US magazine Gambling Times sued the producers of movie Deal for failing to deliver on a product placement deal. A harbinger of things to come in the UK and will UK product placement be seen as a way to get round the advertising codes? Nick Johnson places his comments on contractual and regulatory issues if product placement is allowed on UK TV.
Topic: Product placement
Who: Gambling Times Inc., Scott Lazar
When: May 2009
Law stated as at: 25 September 2009
US trade magazine Gambling Times sued the executive producer of movie Deal for failing to deliver on a product placement deal. The magazine had been promised a "highly visible" product placement in the film, in exchange for a US$50,000 investment. But when the film hit the big screen, the product was nowhere to be seen.
The magazine filed suit in Los Angeles seeking US$1,000,000 in damages – substantially more than the US$80,000 the film reportedly took worldwide at the box office.
Why this matters:
With the UK regime on TV product placement now set to be relaxed, attention here is naturally turning to the business aspects of brand integrations. How will product placement opportunities be sold, by whom and on what terms? And to what extent will it lead to additional liability exposure?
The Gambling Times case is a useful reminder that every revenue opportunity has its associated risks.
Producers and broadcasters negotiating product placement deals will doubtless want to ensure that they secure sufficient flexibility to allow them to drop or reduce the prominence of a proposed placement as necessary for regulatory, operational or creative reasons, with an appropriate adjustment to the fee.
Conversely, brand owners will have to get used to the fact that EC law prohibits them from having any influence on editorial decisions. So they will need to try and ensure they get early visibility of the nature and extent of their placement in the final edit, so that any supporting activity can be planned or adjusted accordingly. They will also doubtless want to insist on contractual provisions requiring that their product not be portrayed in a negative or misleading light.
The dropping of the UK's product placement ban also raises interesting questions around the extent to which advertising law and regulation should bite on product placement. Clearly, certain product-specific advertising legislation is drafted widely enough that it would apply to the practice. For instance, if a UK-produced drama did a brand placement deal with a particular Las Vegas casino, there is a strong argument that this would amount to unlawful advertising of foreign gambling under the Gambling Act 2005.
But it's less clear whether and to what extent product placement could come to be viewed as advertising (rather than editorial) for the purposes of the BCAP Advertising Code. If a car brand is placed in a drama in return for a fee, and is used for a high-speed chase scene, should it be required to comply with BCAP rules on speed and acceleration claims in advertising? This would not be an issue under the current version of the BCAP Code, which assumes a clear delineation between programmes and advertising. But concern may grow over the scope for heavily regulated sectors like alcohol, cars and food start to use product placement as a way to get round the advertising codes. If so, the position on this could come under pressure.
Stay tuned for more analysis once we hear more on the DCMS proposals.