EuroParl TV Rules Vote Changes Direction

Michael Hedges - December 14, 2006

Europe-wide television and advertising rules will take a decidedly liberal turn as members of the European Parliament voted (Wednesday December 13) to overhaul of the Television Without Frontiers Directive.

While the EU Culture Committee voted last month to streamline EU rules, the European Parliament (EuroParl) as a whole went even further. Ad breaks every 30 minutes on television will be allowed, instead of 45 minutes. Product placement is soundly endorsed. Ads can take as much as 20% of any given program hour.

Liberal product placement rules, deemed controversial when debated in the Culture Committee, passed easily. Product placement in childrens’ programming and news broadcasts will be forbidden, as expected. And television channels will be required to “reasonably” disclose that money has changed hands in return for the Rolex watch seen on the sit-com.

“Product placement is essential for broadcasters if they are to continue investing in quality programs,” said conservative London MEP Syed Kamall after the vote. “If the EU bans product placement, advertisers would just place their products in American shows that are broadcast back to Europe. The European Parliament has given the green light to the principle of product placement, which is a crucial step and a massive advancement on the ‘we don’t want it because America has it’ approach some MEPs have been taking.”

Most interesting is EuroParl’s interpretation of the country of origin provision. Watch the language: a Member State may complain if a broadcaster originating in one country…broadcasting into a different country…does not meet the national restrictions of the receiving country but “meeting community law” the broadcaster is free from those restrictions. Some countries – notably Sweden, with tough consumer protection laws – wanted out of country broadcasters to comply with the stronger provisions. Junk food ads will not be specifically banned. Members of the European Parliament  (MEPs) rejected that idea, saying programs could only be blocked “for reasons of public policy, including the protection of minors or public security or public health or the protection of cultural diversity.”

Spacing TV ad breaks each 30 minutes in long form programs and films, allowing more commercial time per hour, passed by a single vote. The Culture Committee proposed 45 minute spacing, pleasing film directors unhappy seeing their works chopped up with messages from the sponsors. And the European film and television production industry – producers, directors, actors and technicians – will certainly benefit from the new found financing from product placement.

MEPs also seemed to reject the basic tenet of DG Info Commissioner Vivaine Reding’s planned restructuring of Europe’s audiovisual sector. The Directive will be limited to television and not expanded into “non-linear services.” European content rules will likely not be forced on YouTube. The lighter touch on non-linear services is turning into no touch.

This will please new media developers who have argued that deeper rules would hinder their long sought business model. Public funded broadcasters will not be pleased as mixing the linear (broadcast model) with the non-linear (internet model) would further the goal of collecting taxes on non-linear media devices.

Wednesday’s vote was the first reading, a statement of the European Parliament’s position on the Directive. The next step is an up or down vote by the Council of Ministers. Then it’s back to EuroParl for a second reading sometime next year. After that the draft Directive goes to the Member States for a further round of discussion and votes, likely extending into 2009.

European-level legislation develops slowly. Tangle media policy with rapidly moving technologies and rules are out of date before they are adopted. Unintended consequences will likely include a sharp drop in TV ad rates as more allowable time for ads on more channels fights with spending on product placement. Some new ad spending for television is likely but the trend is toward the internet. The lower ad rates will keep TV advertising from crashing completely, indeed the big loser in the new media ad rules will be newspapers as TV and the internet further drains their coffers. But pressure on commercial broadcasters will only increase, affecting both radio and television.

Another three years of debate leaves some broadcasters skeptical of the final outcome.

“A trend-setting reorientation of the guideline, setting the right framework for the next five to ten years, is still pending,” said German private broadcaster association (Verband Privater Rundfunk und Telemedien - VPRT) president Jürgen Doetz. “We hope, however, hope the Commission and the Council of Ministers will express themselves and take up the ball for bigger changes.”

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