Media Cos. Plug Product Placement at FCC

National Media Providers: FCC lacks jurisdiction; FCC rules already in place to prevent most abuses.
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Saying that product placement is here to stay, is growing and is integral to the survival of free ad-supported media in a multiplatform environment that has already put the 15- and 30-second ad in jeopardy, a mix of big media companies, broadcast groups and advertisers got together to tell the Federal Communications Commission not to adopt any new policies on enhanced sponsorship identification or product placement.

In a filing in the FCC's inquiry into sponsorship-identification rules and embedded advertising, the companies and associations, together dubbing themselves the National Media Providers, argued Monday that the boost in product placement should not result in a boost in FCC rules.

They argued that the FCC lacks jurisdiction in one case and justification in all cases, and that, legally speaking, product placement isn't even advertising but more akin to the sponsorship IDs in noncommercial shows.

In arguing for no more regulations, they pointed out that since the beginning of broadcast regulation in the 1920s, "There has been an unvarying requirement that all matter broadcast by any station for a valuable consideration is to be announced as paid for or furnished, and by whom."

To make any of the proposed changes would be "overkill," the commenters argued, and would "contradict the careful balancing of interests in the existing rules.” They argued that the FCC's stated goals of protecting children from overcommercialization, the "public's right to know" who is pitching them and preventing deceptive advertising are all "adequately addressed" in commission rules already.

They also argued that there has been no evidence that the existing rules are inadequate or that the public is hurt by product placement. They argued that the FCC is looking to usurp authority rightly confined to the Federal Trade Commission.

The media companies also drew a distinction between commercial sponsorship and advertising, invoking noncommercial TV's sponsorship IDs to make their point.

"FCC rules governing noncommercial broadcasting specifically distinguish paid-program sponsorship, including the display of trademarks and corporate logos, from ‘advertising’ that uses comparative language and/or ‘calls to action,’” they said. “Although enhanced underwriting in the noncommercial-broadcasting context and paid product placement in the case of commercial broadcasting require sponsorship identification … that does not mean they constitute commercial speech for purposes of First Amendment analysis.”

In a unanimous vote last June, the FCC proposed mandating that on-screen disclosures of product sponsorships be a certain size and duration, as is the case now with the disclosures of sponsors of political ads. It is also pondering extending product-integration rules to cable and removing a waiver for identification of plugs used in feature films aired on TV.

Currently, the FCC only requires that the sponsorship ID appear once during a show and remain on long enough to be heard or read by the average viewer.

The FCC is proposing changes to its 70-plus-year-old sponsorship-identification rules to reflect the rise of video-news releases, product placement and product integration.

The FCC confined its proposal to the size and duration of the disclosure but asked several other questions. Those included whether there should be contemporaneous on-screen identification of product placements and whether plugs in feature films aired on TV should have to identify the product sponsors. Those films currently get a pass.

The commission also asked for comment on whether it should clarify its rules governing advertising in children's programming to expressly prohibit embedded advertising. The commenters argued that FCC rules already preclude that. As to extending the disclosures to cable, the group argued that the FCC has no statutory authority to do so.

The National Media Providers making that argument included Fox, ABC (Disney), CBS, NBC, Viacom, Discovery Communications, LIN TV, Journal Broadcast Group, Citadel Communications, Entercom Communications, the Motion Picture Association of America, the Association of National Advertisers, the American Association of Advertising Agencies and the American Advertising Federation.

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