product placement - ecta of contents i. what is product placement ii. history of product placement 3...

PRODUCT PLACEMENT

ECTA 26th Annual Conference

Deauville, June 2007

Irene Braam

Director Government Affairs

Bertelsmann AG

Table of Contents

I. What is Product Placement

II. History of Product Placement

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III. Product Placement - Facts and Figures

IV. Legal Situation in the US

V. Legal Situation in Europe

VI. IP Owner‘s Rights

I. WHAT IS PRODUCT PLACEMENT?

� The intentional usage of a third party‘s intellectual property right in any non-commercial communication space designed for entertainment.

� A way to advertise and establish trademarks.

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� A way to advertise and establish trademarks.

BUT ALSO

� An additional source of income for movie and television production.

WHAT IS PRODUCT PLACEMENT?

Product placement (PP) appears in plays, films, television series, music videos, reality shows, video games and books.

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II. HISTORY OF PRODUCT PLACEMENT

PP can be traced back to at least 1944when in the thriller ‚Laura‘, one of the main characters drinks an imaginary brand ofwhiskey called Black Poney.Following the movie the brand waslaunched in real life.

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� Since the 1980s, PP became more common.

launched in real life.

In 1945 Joan Crawford brought Jack Daniel‘s to the silver screen in the movie ‚Mildred Pierce‘.

II. HISTORY OF PRODUCT PLACEMENT

� At the beginning PP was mostly used in movie productions but with the television screen entering family homes PP found its way into popular television programmes such as soap series.

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� In recent years PP is also used in reality shows,

computer and video games and is likely to

be used in other non traditional and new media.

III. PRODUCT PLACEMENT FACTS AND FIGURES

WHY PP HAS BECOME A POPULAR MEANS TO PROMOTE AND MARKET BRANDED PRODUCTS

� Television and movie producers have started to look for other ways of financing their productions as costs have increased significantly.

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� The development of ad-skipping technologies such as the PVR and accelerating audience fragmentation have led major marketers to look for other ways to advertise.

� PP enables the advertiser to key-target a specific audience.

� PP is relatively a cheap way to market and promote a brand but can have significant impact: The 1982 movie E.T the Extra-Terrestrial, increased sales of Reese’s Pieces by as much as 80 percent.


PRODUCT PLACEMENT IS A WAY OF ADVERTISING

� PP integrates the advertiser's product into a television show or movie thereby giving clear visibility without focussing on the branded product.

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PP should not be confounded withproductor brand integration whereby the advertiser‘s product is centralto the program‘s plot line or sponsoring


� One can identify three major types of PP:

1. PP arranged by the advertisers in return for a financial compensation.

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compensation.

1. PP arranged by the advertisers but without financial compensation as the product serves as compensation- so-called ‚barter‘ deals.

1. PP not arranged by the advertiser but nonetheless included with the aim to strengthen the plot or a character – no financial compensation is given in return.


PP DEVELOPMENT IN FIGURES

� According to the 2007 PQ Media Study companies worldwide paid nearly $3.4 billion last year to have their products appear in movies and television programmes.

� The spending on PP in 2006 was up 37 percent compared to the previous year

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� The spending on PP in 2006 was up 37 percent compared to the previous year � PP spending is expected to rise a further 30% this year according to PQ

Media.� PQ Media cites 18 to 34 year olds as a key audience for PP due to their lack of

brand loyalty and for their channel surfing.� More than 50% of the PP spending is found in 4 marketing categories:

transportation, clothing & accesories, food & beverages and travel & leisureOther categories such as: electronics & technology, toys & sporting goods and media & entertainment are expected to increase their PP spending in the coming years

IV. LEGAL SITUATION IN THE US

� PP has been largely unregulated due to the fact that it has its roots in the movie industry which has been an unregulated industry by tradition except for PP which appears on broadcast television or radio and which is covered by the Federal Communications Commission (FCC).

� The FCC does not prohibit product placement in radio and television broadcasting.

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broadcasting.

BUT

� Section 317 of the 1996 Telecommunications Act requires on-screen disclosure of product placement arrangements.“All matters broadcast by any radio station for which any money, service or other valuable consideration is directly paid, or promised to or charged or accepted by, the station so broadcasting, from any person, shall, at the time the same is so broadcast, be announced as paid for or furnished, as the case may be, by such person”

V. LEGAL SITUATION IN EUROPE

CURRENT STATUS (1)

� The current EU legal framework (1989 Television Without Frontiers Directive) does not explicitly address PP but contains an implicit prohibition if it is considered to be surreptitious advertising.

� PP is therefore covered by the EU-wide definition of surreptitious

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� PP is therefore covered by the EU-wide definition of surreptitious advertising if three cumulative conditions are met:

1. it must be shown that the television broadcaster’s action is deliberate;

2. the broadcasters’ action must be intended to produce an advertising effect; and

3. there must be the risk of the public being misled as regards the purpose of mentioning or showing the product.


CURRENT STATUS (2)� Up till now PP is taking place in a grey area of the law

� This situation is worsened by widely differing national regulatory approaches

� Most EU countries do not have any legislation on PP and consider PP as surreptitious

advertising, some leave the assessment to the broadcasters themselves and any legal

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advertising, some leave the assessment to the broadcasters themselves and any legal

decisions to the national courts

� Some Member States authorise PP, under certain conditions and others don’t

Example:

• In Germany PP is prohibited but is permitted to make products available provided no

payment is made to get them used (known as “Produktbeistellung”).

• UK has a ban on PP while in Austria PP is authorised under certain conditions

THIS GREY AREA HAS LEAD TO THE USE OF FAKE PRODUCTS

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WHILE PP IS AN EXISTING REALITY ON EUROPEAN TELEVISION AND ON ALL OTHER PLATFORMS

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AND WHILE EUROPEAN ADVERTISING CONTENT IS BEING DRIVEN AWAY FROM EUROPEAN TELEVISION

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RECENT DEVELOPMENTS

�� According to the EU Commission, the discrepancy between the EU According to the EU Commission, the discrepancy between the EU MS creates legal uncertainty and puts the European industry at a MS creates legal uncertainty and puts the European industry at a disadvantage in comparison with the US market.disadvantage in comparison with the US market.

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disadvantage in comparison with the US market.disadvantage in comparison with the US market.

� EU Commission attempted therefore to clarify the position in the new Audiovisual Media Services (AVMS) directive (proposal December 2005).

� 24 May 2007, the EU Media Ministers adopt a Common Position thereby backing the new Audiovisual Media Services Directive


� With this new directive the EU allows for the first time product placement.

� Article 1 (k) of the AVMS directive defines PP as „any form of audiovisual commercial communication consisting of the inclusion of or reference to a product, a service or the trademark thereof so that it is

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reference to a product, a service or the trademark thereof so that it is feautured within a programme, in return for payment or for similar consideration“.

� According to article 3f of the AVMS Directive PP is authorised in films, televised series, sport emissions- and light entertainment programmes

UNLESS a Member State decides otherwise

� No PP is allowed in children programmes, news and current affairs programmes, religious programmes and documentaries


The use of PP is subject however to certain conditions:

� The viewer should be informed about the fact that a programme contains PP by a signal at the start and the end of the programme and after commercial breaks (In respect of acquired programmes Member States have the option to waive the identification requirements)

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States have the option to waive the identification requirements)

� The content and the scheduling of PP programmes shall not be influenced in such a way as to affect the responsibility and editorial independence of the media service provider

� They shall not directly encourage the purchase or rental of goods and or services

� No undue prominence shall be given to the product in question

No PP of tobacco and specific medicinal products is allowed.

VI. THE IP OWNER‘S RIGHTS

PP WITH THE IP OWNER CONSENTING

In the early days of PP, the IP owner did not restrict or review the use of their property in the movie or television programme

The IP owner should protect his rights and take the following issues into account when entering into a contractual relationship:

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account when entering into a contractual relationship:

� PP can influence the personality of a trademark – how and when is the trademark exhibited?

� The IP owner should retain the right to review and approve the final version of the use of the intellectual property

� PP is still perceived as a way of advertising and in absence of specific legislation therefore subject to the norms and general principles that regulate the promotion of goods and services

VI. THE IP OWNER‘S RIGHTS

PP WITHOUT CONSENT OF THE IP OWNERUS

� Although the use of the trademarks of other parties that is likely to cause confusion, mistake or to deceive as to the origin or sponsorship or approval of is or her goods by another, are an act of infringement of the trademarks in

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is or her goods by another, are an act of infringement of the trademarks in question according to the Lanham Act, 15 U.S.C §1127, §114 and 1125 (a) such an infringement is often difficult to establish

� „Fair use“ and „Freedom of Speech“ llimit further the IP owner‘s possiblities to succesfully attack the unauthorised use of the IP for PP

EU� The IP owner has the exclusive right to use the trademark but there are no

clear rules in case of unauthorised rules of IP in PP cases

The End

Thank you for your attention!

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Thank you for your attention!

product placement - ecta of contents i. what is product placement ii. history of product placement 3...

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