Submissions
MARCH 2006
EQUITY SUBMISSION TO THE OFCOM CONSULTATION DOCUMENT
"PRODUCT PLACEMENT"
INTRODUCTION
1. Equity is the trade union for people working in the entertainment industry and represents 37,000 performers and creative personnel. According to a recent survey conducted with Skillset, the Sector Skills Council for the audio-visual industries, a third of Equity members who had worked in the UK performance industry in the past year had spent some time working in television.[1]
2. The nature of the work of Equity members - principally in drama, comedy or entertainment programmes - means that the decisions regarding product placement are likely to have a direct impact upon the creative process, the nature of funding and the content of television programmes in which they are involved.
WHETHER TO PERMIT PRODUCT PLACEMENT
3. Ofcom has previously provided detailed analysis of the economic context facing UK broadcasters[2] and this is repeated in Section 4 of the current document. Equity has made it clear in previous submissions to Ofcom that it accepts much of this analysis. In particular, audience fragmentation and declining viewing share is likely to have a direct effect on net advertising revenues and the profitability of commercial public service broadcasters (PSBs) in future.
4. However, it is interesting to note that there have been some significant developments in the past year, in respect of the success of free-to-air digital terrestrial television (e.g. Freeview) and the more detailed research and analysis into the actual impact of Personal Video Recorders (PVRs). Recent developments in both of these areas have called into question the short-term impact of such technology on the economic sustainability of advertiser-funded PSBs. Nevertheless, Equity still shares the view that these commercial broadcasters are facing a steep decline in revenues from traditional "spot" advertising in the long-term.
5. While the current projections of a potential market of £100m (£25m-£35m initially) do not appear capable of replacing these revenues in full, they could form one of a number of important future revenue streams. As a result Equity supports what Ofcom refers to as "a limited and controlled relaxation of the current total prohibition on product placement on commercial television channels" (para 6.9). Such a change in the rules governing product placement must be very tightly defined and include a clear distinction, between the commercial channels able to access this revenue and the operation of the BBC, which should continue to be funded by the licence-fee.
6. For these reasons, Equity believes that there must be clear definitions and guidance provided by Ofcom in the event of any future change. This will also need to make a clear distinction between the current use of "prop placement", the proposed nature of "product placement" being discussed by Ofcom and the increasingly insidious use of "product integration", a method of promotion becoming prevalent in the US, in a manner that violates the rules laid down by the Federal Communications Commission.
7. For further detail on the use of product integration Equity would recommend that Ofcom considers the white paper prepared on this issue by the Writers Guild of America[3]. This document also recommends a code of conduct supported by the Screen Actors Guild, which would provide clearer information for viewers, as well as a transparent framework to protect artists involved in the creative process in US film and television.
8. Clearly, the situation in the UK is currently quite different, as product placement has never been permitted in the same way as it exists in the US . However, it is instructive to see that disclosure of information, protection of children's programming and the constructive involvement of artists remain the key issues in an environment where methods of product placement and integration have been present for some time.
9. These issues should be central to Ofcom's consideration of any framework to regulate product placement in UK in future. Moreover, writers and performers will require clarity in respect of their rights to refuse to endorse products through placement within television programmes. This refusal may be due to the exclusivity of existing commercial arrangements with particular individuals, or due to a conflict with personal beliefs (e.g. ethical or religious).
SHOULD PRODUCT PLACEMENT BE ALLOWED IN ALL GENRES?
10. Equity agrees, for the reasons stated by Ofcom in its document, that news, current affairs and children's programmes should not include product placement.
11. As indicated above Equity members appear principally in drama, comedy or entertainment programmes. If product placement were introduced in the limited and tightly defined manner referred to, then there are no additional reasons to prevent this practice. Similarly there would not appear to be any obvious benefits from delaying the introduction of product placement in the short term. The key is not necessarily when such changes are introduced - but how such a change is made, the manner of its implementation and the future monitoring of its operation.
12. However, Ofcom must ensure that the definitions are very clear and be particularly mindful that "clumsy handling by broadcasters and/ or producers may have a detrimental effect on the viewing experience and/ or risk viewers perceiving that editorial integrity is being undermined" (para 6.17). Equity is firmly opposed to the type of heavy-handed product integration referred to above, which may be introduced in a manner that is out of context or disrupts the narrative of a programme in a clumsy way. This can be to the detriment of viewers, as well as the integrity of writers and performers.
HOW TO ENSURE AUDIENCES ARE AWARE OF PRODUCT PLACEMENT
13. Equity acknowledges the historic significance of a change to the "separation principle" between editorial and commercial content, and is pleased to note that the BBC will remain unaffected by any proposed introduction of product placement. This will ensure that viewers will still have a choice of programmes that have no commercial involvement.
14. However, it is important to ensure that audiences are not misled where content includes a commercial element. Therefore Equity is pleased to see that Ofcom acknowledges the need for broadcasters to adopt appropriate measures to deliver transparency. To that end Ofcom is correct that the use of product placement should be clearly identified at the start of any programme in which it is contained, in the way the audience research indicates that viewers would prefer.
15. In addition, Equity agrees with Ofcom that it would be unacceptable for such notification to be included only at the end of a programme, due to the "current practice of broadcasters to run end-credits fact and/ or shrink the screen to combine with an additional programme channel promotion, (which) could make it hard for a clear message about the inclusion of product placement to be given" (para 6.22). However, we believe that such practices are equally unacceptable in any case due to the impact on performers, whose credits are similarly squeezed and rushed, despite the importance of identifiable credits to their careers.
16. That said, consideration should also be given to the inclusion of a written notification at the end of a programme, in addition to the clear identification at the start. This would not be a huge additional burden for broadcasters and producers and would ensure transparency and awareness for viewers who may have missed the start of a programme and could otherwise be unaware of the product placement.
CAN THE CONCEPT OF "UNDUE PROMINENCE" BE RETAINED?
17. Given the view expressed above - regarding the need to ensure that product placement does not become the sort of product integration that is out of context or disrupts the narrative of a programme - Equity supports the need to retain the concept of "undue prominence". Broadcasters are right to suggest that "clumsy or heavy handed integration of products and services into storylines risks alienating audience, damaging editorial integrity and compromising their independence" (para 6.27).
18. Reference to products must be incidental, within context and have editorial justification. Scripted references to the attributes of certain products and "calls to buy" are particularly unacceptable in dramatic works, where narrative realism is often essential to the integrity of the work and the reputation of the writer and performer.
19. Ofcom should assist in ensuring viewers are protected from this type of integration by development a code of practice which would make it clear to programme makers, advertisers, writers and performers, the nature of regulatory constraints on product placement. This should specifically include the prohibition of scripted references to the attributes of products and time limits on the length of time logos and brand names can appear. It should also provide protection for performers in the sort of circumstances outlined above, where product placement conflicts with an existing commercial arrangement, or an ethical or religious belief.
ARE ALL PRODUCTS AND SERVICES ACCEPTABLE?
20. Should the relaxation in product placement rules proceed, Ofcom is absolutely right in asserting that there should be certain product types that cannot be promoted in this way. Therefore it makes sense for there to be a limit on the inclusion of these products and services, in line with the current Broadcast Advertising Code, which will prohibit some products completely and limit others to those permitted to advertise in breaks around certain programmes. The flexibility to review and reject other unsuitable products should also be retained by Ofcom.
21. While this strict application of the Advertising Code in relation to the advertising scheduling rules in necessary, there may need to be greater freedom to allow for the use of products within a programme compared to the strict way in which they can be advertised. The example given by Ofcom is a case in point, in that a car may need to be used in a dangerous and high-speed car-chase in order to ensure the editorial and creative integrity of the programme. However, such use would not be appropriate in an advertisement.
22. Therefore, while Equity supports the application of the Advertising Code to product types and scheduling, additional flexibility should be allowed for realistic product use in order to ensure consistent creative use of products. Moreover, artists should retain the right to reject the requirement to endorse a product that they believed to be in conflict with strongly held ethical or religious beliefs. This right of refusal should also take into account existing commercial arrangements that artist may be obliged to honour under separate sponsorship arrangements.
WHAT ROLE SHOULD OFCOM PLAY IN COMMERCIAL ARRANGEMENTS?
23. The business models that may be used to enable product placement to appear in UK programming will need time to develop. This should properly be a commercial negotiation between broadcasters, producers and advertisers. Clearly, some broadcasters believe that existing contractual relationships with advertisers and their compliance responsibility means they will be best placed to sell product placement. Meanwhile, many producers will be concerned about the possible impact on their creative integrity, but may also see an opportunity to access an additional and potentially lucrative income source.
24. Ofcom rightly states that "it should be possible for both models of exploiting the opportunities offered by product placement to co-exist with an appropriate sharing of revenues" (para 6.38). Equity accepts that this may well be the case but believes that Ofcom should retain a direct interest in this matter and if necessary propose a broad framework that may help to facilitate an agreed outcome, in the same way it has done in the recent dispute over new media rights.[4]
25. It is also important to note the role of writers and performers in the success of product placement propositions. It is most likely that advertisers will want their product to be identified with a particular programme or its leading performer in order to develop a brand image. Consequently, the use of product placement may begin to have a direct impact on the work opportunities of artists, particularly if advertisers are able to assert greater influence over creative decision making and ultimately upon the casting process.
26. As a result, artists and their representatives must have a right to incorporate this matter in their programme negotiations, given their direct role in generating additional programme income through their indirect endorsement of commercial products.
EXTENSION OF DEREGULATION TO RADIO
27. Equity has no principled opposition to the extension of product placement deregulation to commercial radio broadcasts. However, the key would be the way in which such a change is made and the manner of its implementation.
28. There would need to be extremely tightly defined parameters and clear and regular on-air notification for such deregulation to work. A range of restrictions on the type of products, claims about attributes and calls to buy would all need to be considered in much more detail. Furthermore, such an extension should not be considered for BBC radio.
CONCLUSION
29. Equity welcomes this timely consultation by Ofcom, as the debate continues regarding the future role of product placement within broadcasting in the UK and in Europe.
30. While the further use of product placement looks increasingly likely this should be limited and strictly defined, with the full engagement and involvement of the artists who are central to its success. We hope that the constructive comments in this document help to ensure that the issues and concerns we have raised on behalf of performers and creative contributors will not be neglected.
10 March 2006
For further information contact:
Matthew Payton
Research & Parliamentary Officer
Equity
Guild House
Upper St Martin's Lane
London WC2H 9EG
020 76700260
[1] Skillset/ Equity Performing Arts Industry Survey 2005
[2] Ofcom Review of Public Service Broadcasting (2004-5)
[3] http://www.wga.org/uploadedFiles/news_and_events/press_release/2005/white_paper.pdf
[4] Ofcom Review of the Television Production Sector - Jan 2006
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