This post was written by Christopher Hackford, Marina Palomba, and Huw Morris.
The Audiovisual Media Services (Product Placement) Regulations came into effect in the UK 16 April 2010. Under the Regulations, product placement will now be permitted in television programmes made in the UK, although those featuring product placement will not be permitted until Ofcom has amended the Broadcasting Code, which may not be until sometime in autumn 2010.
“Product placement” is defined in the UK Regulations as the inclusion in a programme of, or the reference to, a product, service or trademark, where the inclusion is for a commercial purpose, has been paid for (by way of cash or other valuable consideration), and does not amount to prop placement (i.e., inclusion of a product that has no significant value and that was not included because of a payment or valuable consideration).
There are four types of programmes in which product placement is permitted: (i) films made for cinema; (ii) films or series made for television or on-demand services; (iii) sports programmes; and (iv) light entertainment programmes. No children’s programmes may carry product placements—programmes primarily aimed at viewers under 16. News programmes fall outside these permitted types, and UK-made religious, consumer affairs or current affairs programmes are not permitted to include product placement. There is also some catch-all wording to prevent programmes for which product placement is “unsuitable”—an undefined term. As for the BBC, it is still bound by its Royal Agreement and is prohibited from making or commissioning programmes that carry product placement, but programmes acquired from third parties and those made by BBC Worldwide will be subject to the new rules.
The new Regulations prohibit product placements of cigarettes, tobacco products or prescription-only medicines, as well as alcoholic drinks, if the programme is aimed at an under-18 demographic or encourages immoderate drinking. Not content, the UK government has expanded the list where the programmes are UK-produced or commissioned-television, or on-demand programmes (excluding films made for cinema), to also include smokeless cigarettes and smoking accessories; medicines (i.e., over-the-counter as well as prescription); any alcoholic drinks; infant and follow-on formula; food or drink high in fat, salt or sugar (HFSS); and gambling services. These were prohibited by the UK government to protect the health and welfare of viewers, especially children, but the result of this is that a vast swathe of potential advertisers who may have considered paying to place their products in programmes are now unable to do so.
The Regulations also fail to deal with the difference between product placement and brand placement. Can McDonalds, for instance, pay to have its name referred to (e.g., “Let’s all go to McDonald’s”) or would this be regarded as a promotion of an HFSS product.
There are also significant conditions that apply under the regulations. For example, the product placement must not influence content or scheduling to affect editorial independence; there must be no direct encouragement to purchase or rent the products; the programme must not give undue influence to the products; no subliminal advertising techniques can be used; and the way the product is included in the programme is not socially irresponsible and does not harm children. The point about “socially irresponsible” means it cannot “prejudice human dignity,” promote discrimination, encourage behaviour prejudicial to health, safety or protection of the environment, cause physical or moral detriment to children under 18, exploit children’s trust in parents, or show children in a dangerous situations.
As you may appreciate if you're watching the advertising marketplace in the UK, there is no indication that advertisers will increase marketing budgets to take advantage of new rules, rather than changing their priorities within existing budgets. In addition, parties cannot enter into contracts stating how, how often, when or whether the product is even placed into a programme, because this is contrary to the requirements for editorial independence. The consequence may well be that advertisers may be reluctant to part with their funds if they have absolutely no control or influence over the way their product is portrayed or used in a programme, or indeed, whether it ends up being used at all.
If you want to keep updated on product placement developments in the UK, or if you need help in understanding how the new UK product-placement regulations may affect you, contact Christopher Hackford directly or, of course, you can always call me, Joseph I. Rosenbaum, or any Reed Smith attorney with whom you regularly work.
