European media commissioner Viviane Reding has proposed the lifting of rules currently banning product placement in European television programmes in a move aimed at helping broadcasters meet the challenges of the digital era.
Reding's draft Television Without Frontiers (TWF) directive—the biggest shake-up of television regulation since the TWF rules were adopted in 1989—brings Europe into line with US broadcasters that are able to counter the challenge of lost advertising revenues from personal video recorder (PVR) usage via product placement. Controversially, the draft directive also seeks to regulate audiovisual content delivered via the internet.
Reding said services delivered in a linear fashion, such as scheduled broadcasting via traditional television, the internet or mobile phones, would be subject to updated rules on broadcast television. Non-linear services, such as on-demand news or movie services, would be subject only to a basic set of minimum rules that sought to protect minors and prevent incitement to racial hatred.
"My aim is for Europe's audiovisual content industry to flourish under one of the most modern and flexible set of rules in the world," said Reding. "The new rules should open up multimedia opportunities, boosting competition and consumer choice, while promoting public interest objectives such as the protection of minors and cultural diversity.
"Existing rules, which have been made redundant by technological and market developments, must be abolished to take a decisive step towards Audiovisual Media without Frontiers in Europe's single market."
Under the modernised broadcasting directive, broadcasters will be able to decide when they want to show advertising within programmes, rather than as now being forced to allow at least 20 minutes between advertising breaks.
The quantity of advertising will not be allowed to increase above the existing 12 minutes per hour ceiling.
The new directive will allow split-screen advertising, virtual and interactive advertising. Product placement would be allowed in all programming except for news, current affairs and children's programmes. Viewers would have to be warned at the start of a programme that it contained product placement advertising.
The European Commission said the new product placement rules "should remove legal uncertainty, provide additional funding for European productions and thus enhance the competitiveness of Europe's audiovisual sector".
The EC stressed that the its TWF update would not cover newspaper and magazine web sites, and those "web sites not primarily intended to provide audiovisual media content, mere audio transmissions or radio".
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