Customers Matter as UK TV company hit with record fine.
September 26, 2007 - The UK’s commercial television sector learnt an important lesson today as Ofcom (UK communications regulator) fined GMTV an industry record $4 Million (£2M). This follows a spate of simular problems in the UK broadcasting sector.
Accused of “Gross Negligence”, GMTV (co-owned by ITV and The Walt Disney Company) were found guilty of keeping premium rate competition lines open even though winners had been selected, deceiving viewers (who paid an average of $4 per call whilst generating extra revenues.
The fine represents big business for GMTV and it’s parent companies as significant portions of revenues are now obtained from such competitions. Cumalitive losses by competition entrants were estimated at upto $20m a year, and as up to half of all callers had no chance of winning.
Whilst GMTV has begun a refund program, industry insiders state that GMTV had failed to treat competition entrants as customers.
With advertising companies traditionally treated as customers with viewers targeted as currency – the shift of viewers to customers had caught the organization without effective processes to ensure customer care. GMTV has admitted to “serious operational errors”, overhauled its systems, and terminated its contract with Opera, the company that ran the competitions.
With the importance of “phone-in” competitions to commercial broadcasters bottom line it’s likely that phone in competitions will return, however in a statement GMTV stated that it would not do so until compliance procedures were in place.
