Ofcom confirms product placement on UK TV ...

From The Guardian:

Media regulator confirms new rules will form part of broadcasting code from end of February

Product placement will be allowed on UK television from the end of February 2011, Ofcom confirmed today.

The media regulator published a set of rules that will govern how products can be promoted as part of a revised broadcasting code following a consultation with the industry.

Ofcom's new rules "will enable commercial broadcasters to access new sources of revenue, whilst providing protection for audiences," the regulator said.

The new rules come into force on 28 February and have been incorporated into the broadcasting code, a legal framework enforced by Ofcom.

The guidelines contain few surprises. Broadcasters will have to alert viewers when programmes containing product placement are aired by using an on-screen logo.

This logo will be unveiled by Ofcom in the new year and will have to appear for a minimum of three seconds at the start and end of programmes that contain product placement. It will also appear after shows return from advertising breaks.

Certain categories of programmes and products are also excluded from the changes, which follow legislation passed by parliament earlier this year legalising product placement.

It will not be permitted in children's programming or news programmes. The practice will also be barred in current affairs shows produced in the UK and from religious programmes.

Four categories of content – films (which in this case includes dramas and documentaries); TV series including soap operas; entertainment shows; and sports programmes – will be free to use product placement.

Placement of alcohol and tobacco products is also barred and the same restrictions apply to gambling, medicines, baby milk and foods that are high in sugar or salt.

Other services that cannot be advertised on television, including escort agencies and weapons, have also been excluded from the new rules by Ofcom.

EU and UK legislation also states that products cannot be advertised in an "unduly prominent" way and the new guidelines include a requirement to ensure references are "editorially justified".

That will prevent broadcasters from filling shows with products or services that have little or no context in their programmes.

Estimates of the size of the UK product placement market vary. MirriAd, a product placement company, claims it should be worth at least 5% of the total UK TV advertising market, as it is in the US. That would give it an annual value of £150m.

Ofcom also announced new rules for product placement on radio, which will come into effect immediately.

They will make it possible for commercial radio stations to incorporate references to products in programming, provided listeners are made aware of the fact they have been paid for.

Sponsorship of news programmes will remain prohibited, however. This has irritated some key figures in the radio industry, who wanted that restriction to be lifted.

Clive Dickens, the chief operating officer of Absolute Radio, said the new guidelines did not go far enough and called for a review at the start of next year.

Dickens added that preventing radio stations from introducing sponsored news bulletins was "ridiculous" in an integrated media market in which companies that operate on the internet are not subject to the same restrictions.

He said that it was confusing for consumers, who did not object to commercial credits or messages on newspaper websites or internet sites such as YouTube.

"All we are asking for is alignment. Commercial radio is still heavily regulated compared to other countries including the US and Australia," Dickens said.

He added that sponsored news would have created "a valuable new revenue stream" for radio. He also criticised Ofcom's decision to retain rules that prevent record companies paying radio stations to pay for their songs to be played.

"If you play output on the internet, that's totally possible. But if the method of distribution is DAB or analogue [radio] it isn't," Dickens said. "The code is going to ... look out of date very quickly."