The European Commission has relaxed its rules on television advertising and has opened the doors to legal product placement.

Until now the practice has been banned in most EU member states - with a notable exception being Austria. The Television without frontiers directive will now allow program makers to charge advertisers for featuring branded products in European shows.

The directive will also loosen the rules on when and how often commercial TV channels can interrupt programs with ad breaks. EU media commissioner Viviane Reding believes the directive will provide for a more "level playing field", create jobs, spur the production of European programmes and allow new technologies to flourish.

Product placement would unlock a fresh revenue stream for traditional broadcasters facing competition from digital and cable channels and growing sales of personal video recorders which allow viewers to skip ads.

In the US the product placement market was worth $3.5 billion (€2.91bn; £1.97bn) last year.

The new regulations, which can still be tweaked by national governments, would preserve safeguards for children's programs, news, documentaries and current affairs shows.

Data sourced from Financial Times Online and; additional content by WARC staff