A new extra-territorial scope is on the horizon for the UK's video-on-demand rules

The Media Bill proposes significant changes to the current regime for video-on-demand (VoD) services available in the UK, alongside its public service broadcast (PSB) and radio reforms.

A central aim of the Media Bill reforms is to level the regulatory playing field between linear and VoD, in recognition of the scale and impact of on-demand programming and digital streaming services in relation to UK audiences.

The UK government intends to achieve this aim by upgrading the relatively light-touch on-demand programme services (ODPS) regime to impose a more fulsome set of standards on VoD services (akin to the linear Broadcasting Code) and to extend these rules to cover major non-UK services.

The legislative intent is to capture VoD services that may have a significant impact on UK audiences and are watched interchangeably with linear programming, but are currently outside of Ofcom's remit due to the current jurisdiction test, which is premised on a country-of-origin principle.

From origin to destination (for some)

Under current law, the provider of a VoD service made available to UK audiences can only fall within Ofcom's jurisdiction if it: has its head office and makes editorial decisions about the service in the UK.

Following the end of the Brexit transition period, the single-market passporting system for VoD services originating from a Member State, as enshrined in the Audiovisual Media Services Directive, no longer extends to the UK. A similar regime set out in the European Convention on Transfrontier Television provides a fall-back passporting system between signatories to that convention, but only for linear channels and not to VoD or over-the-top (OTT) content.

If a service provider falls within UK jurisdiction and meets the full ODPS criteria, as set down in the Communications Act 2003, then the provider needs to notify Ofcom. A provider notified to the UK regulator will also need to comply with the ODPS rules, which is a relatively flexible and light-touch regime.

The bill creates a new category of "tier one" VoD services, which are either PSB services used to fulfil a public service remit other than those operated by the BBC or any other UK or non-UK VoD services designated (by name or by definition) in secondary legislation. The scope of this second limb is undefined, but the expectation is that this will include certain services not based in the UK, but which make their services available to UK audiences

How to identify tier one services

The list of named tier one services, or the parameters within which they will be defined, will be designated by the secretary of state. The criteria is not spelled out in the draft bill, although subsequent comments by government ministers makes clear the intention is to capture VoD services with substantial UK audiences and which make available "TV-like" content.

These changes will primarily impact larger non-UK VoD services, in particular global services whose catalogues are not derived from UK broadcast content (where programming has already been vetted for Ofcom Broadcast Code compliance).

Enhanced compliance regime

Both UK and non-UK tier one services will be subject to enhanced regulation under the draft bill, including a review of audience protection measures. Tier one services will also need to adhere to new standards and accessibility codes, developed by Ofcom.

The standards code will be designed to account for a number of objectives set out under the bill, including: the protection of children, the exclusion of material likely to incite crime, and due impartiality regarding views of the service provider. Ofcom is also required to provide a new accessibility code for tier one services to ensure that these are accessible to those with disabilities.

Osborne Clarke comment

The proposals are not unexpected but represent a significant shift towards a more onerous regulatory environment for some of the biggest OTT industry players. For the first time, larger VoD-only service providers will need to adhere to content standards similar to those applied to broadcast TV channels.

These changes are designed to level the playing field between VoD and linear, given the increasing prevalence of on-demand services and their impact for UK audiences. The government has indicated it is keen to guard against UK audiences being exposed to certain types of content available in the USA and elsewhere, such as polarised political commentary and potentially exploitative religious programming.

The proposal is to operate a tiered system, ostensibly based on proportionality; that is, only the largest services with the biggest audience impact should be subject to the strictest rules. While this logic is clear, many in the industry note that it is not immediately clear that this would achieve the government's aim of protecting audiences. For example, there are many niche services that have dedicated yet relatively small fanbases, but make available potentially harmful content on a regular basis. This tiered approach does not apply to the linear TV regime; no matter how far down the programme guide a channel is placed nor how small the audience, all licensed services have to comply with the Broadcasting Code.

The extension of jurisdictional scope to capture larger non-UK services aligns with post-Brexit changes to linear rules, which apply to channels on a country-of-destination basis, where they are made available on certain electronic programme guides in the UK. This extra-territorial scope also reflects other upcoming changes to UK content regulation; for example, the draft online safety regime.

The impact of this extension of scope will be significant and, for a global content service, global in nature. VoD services don't usually have a ring-fenced pool of content for a specific territory, particularly major markets such as the UK, as this would be uneconomic and burdensome from an investment, production and marketing perspective.

If a non-UK service is designated as tier one (and is not also a UK licensed broadcaster), then, under the bill, each item of content in the extensive catalogue will need to be re-assessed for compliance. Also, future production, commissioning and licensing decisions will need to have reference to the new VoD standards code.

To find out more about the draft legislation head to our Media Bill hub.