There has been yet another change of tack on the road to deciding what to do about paid-for product placement on UK TV now that Brussels says member states can allow it if they wish. Anna Williams reports on hopefully HM Government’s last flip/flop before the new regime is finalised.
Topic: Product placement
Who: Department for Culture, Media and Sport
When: 9 February 2010
Where: United Kingdom
Law stated as at: 26 February 2010
What happened:
Product placement was a topic on which there was much public debate in 2009 and the Government just could not make up its mind how it viewed the issue. In March last year, the Government announced that despite the relaxation of the rules on product placement in the Audiovisual Media Services Directive (the "Directive"), it would not allow product placement in the UK.
The Government claimed that this stance was due to the fact that it had not found conclusive evidence that the economic benefit of introducing product placement was sufficient to outweigh the detrimental impact it would have on the quality and standards of British television. Then in September 2009, the new Culture Secretary of State announced a U-turn on this view and stated product placement would be permitted in the UK, hence all the consultation that took place from November 2009 to January this year.
We are now getting closer to a clear indication as to the safeguards that shall be imposed in the UK as to permissible product placement. On 9 February 2010, the Secretary of State announced that the Government has concluded television product placement will be permitted in such a way as to "provide meaningful commercial benefits to commercial television companies and programme makers" while taking account of "the legitimate concerns that have been expressed" as a result of the consultation exercise.
So what does this mean? Well, the Government will create Regulations under section 2 of the European Communities Act 1972 to give legal effect to the provisions of the Directive relating to product placement. However, it will not simply cut and paste the relevant provisions of the Directive into these new Regulations as other safeguards will also be included in the Regulations which are additional to those restrictions on product placement already required by the Directive.
Some of these additional UK restrictions will be included in the Regulations themselves whilst others shall be introduced by way of the Ofcom Broadcasting Code (which means more consultations as Ofcom will have to consult on any proposed changes to the Broadcasting Code). So let's look at what the restrictions on product placement in the UK will address…
What restrictions will govern product placement in the UK?
1. Restrictions provided by the Directive
As a reminder, the Directive only permits product placement under the following conditions:
- the content and scheduling of programmes must not be influenced by product placement in a way that affects the responsibility and editorial independence of the media service provider;
- programmes must not directly encourage the purchase or rental of goods or services advertised through product placement
- programmes must not give undue prominence to the products concerned;
- viewers must be clearly informed of the existence of product placement (by a signal at the beginning and end of a programme, and after every advertising break, although this does not apply to programmes which have not been produced or commissioned by the media service provider itself or an affiliated company); and
- programmes must not include any product placement of tobacco products, cigarettes or prescription medicines.
2. Additional restrictions that will be introduced by the new UK Regulations
In general terms, the Regulations will follow the wording of the Directive regarding product placement to make it clear that product placement is banned, but derogation is permitted in relation to the following four genres of programmes: (i) cinematographic works; (ii) films and series made for television or on-demand services; (iii) sports programmes; and (iv) light entertainment programmes.
Furthermore, the Regulations will not allow product placement in the BBC's licence-fee funded services. Product placement will continue to be prohibited in relation to such services as part of the BBC's Charter and its agreement with the Government. The Regulations will also prevent product placement in any television news programming and in "children's programmes" as required by the Directive, and they will also include specific prohibitions ensuring that product placement cannot appear in current affairs, consumer and religious programming.
As well as prohibiting any product placement of tobacco products, cigarettes or prescription medicines as is required under the Directive, the Regulations will go one step further and prohibit any product placement of the following:
- alcoholic drinks;
- foods and drinks high in fat, salt or sugar;
- gambling;
- smoking accessories;
- over-the-counter medicines; and
- infant formula and follow-on formula.
In reaching this decision, the Government considered the potential effects on health and welfare of the paid-for placement of such products. The Government has also had the protection of children at the forefront of its mind.
What will be the role of Ofcom?
Ofcom will be responsible for policing product placement in the UK and ensuring that the requirements of the new Regulations are adhered to. It will also be able to set further conditions for ensuring editorial integrity, such as in relation to product prominence. It will also be up to Ofcom to determine, following consultation, how audiences are to be alerted to the presence of product placement in a programme by the means of "signalling" at the beginning and end of a programme and after related advertising breaks as is required by the Directive.
Finally, Ofcom will be responsible for ensuring that product placement only occurs in the four permitted genres of programmes, although the Regulations will not contain definitions of these genres. Ofcom will therefore be responsible for interpreting the terminology of the Directive and the UK Regulations and policing acceptable product placement.
Why this matters:
The Secretary of State has indicated that in creating the required UK Regulations and when considering product placement generally, the Government will "proceed with caution" and it intends to be "very careful" when detailing the types of product that can be placed within TV programming. However, the Government has now realised that every other EU Member State, except Denmark, has either allowed television product placement already or has expressed a firm intention to do so. It recognised the need for UK programme makers be competitive and no doubt the programme makers shall also welcome the ability to benefit from additional advertising revenues, particularly in the current economic climate.
However, now is not the time for UK television companies to start planning programmes containing product placement. Some more patience is required – the details of what will be allowed will not be clear until Ofcom has concluded its own consultation exercise on the amendments to be made to the Broadcasting Code. It will then need to revise and re-issue the Code accordingly. It is estimated that this exercise should be completed at some point later in 2010 but no clear timeframe is yet known. In the meantime, brand owners and their agencies can start to think about how product placement might benefit the brand within the constraints that have been made clear so far.
Anna Williams (née Montes)
Senior Associate
Osborne Clarke, London
anna.williams@osborneclarke.com
