Howell praises product placement

LONDON — An ITV topper has called for U.K. regulators to follow the lead of the U.S. and allow product placement in British TV shows.

ITV’s managing director for brand and commercial, Rupert Howell, speaking on “The New Economics of Television” at a Royal Television Society dinner June 5, highlighted the urgent need for new revenue sources including product placement, which he said was a $5 billion market in the U.S.

Claiming that deflationary pressures had resulted in ITV advertising now selling at 1985 prices in real terms, Howell said auds had “nothing to fear” from product placement, which is expected to be allowed in the U.K. in the near future, provided it is done properly.

He illustrated his point by showing a clip from the U.S. version of “The Office” in which product placement was woven seamlessly into the storyline.

Howell said: “If we do it badly people will switch off or switch over, we have to do it well, it will not be big but it will be valuable.”

ITV also needed to re-introduce premium-rate phone services despite last year’s revelations of viewers being consistently ripped off by phone-in quizzes, which resulted in a $11 million fine for the broadcaster last month.

He said: “PRTS revenues will return but it will need due care and attention.”

Howell added: “We will need watertight controls; however, interactivity is here — you can’t deny it’s a perfectly legitimate revenue source.”

The ITV chief, regarded as a potential successor to executive chairman Michael Grade, also called for a loosening of ITV’s public service broadcasting requirements, that includes a commitment to regional news, which he said were “out of step with current realities.”

His remarks came on the day a critical report from investment bank Lehman Brothers demanded “urgent acceleration” in Grade’s turnaround plan for ITV.

“Eighteen months into the new management’s tenure, but shy of a year into the plan, we find that, even leaving aside the macro situation, the plan is not progressing at the rate with which investors should be satisfied,” said the report.

ITV’s stock price has fallen by 31% so far this year against a 7% fall overall for the Financial Times index of top 100 U.K. companies.

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