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Europe to relax rules on TV product placement

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The European Commission this week set out its plans to update 1989's Television Without Frontiers Directive, extending the rules to all TV-like services and relaxing the rules of advertising to allow product placements.

The main purpose of the shake-up is to reduce the regulatory burden on Europe’s providers of TV and TV-like services and to allow them more flexibility in financing their productions.

At present there are disparate national rules on the protection of minors, against incitement to racial hatred and against surreptitious advertising, and the Commission hopes to replace these with a basic, EU-wide minimum standard of protection for audiovisual on-demand services.

Information Society and Media Commissioner Viviane Reding said: “The new rules should open up multimedia opportunities, boosting competition and consumer choice, while promoting public interest objectives such as the protection of minors and cultural diversity.”

The proposals

Under the Commission plans, the modernised TV Without Frontiers Directive will govern TV and TV-like services – whether these be “linear” services, such as scheduled broadcasting via traditional TV, the internet, or mobile phones, which “pushes” content to viewers; or “non-linear” services, such as on-demand films or news, which the viewer “pulls” from a network.

The new rules will apply to linear services in a modernised, more flexible form, whereas non-linear ones will be subject only to a basic set of minimum principles, such as the protection of minors, prevention of incitement to racial hatred and the prohibition of surreptitious advertising.

With regard to advertising in scheduled broadcasts, broadcasters will be able to choose the best moment to insert advertising in programmes, rather than being obliged, as they are now, to allow at least 20 minutes between advertising breaks. A ceiling of 12 minutes of advertising per hour (the current ceiling) will still apply.

Product placement

The new Directive will also support new forms of advertising, such as split-screen, virtual and interactive advertising, and, controversially, product placement.

Product placement ads, where manufacturers pay to have their particular product used in particular TV shows and films, are common in US programmes.

They are generally banned in all European countries but Austria unless an imported show is being aired. Desperate Housewives and 24 were among the popular US series that pioneered successful product placement.

According to the Commission, the discrepancy is leading to legal uncertainty and is putting the European industry at a disadvantage in comparison with the US market.

The Commission has therefore set out proposals explicitly defining product placement for the first time, and setting the use of the ads in a clear legal framework. Accordingly, a popular programme like Coronation Street could demand high fees for consumer brands to be clearly visible on characters' clothing or in the background of its sets.

The rules will allow clearly identified product placement except in news, current affairs and children’s programmes. Adverts for tobacco and prescription drugs will not be allowed.

To prevent surreptitious advertising, consumers will be informed at the start of a programme that product placement is in use.

See: Draft Directive (18-page / 129KB PDF)

See also: Beyond TV: new EU rules for audiovisual content, OUT-LAW News, 12/07/2005

Copyright © 2005, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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