The regulatory landscape in the early 1980s was different than it is today. It was based largely on a public-interest standard set by the Communications Act to reflect a scarcity theory: Since there were a finite number of broadcast frequencies available on the spectrum, the number of voices that could be granted access to the media was limited, and subject to stringent controls “in the public interest.” Stations licensed by the Federal Communications Commission (FCC) enjoyed a public trust; operators were trustees with a duty to serve the public interest.
During this period, discussions between the FCC and the industry took the form of informal “jawbone” sessions, and regulation was often little more than a raised eyebrow. The National Association of Broadcasters (NAB)—essentially a membership organization for the four major television networks of the era—had evolved into a powerful industry lobby. It issued guidelines covering advertising and program content, and detailed quantitative standards concerning the maximum amount of broadcast time that could be devoted to advertising in a given hour.
In issuing and renewing broadcast licenses, the FCC made it known that it would pay close attention to the station’s adherence to NAB guidelines such as advertising-to-programming ratios to determine whether the station was acting as a trustee in the public interest. The FCC articulated the trusteeship theory explicitly in 1960, and discussed the problem of overcommercialization in its 1964 Report and Order in re Commercial Advertising.
By the early ’80s, NAB’s Codes of Good Practice for Television Broadcasters limited network-affiliated stations to nine minutes of commercials per hour of primetime programming and 16 minutes per hour at all other times; independent stations were allowed to slate more advertising. The code also placed additional limits on the amounts of advertising permitted during children’s programs, and limited the number of times a network-affiliated station could interrupt primetime programs to four times per hour, with each break limited to a maximum of five announcements.
Finally, the Code prohibited advertising two or more products or services in a single commercial if that commercial was less than 60 seconds in duration. None of these standards was issued by the government, however; all were issued by a private organization—NAB—in a stated attempt to flesh out general standards suggested by the FCC.
This model changed dramatically in the 1980s. The Department of Justice’s Antitrust Division harbored a strong mistrust of any agreement among competitors it saw as limiting economic output. In its view, the effect and perhaps the purpose of limitations on the advertising time made available by stations was to raise the cost of television advertising above what it would be in a competitive market. The DOJ sued NAB in federal court under the Sherman Antitrust Act to prevent NAB from enforcing its codes.
The court agreed with the DOJ, and issued a preliminary injunction enjoining the enforcement of time limitations. Later that year, NAB agreed to a consent decree preventing it from enforcing its broadcast codes, including its limitations on the amount of advertising that could be shown in a given hour, and the requirement that two different products could not be advertised in a single spot. The FCC could have issued a rule imposing the same time limits, but never did, and so the time limits were dead in November 1982.
It took time for advertisers and stations to realize that the elimination of these limits made what we call a long-form ad possible. But by the late 1980s, infomercials had become a regular feature of the television advertising scene.
Photo by Stoonn/FreeDigitalPhotos.net
Ed Glynn is former chairman of ERA’s Government Affairs Committee and a partner at Locke Lorde Edwards.
The above post was adapted from a feature article, "Where Did Infomercials Come From," published in the July-August 2015 issue of ER magazine.