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Broadcasting Code Review: Commercial Communications in Radio Programming

Statement on revising the Broadcasting Code

Executive Summary

Ofcom has introduced a new Broadcasting Code Section Ten (Radio) (-1-) on commercial communications (-2-) (i.e. paid-for references to products or services) in radio programming ("Section Ten (Radio)"). This Code Section is implemented with immediate effect.

Ofcom has revised the Broadcasting Code to ensure that it remains fit for purpose and provides consistency with wider public policy concerning product placement on television. The new Section Ten (Radio) also ensures appropriate consumer protection, through transparency of all broadcast commercial arrangements, and offers opportunities for the radio industry to generate new revenue.

The new rules permit the integration of commercial communications in programming, with the exception of spot advertisements which must be separated. The rules include prohibitions on commercial arrangements in relation to key areas of programming: news broadcasts, children's programming and the selection and rotation of music for broadcast.

NOTE: On 28 February 2011 a new Code Section Nine on Commercial References in Television Programming will be implemented. Until then, Section Nine (Television) on Sponsorship, and Section Ten (Television) on Commercial References and Other Matters, will apply to television and will sit alongside Section Ten (Radio) in the Broadcasting Code. For further information please see Ofcom's Statement on Commercial References in Television Programming (-3-).

Introduction

1.1 This document is the final regulatory statement on changes to the Ofcom Broadcasting Code ("the Code") rules on commercial communications in radio programming.

1.2 It follows two consultations on the rules in this area: the 2009 Broadcasting Code Review consultation (15 June to 4 September 2009) (-4-) and the 2010 Commercial Communications in Radio Programming consultation (28 June to 17 September 2010) (-5-). This regulatory statement should be read in conjunction with these consultation documents.

1.3 The rules resulting from the consultations can be found in the new Section Ten (Radio) of the Code (and are summarised in paragraph 1.13 below). For ease of reference, the new Section Ten (Radio) is also set out in Annex 1 of this document.

Background

1.4 As part of its duties and functions under the Communications Act 2003 ("the Act"), Ofcom is required to draw up and, from time to time, revise a code for television and radio services, covering standards in television and radio programmes. The Code first came into effect in July 2005.

1.5 Ofcom made a commitment in the 2008/9 Annual Plan to develop the Code, in order to ensure that it remains fit for purpose. As part of this process, the 2010 Broadcasting Code Review consultation was launched on 28 June 2010. It sought to ensure that the Code would take appropriate account of:

  • changes and developments in the wider regulatory and public policy environment, and
  • the needs and wants of listeners, and the requirements of appropriate consumer protection.

Consultation proposals

1.6 The 2010 consultation paper identified four options concerning the future regulation of commercial communications on radio on which stakeholders were invited to provide responses. A separate consultation explored commercial references in television programming (-6-). The four options for radio were as follows:

  • Option A
    Do nothing' option that maintains the principle of separation (-7-)
    This is a status quo' option and would maintain the comprehensive rules which have required, to date, all commercial communications, other than sponsorship credits, to be separated from programming. The principles of transparency, separation and editorial independence underpin Option A.
  • Option B
    Maintains principle of separation but provide defined set of exemptions
    This option would also be framed as a comprehensive set of rules. It would maintain the requirement for commercial communications to be separated from programming, but would provide a defined set of exemptions. The principles of transparency, separation and editorial independence underpin Option B.
  • Option C
    Allows the integration of commercial communications and programming (except in relation to spot ads)
    This option would remove the principle of separation between commercial communications and programming except in relation to spot ads (which would need to remain distinguishable from programming). This would give radio stations wide discretion to integrate, for example, paid-for, promotional commercial references into programming provided these were transparent to listeners. This option would retain the value of spot ads as a distinct type of content and a distinct revenue source. It would be delivered as a slim set of rules designed to secure one principle: transparency of commercial arrangements. Such transparency would be central to ensuring consumer protection.
  • Option D
    Allows the integration of commercial communications and programming (including in relation to spot ads)
    This option would remove the principle of separation between commercial communications (including spot ads) and programming. This would give radio stations complete discretion to integrate seamlessly commercial elements into programming and would no longer distinguish between traditional spot ads and other commercial communications. As for Option C above it would be delivered as a slim set of rules designed to secure a principle of transparency of commercial arrangements in order to ensure consumer protection.

Stakeholder responses

1.7 Ofcom received 21 responses to its proposals concerning the regulation of commercial communications in radio programming.

1.8 The responses from those individuals and organisations who did not request confidentiality have been published on Ofcom's website (-8-). They were from: the Advertising Association; Bauer Media; British Heart Foundation; Campaign for Press & Broadcasting Freedom; Carat Limited; Central Office of Information; Children's Food Campaign; Children's Radio UK Ltd; European Sponsorship Association; Global Radio; GMG Radio Holdings; The Institute of Practitioners in Advertising; RadioCentre and the Radio Advertising Clearance Centre; Shetland Islands Broadcasting Co Ltd; UKRD Group Ltd; UTV Media (GB); UK Music; and the Voice of the Listener and Viewer.

1.9 Responses have been summarised in relation to each of Options A to D, in Parts Three to Six below. Broadly, implementation of Option C received most support from stakeholders.

Overview of Ofcom's decision

1.10 In light of the responses received and considerations discussed in Parts 3 to 6 of this statement, including in relation to impact and Ofcom's statutory duties, we have decided to implement Option C, subject to prohibitions in key areas (news broadcasts, children's programming and the selection and rotation of music for broadcast).

1.11 The rules in the new Code Section Ten (Radio) are set out in Annex 1 and discussed in Parts 5 and 7 of this document. The rules support the principle of transparency in order to secure consumer protection.

1.12 In our view, the new Code Section Ten (Radio):

  • updates the regulatory framework for radio, so that it is consistent with wider public policy on product placement on television, and reflects listener attitudes identified in Ofcom's 2009 consumer research on commercial radio (-9-);
  • maintains appropriate consumer protection by providing transparency of all commercial arrangements in relation to broadcast material; and
  • at the same time, we are aware that it also offers opportunities for the radio industry to generate new revenue which, in turn, may finance relevant and entertaining programming for listeners.

1.13 The following is a summary of the requirements of the new Code Section Ten (Radio):

Code Section Ten (Radio) on commercial communications in radio programming requires:

  • appropriate signalling of commercial arrangements affecting programming, so as to ensure that the commercial arrangement is transparent to listeners (Rule 10.1);
  • clear separation of spot advertisements and programming (Rule 10.2);
  • prohibitions of commercial arrangements in relation to:
  • commercial references in and around news broadcasts (Rule 10.3);
  • integrated commercial references within children's programming (Rule 10.4); and,
  • the selection and rotation of music (Rule 10.5);
  • the application of the BCAP Code to commercial references in programming (Rules 10.6 to 10.8); and
  • the retention of rules concerning:
  • premium rate services (Rules 10.9 and 10.10);
  • charity appeals (Rule 10.11);
  • appeals for funds for programming or services (Rule 10.12); and
  • financial promotions and investment recommendations (Rule 10.13)

1.14 Ofcom proposes to keep a watching brief on the implementation of the new rule set and, within two years, we will decide whether to consult on any further rule changes. As discussed in Part 5 of this document, the criteria that would determine whether such a review of the rules was required could include the following:

  • developments in public policy related to the issue of additional constraints or prohibitions in broadcasting and advertising;
  • developments in radio output (if any) that raise concerns over consumer protection (in particular, child audiences); and
  • complaints and/or issues raised by stakeholders.

1.15 Consideration may be given, as part of this process, to a possible move towards the removal of the separation requirement for spot advertisements (Option D, discussed in Part 6 of this statement). Consideration may also be given to the appropriateness and effectiveness of the rule set, in relation to potentially harmful products or services, news broadcasts, children's programming and the selection and rotation of music for broadcast.

New Section Ten (Radio) of the Broadcasting Code and Guidance

1.16 The new Code Section Ten (Radio) (-10-) applies to all material broadcast on or after 20 December 2010 and is set out at Annex 1.

1.17 We have updated and revised associated guidance (-11-), which can be found at Annex 2.

Footnotes:

  1. http://stakeholders.ofcom.org.uk/broadcasting/broadcast-codes/broadcast-code/

  2. For a glossary of the meanings and terms used throughout this document, see Annex 3

  3. http://stakeholders.ofcom.org.uk/consultations/bcrtv2010/statement/

  4. 2009 Code Review consultation: http://stakeholders.ofcom.org.uk/consultations/bcode09/

  5. 2010 Code Review consultation: http://stakeholders.ofcom.org.uk/consultations/bcrradio2010/

  6. http://stakeholders.ofcom.org.uk/consultations/bcrtv2010/

  7. Separation (on radio): to date, the integration of commercial communications into the editorial content of programming has not been permitted. Instead, they were required to be kept separate from programming. In particular, spot advertisements appeared (and will continue to appear) in commercial breaks and, sponsorship credits appeared at the beginning and/or end of the relevant programming.

  8. http://stakeholders.ofcom.org.uk/consultations/bcrradio2010/?showResponses=true

  9. http://stakeholders.ofcom.org.uk/binaries/consultations/bcode09/annexes/radioresearch.pdf

  10. http://stakeholders.ofcom.org.uk/broadcasting/broadcast-codes/broadcast-code/

  11. http://stakeholders.ofcom.org.uk/broadcasting/guidance/programme-guidance/bguidance/

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