In a dramatic U-turn, the Government announced last week that it will shortly consult again on the issue of product placement.

What will this likely change in policy mean?

Previously, products acquired for free or at less than full cost and used as props within a programme were permitted where their use could be justified editorially. Now, subject to consultation, the chances are that broadcasters (other than the BBC) will be able to accept payment from advertisers in return for their products appearing in films, series, sports and light entertainment programmes.

Product placement in children's programmes, news programmes and documentaries will remain outlawed.

Controls and limitations

If, as now seems likely, product placement is allowed, we should expect to see controls on it. Aside from any limitations which may be introduced following the new consultation, the Audiovisual Media Services (AVMS) Directive requires product placement to be subject to requirements including:

  • the content and scheduling of the programme must not be influenced in a way which affects the editorial independence of the person responsible for the content of the programme;
  • the programme must not give undue prominence to the product in question and must not directly encourage purchases;
  • viewers must be informed of the existence of the product placement at the beginning and end of a programme and upon resumption after a commercial break; and
  • the programme must not include product placement of tobacco, cigarettes or prescription medicines.

Timescales

The AVMS Directive is required to be implemented by member states by 19 December 2009. As a result of the Government's change in direction, it is inevitable that product placement will now be the subject of separate legislation.

It is anticipated that the new consultation document will be made available within the next few weeks. The purpose of this consultation document will be to establish whether product placement should be allowed at all, what controls should be placed on it and how best to implement any changes.

Likely outcome

Since another turnaround would be somewhat embarrassing, we can anticipate that the outcome of new consultation will endorse product placement in one form or another. Such a move would be welcomed by advertisers and broadcasters alike. In times where broadcasters are facing stiff competition from alternative sources of entertainment, such as YouTube, and many viewers are using technology such as Sky + to fast forward through traditional television advertising, product placement may provide additional income or exposure. Some commentators believe that the product placement market could be worth up to £100 million in the UK.

It remains to be seen though how far legislators and regulators will go in seeking to control how broadcasters manage the delicate balance between meeting advertisers' demands and retaining the integrity of the programme. Too far in one direction will limit the value of this opportunity to advertisers. Too far in the other and viewers may just switch off.