Tuesday, February 02, 2010

Tom Harris, Compass and Product Placement

There's been a bit of a spat developing between Compass and Tom Harris over this whole product placement affair. Personally (and not particularly surprisingly), I'm with the Compassites rather than the proto Blairite.

Beyond the idea of protecting our children I think there are a few other reasons worth considering. Firstly, there's the issue of regulatory complexity. It's often the case that liberalising or deregulating rules on something can actually make it harder and more resource intensive to regulate and this is a good example.

At the moment, policing product placement is simple (what part of "no" don't you understand?). If the ban is lifted it requires a new series of rules to ensure the product placement is not used gratuitously, this will require both a new set of more complex rules and the recources to enforce them. By removing the ban we actually make regulation of television more complex.

Further to this there are some economic arguments. Advertising, can in some ways be viewed as a transaction cost with the external effect of increasing consumer demand. In a society that is underconsuming this might be considered a positive externality, but is that really ther case in the UK?

Robert Peston's figures show our national debt (personal, corporate & government) as 380% of GDP, the years leading up to the credit crunch were characterised by lifestyles financed on debt, people living beyond their means. Considering the consequences of our overconsumption previously, do we really want to happily embrace a change that is likely to further fuel that culture of consumption?

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