Hong Kong mulls new direction on TV product placement

HONG KONG - Regulators here will be taking a hard look at the rules governing free-to-air television product placement advertising.

A spokesman for the Office of the Communications Authority (CA) tells Campaign Asia-Pacific it has “expedited” new research into how indirect advertising and sponsorship over free-TV services are handled in overseas jurisdictions.

In addition, it’s also planning a new survey to gauge the opinions of Hong Kongers on existing rules.

“Outcome of the research and survey would facilitate the CA's consideration of the way forward,” the regulator says.

This latest review follows recent challenges to controversial CA rulings on indirect advertising complaints.

In August, Television Broadcasts Limited (TVB) fought back against a CA decision that fined the free-to-air broadcaster for showing KFC fried chicken being eaten on a TV show last December. TVB argued the regulator blocked its right to free expression and that its "heavy-handed limitations on product sponsorship in Hong Kong goes [sic] against the international trend and is [sic] not conducive to the development of the Hong Kong TV industry."

The CA's latest moves also come on the heels of reported comments from Li Ruigang, the new vice-chairman of TVB, calling for looser rules around product placement, as free-to-air networks compete with new digital services.

In an email response, the CA tells Campaign it has invited TVB “on various occasions” to submit proposals for changing the rules on indirect ads and sponsorship, but has received nothing from the broadcaster to date.

Campaign made multiple requests for comment from TVB for this story, but has not received a response as of this writing.

TVB dominates Hong Kong’s free-to-air TV market, but profits have been slipping this year on slower advertising revenue and online competition.

Current rules restrict free TV broadcasters from indirect advertising. Product or service sponsorship may only if accepted if “clearly justified editorially, not obtrusive to viewing pleasure and not gratuitous.”

Such wording leaves a lot open to interpretation. “I think the regulations around product placement in Hong Kong are very weak at the moment,” says KK Tsang, CEO of marketing services firm The Bees Group.

Tsang says a lack of clarity has hindered TV broadcasters from effectively developing product placement, since consumer complaints can very easily lead to penalties and regulatory headaches.

Meanwhile, Hong Kong advertisers naturally shy away from pursuing placement as a marketing tool, since local TV is not yet skilled enough at how to implement product placement the right way.

“I’m not sure if it’s a chicken or egg problem,” Tsang says. But making the rules clear would be welcomed.