Culture Secretary Andy Burnham has announced “no change” on product placement laws, spurning a chance under the Audiovisual Media Services Directive of a more liberal regime. But with programme funding in scarce supply where does that leave UK programme makers? Carla Basso reports.
Topic: Product Placement
When: 11th March 2009
Law stated as at: 31 March 2009
In July 2008 the Department for Culture, Media and Sport opened their consultation on the proposals for implementing the Audiovisual Media Services Directive 2007/65/EC (the "Directive") in the UK. At the same time, the Culture Secretary Andy Burnham publicly suggested that the UK was unlikely to implement the options made available by the Directive for liberalising the strict product placement regime in the UK. Nevertheless the consultation procedure ran its course, and many advertisers, producers and broadcasters submitted their responses in support of allowing a controlled product placement system in the UK, which they saw as a mechanism for improving the availability of production funding in a difficult financial climate.
Towards the end of 2008 we reported on a pan-EU survey by Osborne Clarke which examined the likely implementation of the product placement rules, and indicated that most EU countries were in favour of liberalising the rules in line with the Directive. In fact, at that stage only Austria, Estonia, Latvia and Slovenia seemed to be adopting the UK's anti-product placement stance.
Death knell sounded?
Against that background, Andy Burnham announced on 11th March 2009 how some of the key areas requiring local legislation under the Directive would be dealt with, and sounded the final death knell for any liberalisation of the product placement regime in the UK.
Mr. Burnham explained that his "priority has always been to make sure we maintain levels of trust between audiences and broadcasters, and protect the standards of broadcasting for which Britain is known worldwide." Having listened to the arguments on both sides his conclusion was "that it should not be permitted in programmes made for this country. There is a lack of evidence of economic benefits, along with very serious concerns about blurring the boundaries between advertising and editorial". He outlined his recognition of the difficult times faced by broadcasters but preferred to consider other avenues for supporting them before allowing product placement.
As a result of this announcement the current UK position on product placement will remain unchanged. It will continue to be prohibited in UK made programming, but will still be allowed in films and non-UK TV programmes, and in video on-demand programming, subject to the controls in the Directive.
The Government has indicated that it will review the product placement rules again in 2011/12 following Ofcom's conclusions on its television advertising review, and any new evidence available about viewing habits and the impact of product placement generally.
For the moment however, it appears that the fight to secure new UK production revenues has failed, although one Sir Michael Grade has been making noises about a possible judicial review tilt at HM Govt by ITV.
Why this matters:
If product placement is allowed in the majority of the EU but not here, then the "level playing field" intended by the Directive will not exist; UK programme makers face competition from non-UK producers who can tap into product placement revenues to produce English language programming for import into the UK. In these tough economic times where programme financing is increasingly unavailable, any additional avenues to funding would have been a life-line.
Although broadcasters and producers made that case forcefully in their responses to the consultation, it seems the need to maintain viewer confidence in the separation between advertising and editorial has tipped the legislative balance. But if the result is that commissioning budgets for original UK programming shrink even further over the next few years, this approach could in fact see programme quality eroded rather than protected – and that cannot be in the interests of either industry or viewers.