A mixed week for ITV this week. News that the Competition Commission’s provisional view
was that the Contract Rights Renewal (CRR) Undertakings, given to protect advertisers from the loss of competition in the sale of TV advertising, following the merger of Carlton and Granada in 2003/4 should stay in place, would have been a big blow. The purpose of the CRR is intended to protect the advertising market by putting in place an automatic ‘ratchet’ which reduces the amount advertisers have to commit if ITV’s audience shrinks, and giving advertisers and media buyers the right to renew their contracts on a rolling annual basis, adjusted for changes in ITV’s audiences, with no reduction in the discounts they receive.
The CC’s Provisional Decision is that the CRR needs to be retained – because with double the market of Channel 4 (for example) ITV is still the place advertisers want to be advertising, even in a shirking market. It remains the only commercial channel were an advertiser can potentially reach audiences over 6 million.
The CC accepted ITV’s argument that the CRR had affected ITV’s incentives to some extent – being more risk averse in programming choices/over-investing in daytime programming etc – but at the same time wasn’t buying ITV’s argument that these were largely or wholly attributable to the CRR.
The CC did however concede that some variations might be justified including widening the definition of ITV1 to include any ITV+1 or ITV1 High Definition channel that ITV decides to launch.
The CC is now seeking views on possible variations, which would:
(a) take into account the decline in ITV1’s market share and the increase in the ability of media buyers to run campaigns effectively without ITV1; or
(b) mitigate the unintended effects of the CRR Undertakings, while addressing effectively the continuing adverse effects identified in the 2003 report.
These variations include:
a) Limiting the scope of CRR to address only ITV1’s advantage in delivering large audiences;
b) Removing elements of CRR while maintaining protection of media buyers through a requirement on ITV to offer airtime on fair and reasonable terms.
c) changing the definition of ITV1 in the CRR Undertakings;
d) incentives for ITV to focus primarily on maximizing ITV1’s share of commercial impacts (SOCI); and
e) the difficulties for ITV in reacting to changing demand.
I think the CC’s preferred option of changing the definition of ITV1 in the CRR Undertakings is probably the correct one. It recognises that ITV is still the dominant force in terrestrial TV advertising. Yes, the market has splintered and there are more and more commercial channels out there for advertisers to attempt to sell their wares on, but viewing figures for most of the programmes on these channels is still tiny compared to the potential and actual audiences available on ITV1. In that sense nothing has changed since the CRR was imposed. A variation to Limit the scope of CRR to address only ITV1’s advantage in delivering large audiences would be great, but it is hard for me to see how this could be done in a satisfactory way at the moment.
Views on the possible variations are requested by 6 October 2009.
There was better news for ITV spouting from the lips of Culture Secretary Ben Bradshaw. Not six months since the government ruled out any relaxation of rules surrounding product placement in TV programmes, they have reversed that view and are now all for it (a bit like their Volte-face on cutting off internet access to alleged repeat illegal downloaders). Back in the early 2009, when Andy Burham was in charge of the DCMS, he said allowing product placement would destroy UK viewers trust in TV and in broadcasters in the wake of the various TV cheating and phone voting scandals. Who knew, we’d get over it so quickly. Why didn’t Andy just say that whilst that was true then it would probably only take another 6 months or so for us all to get over such feelings?
The reason for this change of heart? According to Ben Bradshaw’s speech to the Royal Television Society yesterday it is because the government are not ‘interested in regulation for regulation’s sake.’ They apparently were six months ago, but not anymore. The Government will consult on its proposals shortly with any changes in place by the new year.
The UK is looking at the issue because of having to implement the EU Audiovisual Media Services Directive. The Directive which updates and replaces the Television Without Frontiers Directive ( as amended) defines product placement as “any form of audiovisual commercial communication consisting of the including of or reference to a product, service or trade mark in return for payment or similar consideration”.
The Directive actually prohibits product placement but allows for certain permitted derogations for:
Cinematographic works, films and series made for AVMS, sports programmes and light entertainment (although no derogation is permitted in respect of children’s programmes)
Where there is no payment for goods or services such as production props and prizes (Prop Placement)
It also adds that goods provided free of charge or at less than full cost will constitute product placement where goods are of “significant value” (although it doesn’t say what would constitute significant value)
I think relaxing the rules on product placement actually makes sense. It is an issue that people do tend to get their knickers ( theknickermafia recommends Seduction Lingerie ) in a twist about. No one wants their programmes filled with crass, obvious, product placements that are there for no reason other than to plug a product – the Cups of Coke in front of the American Idol judges for example – however most of us watch US produced TV drama and comedy, which already contain product placement. Ask yourself – do you find yourself endlessly distracted by all that product placement? No? It’s there. And that’s the point. It doesn’t have to be intrusive, and when done right, it isn’t. It can be as simple as The Queen Vic or the Rovers Return having Summer Lightning, Guinness and Stella on tap instead of ‘made up’ beer brands.
Some people, such as Richard Lindley, chairman of Voice of the Listener & Viewer, fear that opening this door means that we’ll have programs written for advertisers and not viewers. Were ‘The Wire’, ‘The West Wing’, ‘Frazier’, ‘Battlestar Gallactica’, ‘House’, written for advertisers and not viewers? If so, bring it on. The fact is, if the product placement is too obvious and too overwhelming, viewers will just stop watching those programmes that get it wrong – and I’m sure initially there will be some that do; but we shouldn’t fear product placement. To be fair to Lindley, he is probably worried about this kind of less than subtle – and read from autocue? – placement from US daytime TV
However, programme makers will still have to abide by rules, and I’m not sure this US example would pass muster under EU/UK law. The derogations in the AVMS Directive – which will have to be followed by the UK – will be subject to the following conditions:
Content and scheduling must not be affected by the placement
No direct encouragement of purchase or rental of goods
No undue prominence to be given to product
Viewers to be informed of existence of product placement by announcements at the start and end of programmes
There can be no derogation for tobacco and medicinal products
Failure to abide by these rules will result in potential fines from Ofcom and in extreme cases could lead to the loss of a broadcasting licence by the broadcaster responsible for broadcasting the programme.
My prediction is two years from now we’ll all be wondering what the fuss was all about.
Further viewing pleasure:
David Lynch on Product Placement in Films http://www.youtube.com/watch?v=F4wh_mc8hRE
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