EU OKs looser rules on TV product placement


BRUSSELS -- Product placement on television in Europe, severely restricted throughout most of the European Union until now, has been given the green light for most program genres as part of an overhaul of Europe's broadcast regulations.

European Union governments avoided a potentially damaging clash with the European Parliament on broadcasting after both institutions agreed Monday to similar policies on product placement and advertising rules.

EU audiovisual ministers, meeting in Brussels, agreed to allow governments the option of allowing product placement in broadcasts. And Euro-MPs, meeting in their Culture and Education Committee in Strasbourg, France, later also voted to confirm product placement, dismissing claims that it allowed advertisers to distort the editorial policies of broadcasters.

Governments and Euro-MPs need to agree on a common text before it becomes law. The discussion over product placement is just one part of the wider debate on how to overhaul EU broadcasting rules to cater for the explosion of technological change that includes the Internet, mobile phones and video-on-demand.

Finland's Transport and Communications minister, Susanna Huovinen, who chaired the Brussels meeting, said the rules updating the EU's creaking 1989 Television Without Frontiers directive would help promote European content and spur the developments of services. "The sector urgently needs rules that are in line with the technological developments in television broadcasting," she said.

But agreement was hard fought. Opposition from Germany and other governments forced Huovinen to rewrite the product placement rules. While the European Commission -- the EU's executive -- wanted countries that opposed product placement to set national bans, the opposite was proposed: a blanket ban across the EU, with national governments opting out if they wish to permit product placement. "But this comes to same the same thing," said EU Audiovisual and Media commissioner Viviane Reding about the new legal formula.

Reding insisted that governments would only be able to allow product placement in certain strict cases: It would remain banned from news and children's programs, as well as documentaries. The rules say that even where they are allowed -- in films, series, sports programs and light entertainment -- they need to be clearly identified at the start and end of the program, that there should be no direct suggestions about buying the products and that they must not interfere with editorial independence.

"We have not opted for allowing U.S.-style TV on European TV screens, with permanent and isolated advertising breaks that are more prominent than the TV program itself," Reding said. "We do not want a system where advertisements drive content. We want content to drive advertising."

But Reding added that it was unrealistic to try to ban product placement altogether. "Product placement is a complete anarchy at the moment," she said. "It happens every day and there is no regulation of it. These rules will put things in order."

British Culture, Media and Sport minister Shaun Woodward said an outright ban would have been unworkable. "What if the cast of 'Friends' reunited for another season and, for some reason, decided to meet at a local Starbucks instead of Central Perk? We would have to airbrush out every shot of Starbucks," he said. "Today's compromise is about flexibility, self-regulation and common sense. And bearing in mind the way the U.S. product placement market is developing, and the British appetite for American programming, it is a relief for the U.K. consumer."

The ministers also agreed that although ads would remain at a maximum of 12 minutes per hour, the frequency of program interruptions would no longer be regulated. And for programs over 90 minutes in length, the Commission's plans to allow ads every 35 minutes was changed to every 30 minutes (current rules impose a 45-minute gap between ads).

In Strasbourg, center-right Euro-MP Ruth Hieronymi tried to negotiate a delicate path with her Parliamentary report on the reforms, steering between demands for full liberalization and concerns for consumer rights. "New services must not be strangled at birth by regulation, but they cannot be ignored by the law," she said.

But she was opposed by Socialist and Green Euro-MPs who attempted to limit advertising and ban product placement.

"This legislation will wipe out all distinctions between advertising sport and program content. The perverse effect of this type of financing on the quality of films has already been denounced by writers and filmmakers," said French Socialist Euro-MP Henri Weber. He also said the 45 minute wait between ad breaks had to stay. "Ad breaks every 35 minutes or every 30 minutes would undermine the integrity of programs and works, and would lead Europe towards an American style of television," Weber said.

Nonetheless, Hieronymi was able to secure the support of the majority in the Committee by making some last-minute changes. Her report only allows product placement in drama and sport programs, and if the product in question is identified on the screen.

Another contentious issue concerned the so-called "country of origin" principle, which allows service providers to broadcast into member states other than their own provided they meet their own national standards. In Brussels, ministers eventually agreed that broadcasters based in one country and broadcasting mainly or solely into another should cooperate with regulators in the target country to ensure that rules were not being circumvented, Huovinen said.

However, the debate is far from over. The full European Parliament will vote on the report next month, and then the Parliament will have to work with EU governments to find a compromise on the points of contention.

While much of the Commission's December 2005 reform plans were accepted, the Ministers refused to back its proposal for independent national regulators -- indeed, out of the 25 EU member states, only Latvia and the Netherlands support this, though the Euro-MPs also voted for the proposals.

"I am very disappointed that only two governments have explicitly supported the Commission on this proposal, and that we find no reference to independent media regulators in the text on the table," Reding said. "In our international relations, the EU regularly requests independent media regulators as an important pillar of democratic and pluralistic societies. Therefore, I firmly believe that in this respect, the EU should lead here by example."