New rules on advertising and product placement
As television goes digital, modern, hard-disk based video recorders are becoming more and more popular. These devices make it easy to skip through advertising breaks in recorded programmes. With some of them, it is even possible to start watching the recording while the programme is still running and, by skipping advertising breaks, to finish watching it at more or less the same time that the broadcast ends.
The spread of this technology will make advertising less attractive and, as a result, cheaper. The main source of revenue for private TV stations and an important source of income also for many state-funded ones will considerably diminish.
The Commission thinks that TV stations will need alternative sources of income that cannot be as easily skipped. Product placement - the paid-for placement of goods in movies, shows and even news programmes - could be this source of income. Product placement is currently illegal in most EU member states, but is a major source of income in the US, where almost 3.5 billion dollars were spent on it in 2004.
The Commission wants to leave the choice to member states whether to authorise product placement, but the proposal says it must be subject to some obligations: The product placement must be made clear in some way at the beginning of the broadcast concerned, the goods may only be placed, not praised, product placement must not take place in programmes for children, and some goods, like tobacco and prescription medicines, may not be placed.
On traditional advertising, current rules will remain valid, namely that there must not be more than 12 minutes of advertising per hour of broadcasting and that, in films, news programmes and children's programmes, there must not be more than one advertising block within any 35-minute period.
Audiovisual media services
The Commission has also included some commercial services on the internet into the scope of the directive, making it effectively an 'Audiovisual without Frontiers' directive. This concerns mainly on-demand content such as shows, movies, serials, sports events and news reports, including the advertising therein. It does not concern video clips and animations in news and press websites, nor blogs, video podcasts, picture telephony over the internet and other non-commercial content.
The obligations for digital "pull", "on-demand" or"non-linear" are different from those for television, the reason being, among other things, that it cannot be controlled as easily. The obligations are:
- to respect protection of minors
- not to incite to hatred
- to identify the media service provider
- to identify advertising and other forms of commercial content
- not to use surrepetitious advertising
- to respect rules on product placement and sponsoring
- to respect some restrictions on advertising (e.g. not to advertise alcoholic beverages in programmes for minors)
