Product Placement

Report of Panel 2Jonathan Davis

UK Film Council

The Responsibilities of Content Providers And Users,

Prague 19 - 20 March 2009

What is Product Placement?

And Now, Ladies and Gentlemen ...

• Product Placement is an audiovisual commercial communication (Av Com Com):– Designed to promote the goods, services or image

of a natural or legal entity pursuing an economic activity;

– Accompanying or being included in a programme;– In return for payment or for similar consideration or

for self-promotional purposes.

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From where does the interest in product placement come?

• Economic crisis - spot advertising revenues declining

• Technological change - a way to stop viewers skipping advertisements

• “The Death of a Business Model” - replacing lost investment in content production or helping the producer to save money

What is Product Placement worth?

• No figures for European market• According to ACT, in 2008, $7 billion globally,

two thirds in the US• According to ACT, product placement

revenues in the US will grow 18% in 2009 while spot advertising revenues fall

• In the US, hundreds of thousands of product placements on television

• Programmes on Discovery entirely funded by product placement

Is the Czech Republic the European capital of product placement?

• Around 20 Czech films produced each year

• total production cost around €30 million• Box office around €15 million• Funding from broadcasters investment

via national fund • Product placement revenue around

20% of production budgets.

Regulating Product Placement

• Before AVMS Directive– Separation of advertising and editorial– Ban on subliminal and surreptitious advertising

• With AVMS– Member states encouraged (by EC, by

commercial broadcasters) to transpose exactly what is in the Directive

Transposition : three options

• Option 1: No specific national measures (product placement implicitly allowed)

• Option 2: Limited prohibition

• Option 3: Product placement explicitly allowed possibly under stricter rules

Member states must ensure that any restrictions on product placement are proportional.

Problems for regulatorsProblems for regulators

• How do regulators know when product placement is How do regulators know when product placement is taking place?taking place?

• How should product placement be identified?• Should it also be identified by a list of

advertisers/products?• How long should the screen display the signal or/and the

list of advertisers/products?• Definition of undue prominence?• Definition of significant value?

Areas to be addressed

• Product placement in videogames, music videos etc.

• Product placement in programmes created for social network sites (soap operas on Beebo)

• People placement• Moral rights

Virtual product placement

Conclusions

• Product placement is a good reason for media literacy

• The best defence against bad effects of product placement is a media literate society

• Evidence - for example, of the economic benefits, the effectiveness or the impact on editorial/artsistic integrity of product placement - needs to be built up.