to persuade them they are wrong. To do this, the regulator has used an argument that no financial analysis — including its own — supports. It is deeply concerning that a regulator that has always prided itself on being evidence-led has come to this conclusion.”

What would change?

Ofcom is now consulting on two options: make the rules between PSB and non-PSB channels the same; or (its preferred option) make them the same, except for the number of internal breaks permitted in programmes for each. Making “no changes” is also a possibility, the regulator added.

The current stricter rules for PSB channels mean that advertising on those channels must not exceed an average of seven minutes per hour, or an average of eight minutes per hour between 6pm and 11pm (evening peaktime). PSB channels can show up to or close to the absolute maximum of 12 minutes of advertising in one or more of the hours within that time period, as the overall total during that period does not exceed 40 minutes.

If the rule changes go through, PSB channels, like non-PSB channels currently, would be permitted to show no more than an average of 12 minutes of advertising and teleshopping spots for every hour of broadcasting, of which no more than nine minutes may be advertising.

In its audience research ahead of the consultation, Ofcom said most people had “limited awareness of the current differences in the amount and frequency of advertising shown on PSB versus non-PSB channels”. However, it also found that an increase in the frequency of advertising breaks on the PSB channels may be more of a concern for audiences.

Audiences will also tolerate more ads on PSB channels if, Ofcom’s research found, the broadcasters reinvest additional ad revenue into content. “Audiences’ willingness to accept more advertising on PSB channels also grew when they recognised that it might not be as disruptive to their viewing experience as they had initially feared,” Ofcom added.

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