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Broadcasting Code Review: Commercial references in television programming

Statement on the Ofcom Broadcasting Code

Executive Summary

This statement concludes Ofcom's 2009 and 2010 consultations on the Broadcasting Code rules for commercial references (-1-) in television programming, and sets out new rules to permit product placement, subject to certain safeguards. It also sets out revised rules for other types of commercial references during television programming, such as sponsorship.

Ofcom has revised the Broadcasting Code to ensure that it remains fit for purpose, and to fulfil our statutory duty to set standards for product placement in television programming. The new rules implement changes to EU and UK legislation, and are designed to enable commercial broadcasters to access new revenue streams, while ensuring that audiences are protected.

The new and revised rules are being issued alongside this statement in a revised Section Nine of the Broadcasting Code, together with accompanying initial guidance. The rules in this revised Section Nine do not come into force until 28 February 2011, after an implementation period. Until that date, commercial references in television programming must continue to comply with the existing rules, now set out in Section Nine (Television) on Sponsorship, and Section Ten (Television) on Commercial References and Other Matters, which sit alongside a new Section Ten (Radio) in the December 2010 Broadcasting Code.

Introduction

1.1 This document is the final regulatory statement on changes to the Ofcom Broadcasting Code ("the Code") rules on commercial references in television programming.

1.2 It follows two consultations on the rules in this area: the Broadcasting Code Review Consultation (15 June to 4 September 2009) ("the 2009 consultation") (-2-) and the Broadcasting Code Review: Commercial references in television programming Consultation (28 June to 17 September 2010) ("the 2010 consultation") (-3-) . This statement should be read in conjunction with these consultation documents.

1.3 The rules resulting from the consultations can be found in Section Nine of the Code (2011), which can be viewed at Annex 1. The rules are being issued alongside this statement, but do not come into force until Monday 28 February 2011, to allow for an implementation period.

1.4 Until this date, broadcasters must ensure that commercial references in television programming continue to comply with the existing rules in Sections Nine (Television) and Ten (Television) of the (December 2010) Code. These can be found at: http://stakeholders.ofcom.org.uk/broadcasting/broadcast-codes/broadcast-code/.

1.5 Stakeholders should note that a separate statement and revised Section Ten (Radio) of the Code is being issued at the same time as this statement. This applies to commercial communications in radio programming, and is available at: http://stakeholders.ofcom.org.uk/consultations/bcrradio2010/statement/. The Code section and rules applying specifically to radio programming come into force on the date of their publication.

Background

1.6 As part of its duties and functions under the Communications Act 2003 ("the Act"), Ofcom is required to draw up and, from time to time, revise a code for television and radio services, covering standards in television and radio programmes. The Code first came into effect in July 2005.

1.7 In June 2009, Ofcom published a consultation in which it proposed, amongst other matters, revisions to the rules that apply to commercial references in television programming (such as the rules on programme sponsorship and product placement).

1.8 The rules proposed in the 2009 consultation were drafted on the basis of the UK's longstanding prohibition on product placement (-4-) . However, during the consultation period, the UK Government announced (-5-) its intention, subject to a consultation (-6-) , to lift this prohibition and permit product placement in television programming, with certain limitations. In view of this announcement, Ofcom decided to extend its review of the rules that apply to commercial references in television programming.

1.9 In April 2010, the Government amended the Act (via the Audiovisual Media Services (Product Placement) Regulations 2010) to enable product placement on television and to require Ofcom to set standards in respect of product placement.

1.10 In June 2010, Ofcom launched a further consultation proposing new rules for commercial references in television programming ("the 2010 consultation").

Responses to the 2009 and 2010 consultations

1.11 Ofcom received 48 responses to the proposals made in this area in the 2009 consultation and 41 responses to the 2010 consultation.

1.12 The purpose of this final regulatory statement is to set out: the key issues raised in stakeholder responses to both the 2009 and 2010 consultations; Ofcom's consideration of those key issues and assessment of impacts; and its decisions, including (where applicable) the final principle(s), rule(s), meaning(s) and explanatory text, which are now included in the revised Section Nine of the Code.

1.13 Where appropriate, having taken into account stakeholder responses, we have re-drafted the rules that were proposed and/or addressed certain issues in guidance. In doing so we have taken account of Ofcom's duty to secure its statutory objectives under the Communications Act 2003 and to comply with the Human Rights Act 1998 and the European Convention on Human Rights.

Overview of Ofcom's decisions

1.14 In summary, having considered stakeholders' views on both consultations, Ofcom's decisions are as follows:

Product placement

1.15 We have introduced Code rules to permit product placement in television programming, subject to certain safeguards, by implementing the explicit requirements of the Act. In addition, we have:

  • included a rule prohibiting product placement in news programmes;
  • included a rule that a product, service or trade mark cannot be product placed if it is prohibited from being advertised on television;
  • included a rule requiring that, where product placement must be signalled, this must be done by means of a universal visual logo (which Ofcom will issue to broadcasters during the implementation period before the rules come into force);
  • confirmed that we will be issuing a formal request to broadcasters in relation to an audience awareness campaign or message about the universal visual logo. This request will apply to broadcasters who transmit signalled programmes at any time within the first six months that the rules are in force;
  • clarified that single dramas fall within the permitted genre of "films made for television" and may therefore contain product placement and must also comply with appropriate film advertising break patterns (see paragraph 1.26, below, and Part 4 for details of a new proposal Ofcom intends to consult on, as a means of addressing the concerns raised by stakeholders in relation to this issue); and
  • clarified that we will apply the product placement rules to paid-for references to products, services and trade marks that are included in a television programme for a non-commercial purpose.

1.16 Full details of these decisions can be found in Part 4 of this statement.

Sponsorship

1.17 We have introduced revised sponsorship Code rules. In doing so, we have:

  • confirmed that sponsors can product place in the programmes they are sponsoring, subject to the product placement rules;
  • included a rule permitting sponsorship credits to be broadcast during programmes ("internal credits"), with limitations on their content;
  • included a rule prohibiting internal credits in programmes that may not contain product placement (e.g. children's programmes) or for sponsors that may not product place (e.g. alcohol brands); and
  • included a rule clarifying that all sponsorship credits must make clear the relationship between the sponsor and the sponsored content.

1.18 Full details of these decisions can be found in Part 5 of this statement.

Other revisions

1.19 We have made other revisions to the Code rules for commercial references in television programming. In doing so, we have:

  • re-structured the Code, placing all the rules for commercial references in television programming (including those for sponsorship) in the revised Section Nine;
  • included introductory text to accompany the rules and given meanings to terms and further explanatory text, where appropriate;
  • amended the principle and associated rule requiring separation between advertising and editorial content to ones requiring distinction;
  • introduced a consumer protection principle;
  • introduced a rule prohibiting surreptitious advertising;
  • introduced a rule requiring the cost of premium rate services to be made clear;
  • revised the wording of the rules for appeals for funds for programmes or services;
  • removed the rule on virtual advertising; and
  • made other minor amendments to existing rules for clarity.

1.20 Full details of these decisions can be found in Part 6 of this statement.

Public Information Programming

1.21 As part of the 2009 consultation, Ofcom sought stakeholders' views on the appropriateness of introducing rules for Public Information Programming (-7-) . Responses to the questions set out in the consultation were strongly polarised. In recognition of the complexities of the issues raised by respondents and the fact that there is no clear consensus on the desirability of this type of programming, Ofcom has decided to defer any decision on introducing specific rules for Public Information Programming until after the implementation of product placement.

1.22 Full details of this decision can be found in Part 7 of this statement.

Section Nine of the Broadcasting Code (2011) and initial guidance

1.23 As discussed above we are now issuing a new Section Nine of the Code which can be found at Annex 1.

1.24 The new rules come into force on Monday 28 February 2011. Until this date, broadcasters must ensure that commercial references in television programming continue to comply with the existing rules, now set out in Sections Nine (Television) and Ten (Television) of the (December 2010) Code. These can be found at: http://stakeholders.ofcom.org.uk/broadcasting/broadcast-codes/broadcast-code/.

1.25 We are also issuing new and revised initial guidance in relation to the new (2011) Section Nine of the Code. It can be found at Annex 2.

Implementation period - next steps

1.26 Stakeholders should note the following key issues:

  • Ofcom may issue further or amended guidance in relation to the new (2011) Section Nine of the Code at the time that the rules come into force. If stakeholders have any comments on the initial guidance (available at Annex 3), or they wish Ofcom to address any additional matters within the guidance, they should contact Suzanne Wright (suzanne.wright@ofcom.org.uk) or Lauren Cleverley (lauren.cleverley@ofcom.org.uk) during the implementation period to discuss this.
  • During the implementation period, Ofcom is consulting on a new proposal for a trial waiver of the COSTA restriction on advertising break length for films shown by public service broadcasting (PSB) channels. For full details of this proposal, please see paragraphs 4.42 to 4.43 of Part 4 of this document.
  • In January 2011, Ofcom will issue the universal visual logo for product placement signalling. It will also issue a formal request to television broadcasters seeking confirmation of their intentions in relation to the product placement signalling audience awareness campaign or announcement. For full details, please see paragraphs 4.145 to 4.151 of Part 4 of this document.
  • This statement also sets out details of Ofcom's intention to start (from January 2012) requesting annual data on all net revenue (from 2011) that licensed broadcasters, and the producers they commission, have generated as a result of product placement. We are inviting stakeholders' comments on this proposal during the implementation period. For full details, please see paragraphs 4.159 to 4.162 of Part 4 of this document.

Footnotes:

  1. For a glossary of the meanings and terms used throughout this document, see Annex 6.

  2. 2009 Code Review consultation is at Annex 4 of this statement and is available at: http://stakeholders.ofcom.org.uk/consultations/bcode09/

  3. 2010 Code Review consultation is at Annex 3 of this statement and is available at: http://stakeholders.ofcom.org.uk/consultations/bcrtv2010/

  4. Product placement is the inclusion in a programme of, or reference to, a product, service or trade mark, in return for payment or other valuable consideration. This is a summary of the definition of product placement set out in the amended Act. The definition can be found at Schedule 11A, paragraph 1(1) of the Act.

  5.http://www.culture.gov.uk/reference_library/minister_speeches/6194.aspx

  6.http://www.culture.gov.uk/reference_library/consultations/6421.aspx

  7. Programmes about matters in the public interest that are funded by organisations that have an interest in the subject matter.

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