Ad blocking could pose threat to existence of creative companies, says UK culture secretary

In a speech at the Oxford Media Convention 2016, John Whittingdale said that ad blocking could present as big a risk to companies in the film and music industries as online copyright infringement once posed.

He said advertising revenue is "an essential part" of the business models relied upon by almost every producer of content.

"Commercial TV, radio, newspaper websites, streaming services, search engines, and many games and apps all rely on advertising," Whittingdale said. "In some cases, they also receive subscription payments from a small minority who are willing to pay to avoid advertisements. The newspaper, music, film and games industry are all having to adapt to a world in which consumers are no longer as willing to pay as their parents were. In almost every case, advertising revenue now plays an essential part in their new business models."

"And so I completely understand the concern that a lot of people have expressed to me about the expansion of ad-blockers. Ten years ago, the music and film industries faced a threat to their very existence from online copyright infringement by illegal file-sharing or pirate sites. Today, ad-blocking potentially poses a similar threat," he said.

Whittingdale said that he was concerned that content and services consumers currently can access for free might disappear because of the move by mobile phone companies and internet service providers to facilitate ad blocking. Mobile network Three recently confirmed that it plans to offer ad blocking software to its customers later this year.

He also described ad-blocking companies that have taken steps to define "acceptable advertising" or that are "offering to white list providers in return for payment" as acting in a manner "akin to a modern day protection racket".

"This practice is depriving many websites and platforms of legitimate revenue," Whittingdale said. "It is having an impact across the value chain, and it presents a challenge that has to be overcome. Because – quite simply – if people don’t pay in some way for content, then that content will eventually no longer exist."

Whittingdale said, though, that advertisers need to "be smarter" to make internet browsing less disrupted by adverts. He referenced pop-up ads and auto-play video and audio adverts as the types of ads that consumers find "intrusive" and dislike.

The culture secretary said that he plans to host a meeting with "representatives from all sides of the argument" in the coming weeks to discuss the concern that ad blocking has raised. He said the meeting would help the government to decide "what role there is for government".

"I am not suggesting that we should ban ad-blockers but I do share the concern about their impact," Whittingdale said. "My natural political instinct is that self-regulation and co-operation is the key to resolving these challenges, and I know the digital sector prides itself on doing just that. But government stands ready to help in any way we can - as long as this does not erode consumer choice."