Earlier this week, the UK’s House of Lords Communications and Digital Committee published its report titled “Public Service Broadcasting: As Vital As Ever“, following its consultation on the impact of Subscription Video-On-Demand (SVOD) services on the UK’s public service broadcasters (PSBs) such as the BBC, Channel 3, Channel 4 and Channel 5.   Amongst other aspects, what is clear from the report is a strong desire to ensure that public service broadcasters are not unfairly hindered as a result of the rapid proliferation of channels and online services (largely due to the rise of SVOD platforms).   Whilst the committee did not support proposals to put a levy on SVOD services such as Netflix, Amazon and Apple TV+, it did recognise that Ofcom should continue to assess the merits of a levy, therefore it will be interesting to see Ofcom’ s response to the report in light of the increasingly competitive environment faced by PSBs.

We set out the key points from the report below:

  • Public Service Broadcasting remains essential to the UK and in its forthcoming PSB review, Ofcom should also consider the contribution of content from non-public service broadcasters to public service objectives.
  • PSBs must produce content which serves and reflects all audiences in the UK.
  • Ofcom should report on the diversity of commissioning teams at PSBs to ensure that under-served audiences are represented at all stages of programme development.
  • The listed events regime provides important protection for the availability of major sports events and the number of listed events should be increased.
  • The Government should broaden the requirement to provide programmes to and fund  the BFI National Archive to non-public service broadcasters and SVOD platforms which produce content in the UK.
  • High-end TV Tax Relief should be tapered in from £800,000 to remove the incentive to spend more to reach a cost of £1 million per hour.
  • Ofcom should explore the future of the Terms of Trade, which are enshrined in the Communications Act 2003.  The report states that as part of its review of public service broadcasting, Ofcom should consider whether the Terms of Trade unfairly disadvantage public service broadcasters in a competitive market and further states that “The Terms of Trade were originally introduced to protect independent production companies from the dominance of public service broadcasters. Given the degree of consolidation in the market, in order to uphold their original purpose of protecting small and medium sized independent production companies, Ofcom should review whether the Terms of Trade should still to apply to larger companies.”
  • The report distanced itself from calling for the introduction of an SVOD levy but it did note the potential threat of rising production costs on PSBs.  The report states that “In a fast-changing market public service broadcasters’ access to third-party funding for programmes for UK audiences should be kept under review. We do not support proposals for a levy on SVOD subscriptions at this time, but we would expect Ofcom to assess the merits of a levy if the situation changes and to make recommendations accordingly.
  • The report calls for the creation of a Funding Commission to oversee the process for setting the BBC licence fee, in an attempt to ensure an “independent and transparent process”, and supported Ofcom’s recommendation to improve the prominence of PSBs as viewers move away from linear channels.
  • The Government should support PSBs in the new technological environment, and think very carefully before imposing any further regulatory or financial burdens which might impinge on their ability to fulfil their public service obligations to viewers.
  • Ofcom should review the adequacy of the broadcast and non-broadcast codes in respect of video advertising with a view to making recommendations to reduce the difference of regulatory burdens between broadcasters and on-demand services.  The report states that following the UK’s departure from the EU, the Government should implement provisions of the Audio-Visual Media Services Directive on advertising to ensure a level playing field and make video-sharing platforms responsible for the advertising that they display.

Hayley Brady
Hayley Brady
Consultant, Head of Digital and Media, London
+44 20 7466 2079

James Balfour
James Balfour
Associate, Digital and Media, London
+44 20 7466 7582