1. Commercial influences on programme content: The German and British approaches to transposing European Union rules on product placement Dr. Irini Katsirea, Senior Lecturer in Law, Middlesex University

2. Outline Product placement in Germany and the UK before the AVMSD The AVMSD rules on product placement The implementation of the AVMSD rules –Product placement vs. surreptitious advertising –Prohibited products –Identification –Prop placement –Thematic placement Has the new regime achieved its aims?

3. Product placement in Germany before the AVMSD (I) Principle of separation (§7 (3) 12. RStV of 18.12. 2008) Prohibition of surreptitious advertising (used synonymously with product placement) Difficult to prove intentional acting by the broadcaster. Possible indications: payment; contractual arrangements for the representation of goods; production of a programme so as to include promotional references.

4. Product placement in Germany before the AVMSD (II) Tension between principle of separation and broadcasting freedom The representation of goods or services or of their providers outside of traditional advertising is allowed if it is indispensable on mainly editorial or artistic grounds, esp. so as to depict the real world (Art. 5 (1) 2 GG ; ARD/ZDF Advertising Guidelines). If products are referred to or appear in a programme, their representation should not promote commercial interests (market studies; change of products etc.) (ARD/ZDF Advertising Guidelines) See ‘Barbie’ case; ‘ADAC’ case (OVG Lüneburg, 1998). Cf. ‘Hardware store’ case (OVG Berlin-Brandenburg, 2007). Prop placement, esp. in drama and as competition prizes, was not considered to be surreptitious advertising. More lenient treatment of bought in programmes and of cinema films

5. Product placement in the UK before the AVMSD Principle of separation No promotion of products and services in programmes (Rule 10.3 Ofcom Broadcasting Code) Prohibition of undue prominence (Rule 10.4 Ofcom Broadcasting Code) Prohibition of product placement (Rule 10.5 Ofcom Broadcasting Code) Prop placement allowed if justified editorially Product placement allowed in non-UK programmes and in cinema films

6. AVMS Directive Prohibits product placement but allows it exceptionally subject to conditions. Product placement: ‘any form of audiovisual commercial communication consisting of the inclusion of or reference to a product, a service or the trade mark thereof so that it is featured within a programme, in return for payment or for similar consideration’.

7. Art. 11(2),(3) AVMSD. Product placement shall be prohibited Product placement shall be admissible, unless a MS decides otherwise: -in cinematographic works, films and series made for audiovisual media services, sports and light entertainment programmes (but not children’s programmes) - where there is no payment but only the provision of certain goods or services free of charge

8. Art. 11(3) AVMSD Programmes that contain product placement must: (a) not affect the responsibility and independence of the media service provider (b) not directly encourage the purchase or rental of goods or services (c) not give undue prominence to the product in question (viewer protection?) (d) must be appropriately identified at the start and the end of the programme, and when a programme resumes after an advertising break (but see exception for bought in programmes!).

9. Art. 11(4) AVMSD Programmes shall not contain product placement of: tobacco products, cigarettes or pp from undertakings manufacturing such products medicinal products or medical treatments available only on prescription

10. Prop placement  AVMSD., rec. 91: The provision of goods or services free of charge, such as production props or prizes, shall only be considered to be product placement if the goods or services included are of significant value.  The legal treatment of prop placement in the same way as product placement is questionable.

11. Surreptitious advertising Art. 9(1)(a) AVMSD prohibits surreptitious audiovisual commercial communication Art.1(1)(a)(j) AVMSD: ‘Surreptitious audiovisual commercial communication’ means the representation in words or pictures of goods, services, the name, the trade mark or the activities of a producer of goods or a provider of services in programmes when such representation is intended by the broadcaster to serve as advertising and might mislead the public as to its nature. Such representation shall, in particular, be considered as intentional if it is done in return for payment or for similar consideration.

12. Thematic placement Thematic placement is the payment by a third party for the creation of storylines/scripts as vehicles for the purpose of featuring particular issues or references (including generic references) to the third party funder's aims, objectives, beliefs or interests. AVMSD, Rec. 93: Thematic placement should be prohibited.

13. Aims of the new regime To yield meaningful commercial benefits to commercial television companies and programme makers. To ensure broadcasters retain editorial control over programmes they transmit. To protect viewers from surreptitious advertising.

14. Introduction of the new regime Germany: Initial resistance of the Länder, PSBs, publishers,journalists, trade unions and the churches. Transposition by means of the 13. RStV of 1.4.2010. UK: Initial decision of the UK Government against introduction of product placement in March 2009. Change of heart in November 2009. Transposition by means of the AVMS (Product Placement) Regulations 2010, 831 and revised Ofcom Code.

15. Mueller Rice Pudding in Stromberg Photograph: Pro7

16. Nationwide’s ATM in Coronation Street’s corner shop Photograph: ITV

17. Key principles Both Germany and the UK have adopted principles mirroring Art. 11 (3) (a) – (d) AVMSD. Germany: Product placement must be editorially justified. This is the case when the product is integrated in the storyline on mainly editorial or artistic grounds or when the use or representation of the product provides necessary information clarifying the content of the programme (s. 4 Nr. 3.3 LMA Advertising Guidelines). Is this realistic? Does it signify a departure from the pre-AVMSD position?

18. Case Hasseröder Männercamp (I) SAT1 broadcast in May 2011 the final of the UEFA- Europe League. It switched twice, before and after the match, to the ‘Hasseröder Männercamp’. The Hasseröder beer was repeatedly mentioned in conversations between the presenter and an expert and the brewery’s logo was shown in the studio, on beer bottles etc. The presentation was identified as product placement. The broadcasting authority found that the product placement was not editorially justified.

19. Case Hasseröder Männercamp (II) VerwG Neustadt: admissible product placement OVerwG Rheinland Pfalz: prohibited product placement due to undue prominence BVerwG: admissible product placement. The depiction of a product is not excessive because it serves a discernible advertising purpose. It only becomes excessive when the commercial element dominates over the editorial part.

20. Product placement vs. surreptitious advertising (I) Product placement requires payment or similar consideration. Surreptitious advertising does not. Payment is only a presumption of advertising intention. See Case C-52/10, Alter v Ipourgos Tipou. What happens when the two coincide?

21. Product placement vs. surreptitious advertising (II) In Germany there is clear separation between surreptitious advertising and product placement. § 2 (2) Nr. 11 RStV: ‘Product placement’ means the identified representation in words or pictures of goods etc…’ In the AVMSD and in the UK the two are not mutually exclusive. The conditions for both surreptitious advertising and illegal product placement may be fulfilled at the same time.

22. Germany: Prohibited products German rules mirror those of the AVMSD. Placement of tobacco products is prohibited under the Provisional Tobacco Act. Placement of prescription-only medicines is prohibited under the Medicinal Products Advertising Act.

23. UK: Prohibited products  The same products as under the AVMSD are excluded from product placement.  Also, the following products cannot be placed in programmes produced under UK jurisdiction: electronic or smokeless cigarettes, cigarette lighters, cigarette papers, or pipes intended for smoking; alcoholic drinks; HFSS foods and drinks; gambling; infant and follow-on formula; all medicinal products; any product, service or trade mark that is not allowed to be advertised on TV (Rule 9.13).  The legitimate use of such products or services as props is allowed (Guidance Note 1.118).

24. Germany: Identification (I) Product placement is signalled by means of the universal logo P for three seconds. In addition, the following text appears: ‘contains product placement’ or ‘is supported by prop placement’. In the case of prop placement on ARD/ZDF, lists of the companies involved –but no logos or trade marks- have to be included in the end credits. Private broadcasters may provide additional information, and can also include a brand logo.

25. Germany: Identification (II) The identification requirement can only be waived if it is not possible to establish at reasonable expense whether the programmes, which have neither been produced nor commissioned by the broadcaster itself, contain product placement; information to this effect shall be given (§7 (7) 5 RStV). However, no administrative offence is committed in cases of breach of the duty to establish whether such acquired programmes contain product placement.

26. UK: Identification (I) Product placement is signalled by means of the universal logo P for no less than three seconds. Broadcasters may provide viewers with a list of placed products, services or trade marks in the end credits of the programme or by other means, in a neutral non- promotional manner (no brand slogans, advertising messages etc.).

27. UK: Identification (II) No signalling requirement for acquired programmes (Rule 9.14). However, the signalling requirement applies if a broadcaster acquires a programme from a third party on the condition that product placement within the programme will be broadcast.

28. Germany: Prop placement Props are of significant value when their value exceeds 1% of the programme budget and the amount of 1000,- Euro. The value of the products is added when they emanate from the same source (ARD/ZDF Advertising Guidelines, s. 9.1). Props of significant value may not be placed in news programmes, current affairs programmes, advice and consumer programmes, programmes for children or religious broadcasts (§15 (1) Nr. 2; 44 (1) Nr. 2 RStV). Props of no significant value are allowed in all genres. (ARD/ZDF Advertising Guidelines, s. 9.2.3) Props of no significant value are subject to the prohibition of undue prominence (§ 7 (7) Nr. 3 RStV).

29. UK: Prop placement Props are of significant value when their residual value is more than trivial (Guidance Note 1.48). Props of no significant value must comply with Rules 9.1 to 9.5: independent editorial control over programming; editorial control distinct from advertising; ban on surreptitious advertising; no promotion; no undue prominence.

30. Thematic placement Germany: Thematic placement is prohibited (§ 7 (7) S.1 RStV). UK: No consensus on the explicit exclusion of thematic placement. Reliance on Ofcom Rules 9.1 to 9.5.

31. Has the new regime achieved its aims? (I) Limited use of product placement so far due to : –The unclear division of income between producers and broadcasters. –The difficulty of early integration of placements in storylines. –The fear of negative viewer reactions. –The high price of product placement compared to traditional advertising. –Its questionable efficiency. –The limited genres in which placements are allowed. It is likely that no additional income will be generated but only funds shifted from traditional advertising to product placement.

32. Has the new regime achieved its aims? (II) The new regime cannot protect the editorial integrity of programmes since agreements about content and scheduling are hard to prove and are part and parcel of product placement. it relies too much on identification. there are still many grey areas: e.g. innovation placement/derived products; corporate placement/representation of the real world (new IKEA branch; ‘Undercover Boss’).

33. Has the new regime achieved its aims? (III) The new regime has not increased transparency for the viewer since the viewer cannot tell –whether products that appear in a programme without identification are illegal placements, prop placements of no significant value or whether their inclusion was merely fortuitous and unintended. –which products the logo P actually refers to. The legitimacy of prop placements should depend solely on their editorial justification. The criterion of ‘significant value’ is confusing and irrelevant.