It has been a busy week on the content regulation front. On 14 September Ofcom published a consultation on the implementation of the Audiovisual Media Services Directive and the future regulation of video on demand services followed by last night's announcement by the Secretary of State for Culture, Media and Sport, Ben Bradshaw MP, that the Government will be re-assessing its previous decision not to permit product placement, following a further public consultation. Both will have wide ranging implications for content producers and broadcasters.

What is the Directive?

The Directive deals with the regulation of on demand and linear (traditional broadcast) programming. It replaces the Television Without Frontiers Directive that dates from 1989 and which set minimum standards for linear television services across Europe. The Directive continues the existing rules for linear programming but also extends regulation to television like VoD services for the first time so as to create a level playing field for emerging audiovisual media services across Europe. The Directive provides for two tiers of regulation with VoD services being subject to a lighter level of regulation than linear programming.

Ofcom this week published a consultation on the implementation of the Directive and the proposals for regulation of VoD services (the Consultation). The Consultation seeks input on the following main issues:

  • the draft guidance covering what services will be in the scope of regulation;
  • the designation of the Association for Television On-Demand (ATVOD) and the Advertising Standards Authority (ASA) as co-regulators for editorial on demand content and advertising around this content; and
  • the suggested allocation of responsibility between the co-regulators and Ofcom regarding the administration of VoD service notifications under the new regime;

The Directive has to be implemented into UK legislation to have effect. Draft regulations amending the Communications Act 2003 have been drafted and are proposed to take effect from 19th December 2009.

Which services will be affected?

There are various criteria in the Directive to determine if a VoD service will be regulated, including:

  • is the principal purpose of the service to provide "television like services";
  • are the programmes provided on an on demand basis to members of the public;
  • is the service established within the UK jurisdiction for the purposes of regulation; and
  • is there a media service provider with "editorial responsibility".

Only if all of these criteria are satisfied will the service attract regulation. The Directive also sets out various services that will not be caught by the regulation including: electronic versions of newspapers and magazines; private websites and correspondence and unmoderated user generated content.

A key concept of the Directive is platform neutrality: a service will attract regulation if it fulfils the definition of an on demand service and it is immaterial if the service is accessed, for example, via a cable service, via the open internet or on a mobile phone. The key point is that it is the service that is regulated and not the platform it is accessed through.

The Consultation seeks views on how to decide exactly which services will be in scope of the regulation. The Consultation contains draft non-binding guidance on the statutory definition of what constitutes a VoD service to help providers work this out. It is proposed that this guidance is owned and administered by the new co-regulator for editorial content. The Consultation also contains an illustrative list of services that are likely to be considered as falling within the scope of the new regulatory remit.

In addition, the Consultation covers the proposed notification process whereby VoD service providers will be required to notify the co-regulator of an intention to provide a VoD service. It is proposed that the co-regulator will take primary responsibility for running the notification process, but that Ofcom would deal with borderline cases where it is not clear if a service is within the scope of regulation and would also deal with enforcement of decisions around notification and scope, such as the imposition of statutory sanctions.

Minimum standards for VoD Content

The Directive will introduce new minimum standards for VoD content which can be summarised as:

  • VoD editorial content should not contain any incitement to hatred based on race, sex, religion or nationality;
  • content which might seriously impair the mental, physical or moral development of minors should only be available in such a way that ensures minors will not normally hear or see such content; and
  • content should comply with the rules on sponsorship in the Directive.

The Co-Regulators

The new regulation will be provided through a co-regulatory framework. The Consultation is asking for input on the proposal that ATVOD will be the new regulatory body for editorial content and that the ASA will be responsible for regulating advertising on VoD services.

In each instance Ofcom will retain backstop powers, were there to be a failure in regulation. Although this is the first formal regulation of on demand content, ATVOD is already running the voluntary self regulatory scheme for television on demand.

The Consultation on proposals for the regulation of video on demand services is open until 26th October 2009 and is available at: http://www.ofcom.org.uk/consult/condocs/vod/. A summary of responses to the Consultation and a decision statement is due in December 2009.

Further consultation on Product Placement

The Directive gave member states the opportunity to allow product placement (the inclusion of, or reference to, a product or service within a programme in return for payment or other valuable consideration to the programme maker or broadcaster) in certain limited genres of programming for the first time. Many member states have taken the opportunity to introduce this to help the ailing broadcast advertising market, but in April of this year the UK Government announced that the UK would not be joining this group and that product placement in programming made for and by UK broadcasters would not be allowed to contain product placement.

This decision was heavily criticised at the time and, in the face of this continued criticism and lobbying from UK broadcasters and producers, the UK Government last night formally announced its decision to reassess its previous decision. A further public consultation is to be conducted, which is expected to lead to a relaxation of the rules and to permit product placement after all.

Product placement would still be subject to various controls, such as the rule prohibiting undue prominence of the goods and services placed and the ban on product placement in children's programming will be retained. The detailed rules, originally to be included with this year's legislation to implement the Directive, will now be separated out to allow more time for the consultation. The new consultation paper is expected within the next few weeks which should set out further detail on the revised time-frames.

Some analysts are saying that a relaxation of the rules around product placement would not be a panacea for the embattled commercial broadcasting market, but this decision to revisit the ban is, nevertheless, likely to be very much welcomed by the UK's broadcasters and others in the industry.