AER’s Contribution to the Commission’s Consultation on Sponsorship

20 December 2002 – AER CONTRIBUTION TO THE COMMISSION’S CONSULTATION ON SPONSORSHIP (EXPERT GROUP ON COMMERCIAL COMMUNICATIONS)

In the context of the Commission’s commercial communications policy, AER is pleased to submit its views on the issue of sponsorship. It has been difficult to draw conclusions about the national experts’ opinions since we understand they refer to a draft opinion prepared by the Commission that has not been sent to AER.

Advertising and sponsorship are in most cases the only source of revenues for European commercial radio stations. They are thus a matter of great importance for AER, as representative of commercial radio operators in 11 EU Member States and Switzerland.

While advertising is an intrusive medium interrupting programmes, sponsorship is tightly bound to the programme. It is part of the programme output closely related to the station concerned and its sound. The effectiveness of sponsorship on radio is enhanced because radio is a very trusted medium. The trust of the radio station is shared by the product or service involved.

Definitions

In market terms, sponsorship is for radio a “Mutual exchange of brand values”.

In legal terms, we can define sponsorship as “any contribution made by a public or private undertaking to the financing of radio programmes with a view to promoting its name, its trade mark, its image, its activities or its products”.

Furthermore, it is important to draw a distinction between event and broadcast sponsorship. In this sense, we support the point made by the UK Department of Trade and Industry in its position paper.

The case of Europe’s commercial radios and sponsorship

As we said earlier, sponsorship is an important source of revenues for commercial radio stations. The percentage of revenue obtained by stations ranges for example from 20% (of total revenues) in the UK or 10% in Sweden.

The main overall benefits of radio sponsorship are:

  • Advertisers can enhance the listening experience
  • They can connect powerfully in a way that advertising may not
  • Sponsorship can be seen as adding value rather than detracting from programming.

Radio programmes are produced for national markets and are most often only aimed at regional and local markets. Thus, radio sponsorship, even of programmes based on events taking place in third countries, would mainly be attractive only to the area and to the language in which the programme is broadcast.

Commission’s questions on sponsorship

1. Is your organisation aware of specific actual or potential cross-border problems in the area of sponsorship?

The AER secretariat has carried out an extensive consultation among its members. After evaluating the responses received, we can conclude that today European commercial radio stations do not experience cross-border problems in the field of sponsorship. In its contribution to the Commission’s Green Paper on Commercial Communications of 1996, AER made reference to the expected technological evolution of radio services (e.g. terrestrial and satellite digital radio) and the potential cross-border implications. However, time has shown that despite developments in communication technology, radio continues to be a national, regional and local service. Even the introduction of the Internet has not changed the nature of radio. The percentage of Internet listeners outside a Member State for which the transmissions were primarily intended by comparison to those listening to terrestrial transmissions in their intended market, is so marginal that in our view it does not represent a cross-border problem.

2. Is your organisation aware of national codes that apply to these services in one or more Member State?

As far as we are aware, specific sponsorship codes exist in the area of alcoholic beverages in most European countries. It should be noted that the ICC (International Chamber of Commerce) is currently going through a revision of the “International Code on Sponsorship” that serves as a framework for national codes.

3. Your organisation’s opinion as to whether the application of mutual recognition either directly or through harmonisation is required in this field?

Considering that cross-border problems in radio sponsorship have not been identified, we believe a process of legal harmonisation is not necessary. As we said in our contribution of 1996, the only way to achieve a true internal market, which recognises the different national characteristics, is to continue to use the “country of origin” approach and the principle of “mutual recognition”. In any case, should cross-border problems arise in the future, these should be treated on a case-by-case basis applying EC Treaty rules (in particular, those concerning the free movement of services) and the extensive existing EC case-law.

ENDS
20/12/02

NOTES: Brussels-based AER (the Association of European Radios) represents the interests of 13 national private radio associations in eleven EU Member States and Switzerland, whose combined membership is approximately 4,500 private/commercial radio stations. The AER web site provides further information on membership www.aereurope.org