TELEVISION WITHOUT FRONTIERS DIRECTIVE Product Placement vs. Surreptitious Advertising Warsaw, 8 December 2005 Frédéric Bokobza European and International Affairs Directorate for Media Development France

2 PRODUCT PLACEMENT VS. SURREPTITIOUS ADVERTISING Agenda  Current EU juridical framework  Implementation in France  Assessment of current situation  The way forward  Conclusion

3 CURRENT EU JURIDICAL FRAMEWORK Definition of surreptitious advertising  In the TWF directive, surreptitious advertising defined as  Presentation of products (1) in programs intended by the broadcaster  Considered to be intentional in particular if done in return for payment or similar consideration  To serve advertising  Which might mislead the public as to its nature  The interpretative communication of 23 April 2004  Underlines that no absolute prohibition of products presentation (1)  Points to “undue prominence” as a criterion to evaluate the above No definition of product placement In practice, disparate implementations in Member States (1) Representation in words or pictures of goods, services, the name, the trademark or the activities of a producer of goods or a provider of services.

4 IMPLEMENTATION IN FRANCE (I) The framework  National definition of surreptitious advertising broader/stricter  Presentation of products (1) in programs to serve advertising  No reference to the intention of the broadcaster  Nor to the risk of misleading the public as to its nature  Regulator implements this rule in full conformance with EU law  Product placement tolerated within cinema films  Evaluation against “undue prominence” criterion on a case by case basis for other programs, especially audiovisual works  Absence of justification considering editorial needs of program/scenario  High frequency of presentation of the product (1)  Bias towards product / Absence of pluralism in presentation of products (1)  Indication of address/phone/internet/ of producer/provider  Risk to mislead the public (1) Representation in words or pictures of goods, services, the name, the trademark or the activities of a producer of goods or a provider of services.

5 IMPLEMENTATION IN FRANCE (II) In practice  Regulator performs regular (1) and effective program monitoring  Sanctions (including financial ones) have been taken on several occasions  Broadcasters recently tend to go beyond the guidelines of regulator (i.e. of interpretative communication)  More and more frequent masking or blurring of brands/logos in  Audiovisual works  News and current affairs programs  …even in some cases where “undue prominence” criterion respected Level of protection is high… … but legal certainty not always felt sufficient (1) Monitoring is exhaustive for terrestrial channels.

6 ASSESSMENT OF CURRENT SITUATION Clarification/enhancement of framework may be appropriate  Definition of “surreptitious advertising” leaves considerable margin for interpretation  No level-playing field for cinema/audiovisual works  National implementations vary to a significant extent  Legal security not always felt sufficient - which may  Lead to additional costs  Be detrimental to viewers’ comfort  Product placement in a number of countries de facto banned  May be an alternative source of revenue - or avoided costs - for audiovisual industry  A number of stakeholders favour its authorisation  Provided that adequately defined and controlled

7 THE WAY FORWARD (I) Possible objectives of a revision  Surreptitious advertising’s ban should in no way be weakened... Key objectives are, and shall remain  Protection of public  Protection of quality/integrity of works  … but shall be made clearer to enhance legal security  Add “undue prominence” criterion  Reflection may be opened with a view to defining and allowing product placement per se  Without prejudice to surreptitious advertising’s prohibition  With additional rules guaranteeing protection of public  Ban for certain categories of products  Ban in certain types of programs (children, news, religious)

8 THE WAY FORWARD (II) Summary of possible tentative definitions Surreptitious advertisingProduct placement Presentation of products (1) in programs intended by broadcaster In particular, if done in return for payment or similar consideration AND To serve advertising (1) Representation in words or pictures of goods, services, the name, the trademark or the activities of a producer of goods or a provider of services. Presentation of products (1) in programs intended by broadcaster In particular, if done in return for payment or similar consideration AND To serve advertising = = Additional conditions for product placement AND Ban: certain categories of products AND Ban: certain types of programs AND...   AND Might mislead public as to its nature AND/OR Undue prominence of product Adequate information of the public AND No undue prominence of product

9 CONCLUSION A number of key questions remain open  Current situation leaves margin for improvement  Enhancing clarity and legal security of surreptitious advertising’s ban  Possibly, allowing product placement with adequate control  Issue is sensitive, margin is tight  Protection of public and integrity of works not negotiable  Conditions put on product placement to be refined further  Information of public, products/programs banned,...  Economic impact to be evaluated further  Distribution of revenue along value chain (producers/broadcasters)?  Impact on advertising revenue?

10 For further information or questions: Frédéric Bokobza Tel.: THANK YOU FOR YOUR ATTENTION