Ofcom launches consultation on TV advertising rules

Ofcom has launched a consultation on television advertising rules governing whether public service broadcasters (PSBs) must sell all of their available advertising airtime.

The consultation is on the possible removal of the Airtime Sales Rules – two rules referred to as the ‘withholding rule’ and the ‘conditional selling rule’.

The withholding rule means all of the airtime available on the commercial analogue channels – ITV1, C4 and Five – must be sold.

The conditional selling rule applies to all broadcasters, banning them from forcing media buyers – who want to buy airtime on one channel – to purchase airtime on additional channels.

Ofcom said it is assessing the rules, which were last updated in 2003, because of key changes such as the increase in digital channels, which has given buyers more opportunities to secure advertising from non-PSBs.

“We believe there are limited incentives for withholding airtime, given evidence that, in the short run, it is unlikely to be a profitable strategy for C4 or Five and it would provide very little uplift for ITV1’s revenues. Moreover, we believe the way TV advertising is traded incentivises broadcasters to sell all their airtime in the long run,” said Ofcom.

It added that it is more appropriate to treat conditional selling on a case by case basis, rather than through an industry-wide rule.

“Removing unnecessary regulation is important to enable sectors to develop and to give players more flexibility to run their businesses. This may then have positive impacts on innovation or investment,” said Ofcom.

The consultation closes on 7 June 2010.