Reform groups want FCC to take on product placement epidemic

Ars Technica

Matthew Lasar

June 22, 2008

Almost two dozen public interest groups have asked the Federal Communications Commission to start a proceeding on what they call "advertainment"—TV programming saturated with product placement. "We must not allow television programs to become Trojan horses," the Campaign for a Commercial Free Childhood (CCFC) wrote to the FCC on Thursday, "carrying messages that would otherwise be criticized by the public or even deemed illegal."

The Campaign includes Children Now, Free Press, the Parents Television Council, the Benton Foundation, the United Church of Christ, and 18 other groups.

These organizations cite as cause for concern a Nielsen report indicating a 13 percent boost in product placement spots on network TV last year—over 25,000 placements in the top ten shows. If you watch American Idol on a regular basis, you saw over 4,000 product placements in 38 episodes this year, CCFC says.

The CCFC request is not the first along these lines. In May of 2007 two key House Democrats sent the FCC a complaint asking for an investigation of the problem. "As the use of product placement and product integration in television programs continues to expand, broadcasters and cable operators should comply in a meaningful way with their statutory obligation to identify what entity is behind sponsored programming and what product is being pitched," Rep. Edward Markey (D-MA) and Rep. Henry Waxman (D-CA) told FCC Chair Kevin Martin. Their letter suggested that advertisers are pushing product placement because more consumers use DVRs to record programs and fast forward past ads.

Markey and Waxman cited Section 317 of the Communications Act, the "payola" clause, which requires broadcasters to tell listeners and viewers if the license aired something "in exchange for money, services or other valuable consideration." And you've got to wonder about the planning behind two installments of the show Seventh Heaven in which Oreo cookies figured prominently in the plot. "I think what they're saying is that you can give a person a few Oreos and they'll talk to you," a child says during one of the episodes.
Valuable considerations

But working this out is going to be a little complicated for the same reason that the fight over undisclosed video news releases (VNRs or "fake news") is messy: what if nobody actually paid a network to place their phony news feature or product on a show? Or what if the network signed off on the placement as the result of a big, complicated quid-pro-quo deal that has no paper trail?

In the case of Comcast, which the FCC proposed to fine last year for running "news stories" on its CN8 show about sleep aids that were actually commissioned by Nelson's Rescue Sleep, the agency ruled that such fare went "beyond an identification which is reasonably related to the use of such service or property on the broadcast.” Therefore, Comcast ran afoul of the Commission's interpretation of Section 317. I think that a simpler way of saying it would be that if you give a program a free news feature or free products to show, that's the valuable consideration that violates the Communications Act.

But there's another problem: even if broadcasters do disclose the money and other goodies they received in exchange for placement, will that be acceptable? Will marinating a prime-time comedy directed at tweens with junk food sightings be kosher if at the end of the episode the credits quickly list all the valuable consideration donors?

Interesting questions to grapple with here, but the FCC has yet to launch a proceeding on the matter. The agency actually proposed an Notice of Propose Rulemaking (NPRM) on this issue at one point late last year. Then it mysteriously came off the agenda. Now advertising industry lawyers are trying to dodge the issue in their usual clever ways, urging the agency to launch a Notice of Inquiry (NOI) instead. Generally the Commission runs an NOI to decide whether it should actually propose some rules for public comment—without, of course, proposing the rules. Sometimes the FCC starts one in order to give the appearance of actually doing something, when, in fact, it doesn't want to (see impact of cell phone towers on migratory birds).

An NOI on product placement would just prolong the jaw flapping stage on this difficult problem, and there's already been plenty of that. Some of the groups who signed CCFC's petition have been asking the Commission to turn this into a serious docket item since 2003.