As the UK Government lifts a ban on product placement in British TV programmes, could The X Factor become the UK Super Bowl for brands?  If placement traction in the US is anything to go by it certainly could.
 
The introduction of product placement offers something of a desperate lifeline to the beleaguered broadcasting industry. UK Culture Secretary Ben Bradshaw stated that keeping an enforced ban “would lead to continuing damage” of the creative industries and that to do so would also “jeopardise the competitiveness of UK programme-makers against the rest of the EU”. The decision leaves Denmark as the only EU country with a ban in place and new shows utilising the format are expected to roll out in the UK later this year.
 
The news may have a major impact on the way music reality shows – such as The X Factor – are handled in the UK. In America – where product placement accounts for around 5-6% of the advertising market – reality shows stole all the top 10 product placement slots in the US in 2009, according to Nielsen. American Idol featured 4,349 product placements during a recent run – which included a $35M deal with Coca-Cola. This brand saturation saw the Fox TV network generating $903M in advertising revenue in 2008 around the show. It’s not difficult to see how this will be replicated in the UK. ITV was apparently selling 30-second ad slots to late buyers for an estimated £190,000 – £250,000 in the run up to Christmas and product placements are bound to be equally lucrative.   Some experts believe new deals could raise as much as £125M annually for the broadcasting industry, although UK broadcasting regulator Ofcom is estimating that product placement could make a more realistic £25M to £35M within five years of launching.
 
Either way the prospects seem bright amid a £3B TV advertising market that is predicted to decline into 2012. However, some broadcasters are concerned that the news will simply divert marketing resources rather than provide additional funds. Also many advertisers are concerned over the additional ‘blacklist’ – against alcohol brands and food and drinks high in fat, salt or sugar – put in place by the UK Government. “If you take out HFSS and alcoholic drinks, those are the two areas most likely to get excited about product placement,” said one broadcaster.
 
A more interesting question for the music business is whether the recent interest in ad-funded music (such as Spotify) could now swing back to TV and usher in a wave of brand sponsored music TV models. Product placement in Internet music-based dramas – where restrictions don’t apply – have been utilised previously, such as Universal Music and Bebo’s online drama ‘The Secret World of Sam King’ in 2008 (which featured placement by Sony Ericsson). However, these audiences are minuscule when compared to national TV exposure.
 
Arguably the UK music industry has had to position its artists as ‘placed products’ on TV for some considerably time both in stand alone shows and within established dramas. As recording revenues continue to fall the gentle nudge towards deeper brand alignments rapidly becomes a shove of necessity. With the death of the traditional music television format – depicted by Top of the Pops/MTV’s TRL – could product placement see a resurgence of ad-funded music television? With artists and brands both crying out for greater exposure the lifting of the ban potentially opens up a wealth of opportunity. The X Factor hit its highest ever audience figures last year, making it unlikely to move from pole position for some time, but the next generation of integrated brand led music TV could be ushered in sooner than we realise with household names taking centre stage.

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