Cross-promotion Code

Introduction

1.1: Subject to this Cross-promotion Code(“the Code”), television broadcasters are able to promote programmes, channels and other broadcasting-related services without such promotions being considered advertising and included in the calculation of advertising minutage.

1.2: The amount of advertising that may be broadcast on a television channel is restricted by the Code on the scheduling of television advertising (“COSTA”). COSTA imposes a maximum on the amount of advertising that can be shown in a given hour and over any one day. For the purposes of COSTA, the term ‘advertising’ is used to refer to any form of promotional announcement broadcast in return for payment or similar consideration.

1.3: The Code replaces the rules regulating the promotion of programmes, channels and related services on commercial television issued by the ITC in January 2002 and takes effect from 10 July 2006.

1.4: The Code applies to television services regulated by Ofcom. However, it does not apply to BBC services funded by the licence fee. Cross-promotions on such services are subject to Clause 63 of the BBC Agreement.
All references to ‘licensees’ should be interpreted accordingly.

1.5: The Code applies to promotions outside programmes only.

1.6: Within programmes, references to all products and services, including broadcasting-related services, are subject to the rules in Broadcasting Code, Section nine: Commercial References in Television Programming.

1.7: The Ofcom Code applies in the usual way to the content of promotions outside programmes, unless otherwise stated in the guidance on Section Nine of the Broadcasting Code.

Legislative background to the Code

2.1: Under Ofcom’s powers to issue broadcasting licences under the Broadcasting Acts 1990 and 1996, broadcasting licences may contain such conditions as Ofcom considers appropriate having regard to the duties imposed on Ofcom under the Broadcasting Acts and Communications Act 2003. Under the Communications Act 2003 Ofcom also has the power to approve codes for the purposes of a provision contained in a licence.

2.2: Under section 316 of the Communications Act 2003 Ofcom has the power to include conditions which Ofcom considers appropriate for ensuring fair and effective competition. All television broadcasting licences currently contain a fair and effective competition licence condition. This condition requires licensees to comply with any code or guidance approved by Ofcom for the purpose of ensuring fair and effective competition.

2.3: Section 319 of the Communications Act 2003 imposes a duty on Ofcom to set standards to secure, amongst other things, that the international obligations of the United Kingdom with respect to advertising in television services are complied with. Ofcom must also set standards to secure that the requirements with respect to advertising contained in the European Convention on Transfrontier Television T-TT(2000)008 and any EU Directives, as they had effect immediately prior to the end of the transition period, are met. This includes the requirements contained in the Audiovisual Media Services Directive (Directive 2010/13/EU) as it had effect immediately before the end of the transition period.

2.4: Broadcasters should bear in mind the legislative background that has informed the rules, the principles that apply to each section, the meanings given by Ofcom and the guidance issued by Ofcom, in this Code,the Broadcasting Code all of which may be relevant in interpreting and applying the Code.

Principles

3.1: There are two key principles which the Rules contained in Section 4 of the Code are designed to reflect:

1. ensuring that cross-promotions on television are distinct from advertising and inform viewers of services that are likely to be of interest to them as viewers; and
2. ensuring that promotions on television outside programmes do not prejudice fair and effective competition.

Rules

Broadcasting-related services

4.1: All licensees and S4C shall ensure that Cross-promotions are limited to Broadcasting-related Services.

Guidance

5.1: This guidance is non-binding and will be reviewed from time to time to reflect Ofcom’s experiences with individual cases. It is provided to assist licensees in interpreting and applying the Code. Every complaint or case will be dealt with on a case by case basis according to the individual facts of the case.

Broadcasting-related services

5.2: Ofcom does not wish to be prescriptive in defining the term ‘Broadcasting-related Services’. Depending on the individual facts, it may include a service whereby audiovisual content is delivered over a mobile or broadband platform, and video-on-demand. It is distinct from ‘programme-related material’, which is defined in Section Nine of the Broadcasting Code.

Cross-promotion relationships

5.3: Certain relationships between broadcasters (which are based on shareholdings or voting power) create a rebuttable presumption that there are sufficient incentives for the promoting channel to provide another channel or broadcasting-related service with free airtime without the need for additional consideration. In these specific circumstances Ofcom would not, in the absence of evidence to the contrary, consider these Cross-promotions to be advertising. However, if Ofcom believes that payment or some other consideration has passed or is passing between the parties, these types of arrangements could be investigated under the advertising minutage rules and may be counted as advertising minutage.

5.4: The relevant relationships that create this presumption of sufficient incentives are as follows:

1. the Licence Holder for the promoting channel has a shareholding of 30% or more (or voting power of 30% or more) in the Licence Holder for the promoted channel;
2. the Licence Holder for the promoted channel has a shareholding of 30% or more (or voting power of 30% or more) in the Licence Holder for the promoting channel; or2
3. the Actual Licence Holder for the promoted channel and promoting channel are the same.

5.5: For the purposes the relevant relationships outlined in paragraph 5.4:

‘Actual Licence Holder’ means: the legal entity or company which holds the broadcasting licence granted by Ofcom pursuant to the Broadcasting Act 1990 (as amended by the Broadcasting Act 1996 and the Communications Act 2003); and

‘Licence holder’ means: the Actual Licence Holder or any legal entity or company which has a 30% or more shareholding (or 30% or more voting power) in the Actual Licence Holder.

5.6: If there is less than a 30% shareholding (or less than 30% voting power), there may be insufficient incentives for a broadcaster to provide another channel or service with free airtime and broadcasters will need to demonstrate that no consideration has passed between the parties and that Cross-promotion is justified on the basis of other incentives.

5.7: In the case of Cross-promotions between Channel 3 licence holders, there will be a rebuttable presumption that no consideration has passed.

5.8: These presumptions do not apply to public service announcements, charity appeals broadcast free of charge, announcements required by Ofcom and information to viewers broadcast in accordance with an Ofcom requirement, which are already excluded from paid for advertising by COSTA.

General guidance on the Cross-promotion Code

6.1: It is the responsibility of the broadcaster to comply with the Cross-promotion Code

6.2: Ofcom can offer general guidance on the interpretation of the Cross-promotion Code However, any such advice is given on the strict understanding that it will not affect Ofcom’s discretion to judge cases and complaints after transmission and will not affect the exercise of Ofcom’s regulatory responsibilities. Broadcasters should seek their own legal advice on any compliance issues arising. Ofcom will not be liable for any loss or damage arising from reliance on informal guidance.