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Industry Trends

New Ofcom Ad Rules May Drive Viewers To The Internet

By March 25, 2008July 30th, 20235 Comments

UK electronic media watch dog Ofcom has new proposals, which if sanctioned will result in commercial breaks on television getting longer and more frequent. This could turn out to be beneficial for broadcasters, or it could fuel viewer abandonment of television in favour of the Internet.

These proposals have not yet been finalised, but The Register reports that they are in line with EU Audiovisual Directives issued last year.

Current rules allow channels like ITV1, GMTV, Channel 4 and Five only 7 minutes of advertising per hour, with only one break in a show of half an hour, and two breaks during a show of one hour duration with a minimum interval of 20 minutes between two consecutive ad breaks.

The new guidelines proposed will allow channels to include 2 ad breaks during a half hour program. Also, the mandatory 20 minute interval between breaks will be abolished to allow the break to be inserted at a convenient point during the program. An ad break will be allowed every 30 minutes, instead of the current 45 minute interval while broadcasting movies.

The statement released by Ofcom implies that while viewers opinions and concerns are important and will be welcomed, they are bound to take into account the revenue generated by advertising in order to pay for the choice of television services viewers are able to enjoy.

Commercial broadcasters are very much in favor of these changes as TV advertising revenues have been falling in proportion to the increase in number of users of the Web. Paradoxically, however, it is very likely that longer and more frequent ad breaks on TV may drive more viewers to the Web, eventually leaving them with even fewer viewers.

If things work out well, broadcasters and large companies as well as small and medium businesseses will benefit from the new laws. The increased advertising opportunities would allow brands additional opportunities to reach viewers, also earning the broadcasters additional revenue. Some viewers, though, might abandon TV for the Internet. SME advertisers could then reach these consumers through online ads that are typically cheaper than TV.

However, if viewers respond badly to too many ads, both the brand owners and broadcasters could incur heavy losses as viewers look upon the ads and their associated products negatively.
Ofcom will take a final decision on these regulations and implement them by 1st January 2009.