Ofcom launches consultation over TV ad airtime sales

Ofcom has launched its consultation over changes to existing regulations that require ITV1, Channel 4 and Five to sell all their advertising airtime, even if it means slashing prices.

The consultation, running until 7 June, will also consider the restrictions covering the way in which all broadcasters sell bundles of advertising airtime across their portfolios of channels.

The rules were last reviewed in 2003 and designed to ensure “fair and effective competition” in the sale of TV advertising airtime.

The television regulator now believes that these rules may no longer be appropriate as a result of significant developments in the television sector, including the explosion in the number of digital channels and increasingly fragmented TV audiences.

Changing the “must sell” rule will bring the commercial PSB channels into line with other UK commercial broadcasters.

Ofcom also says that concerns over conditional selling, a specific type of bundling of channels for ad sales, may no longer apply. It suggests that any anti-competitive effects from bundling, should they arise, would be best dealt with on a case-by-case basis.

Ed Richards, Ofcom’s chief executive, says: “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.”

Final rulings on the Competition Commission’s proposed changes to the Contract Rights Renewal system placed on ITV are expected in April. Both the main political parties have signalled that they may intervene to alter the regulations in ITV’s favour.

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