Memorandum by the Advertising Association
ABOUT THE
ADVERTISING ASSOCIATION
The Advertising Association is a federation
of 31 trade bodies and organisations representing the advertising
and promotional marketing industries including advertisers, agencies,
media and support services. It is the only body that speaks for
all sides of an industry worth almost £19 billion in 2005.
THE PROPOSAL
FOR A
REVISED DIRECTIVE
While the AA welcomes a revision which would
modernise current rules relating to broadcasting, it is concerned
that the Commission proposal does not particularly represent a
modernisation and in some ways seems to impose additional restrictions
on those who will be included in its scope.
In its response to this consultation, the AA
will answer questions relating directly to the advertising industry.
Those questions are:
1. Jurisdiction and country of origin—Does
the Proposal go far enough in facilitating the free movement of
broadcasting services?
2. Regulatory approach—What
role should industry self-regulation play in the new regulatory
framework?
3. Advertising and commercial communications—Should
broadcasters be given greater flexibility in respect of the commercial
arrangements they enter into for the financing of programmes?
1. Jurisdiction and country of origin—Does
the Proposal go far enough in facilitating the free movement of
broadcasting services?
The Country of Origin approach to regulation
of the EU broadcast market is acknowledged by the Commission,
some Member States and industry as a successful way of facilitating
free movement. The AA supports the Country of Origin approach
to regulation of the audiovisual industry in Europe and makes
the following observations:
— Since the Directive is designed to
ensure a properly functioning internal market in broadcast and
is minimum harmonisation in its nature, a strong Country of Origin
clause is necessary to guarantee the free movement of programming
and advertising across the EU.
— Any disputes resulting from broadcasts
out of one Member State into another should be resolved on a bi-lateral
basis, using the Contact Committee. Extensive changes to Article
2 of the Directive, which would weaken the Country of Origin Principle,
are not acceptable.
— The AA stresses that the rules contained
in the revised Directive must be general in their nature. Their
content and their detailed interpretation should be left to the
discretion of Member States. This scenario, backed by a strong
Country of Origin Principle, will ensure the free movement of
programming.
2. Regulatory approach—What role should
industry self-regulation play in the new regulatory framework?
Self-regulation is an important tool available
to Member States in the implementation of legislation. It is a
better way of regulating because it is more flexible, can be updated
more rapidly than legislation and is an effective, less expensive
way of handling consumer complaints. For the UK advertising industry
it is the well-established means of ensuring the highest possible
standards of conduct.
Across the EU, self-regulatory systems are in
place or are being developed with the support of the European
Advertising Standards Alliance. DG SANCO has recently published
a paper supporting the work of EASA and its members which can
be found at: http://ec.europa.eu/consumers/overview/report_advertising_en.pdf
As mentioned earlier in this submission, the
UK advertising industry has a well-established system of self-
and co-regulation in place. The wording put forward by the Commission
in its proposal relating to self-regulation would undermine that
system. The text should therefore be amended to allow Member States
to choose whether to use self-regulation or co-regulation as a
permissible way of implementing this Directive. The rigid wording
incorporating the definitions of self- and co-regulation from
the Inter-Institutional Agreement (IIA) should be removed from
the text.
It is encouraging to see that in some of the
proposals for revisions to the Commission text by Parliament and
Council, the reference to the IIA has been deleted and self- as
well as co-regulation has been encouraged. The AA supports this
position. For more detail please see the AA amendments put forward
to Parliamentarians appended to this response.
3. Advertising and commercial communications—Should
broadcasters be given greater flexibility in respect of the commercial
arrangements they enter into for the financing of programmes?
In light of the evolving market in audiovisual
content delivery, broadcasters should be able to explore new methods
of funding programming in order that a level playing field be
maintained for all providers of audiovisual content. To this end
the move in the Commission proposal to modernise rules relating
to advertising and sponsorship is welcome and necessary. Broadcasters
should be given more flexibility when investigating means of financing
programmes.
The AA welcomes the removal of the daily advertising
quotas and agrees that it is still appropriate to maintain the
hourly quota, though it favours greater flexibility in this area.
The AA also welcomes the Commission's move to modernise how advertising
is inserted by abolishing the rule which allows the insertion
of advertising spots only every 20 minutes.
However, the AA does have some concerns about
elements of the Commission proposal which seem more limiting than
liberalising. The AA believes that a truly forward-looking Directive
would no longer contain prescriptive rules on advertising breaks
relating to specific types of programmes. This should be left
to the discretion of Member States. The AA's particular concerns
relate to the following:
ISOLATED SPOTS
The AA disagrees with the Commission's decision
to maintain limitations on isolated spots, as it is unclear what
purpose this rule serves and it could inhibit greater flexibility
in television advertising in future.
The Commission proposal allows isolated spots
only during sports programming. This represents a minor liberalisation
of the advertising rules and would be beneficial in so far as
it would allow broadcasters to schedule short breaks during live
sports programmes. However, the maintenance of the current rule
for all non-sports programmes is highly regrettable.
The greater pressures on advertiser-funded television
in future years mean broadcasters will require greater flexibility
in scheduling advertising. Single spots could well have an important
role to play. Maintaining the current arbitrary constraint inhibits
that flexibility for no clear public purpose. Keeping an isolated
spot rule while abolishing the 20-minute rule could lead to the
anomaly that a commercial break with two 15 second advertisements
would be acceptable but a break with one 30 second (or longer)
advertisement would not be.
35-MINUTE RULE
It is the AA's opinion that the proposed "35-minute
rule" for films, news and children's programmes, is an unacceptable
new restriction.
The Commission has merged two of the existing
rules in Article 11 without conducting a proper impact assessment
and without taking into account that 35 minutes has no meaningful
application to existing programme lengths. As a result, the proposed
advertising break rules relating to children's and news programmes
are more restrictive than the previous rules—an absurdity
in a Directive that is supposed to be future-proofing for a digital,
converged media environment.
Furthermore, the proposed rules for breaks in
films provide no meaningful liberalisation. This discourages broadcasters
from showing films and has a disproportionate effect on films
with more limited audience appeal, including many European films.
Furthermore, without further liberalisation investment by broadcasters
in European films may also be at risk. The AA is concerned that
these proposed rules could undermine the commercial rationale
for these programme genres.
The proposal also lacks the "scheduled
duration" wording contained in the current Directive. This
is essential to provide clarity of application of the rules, based
on existing practice. Any interpretation that these rules are
based on the running time of the programme, instead of its scheduled
slot, would be unworkable in practice.
PRODUCT PLACEMENT
The AA supports the Commission's proposal to
allow product placement. With audience fragmentation and revenue
pressures, broadcasters need to diversify their income streams
in order to maintain levels of investment in programmes. Permitting
broadcasters to access a supplementary source of commercial revenue
such as product placement, at a time when new technology such
as PVRs and the drift of advertising revenue towards new media
is putting pressure on traditional sources of advertising income
is sensible and proportionate.
The method of identification of product placement
should not be prescriptive and where in the programme it takes
place, should be left to the discretion of the Member States.
The AA believes a controlled liberalisation
of the product placement rules, with clear identification to the
viewer, is important and if it is permitted within the Directive,
the UK government should reflect this fact in its implementation.
CONCLUSION
The Advertising Association and its Members
have been involved in the debate on the revision of the TVWF Directive
from an early stage in its development. Although we welcome a
revision which will make more sense in the rapidly changing audiovisual
arena, we are concerned that the drafting of the Commission proposal
could be "tighter".
With this in mind the AA reminds this enquiry
of its key issues relating to this Directive:
— The Country of Origin principle should
not be weakened;
— Self- and Co-Regulation both play
an important part in the legislative landscape surrounding this
Directive and should both be considered as implementation tools
for this Directive. Member States should have the discretion to
decide how/if they will use these tools; and
— Modernisation of advertising rules
is to be welcomed but should go much further.
Attached at Annex 1 are the amendments which
the Advertising Association has sent to Members of the European
Parliament, based on the original Commission text.
3 October 2006
Annex 1
The Advertising Association Draft Suggested
Amendments to Commission Text AVMS Directive August 2006
| Commission Text
| Suggested Amendment
|
| Self and Co-Regulation
|
| Recital 25
In its Communication to the Council and the European Parliament on Better Regulation for Growth and Jobs in the European Union the Commission stressed that a careful analysis on the appropriate regulatory approach, in particular whether legislation is preferable for the relevant sector and problem, or whether alternatives such as co-regulation or self regulation should be considered. For co-regulation and self-regulation, the Interinstitutional Agreement on Better Law-making provides agreed definitions, criteria and procedures. Experience showed that co- and self-regulation instruments implemented in accordance with different legal traditions of Member States can play an important role in delivering a high level of consumer protection.
| Recital 25
(25) In its Communication to the Council and the European Parliament on Better Regulation for Growth and Jobs in the European Union the Commission stressed that a careful analysis on the appropriate regulatory approach, in particular whether legislation is preferable for the relevant sector and problem, or whether alternatives such as co-regulation or self regulation should be considered. For co-regulation and self-regulation, the Interinstitutional Agreement on Better Law-making provides agreed definitions, criteria and procedures. Experience showed that co- and self-regulation instruments implemented in accordance with different legal traditions of Member States can play an important role in delivering a high level of consumer protection. Both self- and co-regulatory models which operate within a legal framework should be considered as effective means for the implementation of this Directive.
|
Justification
The approach to Self and Co-Regulation in Member States is diverse. The common point of reference which makes their use in the implementation of legislation should not be whether the method is called self or co-regulation but whether it has been proven to work and provides an appropriate "legal link" which makes it enforceable. The text above provides that link when it mentions that models should operate within a legal framework.
|
Article 3.3
Member States shall encourage co-regulatory regimes in the fields coordinated by this Directive. These regimes shall be such that they are broadly accepted by the main stakeholders and provide for effective enforcement.
| Article 3.3
Member States shall encourage co-regulatory regimes in the fields coordinated by this Directive. With a view to implementing and enforcing this Directive, Member States shall promote self-regulatory and co-regulatory regimes. These regimes shall be such that they are broadly accepted by the main stakeholders and provide for effective enforcement in the respective Member States.
|
Justification
See above
|
| Product Placement
|
Article 1k
"product placement" means any form of audiovisual commercial communication consisting of the inclusion of or reference to a product, a service or the trade mark thereof so that it is featured within audiovisual media services, normally in return for payment or for similar consideration.
| Article 1k
"product placement" means any form of audiovisual commercial communication consisting of the inclusion of or reference to a product, a service or the trade mark thereof by or at the request of the media service provider so that it is featured within audiovisual media services, in return for payment or for similar consideration except that
— the inclusion (other than in return for payment) of or reference to a product, a service or the trade mark thereof where such products or services have been acquired at no, or less than full, cost and where their inclusion within an audiovisual media service is justified editorially and is not unduly prominent; or
— prizes awarded in programmes and branded merchandising products in programmes
do not constitute product placement.
|
Justification
It is important that new regulation on product placement does not accidentally regulate existing and legitimately practiced formats in programming. For instance, broadcasters and producers regularly source items such as props for use within television programmes. These items are often provided for free or at a reduced cost to the broadcaster/producer (which might be thought to constitute "similar consideration") but there is no guarantee that such items will appear on screen. This existing activity is widespread across public service and commercial broadcasters and helps production budgets to go further. However, it is not akin to Product Placement where there is usually a guarantee of inclusion in return for payment. We assume that it was not intended to catch this existing activity within the definition of product placement since it would be very difficult to appropriately credit all items used and also introduce product placement and credit those items too.
|
Article 31hca
New text ahead of Commission article 31hc
| Article 31hca new
(c) they must not contain product placement which presents products in an unduly prominent manner. The "Undue Prominence" shall be determined by the recurring presence of the brand, good or service in question or from the manner in which it is presented, having regard to the content of the programmes in which it appears.
|
Justification
Product placement should not interfere with editorial freedom and we would support a guarantee that neither product placement (nor the inclusion of props or other items mentioned above) should be unduly prominent in programming. The undue prominence restriction has been used in many Member States to protect viewers' interests and will help to ensure that undesirable forms of product placement such as product integration are not used in European productions. The Commission put forward the undue prominence criteria in its Interpretative Communication on certain aspects of the provisions on televised advertising in the Television without Frontiers Directive (2004/C 102/02) in order to help national authorities to distinguish between surreptitious advertising and lawful reference to goods, services and brands.
|
Article 3h1c
Viewers must be clearly informed of the existence of a sponsorship agreement and/or the existence of product placement. Sponsored programmes must be clearly identified as such by the name, logo and/or any other symbol of the sponsor such as a reference to its product(s) or service(s) or a distinctive sign thereof in an appropriate way for programmes at the beginning, during and/or end of the programmes. Programmes containing product placement must be appropriately identified at the start of the programme in order to avoid any confusion on the part of the viewer.
| Article 3h1c
Viewers must be clearly informed of the existence of a sponsorship agreement and/or the existence of product placement. Sponsored programmes must be clearly identified as such by the name, logo and/or any other symbol of the sponsor such as a reference to its product(s) or service(s) or a distinctive sign thereof in an appropriate way for programmes at the beginning, during and/or end of the programmes. Programmes containing product placement must be appropriately identified at the start and/or the end of the programme in order to avoid any confusion on the part of the viewer.
|
Justification
Flexibility should be built into the rules on signalling of product placement in the same way that they are in sponsorship. The additional flexibility provided by this amendment leaves the decision about signalling to the individual Member State and respects the principle of subsidiarity.
|
| Isolated Spots
|
| Article 10.2
Isolated advertising and teleshopping spots, other than in sports programmes, shall remain the exception.
| Article 10.2
Isolated advertising and teleshopping spots, other than in sports programmes, shall remain the exception.
|
Justification
As this Directive has as one of its aims the increase of flexibility for linear broadcasters in a changing market, it is unhelpful to limit isolated spot advertising in this manner. The general rule on insertion at article 11.1 is adequate to ensure that the use of isolated spots does not effect the integrity of the programme it appears in.
|
| 35-Minute Rule
|
Article 11.2
The transmission of films made for television (excluding series, serials, light entertainment programmes and documentaries), cinematographic works, children's programmes and news programmes may be interrupted by advertising and/or teleshopping once for each period of 35 minutes.
| Article 11.2
The transmission of films made for television (excluding series, serials, light entertainment programmes and documentaries), cinematographic works, children's programmes and news programmes may be interrupted by advertising and/or teleshopping once for each period of 35 minutes.
|
Justification
See above.
|
| 
