Changes to EU law around the regulation of On Demand Video

There has been a relaxation of the rules around Product Placement and Sponsorship; but there are still key restrictions and regulations around the requirement to identify product placement and for the advertiser to have no influence over the editorial.

This is a key issue for creators and publishers of short form branded on demand video, including brands, publishers and digital platforms.

Background

The AVMSD regulates both broadcast TV and on-demand services. The current revision deals with a number of issues across the board.

Within scope of the AVMSD is also the regulation of services that provide access to "TV-like" content if the "primary purpose" of the service in question is the provision of that video content.

Over the last couple of years more and more online services are getting caught by this as more short form content is deemed to be “TV-Like” and more services have dedicated video areas. The regulators have made a number of decisions recently that tighten the rules to capture these dedicated video sections as they can be deemed to be separate services that therefore fall within the “primary purpose” test.

Impact for branded content

The key impact in this context is that if a service and content is caught by the regulations, then a number of rules around the content itself and commercial communication within the content need to be complied with.

The Product Placement rules have to date been very restrictive and have not allowed the commercial model of advertising funded content to flourish. Historically this had little impact on short form branded content, but as the AVMSD net gets wider this is becoming an issue for brands and digital platforms.

These current revisions are aimed at relaxing the rules and making it easier for brands to fund and be promoted in video content, but still contain key restrictions on the commercial messaging:

• Sponsored or product placement content "shall in no circumstances be influenced in such a way as to affect the responsibility and editorial independence of the media service provider"
• Sponsorship or product placement content "shall not directly encourage the purchase or rental of goods or services". The revision removed the extra wording, but the remaining restriction still needs consideration
• The following restriction on product placement has been removed. This will be very helpful in removing a large degree of uncertainty in how to effectively implement product placement
• However the following disclosure requirement is still in place - viewers shall be clearly informed of the existence of product placement. [Content] containing product placement shall be appropriately identified at the start and the end […], in order to avoid any confusion on the part of the viewer".

This issue around product placement and commercial messaging, as well as the overall theme about which services are now being caught by the regulations as a whole, will be a key challenge in this space going forward.

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