New law allows product placement in some television programs

As of June 1, product placement in soap operas or talk shows will become a legal way for television networks to increase their budgets in the Czech Republic. This change in law follows an EU directive aiming to provide some clear guidelines for product placement in television. Networks are obliged to air a disclaimer before any program that contains this form of advertising, but nonetheless, the line between advertising and programming has just become a bit more blurry. Media lawyer Martin Elger talks about the significance of this new law.

“The change in the Czech Broadcasting Act, valid from June 1 of this year, is the transposition of a European directive of this problem. Czech TV broadcasters may use this product placement in some types of TV programs for the benefit of their budget. This product placement makes it possible to produce new TV programs and to finance the TV service in the Czech Republic.”

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This is part of implementing a new EU directive, but until recently, product placement was regarded as rather problematic in Europe, unlike in America, for example. What brought about this change?

“I think Europe recognizes that to be able to compete with the American entertaining business, it’s necessary to make this kind of commercial activity possible, and this is the main reason for Europe some types of product placement.

“Generally, product placement is banned; only in some types of programs it is legal, and only if the broadcaster fulfills some conditions, such as clear announcement to the viewers that the product is broadcast with product placement, and also, there is another condition, to use product placement in an appropriate manner.”

Lastly, how do you think will this affect the way advertising is done in the Czech Republic, and how will TV networks be affected by this new legislative?

“I think it’s a commercial question. I recognize that now there are huge hopes for TV broadcasters and also some production, but in reality, this will be a question of the commercial and market situation here in the Czech Republic, and I’m not sure if these hopes will be fulfilled.”