Networks must limit ad airtime or face fines

MANILA, Philippines - Television networks face stiff fines in case they fail to comply with an industry-wide prescription on TV ad length that could hurt earnings while improving the public’s viewing experience by preventing commercial overload. The rule, imposed by the Kapisanan ng mga Brodkaster ng Pilipinas (KBP) last month, limits the commercials that members can air to 18 minutes per hour. Noncompliant members will be fined an amount equivalent to 125% of the profits they get from the extra airtime, KBP legal counsel Rudolph E. Jularbal said in an interview last week. The KBP insists limiting ads to 18 minutes every hour is a form of self-regulation, taking into account that broadcasting is a form of public service and is not a pure moneymaking business. KBP members generally agree that while the restriction could hurt their earnings, advertisers would see it as a more efficient way of getting their message across since there is less clutter. On March 11, KBP President Maloli K. Espinosa issued a circular limiting the commercials that TV networks can air to 18 minutes per hour following complaints of commercial flooding during prime time, when most viewers are tuned in. Networks cash in on popular programs — soap operas at night and rare, live boxing matches abroad shown on a Sunday and featuring local boxers — by showing excessive commercials. But GMA Network, Inc. said the ad airtime limit is anti-competitive, disruptive and would lead to higher TV ad costs. "A limitation on... commercial airtime will push prices upwards. [The] time standard disrupts market forces that dictate supply and demand and is anti-competition," GMA said in a statement. GMA is not a KBP member and does not have to follow the standard. It left KBP in 2003 due to disagreements on issues such as advertising overload. Ramon R. Osorio, corporate communications chief of rival and KBP member ABS-CBN Broadcasting Corp., said the Lopez firm is complying with the rule even if revenues might suffer initially. "In the long-term, advertisers are going to like it because there will be less clutter and more opportunities for their message to be effectively communicated in public," he said in an interview. Mr. Jularbal said the 18-minute ad limit per hour does not restrain trade. "Otherwise KBP members would not have consented... The management of the programming remains with the station and not with us," he pointed out. "The overloading of commercials in programs affect the public that we serve. Broadcasting is in view of public interest and not pure money-making," he added. The KBP thinks the ad restriction will improve the public’s viewing experience by sparing people lengthy commercial breaks. "The decision to resume enforcement of the 18-minute rule has been under consideration for some time now as a result of complaints received from the public on excessive loading of commercials in TV programs," Ms. Espinosa said in the circular. The rule, she added, is part of the KBP’s code of conduct that seeks to promote free, independent and responsible media through a system of self-regulation. - BusinessWorld