TELEVISION WITHOUT FRONTIERS DIRECTIVE Product Placement vs. Surreptitious Advertising

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

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

3. No definition of product placement In practice, disparate implementations in Member States CURRENT EU JURIDICAL FRAMEWORKDefinition 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 (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/e-mail 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. Level of protection is high… … but legal certainty not always felt sufficient 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 (1) Monitoring is exhaustive for terrestrial channels.

6. ASSESSMENT OF CURRENT SITUATIONClarification/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. Presentation of products(1) in programs intended by broadcaster • In particular, if done in return for payment or similar consideration • AND • To serve advertising • Presentation of products(1) in programs intended by broadcaster • In particular, if done in return for payment or similar consideration • AND • To serve advertising = = AND AND • Adequate information of the public • AND • No undue prominence of product • Might mislead public as to its nature • AND/OR • Undue prominence of product AND • Ban: certain categories of products • AND • Ban: certain types of programs • AND • ... Additional conditions for product placement (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. THE WAY FORWARD (II)Summary of possible tentative definitions Surreptitious advertising Product placement

9. CONCLUSIONA 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. THANK YOU FOR YOUR ATTENTION For further information or questions: Frédéric Bokobza Tel.: +33 1 42 75 57 19 frederic.bokobza@ddmedias.pm.gouv.fr