On 29 March 2023, the Department for Culture, Media and Sport published the draft Media Bill. It seeks to put in place the government’s strategy, as set out in the Broadcasting White Paper published on 28 April 2022, and streamline the broadcasting regulatory landscape, including, for the first time, video-on-demand (VOD) services.
The background
The White Paper which preceded the Bill set out various proposals for reform of streaming platforms. Their prominence in the current broadcasting market, has, as the White Paper acknowledged, placed pressure on traditional mainstream broadcasting distribution, which has seen a surge in competition but currently faces stricter regulation than the streaming platforms. The robust regulatory framework which applies to UK television broadcasting does not currently encompass VOD services (apart from the BBC's iPlayer service). The shift in viewing habits towards VOD services has led to the government reassessing this position and the Bill seeks to level the playing field from a regulatory perspective between VOD and traditional broadcast media.
A key proposal is that Ofcom, the UK communications regulator, will have a broadened remit and create a code similar to that of the Broadcasting Code which governs the standards for offensive, accurate and harmful material. It will set a standard governing VOD services that do not fall under the current regulations.
The Bill is also significant in that it casts a wide net in order to capture (and therefore regulate) those VOD platforms whose headquarters are not based in the UK, such as Netflix, Disney and Amazon Prime which are currently out of the UK/Ofcom regulatory remit but make content available to consumers within the UK. Legislating for Ofcom to increase VOD regulation (including those services situated outside the UK but which make content available to UK viewers) will provide for standardisation across all services.
The scope
The Bill is split into 6 parts with Part 4 focusing on VOD services.
The Bill introduces a new category of service called “Tier 1 services”, that are subject to "enhanced regulations". Tier 1 services cover:
- VOD services operated by Public Service Broadcasters (PSBs) and
- VOD services specified by the Secretary of State – these could be referenced by name specifically and may include both UK on-demand programme services and non-UK on-demand programme services (as some services are not headquartered within the UK but are still accessible).
Tier 1 VOD services will be subject to a new Ofcom code containing enhanced content standards and accessibility requirements akin to those applied to linear broadcasters, regardless of their establishment in the UK. The new Ofcom content standards code will be aimed at protecting minors, excluding content likely to incite crime or disorder, ensuring news accuracy, meeting impartiality requirements, protecting audiences from offensive and harmful material, and ensuring religious programmes are responsible.
Prior to the Secretary of State’s designations, Ofcom will prepare a report on the UK VOD market to include details of audience figures and content capacity. The Bill does not specifically identify particular VOD services that will be designated as Tier 1, the government’s press release on the Bill specifically references Netflix, Amazon Prime Video and Disney+ as falling within the scope of new regulation. It would be a fair assumption that these platforms would fall within the SoS's first designations.
In summary, the code will:
- create equal opportunities for PSBs and the content they produce
- bring VOD platforms that are operated from territories outside of the UK, but which are available to UK consumers, within the remit of Ofcom jurisdiction
- ensure the protection of all UK audiences with particular attention given to large non-UK operated VOD services, and proactively review via requests for information
- ensure compliance with standards for offensive or harmful material being distributed via linear channels or VOD services, to ensure fairness and accuracy
- promote and focus on local content production
- introduce a requirement for Tier 1 service providers to make content more accessible; for each of the first two years at least 40% of catalogue hours must be subtitled, 5% must be audio described and 2.5% must be signed. This then doubles such that in each of the subsequent years the targets are 80%, 10% and 5%, respectively
- align content standards of the most prominent VOD providers (whether based in the UK or not) to that of UK broadcasters to level the playing field.
Ofcom will, for the first time, be given the authority to control the compliance of these global streaming platforms not established in the UK but which make content available to UK audiences. However, the enhanced standards that Ofcom will implement only apply to these Tier 1s (whether UK or non-UK) whereas any amendment to audience protection measures will be applicable to all UK services and non-UK Tier 1s. It's not yet clear whether the SoS will put in place measures in relation to non-Tier 1 providers and the assumption is that, in relation to UK providers, they will continue only to be subject to the 'on-demand programme service providers' rules and in respect of non-UK providers, unregulated.
Who benefits from the new provisions?
The new legalisation will implement a simpler, flexible yet robust when applied, set of rules on what can be shown by PSBs and VOD services. This means that PSBs will be in a better position to adapt to evolving audience behaviours as more people conduct their viewing on digital devices instead of television sets.
The Bill also makes a conscious effort to make sure that PSB on-demand services are easily discoverable by audiences in the UK and includes new rules to make VOD content more accessible to those with seeing and hearing disabilities. There is a clear push for PSBs to be able to grow and create content on an equal footing with VOD services and invest in the new technologies currently not competitively accessible to PSBs given the lack of the subscription element.
VOD audiences also arguably benefit from these new regulations as they will now be able to make official complaints to Ofcom about content published by VOD platforms in the same way viewers currently can about PSBs and terrestrial live television. The Bill will require Ofcom to guarantee viewer protection measures are consistent, for example, through age ratings.
The rules in practice
One of the main aims of the code is to bring all mainstream VOD services accessible in the UK under an Ofcom regulated content code, and protect viewers from harmful material, for example misleading health claims. Recent research shows that the number of viewers watching programmes on linear broadcasting channels at the scheduled times has fallen by 25% since 2011, with 68% of this figure representing those aged 16-24.
It should be noted that there is an evident lack of commentary in the Bill on the scope of Ofcom's enforcement powers. Currently, under the Communications Act, Ofcom has enforcement powers covering registered on-demand programme services (for example BBC iPlayer.) Tier 1 services will now be subject to the compliance rules stipulated by Ofcom and, as such, Ofcom will also be in charge of handling complaints in relation to these services. Where VOD services do not comply with the legislation, Ofcom will have the authority to sanction them by issuing fines or restricting access to the UK market altogether.
Key takeaways
While there is nothing particularly surprising in the content of the Bill, it is important to monitor its development and any secondary legislation it may give rise to closely, including whether a second tier of regulated entities will be introduced. ITV’s Chief Executive, Dame Carolyn McCall, said: “This Bill will modernise the framework for a Public Service Broadcasting system that is the cornerstone of the £116bn creative economy." What the Bill fails to address is the increasing consumption of content on other video-sharing platforms which will fall outside the scope of the Bill.
For a considerable amount of time now, broadcasters BBC, ITV and Channel 4 have called on the (D)CMS to level the playing field. Viewing habits have changed over the last ten years and the global COVID-19 pandemic saw these linear broadcasters having to adapt quickly. If these proposals become law, there will be a noticeable increase in accountability of VOD services and they could be fined up to £250,000 or restricted in the UK entirely for failing to adhere to the new standards, particularly around harmful material.
The government has stated that the Bill will be put to Parliament and scrutinised as soon as possible and a consultation has already taken place.
To discuss the issues raised in this article in more detail, please contact a member of our Technology, Intellectual Property and Information team.
