The Pickle over Product Placement in the UK

It’s a funny thing looking at Britain’s situation at a time in which the country has only just released its Digital Britain report. Product placement is now legal in almost every other European country – except Britain. Here in Australia, the market is relatively self regulated and does not suffer from the same malaise. It is widespread in US television and in the film industry, with an estimated value of about $2bn in 2007.

Which seems crazy when you realise that product placement in the UK alone could bring as much as £100m a year in production revenue.

But there’s much more to this debate than meets the eye. Product placement is set to play a crucial role in the development of IPTV. According to well-known angel investor and Silicon Valley insider Ron Conway, product placement will become a big revenue driver online and will join search and display advertising as the next billion-dollar ad market, becoming an opportunity for viewers to click on items of interest in the field of view to learn more about them, to a gateway of t-commerce potential.

The Audiovisual Media Services Directive came into force about a couple of years ago (on 19 December 2007), it is still not very well known amongst users and consumers. The modernised rules for Audiovisual Europe will fully apply from December 2009 this year.

The Directive provides for a modern set of rules for Europe's audiovisual industry covering all audiovisual media services – traditional as well as online. It also created less complicated and more flexible EU rules on TV advertising, and focused on future IPTV trends to make it easier for service providers to finance their programs and for users to recognise commercial messages in-program.

Some countries have already completed the necessary steps to fully implement the new Directive, as well as the EEA countries (European Economic Area) and the candidate countries; some like Italy are in the process of putting these in place. In some Member States, the governments are in the process of completing consultations in others, drafts of the new rules are in parliamentary procedures for adoption. Austria and Malta have already implemented some of the new rules, notably advertising rules.

Under the new Directive, the rules for television advertising were updated and general rules for product placement introduced.
 
The rules are there to strengthen the economic base for the audiovisual industry, thanks notably to more flexible rules on TV advertising, as well the recognition of new forms of dynamic advertising such as split-screen, virtual or interactive. This includes more flexibility for broadcasters to insert spot advertising.

The Directive opens up new revenue sources for Europe’s audiovisual providers and producers for gap financing and will help boost Europe’s creative economy and reinforce its cultural diversity.

Product placement globally has become common practice in independently produced works, feature films and WebTV shows. Until now, the absence of EU-wide rules was an obstacle to the single market. This led to unclear and divergent rules on product placement and prevented audiovisual content producers from making use of this important source of financing.

With a UK general election just around the corner, it now appears the Conservatives led by David Cameron might just reverse that decision if, as currently expected, they form the next government. We shall see.