In the UK, advertisers say the recent ban on advertising products that are high in salt, sugar and fat will reduce revenues by around £40 million per year, and there have been calls for a "children's fund" to safeguard the future of the sector.
But how much of an impact have regulations had across Europe, and what are broadcasters doing about it?
Across the European Union, the situation varies. The current regulatory framework is provided by the Television Without Frontiers Directive, which is designed to create a single European TV market. In place since 1989, it provides a minimum set of common rules, and includes provision for the protection of minors.
TVWF has now morphed into the Audio Visual Media Services Directive, which is due to be finalised under the Portuguese presidency of the EU. AVMS is designed to bring the rules up to date to cover all audio-visual media, and offer more flexibility for TV advertising, complete with an emphasis on industry self-regulation.
Enshrined in the directive is the "country of origin" rule, which states that content must comply with the laws of the country of broadcast. Will Gilroy, a spokesman for the Brussels-based World Federation of Advertisers, says the directive has been a "huge success for advertisers, having created a level playing field for broadcasters".
Under the directive, advertising is prohibited from exploiting minors' credulity, directly encouraging pester power, exploiting children's trust in parents or teachers or showing minors in dangerous situations.
Beyond this, member states can impose their own regulations, which, Gilroy says, has led to a "range of rather cluttered national rules, but, in general, minimum harmonisation".
The UK's recent ban on junk-food advertising to children applies to all children's programming, dedicated children's channels and programmes with an above-average audience of under-16-year-olds.
Sweden has banned all advertising to children who are under the age of 12 since 1991, and it used its EU presidency to push hard for this measure to be adopted across Europe.
The Broadcasting Commission of Ireland adopted a stringent code in 2005, which restricts the use of celebrities and famous characters in advertising to children.
In France, all food advertising has to carry public health messages. Greece has banned all toy advertising between 7am and 10pm, and Norway's public channel TVNorge shows no ads to children before 9pm.
Other countries, such as The Netherlands and Spain, have favoured self-regulation, and the AVMS means this approach is more likely to be adopted in the future. Gilroy says advertisers are "beginning to align their marketing strategies with society based sensitivities", and a range of companies that include Mars, PepsiCo and Cadbury Schweppes have recently announced they will stop advertising to children.
Filippa Arvasolsson, the head of media at the Ministry of Culture in Stockholm, says programming has been little affected by Sweden's long-running ban because it is such a small market. "Our major public broadcaster has strict requirements to provide a certain amount of children's programming," she says. "One commercial broadcaster has strict licensing requirements, and the other two major ones are based in the UK, so they are not affected by the rules."
The UK ban, however, has dealt a blow to children's TV. Ofcom estimates that the restrictions will reduce adspend by £40 million, and says the future of high quality UK-originated programming is under threat.
Competition in the UK is intense, with more than 20 dedicated children's channels on air and increasing pressure from other media. ITV no longer makes its own children's programmes, and it has recently unveiled plans to reduce children's programming on ITV1 to just five hours per week.
Dedicated children's channels such as Nickelodeon and Cartoon Network have taken a hit, but are aided by being part of international networks so they can share production and rerun costs.
They say that while the restrictions hurt, they will still continue to invest in original programming.
Dee Forbes, the general manager of Turner Broadcasting UK and Ireland, says: "Ofcom rulings govern anything that is broadcast from the UK, so a number of our channels are affected.
"Similar to everyone else, we were taking revenue from that form of [now banned] advertising, but it's now about moving forward. We are upbeat about the UK marketplace."
Turner recently revamped its UK channels and launched a dedicated Cartoon Network Development Studio to create UK content, which it hopes will encourage UK and European programming.
"We've experimented with European producers in the past, and felt the time was right to go it alone," Forbes says. "Of course, we are looking for European-inspired and UK-inspired talent, but the outcome of that will be seen worldwide."
The network will launch a second series of Robotboy this September, in co-production with the French animation house Alphanim. And Skatoony, an animated and live-action quiz show, which pits cartoon characters against real children, will also be back.
Turner has also responded to market challenges by rebranding its sales team, and adapting to new media, working with manufacturers and retail partners across TV and online.
"The key thing for us is that we have content on as many platforms as possible," Forbes says. "It's no longer about the TV in the corner of the room. We have to look at other revenue models and other advertising platforms. It's a challenge, but we're moving on."
LazyTown is the brainchild of Magnœs Scheving, an Icelandic world aerobics champion with a mission to motivate children around the globe.
A true Renaissance man, Scheving is the show's creator, writer and producer, and the chief executive of LazyTown Entertainment, as well as the show's lead character, Sportacus.
LazyTown depicts a world of children tempted with sweets and laziness by Robbie Rotten, the show's slothful villain. Sportacus is invariably on hand to help them see the light via a combination of exercise and "sports candy" in the shape of fruit and vegetables.
LazyTown airs in 109 countries and in 13 languages; it is the number-one children's show in the US. Children in Iceland go to bed at precisely 8.08 pm, because that's when Sportacus does.
As the world's most expensive children's TV show, LazyTown is created under one roof at a purpose-built studio in Gar_ab¾r, Iceland. Each episode costs around $600,000 to $1 million to make, using advanced screen animation techniques. Scheving has built the LazyTown concept from books, TV and stage to a global lifestyle brand for children, relentlessly pursuing new retail and media channels.
"LazyTown will not go the traditional licensing way where you can slap a logo on any old product," Scheving says. The secret of the brand's success, the entrepreneur, TV star and athlete says, is "integrity, and never compromising when it comes to children", so sedentary toys and fast food are out.
"If you do see LazyTown on a bottle of water," Scheving claims, "you can be sure it's the healthiest water there is."
Health initiatives include the LazyTown Economy, in which Icelandic children exchanged vouchers for healthy products, boosting sales of fruit and veg by 22 per cent in just one month. Scheving is now in talks with the UK's public health minister, Caroline Flint. Merchandise with the LazyTown logo on it includes activity-based toys, accessories and home furnishings.
Live tours are also scheduled for the UK and the US, and a Nintendo video game and movie are also in the planning stages.