The legal considerations of branded entertainment in
Before engaging in branded entertainment, there are a few things
you're going to have to figure out. First, it is essential to
know the difference between "advertising" and
The line between the two may be blurring in some respects, and
even legally it can often be hard to define, but the distinction
can carry major consequences. Second (and related), you are also
going to have to figure out if your show, even if produced in
Canada, qualifies as Canadian content.
The branded advertainment content segment is booming. Think of
Recipe To Riches, for example, where entrants compete for the
opportunity to have their recipe selected by Loblaw to become a
President's Choice product. Projects like this are often the
result of a complex partnership between advertisers, producers and
broadcasters and come with additional legal and regulatory hurdles
compared to other productions.
There are 10 million reasons to pay attention to definitions. Once
something is deemed to be "advertising" (i.e. any
message, the content of which is controlled by the advertiser with
the intent to influence consumers' choice, opinion or
behaviour), it must adhere to all advertising laws, rules and
regulations of general application. For example, advertising cannot
be "false or misleading" and all implied or direct claims
about a product must be substantiated by adequate and proper
evidence. Failure to do so can result in significant penalties,
including administrative monetary penalties up to $10
Then there is the question of meeting Canadian content
requirements with their related tax benefits. When it comes to
branded content television, where brand messaging and products are
heavily integrated into the design and structure of the
programming, it becomes necessary for the applicable governmental
and regulatory bodies to assess whether the "Canadian"
criteria are satisfied.
If they decided the show is really one big commercial, it would
be deemed to be "advertising" and, therefore, be
ineligible for Canadian production tax credits and/or a CRTC
"C" number. Without such certification, a broadcaster
cannot claim the program against the Canadian program exhibition
Both the federal and provincial governments offer a number of
tax incentives to Canadian content productions to support the
development of the Canadian film and television production
For example, at the federal level, the Canadian Audio-Visual
Certification Office (CAVCO), a branch of the department of
Canadian Heritage and the Canada Revenue Agency administer the
Canadian Film or Video Production Tax Credit program and the Film
or Video Production Services Tax Credit program.
In Ontario, the Ontario Media Development Corporation (OMDC)
administers the Ontario Film & Television Tax Credit and the
Ontario Production Services Tax Credit. To be eligible for these
benefits, the program must meet certain "Canadian"
criteria similar to those established by the CRTC. Furthermore, the
production must not fall under an excluded genre such as, you
guessed it, "advertising."
In making this decision, the authorities will exercise a
significant amount of discretion and consider factors such as:
How much control the brand exercises over the production and
content of the program;
The extent of any brand/product integration into the show;
Whether the brand is providing financing to create the
Who owns the distribution rights;
Who came up with the concept; and
How much brand advertising is integrated into (and outside of)
the show itself.
Accordingly, advertisers will need to work closely with
producers and broadcasters to strike a balance between allowing the
producer complete control over the program messaging and content
(including any branded components) and protecting the interests and
investment of the brand.
The bottom line is that due to the unique legal and regulatory
considerations outlined above, the branded content program cannot
not be considered "advertising" without putting the
entire program in jeopardy. This can be challenging as advertisers
are, by nature, fierce protectors of brand image and are used to
having complete control over the content and distribution of any
Producers, on the other hand, will want to ensure that any
branded elements (such as product integrations) are authentic to
the story being told and do not interrupt the entertainment value
of the program. At the end of the day, viewers will ultimately be
turned off by something that looks, smells and feels like one big
Originally published in Marketing Magazine and on marketingmag.ca, July 24, 2013.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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