RTL TELEVISION Do the rules on advertising still comply with the principle of proportionality ? Dr. Thorsten Grothe, Head of Corporate Communication and Media Policy 16. May 2003, Vienna

RTL TELEVISION RTL is Germany’s most successful and popular TV station. Its continuous success with the viewers has also made RTL the market leader of the German TV-advertising market. Since September 1992, RTL has been the unchallenged market leader among the 14- to 49- year-olds - uninterruptedly and clearly ahead of all other stations. RTL as a private broadcasting company basically (almost 90 % of the revenues) relies on advertising fees. The advertising regulation in the TVWF directive is crucial to the future of our industry, in particular at a time of recession and increasing competition.

TVWF I The TVWF directive lays down various obligations and rules relating to advertising, sponsoring and teleshopping. 1. Amount of advertising permitted on screen (art.18): The proportion of transmission time devoted to advertising shall not exceed 20% of the daily transmission. The proportion of advertising within a given clock hour shall not exceed 20 %. 2. Number of and form of advertising interruptions (art.11,10): Advertising spots shall be inserted between programmes. A period of at least 20 minutes should elapse between each successive advertising break within the programme. The transmission of audiovisual works as feature films and TV films may be interrupted once for each period of 45 minutes. Isolated advertising shall remain the exception.

TVWF II 3. Rules applicable to the content and presentation of advertising messages (art. 10, 12, 13, 14, 15 and 16): Respect for human dignity, ban on discrimination on the grounds of race, sex or nationality, ban on incitements to behaviour prejudicial to health or safety, Principle of identification and separation, Protection of the interests of minors, Prohibition of any form of advertising for cigarettes and other tobacco products, limitation for medicinal products This detailed regulation on advertising is only applied to broadcasters, and not to competing forms of delivering content (as newspapers, internet). Broadcasters compete with other media on the market for commercial communication.

REVIEW The detailed regulations restrict our flexibility regarding the program and slow down the development of Special Ads. The restricted rules on advertising during the transmission of feature films make it difficult to promote European works. We can’t extend special advertising forms like “single spot” because of the current limitations of isolated spots. A regulatory framework needs to be made “future proof” with regards to new forms of advertising (Split-Screen etc.). We don‘t need any ban on advertising for products you can buy without limitation (as alcoholic beverages).

THE APPROPRIATE LEVEL OF REGULATION Today viewers have the choice between a wide range of private and state aid funded channels. The citizen decides how much advertising he is willing to accept. There is no need for quantitative restrictions on TV advertising. Rules on advertising therefore must be kept to a minimum: Principle of identification and separation Interdiction of misleading advertising Any more detailed provisions should remain within the scope of self-regulation by virtue of the principle of proportionality.

SELF-REGULATION Self-regulation is the most flexible means of regulation considering the diversity of the different European cultures. Deutscher Werberat: The German Advertising Council is a self-disciplinary institution of the german advertising industry. It has issued codes and rules of conduct. These regulations are only recommendations, not laws. European Advertising Standards Alliance: EASA brings together national advertising self-regulatory organisations and organisations representing the advertising industry in Europe. Self-regulation can only function if its spirit is respected, meaning that it must be voluntary and independent of the public authorities.