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Insight

Change to Regulation of Video-on-Demand

Ofcom is to take over the regulation of video-on-demand ("VOD") programme services alongside its current regulation of broadcast content with effect from 1 January 2016.  This follows Ofcom's recent Ofcom is to take over the regulation of video-on-demand ("VOD") programme services alongside its current regulation of broadcast content with effect from 1 January 2016.  This follows Ofcom's recent review of regulation to ensure broadcast and on-demand content regulation is as effective and efficient as possible for audiences and the industry.

Ofcom delegated its powers to regulate video-on-demand content in 2010 to the current co-regulator - the Authority for Television On Demand ("ATVOD") - but has since decided that a single regulator for video-on-demand is likely to be more effective than a co-regulation model.  It believes that operational efficiencies will be created by regulating on-demand content alongside traditional broadcast content.  In light of the increasing convergence of traditional and on-demand services, and given the complexity of the regulatory framework engaged, having a single regulator may prove to be a more effective way of delivering effective regulation in the sector.

VOD is becoming increasingly popular amongst viewers, with an increase of 27% in 2010 to 57% in 2014 of those aged 15+ consuming VOD services.  The figures are higher among younger audiences – 70% for 15-24s (second half of 2014) and 71% among 25-34s (second half of 2014) – up from 35% for both demographics since 2010.

ATVOD and Ofcom have committed to a smooth transfer of responsibilities to ensure that regulation will remain consistent and that audiences remain protected.  The Advertising Standards Agency will continue to act as co-regulator for advertising on VOD services.

 

In other news, at the request of the Secretary of State for Culture, Media and Sport, Ofcom is conducting a review of TV production and will be considering the changing market, effectiveness of current regulations, the impact of production sector regulation on Public Service Broadcasters ("PSBs") and the options for reform of regulation.  The UK’s television production sector has grown significantly in recent years, now generating revenues of around £3bn a year, establishing the UK’s position as a major global content creator and exporter.  There is growing uncertainty for PSBs due to the consolidation of the independent production sector and the acquisition of major UK producers by large foreign media corporations.  With increased vertical integration and consolidation in the market, the Secretary of State is concerned that the current system may disadvantage PSBs in the supply of a range of high quality original content.

Options for reform to be considered include adjusting the terms of trade, quotas, definitions of independent productions.  Ofcom will therefore need to review the potential impact of reform on PSBs, independent producers and other stakeholders, as well as looking at how regulation can promote content production for at-risk genres such as children's TV and religious programming.

Ofcom invites comments from stakeholders throughout the review of the report (to be submitted by the end of October 2015) with a view to Ofcom publishing the final report before Christmas.

 

 

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