United States: Branded Entertainment: Outline of Key Issues

Last Updated: August 6 2015

BRANDED ENTERTAINMENT

  • Successfully executed branded entertainment has the potential to have a massive impact and to reach a broad spectrum of viewers. However, in order to create successful content, one must first navigate complex behind-the-scenes legal considerations.

EXAMPLES

Branded entertainment consists of a wide variety of content vehicles through which to market one’s brand:

  • Creating Content: Creating content such as a documentary film, webisode series or online game which aligns with your brand’s message, goals and values.
    • Example: A financial services company partners with a major director to produce a documentary focused on issues in the financial services industry.
    • Example: A personal care brand creates a series of short web videos focused on improving self-image and changing popular conceptions of beauty.
    • Example: A candy company creates mobile games that integrate its products into gameplay.
  • Brand or Product Integration: Integrating one’s brand or product into an existing media vehicle in order to promote one’s own values and message, or to tie one’s brand to the values and message of the vehicle in question.
    • Example: A car manufacturer partners with a popular situation comedy to integrate its cars into the show visually and through dialogue.
    • Example: A soft drink manufacturer partners with a reality television program to integrate its products into program content.

DEAL POINTS

In entering a branded entertainment agreement, there are many key factors to consider:

  • Choosing a Medium
    • Whom are you trying to reach?
    • How many people are you trying to reach?
    • What resources and budget do you have available?
  • Control Over Content / Ownership
    • When producing content, how much creative control is retained by the producer rather than the brand?
    • When integrating one’s product or brand with an existing vehicle (e.g., a popular YouTube show), how much creative input will the brand have so as to be able to avoid potentially inflammatory content?
    • Must retain enough control to avoid derogatory or adult content where it is not desired.
    • Who owns the content created?
  • Exclusivity:
    • Will content integrate other brands as well?
    • How can this be done to avoid diluting your brand message?
    • Who will have a right to show the content?
  • Financing
    • Who is financing the content?
    • Consider how financing should impact the level of discretion among parties. 
  • Promotional Opportunities
  • Dissemination
    • Who controls the distribution of the content?
    • When will the content be distributed? Does the time-slot matter?
    • Where will it be distributed? (Location, Medium etc.)
  • Indicators of Success
    • How will success be measured?
    • What milestones are being targeted? Examples?
    • What happens at these milestones?
  • Termination
    • Does the agreement include a termination mechanism? 
    • What circumstances trigger termination?

STATUTORY & REGULATORY CONSIDERATIONS

This is perhaps the most complex area of concern when dealing with branded entertainment. Various US government agencies regulate branded entertainment. And the First Amendment of the US Constitution offers significantly less protection for commercial content. Further, many self-regulating bodies have their own sets of policies and guidelines to which industry members must adhere.

  • Governing Bodies
    • Commercial speech and advertising are regulated by the Federal Trade Commission (FTC) and the Federal Communications Commission (FCC)
    • The FCC & FTC regulate disclosure requirements for branded content and relationships, and further regulate how, when and to whom advertising and marketing efforts can be targeted.
      • 47 CFR §73.1212 of the FCC rules dictates how sponsored content must be identified.
      • §5 of the FTC Act bans the dissemination of false advertising and unfair or deceptive practices
    • The Advertising Self-Regulatory Council (ASRC), a self-regulating entity, consists of multiple units tasked with regulating advertising content — including the Children’s Advertising Review Unit, The National Advertising Division of the Better Business Bureau, and the Online Interest-Based Accountability Program.
  • Nature of Speech & First Amendment Protections
    • Is the content in question commercial or non-commercial speech?
      • The distinction between these categories could once be made using an “I Know it when I see it” approach.  The definition of commercial speech was then limited to that which does “no more than propose a commercial transaction” (See Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer Council, Inc - http://www.oyez.org/cases/1970-1979/1975/1975_74_895).
      • However, with the proliferation of branded entertainment, and the increasingly blurred lines between advertisers and producers, making this distinction has become more difficult. (See Nike v. Kasky - http://www.oyez.org/cases/2000-2009/2002/2002_02_575)
    • If it is commercial content, is the content protected from restriction by the First Amendment?
    • What degree of First Amendment protection will be afforded?
  • Truth in Advertising
    • FTC prohibits unfair or deceptive acts or practices, misrepresentations or omissions that are likely to mislead a reasonable consumer, and are “material” — meaning likely to affect the consumer’s conduct or decision regarding a product or service. 
    • Where does one draw the line between humor that exaggerates, and misrepresentation or omission?
    • Will you be making use of endorsements? If so, one must adhere to the FTC endorsement and testimonial guidelines.
  • Intellectual Property Concerns
    • Have you performed trademark and copyright searches to determine whether content is protected?
    • Will the content make use of any copyrighted material?
    • If so, will the use be deemed a “Fair Use”?
    • Will use of content be for editorial or advertising purposes?
    • Does the content make use of trademarked images or phrases?
    • If so, have you secured the licenses necessary to legally use those trademarks?
    • Does your license encompass the manner in which you will be using the trademark?
This document is not intended to create an attorney-client relationship. You should not act or rely on any information in this document without first seeking legal advice. This material is intended for general information purposes only and does not constitute legal advice. If you have any specific questions on any legal matter, you should consult a professional legal services provider.

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