Product placement will be allowed on UK terrestrial television programmes under new legislation announced by the Government on 9 February 2010. In his statement, Culture, Media and Sport Secretary Ben Bradshaw said that maintaining a ban on television product placement would "jeopardise the competitiveness" of UK programme makers "at a time when this crucial part of our creative industries needs all the help we can give it."

This decision follows the introduction of the Audiovisual Media Regulations 2009 on 19 December 2009, which allowed some product placement in 'on-demand' television and television-like services. However, until this week's Government announcement, there were no exceptions to the prohibition on television product placement. The question of television product placement has proved a contentious issue, with many stakeholders expressing concerns about the potential adverse impact on the editorial independence of broadcasters and on viewers' trust in what they see on television. The strength of opinion is evident in that the Government received almost 1480 responses during its recent consultation.

For this reason, the Government has decided to "proceed with caution" and has decided to introduce further safeguards beyond those set out in the AVMS Regulations 2009. Products and services such as alcohol, food and drinks high in fat, salt and sugar (HFSS), infant follow-on milk and gambling will all be excluded from the new product placement rules, and BBC licence funded programmes will also remain unaffected.

Further, it is significant that the new rules will not take effect immediately, as the Government want to give Ofcom the opportunity to run a public consultation and make detailed changes to its Code. However, it is anticipated that shows including product placement will be being shown on terrestrial TV by the end of the year, in what could herald a new era for television advertising and broadcasting.

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Product placement will be allowed on British television programmes under new legislation announced by the Government on 9 February 2010. In his ministerial statement, Culture, Media and Sport Secretary Ben Bradshaw said that maintaining a ban on product placement would "jeopardise the competitiveness" of UK programme makers "at a time when this crucial part of our creative industries needs all the help we can give it." This somewhat controversial decision follows a period of public consultation (www.culture.gov.uk/reference_library/consultations/6614.aspx) ending 8 January 2010, in which the Government received almost 1480 responses.

Background

The Audiovisual Media Services Directive (AVMS) 2007 allows Member States, if they so wish, to introduce product placement within certain limits. Product placement may be permitted in "cinematographic works, films and series made for audiovisual media services, sports programmes and light entertainment programmes" provided that no product is given undue prominence, there is no direct encouragement to purchase and content and scheduling are not influenced by product placement. The Directive also prohibits product placement in relation to prescription medicines, tobacco products and children's programming.

The UK Government recently introduced the Audiovisual Media Services (AVMS) Regulations 2009, which implemented the AVMS Directive in relation to 'on-demand services' that provide television and television-like services (to see our recent Law-Now article in relation to the AVMS Regulations 2009 Regulations please click here) (www.law-now.com/law-now/2009/medianov09.htm).

The AVMS Regulations 2009, which came into force on 19 December 2009, permit product placement in on-demand services within the boundaries set out in the AVMS Directive. However, these Regulations do not apply to general television product placement, which has been the subject of a separate public consultation process (to see our recent Law-Now article on the Consultation on Product Placement on Television please click here) (www.law-now.com/law-now/2009/tvproductnov09.htm).

Implementation

Following this public consultation process, and despite some previous indications to the contrary, the Government has decided to lift the ban on product placement in general television and intends to introduce further Regulations under Section 2 European Communities Act 1972 to deal specifically with television product placement.

Many provisions of the new Regulations will mirror the existing provisions in relation to 'on-demand services': product placement will not be permitted in TV news, current affairs, consumer, children's or religious programmes and prescription medicines and tobacco products will also be excluded.

However, the Government also intends to introduce additional safeguards beyond those already envisaged by the AVMS Directive and the AVMS 2009 Regulations in response to concerns of health and welfare campaigners. This means that alcohol, food and drinks high in fat, salt and sugar (HFSS), infant follow-on milk, over-the counter medicines and gambling will all be exempt from any changes to product placement rules. These further restrictions reflect the Government's desire to balance economic interests with national health and welfare issues, particularly where the welfare of children is concerned.

As expected, BBC licence funded programmes will also remain unaffected by the new rules. Product placement will continue to be prevented by the BBC's Charter and its Agreement with the Government.

It is also significant that TV product placement will not be permissible immediately. Programmes containing product placement can only be commissioned and produced once Ofcom has completed a public consultation on detailed changes to the Code and has implemented these changes, so that product placement can be effectively and appropriately regulated. It is envisaged that this stage will be reached later this year.

Conclusion

The Government's decision to lift the ban on product placement has been taken cautiously, with an emphasis on balancing economic need with preserving editorial integrity and addressing health and welfare concerns, particularly in relation to children. Whilst broadcasters have generally welcomed the move as a 'step in the right direction', many have also criticised the conservative approach taken. Many broadcasters argue that UK audiences are already regularly exposed to product placement as a result of popular USA shows, such as "Sex and the City" and "American Idol", and so permitting product placement in British made television shows would have limited adverse impact but would allow UK broadcasting companies to share the financial benefits already being enjoyed by their USA counterparts. Such broadcasters would have preferred the Government only to include such measures as were necessary under the AVMS Directive (as with 'on-demand services') to avoid imposing an increased regulatory burden, and to increase the number of available products that may attract product placement revenue.

Nonetheless, this is a landmark decision that departs significantly from the existing blanket prohibition on product placement on standard television programmes. The effect of the decision is likely to become more clear following Ofcom consultation and changes to the Code later this year. However, product placement appears likely to remain a controversial issue and its wider impact on terrestrial television advertising and broadcasting is definitely something to watch out for.

The full ministerial statement can be accessed on the Department of Culture, Media and Sport website (www.culture.gov.uk/reference_library/minister_speeches/6624.aspx).

All of the responses to the public consultation on product placement have also been published and can be accessed by clicking here(www.culture.gov.uk/reference_library/consultations/6614.aspx).

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 16/02/2010.