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In a u-turn, the government has announced that it wants to permit some product placement in TV programmes. In his speech to the Royal Television Society on 16 September the Culture Secretary, Ben Bradshaw, announced that a consultation process would commence "shortly" and that he would hope to have any change in place in the New Year. As we await the consultation, it might be helpful to remind ourselves of the current position.
Ofcom, the regulator for the UK television industry, has statutory duties under the Communications Act 2003 which include a requirement to set, review and revise (as appropriate) standards for the content included in television and radio services. Ofcom is obliged to take into account the UK's obligations under European legislation, specifically the "Television Without Frontiers” or “TVWF” Directive. By the end of this year, it will need to take into account the “Audio Visual Media Services” or “AVMS” Directive, which amends and renames the TVWF Directive and which, according to the EU, provides “less detailed but more flexible regulation”.
The Ofcom Broadcasting Code, in force from 25 July 2005, specifically refers to the "separation principle", whereby there must be a clear distinction between advertising and programme content, and contains an absolute prohibition on product placement. The rationale for this is to avoid misleading audiences about the nature of the content they are viewing. The definition of product placement in the Broadcasting Code is:
"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 any representative or associate of either)."
The UK has to incorporate the AVMS Directive into national law by 19 December 2009. The Directive, passed in December 2007, relaxes the prohibition on product placement under the TVWF Directive, as it sets out that EU Member States may allow it in certain programme genres. The government made it clear, howerver, in a consultation published in July 2008 that, the possibility for relaxation of the rules under the AVMS Directive, its preferred approach was to continue the blanket prohibition. In March this year, following a further three-month consultation, Andy Burnham, then Culture Secretary, said that lifting the ban on product placement “raised very serious concerns”.
So why the about-turn? It may take the following factors into account:
- Since the UK imports so many programmes from the US (where product placement is permitted), it is anomalous that domestic producers do not have access to a valuable source of funding.
- If product placement is excessive, there is evidence that viewers switch off, - i.e. the market regulates itself.
- Broadcasters and ad agencies, many of which have been hit hard by the recession, have lobbied hard for a relaxation of the prohibition on product placement.
- There is a view that the UK regulatory framework makes it difficult for UK producers to compete, particularly with producers in the US.
For the time being we must await the new consultation, but a relaxation of the rules on product placement in the UK looks very likely.
Nigel Bennett and Eleanor Steyn
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Simkins' early warning bulletins are for general guidance only. Legal advice should be sought before taking action in relation to specific matters. Where reference is made to Court decisions facts referred to are those reported as found by the Court. Please note that past bulletins included in the Archive have not been updated by any subsequent changes in statute or case law.
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