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Last Updated: Tuesday, 24 April 2007, 09:43 GMT 10:43 UK
Q&A: Premium rate phone lines
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Television companies have been caught up in a row over their use of premium rate phone lines that has centred on some of the highest-rating programmes.

So what exactly has been going on, which shows have been embroiled and who has been pocketing consumers' cash?


What does "premium rate" mean?

According to industry watchdog Icstis, it's when you pay for information or entertainment over and above the rate of a normal phone call on a designated dialling code.

In the UK, premium rate numbers usually start with an 09 dialling code, and have been used for services as varied as television shows, quiz programmes, pornographic phone lines and downloadable ringtones for a mobile phone.

And it's not just phone calls. Users can access premium charge services by texting from their mobile phones or pushing the red button on their TV remote, or via the internet.

The key part of premium service is the fact that it is charged to a user's phone bill.

Are they big business?

It's not small potatoes, and it's a growing business.

ITV had revenues of more than 100m in 2006 from premium rate phone lines and interactive programmes, such as quizzes.

Five said that it earns about 10m a year from similar products.

At present, you can be charged in two different ways - by the minute, or a one-off connection charge. The maximum charge per minute is 1.50, while the top one-off charge is 1.50, and you can stay on the line as long as you like.

How is the cash split?

It varies greatly, depending on the type of programme and the companies that are involved.

Industry insiders give a rough split of earnings along these lines:

  • The broadcaster takes a 30% cut
  • The phone service provider gets about 10%
  • The production company's costs are about 15%
  • The production company gets about 10% as profit
  • Prize money is about 15%
  • The rest of the money is usually tax

So why the fuss all of a sudden?

A number of broadcasters, the BBC included, have revealed problems with the way their premium rate phone lines have been run.

For example, Channel 4 said that callers to the Richard & Judy show were told a competition was still open when a winner had already been picked.

ITV revealed that people who voted in The X Factor talent show were overcharged to the tune of 200,000.

Five temporarily suspended all quiz shows after finding that fictional winners were created for its Brainteaser show.

The BBC, meanwhile, asked callers to ring in to a live programme of Saturday Kitchen, despite the fact that it was a recorded show, while on Blue Peter, a child who was visiting the studio was asked to step in as a "winner" when technical difficulties hit another phone-in competition.

And GMTV promised to reimburse viewers who were found to have entered phone quizzes but had no chance of winning. This followed claims that shortlists of potential prize winners were drawn up before telephone lines had closed.

Whose fault is it then?

It's not easy to point a finger of blame, and regulators are keen to stress that they are still probing the problems and don't want to put the boot in just yet.

At the same time, the way contracts are structured also makes it tricky to single out one party, analysts said.

Usually, there are three players in the TV premium rate business - the phone provider, the production company and the broadcaster.

The phone company provides the 09 number and the infrastructure that allows the competitions and call-ins to be run. Some of the biggest firms are Eckoh and iTouch.

A production company, such as Cactus, Endemol or Fremantle, makes the TV shows that use and promote the phone service, while the broadcaster, be it the BBC, ITV, Channel 4 or Five, transmits the programmes.

All of the three are responsible for ensuring that consumers are not ripped off. However, this sometimes proves difficult to enforce.

So who's keeping an eye on it all?

Icstis runs a rule over the companies that provide the premium rate services and has a pretty big stick with which to keep them in line.

If it upholds complaints that consumers have been ripped off, it can fine a firm up to 250,000 for each breach of its code of conduct. It can bar companies and individuals from operating within the industry.

It can also refer any instances of suspected illegality to the police.

The production companies are supposed to be aware of the rules, and also have to operate to a standard of practice that is laid down by the broadcaster, which itself has a number of internal checks and balances to protect viewers.

TV watchdog Ofcom will step in, should a company be found to have misled viewers.

Any plans for the future?

Yes. Icstis plans to introduce a licensing regime for the phone service providers that will make it easier and clearer to define which companies are responsible for ensuring that consumers entering competitions get fair treatment.

Other measures announced were a systematic monitoring of premium phone services and the publication of clear rules on competitions.

Icstis has also announced new rules which force quiz-based TV shows like Brainteaser to tell viewers their chances of getting through, and how much it will cost.

Under the rules, which come into effect on 2 May:

  • Viewers' "chances of acceptance or rejection" must be permanently shown and updated at no more than 10-minute intervals.
  • A presenter or voice-over must explain pricing information at least every 10 minutes.
  • Participants must receive warnings about costs for every 10 spent in a day.

The key is making sure that consumers know how much they are paying and for what service, and that they get a fair and equal chance of winning competitions and quizzes.

The broadcasters all said they would work with the regulators to ensure greater transparency and win back the trust of viewers.


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