The European Commission Decides – Let It Be

Last Monday, November 13, the members of the European Commission, the communications regulator of the European Union, reached an agreement regarding product placement rules for film and television. The new regulations would allow for product placement in all fictional shows with the exception of news and programming for children. However, there is a strict requirement that the name of advertisers be disclosed at some point during the show. According to some critics of the proposals, they are still years away from approval, because before the suggested corrections of the existing law can go into effect they will face major tests before the European Parliament; in addition they need to be approved by the 25 national governments, as well.

Called The Television Without Frontiers Directive, the rules are a revision of standards dating back to 1989. According to communications specialists the update is necessary in order to take better account of new "on demand" technologies that allow viewers to chose what they want to watch and when.

"My aim is for Europe's audiovisual content industry to flourish under one of the most modern and flexible set of rules in the world," said Viviane Reding, the commissioner for information. "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." However, Reding adds that although the new rules approved of the introduction of the American practice of product placement in European programming, the regulations would still ensure that the EU television market remains distinctly different from its commercialized American counterpart. The commissioner says that the goal is to introduce a new European television model where content drives advertising, unlike in the U.S.-style television where, according to Reding, the content revolves around advertising.

Another major change the new rules will bring regards the limits on advertising. According to the Directive commercial breaks are to be kept to a maximum of 12 minutes an hour, although more leniency is granted on the number of ad slots allowed. Films and news programs will be allowed only one advertising interruption every 30 minutes of broadcasting. The same applies to children's programs lasting more than half an hour. Presently there is a 20-minute gap between advertising breaks, except for films, where the breaks must be at least 45 minutes apart. Broadcasters had long sought more flexibility for ad breaks.

The new directive also divides the media into two distinct categories. The traditional TV programming with a controlled schedule is labeled “linear” and offerings like IPTV and mobile telephone programming, which viewers can watch at their own pace are categorized as “nonlinear”. Legislators agreed to limit the extension of broadcasting regulations to the new media industry. The new rules will be restricted to on-demand television-like services. Some media and technology companies have warned that the new regulations could restrict the growth of emerging media formats like video broadcasts through the Internet and mobile phones. They claim that EU proposals ultimately could mean less investment in an area that has enormous growth potential. In response to these warning, European government officials said that they introduced the new regulations because they are conscious of growing revenue in the United States, with some studies showing that product placement advertising there has been rising by an average of 21 percent annually since 1999.

The European Parliament began the first of a series of votes on the review last Tuesday, November 14. It should be going to the plenary session of the Parliament in mid-December and it is foreseen that the entire process should be completed by May 2007.