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EU: Audiovisual Media Services Directive

Volume 708: debated on Wednesday 11 March 2009


My right honourable friend the Secretary of State for Culture, Media and Sport (Andy Burnham) has made the following Written Ministerial Statement.

I am today setting out how the Government intend to proceed with implementation of the European Union Audiovisual Media Services (AVMS) Directive.

The AVMS Directive amends the Television Without Frontiers Directive and extends its scope to cover video-on-demand services. It enables us to permit product placement—if we choose to do so—in certain types of television programmes, and subject to certain controls and safeguards. It gives the UK responsibility for regulating non-EU satellite channels which are uplinked to satellite from within our territory. It allows television broadcasters to take short extracts from other broadcasters’ exclusive coverage of events for the purpose of news reporting. Lastly, it makes changes to the amount and scheduling of advertising allowed in television broadcasting. The directive must be implemented by 19 December 2009.

The Government consulted last year on implementation proposals for four main areas of the directive: the definition of the services to be regulated; the regulatory arrangements for video-on-demand services; product placement; and the regulation of non-EU satellite channels. I shall address each of these issues in turn.

First, the directive requires us to regulate the content of video-on-demand services—that is, mass media services whose principal purpose is to provide television programming to the public on demand. It calls for this to be done through co-regulatory arrangements in which the video-on-demand industry takes responsibility for ensuring content standards.

Ofcom will be given powers to regulate UK video-on-demand services so that Ofcom can then designate, and delegate powers to, an industry-led co-regulatory body to regulate programme content in these services.

These arrangements will ensure that UK video-on-demand services maintain, as a minimum, the standards and requirements set out in the directive. All UK providers will need to notify the co-regulator that they are providing a video-on-demand service.

The directive does not allow us to rely on self-regulation, but it is right that industry should be allowed and encouraged to set up and manage its own regulatory arrangements as far as possible, as it has done very effectively since 2003 through the self-regulatory body, the Association for Television On Demand. In the light of these decisions, the Government urge video-on-demand service providers to work together to finalise the details of the new co-regulatory arrangements.

The directive’s definition of the on-demand services to be regulated will be transposed into UK legislation. The definition is narrow and covers only mass media services whose principal purpose is to provide television-like programming to users. The co-regulator will be able to issue guidance on the interpretation of the definition and on the services which fall within its scope. Those whose role is only to provide access to other providers’ video-on-demand services will not be responsible for the content of those services. However, the Government expect that access providers will want to ensure, as far as possible, that all video-on-demand services to which they provide access meet the minimum standards required for UK video-on-demand services.

The Government also expect that Ofcom will designate, and delegate powers to, the Advertising Standards Authority (ASA) to regulate advertising in video-on-demand services. This will maintain the ASA’s role as a one-stop shop for all complaints about advertising. The directive’s definition of the advertising to be regulated will be transposed into UK legislation, and the ASA will be able to issue guidance on the interpretation of the definition and the advertising which falls within its scope. The Government expect that this will cover all advertising in video-on-demand services, both that which is included in programmes and that which accompanies them.

For both programme content and advertising, Ofcom will retain backstop powers to deal with serious or repeated breaches of the standards and to intervene in the event of systemic failure.

Secondly, the directive sets out new EU rules on product placement in television and video-on-demand. These require member states to prohibit product placement but allows them to make exceptions to permit it in certain types of programme, if they choose to do so.

Last year, when we launched the consultation, I indicated an initial preference to maintain the status quo on product placement in television programmes. I said, however, that the Government would listen to both sides of the argument. The Government have received many representations on the matter since then, and we have considered them carefully alongside existing research and evidence.

Programme makers, commercial broadcasters and advertisers have argued that product placement would give broadcasters a new source of revenue. Responses provided a range of assessments of the value of this revenue. Ofcom’s assessment in December 2005 of the revenue of product placement in the UK market was that most observers thought it might be worth around £25 million to £35 million after five years. Respondents believed that the expected revenue would help maintain investment to ensure quality and diversity of programmes on British television. They also argued that rules ensuring that products are not unduly prominent in programmes would make sure that product placement did not detract from viewers’ enjoyment.

On the other hand, consumer and viewer groups argued that allowing product placement in television programmes would bring about a blurring of the distinction between advertising and editorial content in television programmes which would undermine the trust viewers have in the integrity of UK-made programming. It was also argued that allowing product placement would risk undermining the creative integrity of writers. Others were concerned that product placement could weaken the effectiveness of our restrictions on the promotion to children of foods high in fat, salt or sugar.

The Government recognise the legitimate points made in these submissions and the strength of feeling on both sides of this issue.

On balance, and mindful of the need to maintain public trust in television broadcasters and British television’s reputation for high standards, the Government have concluded that no conclusive evidence has been put forward that the economic benefit of introducing product placement is sufficient to outweigh the detrimental impact it would have on the quality and standards of British television and viewers’ trust in it.

Therefore, the Government have decided to maintain the status quo so that product placement will continue to be prohibited in television programmes made by and for UK television broadcasters.

The Government recognise that these are challenging times for broadcasters and are prepared to look at new evidence as it emerges and to consider first other avenues to assist broadcasters. Through a separate process arising from the AVMS directive, Ofcom is currently reviewing the rules on the quantity and distribution of television advertising. This review will consider the different regimes which currently apply for public service broadcasters (PSBs) and non-PSBs. Ofcom's conclusions will be announced after Easter.

We will review the position on television product placement in 2011-12, taking into account the conclusions reached by Ofcom on the quantity and distribution of television advertising, changes in viewing habits, and any new evidence about the impact and potential benefits of product placement.

Product placement is currently allowed in programmes made by and for UK video-on-demand services. Maintaining the status quo means that this will continue, subject to the limitations and safeguards imposed by the directive and the co-regulator.

Product placement will also continue to be permitted in films, and in television programmes acquired from outside the UK, subject to the limitations and safeguards imposed by the directive. Product placement will continue to be permitted in all television and video-on-demand programmes, subject to the requirements of the directive and to guidance from Ofcom and the video-on-demand co-regulatory body.

Finally, the directive requires member states to ensure that non-EU satellite TV channels which are uplinked from their territory and can be received within the Community meet minimum EU standards. A channel is uplinked from a member state if that country hosts the ground station from which the television signal is sent up to the satellite for broadcast.

As a result, non-EU satellite television channels which are uplinked from within the UK and which are not already within the jurisdiction of another member state of the EU or European economic area will be required to have a broadcasting licence issued by Ofcom. This will ensure that Ofcom can take appropriate action against them if they breach the standards set out in the directive. Providers of uplink services will be required to stop uplinking a channel if they are informed by Ofcom that the channel does not have a licence or that it is in breach of the licence conditions, but they will not be required to check that a channel has a licence before agreeing to uplink it, or to monitor broadcasts themselves.

The Government are working closely with Ofcom and with the broadcasting and video-on-demand industries to establish the new regulatory arrangements.

The Government are considering separately the implementation of the short reports provisions of the directive.

Later this year, the Government will lay before Parliament an order under Section 2(2) of the European Communities Act 1972, to implement the new arrangements in UK law.