Product placement among EP broadcast reforms

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BRUSSELS -- The European Parliament on Thursday cleared a package of far-reaching broadcasting reforms, including a widespread easing of restrictions on product placement in TV programming.

The product placement development is significant for U.S. studios that sell branded TV content throughout Europe.

The vote marks the end of the two-year legislative process for the overhaul of Europe's creaking rules. Euro MPs adopted the Audiovisual Media Services Directive, which aims to update EU broadcasting law to cater for developments such as the Internet and mobile TV. The new rules will now be sent to national capitals, and the EU's 27 member countries will have until the end of 2009 to implement them into their statute books.

The new broadcasting rules are simpler, more flexible and more in tune with new applications. They cover issues from ad break scheduling to cross-border transmissions and from junk food ad bans to quotas for foreign programs. And they say that for the first time in EU law, television stations can feature branded products -- common practice in the U.S. but banned in many EU countries. However, product placement will remain banned from news and children's programs as well as documentaries. The rules say that even where placements are allowed -- in films, series, sports programs and light entertainment -- they need to be clearly identified at the start and end of the program.

Product placement has been overlooked by EU law until now. But the European Commission -- the EU's executive authority -- argued that this lacuna created confusion for broadcasters, studios and advertisers. Viviane Reding, the EU's Media and Information Society commissioner, pleaded her case by wondering how media lawyers would handle the Lotus Esprit that appeared, "much to my personal regret," more often than Richard Gere in the first 10 minutes of "Pretty Woman."

The rules now refer to the "undue prominence" of a product. "In other words, it is acceptable if James Bond drives a BMW or an Aston Martin, as it could be part of the dramatic denouement," a commission official said. "But not if the camera lingers on the car's badge for five minutes."

German Euro MP Ruth Hieronymi, who co-drafted Parliament's law, said the new regulations set the same ground rules for all audiovisual services.

"Conventional television and new services such as TV on demand based on the Internet or mobile phones are now subject to the same basic principles," she said. "And television will not be treated as a mere economic product but from a cultural point of view, too. The directive, therefore, protects both freedom of thought and information as well as the development of new business models."

The European Commission said the new rules would meet the demands of a fast-moving and dynamic industry while protecting consumers. "There will be less regulation, better financing for content and greater visibility to cultural diversity and the protection of minors," the EC said in a statement.

Europe's commercial broadcasters also welcomed the vote as an overdue update of the EU's first broadcasting law, the 1989 Television Without Frontiers directive.

"The new text should help European media business remain competitive in the digital era," said Ross Biggam, director general of the Association of Commercial Television in Europe. But he added the proviso that national governments and media regulators needed to implement the text in a flexible, future-proof manner.
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