Following Andy Burnham’s negative comments on liberalising UK TV product placement rules, the DCMS is now consulting on whether it should be permitted. What are the arguments and the prospects for dissuading HM Govt from its negative view? Carla Basso reports.
Topic: Product Placement
Who: Department for Culture Media and Sport
When: 25 July 2008
Where: London
Law stated as at: 29 July 2008
What happened:
Last month we reported on the press coverage surrounding Secretary of State Andy Burnham's comments during his 11th June speech at the Convergence Think Tank, when he clearly set out his stall against allowing product placement in the UK because it " contaminates our programmes". In his view, allowing it means that "at the very moment when television needs to do all it can to show it can be trusted… we elide the distinction between programmes and adverts." Notwithstanding these somewhat premature and forceful views, Mr. Burnham conceded he was "ready to listen to the arguments on both sides", and will now have to do so, since DCMS have published their consultation paper on the proposals for implementing the Audio Visual Media Services Directive into UK law. A copy is available at: http://www.culture.gov.uk/reference_library/consultations/5309.aspx. A major part of this relates to the potential liberalisation of the rules on product placement.
Current position
Under the current Ofcom Code, there must be a clear distinction between programmes and advertisements, and programmes must not refer to the use or appearance of any product or service. As a result, product placement is, effectively, prohibited from UK produced television programming. Prop placement (where products or services are acquired at no or less than full cost) is allowed provided that the placement is editorially justified, and the rules on editorial independence and undue prominence are complied with. There is currently no restriction on product placement in video-on-demand programming in the EU.
New rules
Although Article 3g of the new Directive requires member states to implement a general prohibition on product placement, they could now choose to permit it in feature films, television films and series, sports programmes and light entertainment programmes (but never in children's programming), subject to certain requirements designed to prevent any influence by brand owners over media service providers, and to avoid viewer confusion. These include rules:
- preserving the editorial independence of the media services provider;
- preventing undue prominence being given to the product/service and banning direct calls to buy; and
- ensuring viewers are informed of the existence of the product placement by appropriate identification at the start and end of programmes, and when they resume after commercial breaks.
The new Directive will therefore require a general prohibition on product placement – the Government think this will have to be implemented by new UK legislation since the current indirect prohibition in the Ofcom Broadcasting Code would not be enough (nor would express prohibitions effected by a change to the Code). Since member states can then derogate from that prohibition and allow product placement in the specified programme genres if they wish to do so, the question DMCS now have to answer is, do we?
Consultation offers three options
The DCMS consultation paper presents three basic options for the UK:
- No new legislation. TV broadcasting services would rely on the existing (or an amended) Ofcom Broadcasting Code prohibition, and we would need to introduce a similar ban in codes governing on-demand services. However, this would not properly implement the Directive's prohibition requirement, so this option is not likely to be adopted.
- Introduce legislation to ban product placement, except for some or all of the programme genres allowed by the Directive. This would require Ofcom and the co-regulator for on-demand services to establish detailed implementing rules. For example, the consultation suggests that it would be consistent with existing rules if Ofcom were to ban product placement of foods high in fat, sugar and salt, from programmes which appeal to children.
- Introduce legislation to ban product placement in all programmes, whether television or on-demand.
The Consultation sets out some interesting background debate on the arguments in support of of (and counterarguments against) allowing product placement:
- Viewers are used to it, and given the volume of US programming now aired in the UK, are canny enough to know when someone is trying to sell them something. However, the DCMS say that although product placement is allowed in imported programming, products are still subject to the requirement not to be unduly prominent, and viewer ability to spot product placement will differ across the population.
- It adds to programme realism. But DCMS say the Ofcom code already allows for prop placement where that is editorially justified;
- Product placement income is a welcome support to production budgets now that spot advertising income is decreasing due to audience fragmentation from increased competition between entertainment services. DCMS say that although Ofcom's original analysis suggested UK income from product placement may reach £25-35 million over 5 years, such potential figures pre-date the introduction of limits on the programme genres which can carry product placement, and of conditions against undue prominence and the like, so they are optimistic, particularly as the UK market is unlikely to bear the same placement levels that US audiences accept.
Despite the arguments in favour, there are no surprises for guessing (given Burnham's earlier comments) that the Government prefer option 3. They say this is best suited to preserving viewer confidence in the integrity of UK programming and a distinction between editorial and commercial material. However, they "will give detailed consideration to all the points that are made in response to this consultation before reaching a decision".
Prop placement and imported programming
Whichever option is selected, the Government will also have to decide:
- how to treat programmes which contain prop placement, and bought-in films and TV programmes containing product placement. The Government favours preserving the existing position, so that both prop placement, and product placement in imports (without undue prominence) continue to be allowed;
- how to define "significant value". Although prop placement is still permitted under the new Directive, if the goods/services placed reach a "significant value" threshold, they must be treated as product placement and become subject to the applicable product placement rules outlined above. The consultation therefore seeks input on how "significant value" should be determined. Should this be a retail/wholesale value; the value to the broadcaster or programme-maker (e.g. the hire costs of the item for the production period, as favoured by the Government); a fixed sum; or a value related to the overall production costs? Should "significant value" be enshrined in legislation or (as preferred by Government for its flexibility) applied via guidance issued by Ofcom and the video-on-demand co-regulator?
- what constitutes an "appropriate" identification at the start and end of programmes and after breaks? Should this be in the form of general announcements, specific product mentions, written overlays on programming or in separate screens?
- what is an "affiliate"? Since product placement identifications can be waived for bought-in programming which has not been produced or commissioned by the media service provider itself or any "affiliate", that term needs to be defined.
Why this matters:
The Government are "open to other options if there are strong arguments that the concerns can be met". The consultation is open for responses until 31st October, but failing any decent arguments presented by advertisers, brand-owners and media service providers, the Government will clearly be setting a general prohibition. Are programme standards and editorial integrity paramount, or should product placement be introduced in a controlled and balanced manner, so that the E.U can benefit from a new production revenue stream? You decide.
