New Media Bill: Video On-Demand Services must prepare for Ofcom Complaints

3rd April 2023

King Charles III may not have complained to Ofcom yet. But he will have the ability to make a formal complaint to media regulator Ofcom about the controversial way he is portrayed as Prince of Wales in episodes of the hit Netflix series once the government’s new Media Bill becomes law. And not only King Charles – any viewer of the series will also be able to complain to Ofcom if they were offended.

The draft legislation was finally published on 28 March. It is intended, in the government’s words, to “modernise” the UK’s “decades-old broadcasting legislation” and covers a wide range of topics, from giving Channel 4 the ability to make its own programmes for the first time, to freeing UK commercial radio from many outdated restrictions dating from the 1980s.

The principal aim though of the Media Bill says the Culture Secretary, Lucy Frazer (pictured), is to help the major UK TV public service broadcasters compete on a more level playing field with the American streaming giants like Netflix, Disney+ and Amazon Prime. The most eye-catching way the legislation aims to achieve this aim is to subject these, and other large video-on-demand service providers, to new (and intrusive) regulations by Ofcom.

Having looked at the draft Bill in some detail, it is clear that the devil will lie in the detail and much will depend on how interventionist the Government and Ofcom wish to be. The bigger on-demand service providers now have an invaluable opportunity to study and comment on the Bill. They should do so quickly. They face a raft of new regulations of their services and need to ensure the scope of the Bill is sensible and proportionate.

At the moment only on-demand programme services based in the UK which meet the existing criteria (section 368A Communications Act 2003) are under a duty to notify Ofcom and comply with a handful of relatively light touch rules about content. Under the Media Bill, the Culture Secretary is given very wide powers to make regulations defining what are called Tier 1 services – by either naming them or setting out a description of them. The only objective factor is that the Culture Secretary must think it “appropriate” that the on-demand service provider should be subject to the new duties imposed on Tier 1 services. This wording gifts the Culture Secretary wide discretion.

Under the Media Bill, for the first time, the UK government will take powers to regulate on-demand services based outside the UK which provide programmes to users in Britain. They are defined as “non-UK on-demand programme services.” Some of these providers like Netflix and Disney+ (as well as UK-based services) will be designated Tier 1 services.

The obligations on Tier 1 services will be onerous. In particular, their content will need to comply with a new Ofcom On-Demand Standards Code. These rules will go far beyond the existing Ofcom on-demand content restrictions. The draft Bill requires the new Code for Tier 1 services to be in effect a version of the Broadcasting Code – with clauses obliging providers for example to protect children, apply generally accepted standards to protect users from harmful or offensive content, ensure due impartiality, and to stop unfair treatment (hence possible future complaints by King Charles III about The Crown or from other celebrities about on-demand programmes they feature in) and unwarranted breaches of privacy.

These new duties may have relatively little impact on the on-demand services provided by Britain’s public service broadcasters like the BBC iPlayer, All4 or ITVX. They already have arrangements in place to ensure their on-demand programmes comply to a great extent with the Broadcasting Code. But other large UK-based on-demand services, and especially those bigger providers based outside the UK, which might be designated Tier 1 services, need to examine the Media Bill with great care and take advice as necessary.

In the coming months, there will a valuable opportunity to influence the wording of these measures. The government stated in April 2022 in its response to a VoD consultation that it would legislate in a “light touch manner”. A reading of the draft measures in the Bill to regulate Tier 1 services suggest many of them have the potential to be far from “light touch”. They also raise a number of important questions. One is about due impartiality during elections – a very murky area currently in the Bill.

Much will depend be the form and content of Ofcom’s new On-Demand Standards Code. This will need to be consulted on of course. But the temptation for the regulator might simply be to transpose great chunks of the Broadcasting Code to create the new rule book. This would be a great opportunity lost. One of the reasons the on-demand sector has flourished in the UK in recent years has been genuinely “light touch” regulation.

Undoubtedly there is a need to tighten regulation in the on-demand sector and help public service broadcasters compete. But the rigorous new on-demand regulation must be proportionate and fit for purpose. The Ofcom Broadcasting Code was implemented in 2005. It has only expanded since then and has never been subject to a comprehensive review. Ofcom’s new on-demand standards Code is a useful opportunity for the regulator to create an appropriate and modern set of rules for Tier 1 services – but also to have its first thorough revision of the Broadcasting Code to mark the celebration this year of its 18th birthday.