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The Audiovisual Media Services (AVMS) Directive has liberalised EU law on product placement. It was incorporated into UK law on 19 December 2009. For the first time, EU Member States have been given the option to allow product placement in drama, sports and light entertainment programmes on television, subject to specific safeguards.
Initially, the UK Government was unreceptive to broadcasters’ pleas to take up the AVMS Directive option to permit product placement. This may well have been based on a desire to be seen to have viewers’ interests at heart following revelations of a series of premium rate services scams on all major public service television channels, which had undermined viewers’ trust in broadcasters. In September 2009, however, the Government had a change of heart and, in November 2009, it published its much-anticipated Consultation on Product Placement on Television.
Ben Bradshaw, the Culture Secretary, has acknowledged concerns that maintaining a blanket prohibition on product placement puts UK production companies "at a competitive disadvantage against international rivals, particularly from the US". He also acknowledges that most EU Member States have now decided that they will allow product placement and wishes “to ensure that UK broadcasters do not suffer through being overly strictly regulated".
The overarching message of the consultation paper is that, should product placement be allowed (as indeed it now looks that it will), it should not be at the cost of editorial integrity. Therefore the consultation document asks for views on whether additional safeguards should be put in place, over and above those set out in the AVMS Directive.
Background
The AVMS Directive replaces the Television Without Frontiers Directive, which was interpreted in the UK and most other EU Member States as prohibiting product placement in EU-made television programming. While requiring Member States to prohibit product placement, the AVMS Directive nonetheless allows them to derogate from that prohibition in order to permit product placement in any or all of the following programme genres: “cinematographic works, films and series made for audiovisual media services, sports programmes and light entertainment programmes”.
Although the UK may continue to prohibit product placement and must do so in relation to certain categories of programming such as children's programmes, it can now permit television product placement in some or all of the programme genres listed in the AVMS Directive, subject to specific safeguards. For example, programmes containing product placement must conform to the rules relating to editorial independence and undue prominence and may not directly encourage purchase or rental of goods or services. Viewers must also be informed of the presence of product placement at the start and end of the programme and after any advertising break. Member States are free to introduce further safeguards, if they so wish.
The current position in the UK is set out in the Ofcom Broadcasting Code, which contains the rules on including products and services in television programmes. The Code requires broadcasters to maintain independent editorial control over programmes and to ensure that the advertising and programme elements of a service are kept separate. It also requires that no undue prominence should be given in any programme to a product or service. The status quo under the Code is that product placement is prohibited. The Code defines product placement as: “the inclusion of, or a reference to, a product or service within a programme in return for payment or other valuable consideration to the programme maker or broadcaster (or a representative or associate of either)”.
Scope of the consultation
Any new product placement regime will relate exclusively to programmes made to be shown on UK television. The consultation paper does not cover product placement in video-on-demand (VOD) services, which the Government has already made clear will be permitted, subject to the safeguards set out in the AVMS Directive. The regulation of VOD services, including product placement within VOD services, is being dealt with separately. 1 In addition, the consultation does not cover product placement in films shown on UK television, or in television programmes acquired from outside the UK, both of which are already permitted.
The position on "prop placement" is unaffected. “Prop placement” involves the loan or provision of clothing, cars or other goods or services to broadcasters, including prizes in quizzes and competitions, at a reduced rate or free of charge. It is currently allowed in all television and VOD programmes subject to safeguards and a "significant value" threshold. Again, this regime will remain unchanged.
The BBC's constitution prevents it from accepting product placement in its services funded by the licence fee, and that will remain the case; however, the BBC's UK commercial services (which are operated through BBC Worldwide) will be subject to the same rules on product placement as other broadcasters.
Additional safeguards
Section 5 of the consultation paper sets out the safeguards that the Government suggests might, in addition to those contained in the AVMS Directive, be appropriate if a product placement regime were to be introduced.
- Genre definitions – The Government is inviting views on whether UK controls should be more specific than the AVMS Directive as to what is meant by the genres in which product placement can appear. For instance:
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(a) |
The phrase "films and series made for audiovisual media services" potentially covers an enormous variety of television programming, factual and non-factual. Examples given include "reality" strands such as Big Brother, serious documentary strands such as ITV's Tonight and Channel 4's Dispatches, fictional TV series, and entertainment-focused documentary strands "verging on reality TV" such as Ramsay's Kitchen Nightmares. The Government suggests that, with such a wide variety of TV-show concepts and formats, it is difficult to devise hard and fast rules about whether particular types of "films and series" should be excluded from the permitted genres for product placement. It seeks views on what is meant by "films and series", and whether there are definable types of "films and series" in which product placement either should or should not be permitted.
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(b) |
Similarly, "light entertainment programmes" can cover a wide variety of television programming, including soap operas, comedy, variety, quizzes and reality strands. Again, the question is whether the UK controls should be more specific than the AVMS Directive's "light entertainment programme” genre.
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(c) |
The Government considers that the term "sports programmes" should include both broadcasts of sports events and programmes about sport. It questions whether there is any reason to restrict product placement in particular types of sports programming. |
- Particular risks – The consultation paper identifies certain types of programmes for which product placement might be thought to pose particular risks, such as news, religious, current-affairs and consumer programmes. Unsurprisingly, the Government seems to favour prohibiting product placement in these types of programme. The particular concerns are that product placement might, in news, current-affairs and consumer programmes, be seen as affecting their impartiality and could, in religious programmes, offend religious or cultural sensitivities.
- Children's programmes – The AVMS Directive specifically prohibits product placement in children's programmes, and any UK legislation on product placement will replicate that. The consultation paper invites views as to whether the UK rules on television product placement should go further, for example by placing restrictions on certain types of products (for example, high fat, salt or sugar foods or alcohol) in programmes with a "disproportionately high child audience". It enquires whether any such restrictions should be the same as (or greater than) those currently in place for the scheduling of spot advertising of those products, insofar as they require a broadcaster to assess, when scheduling advertising, whether a programme is likely to be of particular appeal to children.
- Editorial independence, undue prominence and direct encouragement to purchase – The AVMS Directive requires Member States to ensure that:
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(a) |
the content and scheduling of programmes containing product placement are not influenced in such a way as to affect the broadcaster’s responsibility and editorial independence;
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(b) |
programmes do not give undue prominence to products that have been placed; and
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(c) |
product placement does not directly encourage the purchase or rental of goods or services. |
The Government is seeking views on "how undue prominence could be avoided, given the commercial imperative for audiences to recognise the products and services that have been placed" and where the line should be drawn between legitimate paid placement and illegitimate "direct encouragement" to purchase.
- Prohibited products and services – The AVMS Directive prohibits product placement of tobacco products and product placement by companies whose principal activity is the manufacture of tobacco products. It also prohibits product placement of medical products and treatments available only on prescription. Apart from tobacco and prescription medicine, the types of product and service about which the Government has particular concerns are alcohol, high fat, salt or sugar foods, and gambling. It questions whether an outright ban on product placement or restrictions of some kind are appropriate for these categories of product and, if so, what those restrictions should be. The Government notes that there are practical difficulties around applying the full detail of BCAP Code rules on the content of alcohol advertising to product placement. For example, the BCAP Code requires that advertising must not suggest that the success of a social occasion depends on alcohol and prohibits anyone under 25 playing a significant role or people behaving in an adolescent or juvenile way in an advertisement. The Government recognises that strict enforcement of such rules in a programming context could "undermine the editorial independence of the programme maker".
- Signalling – The Government seeks views on exactly how and when product placement should be notified to viewers and, in particular, whether it should go beyond the AVMS Directive's requirement for notification before and after the programme and after any advertising breaks. It notes, for example, that the AVMS Directive is specific as to when, but silent as to how, viewers are to be informed, except to say that they must informed "clearly". The consultation paper discusses the various options, which include script appearing on screen, the use of a logo and/or the use of spoken announcements. It notes that specific rules might be needed, for example, about the size and duration of announcements. Questions also arise over the exact content of any script or announcements and, in particular, whether mention of what has been placed and/or by whom is appropriate. There also needs to be clarity as to what should be said in a script or announcement, in particular whether specific mention of a placed product should be permissible.
- Thematic placement – The consultation paper also considers the question of thematic placement, noting that placement can be achieved not only visually and orally but through a placed storyline contrived to advertise a product or service. In the Government’s view, such contrived storylines are incompatible with the AVMS Directive, which allows product placement “only when it involves products or services appearing in a wholly natural way that is entirely justified by the editorial context in which they appear”. The Government notes, however, that some situations may not be clear-cut; the examples given include a broadcaster being paid by a home insurance company or by a trade association to include a storyline featuring house insurance in a soap opera, or a religious organisation paying a broadcaster to refer to their particular belief in a programme. The Government questions whether the prohibition of thematic placement should extend to placements which feature only generic products and services or types of products and service, rather than branded ones. It also enquires whether the prohibition should extend to the placement of references to the placer’s beliefs, policies, aims or objectives.
- Negative placement – The Government is considering introducing specific rules to prevent negative placements, i.e. where one company uses product placement to create a negative damaging perception of a competitor’s products or services.
- Look-alike products – Finally, the Government questions whether there should be specific controls on the use of simulated products, such as a fake cigarette, or a bottle which could be mistaken for a particular brand of soft drink. It recognises, however, that this issue "might in practice only be significant where the placement of the item in question was either prohibited or restricted in some way".
Comment
So what changed the Government's mind? Back in March 2009, the ministerial statement from Andy Burnham, then Culture Secretary, was little short of emphatic in its conclusion that there was insufficient evidence of any economic benefits associated with product placement to outweigh the "very serious concerns about blurring the boundaries between advertising and editorial".
In its Summary of Responses to the previous consultation, also published in March 2009, the Government acknowledged concerns raised by ITV and Five over the diminishing funding for PSB programming, but appeared unconvinced that product placement could have any positive impact. It also appeared to dismiss Ofcom's estimate, from its 2005/2006 survey on product placement, that income from product placement might be worth between £25 million and £30 million per annum after five years. Nor did it seem convinced that the UK viewer was ready to accept product placement, having become attuned to its presence in films shown on television and in non-UK programming.
Some broadcasters have expressed misgivings about product placement. For example, in its response to the previous consultation, BSkyB suggested that product placement revenues might come at a cost to traditional advertising and Channel 4 expressed scepticism "as to whether the impact of product placement on both viewer engagement and the editorial integrity of programming would be proportionate to the modest economic gain that it offered".
Nonetheless, the groundswell of opinion was in favour of product placement and it is likely that, in these politically sensitive times, the Government has thought better of slaughtering a potential cash cow before it gets to market.
There is unlikely to be a further u-turn, even if there is a change of Government later this year: the Conservative Shadow Culture Secretary, Jeremy Hunt, also seems broadly in favour of relaxing the current prohibition on product placement, stating that “the danger of taking a hard-line position on product placement is that you reduce the capability of commercial broadcasters to invest in programme production”.
Eleanor Steyn
Article to be published in Entertainment Law Review.
1 Following a consultation on Ofcom’s proposals for the regulation of video-on-demand services, Ofcom announced on 18 December 2009 that it had decided to finalise guidance on the scope of regulation, and that it would work towards adopting a co-regulatory approach to the regulation of VOD editorial content with the Association for Television on Demand and to the regulation of VOD advertising with the Advertising Standards Authority.
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