Ofcom consulted on issues related to product placement in December 2005 primarily in response to concerns raised by some respondents to our earlier Broadcasting Code consultation that increasing pressures on traditional broadcast advertising risked affecting the main sources of funding for commercial broadcasting. Ofcom committed to taking a closer look at potential new funding sources – of which product placement was one – and to reviewing any regulatory barriers that might prevent their use (in accordance with Ofcom’s statutory duty to review regulatory burdens1).
In issuing the consultation document Ofcom made it clear that the concept of product placement (the inclusion of, or reference to, a product or service within a programme in return for payment or other valuable consideration) was implicitly prohibited by the prevailing EU legal framework2. As such, whilst Ofcom was at liberty to consult on the potential for deregulation of product placement, its ability to act on the outcome of the consultation would be influenced and constrained by developments at European level.
At this time the European legislative position remains unchanged, although there continues to be discussion about removing the total prohibition on product placement and the sorts of controls to govern its use that might need to accompany its introduction.
Ofcom has now considered all of the responses received to its consultation and it is clear that the introduction of product placement remains an issue on which there is no consensus - in general broadcasters favour a controlled introduction of product placement whilst consumer and viewer groups are opposed to the concept. It is also clear that before any even limited and controlled introduction could be contemplated there remain a significant number of issues on which further detailed work would need to be undertaken. Predicted economic benefits also appear to remain modest.
In light of this, and the position under European law remaining unchanged so far, Ofcom does not intend to make any proposals for regulatory change in relation to product placement and television at this time and this document seeks only to set out a summary of the key points made in response to the consultation.
