COBA response to DCMS Select Committee on Media Bill

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DMB0009

Written evidence submitted by COBA

Pre-Legislative Scrutiny of Draft Media Bill

Response from COBA to DCMS Select Committee

May 2023

Introduction

1. COBA is the Association for Commercial Broadcasters and On-Demand Services. It represents multichannel broadcasters in the digital, cable and satellite television sector and on-demand services.
2. COBA members operate a wide variety of services, offering news, factual, children’s, drama, music, arts, entertainment, sports and comedy. Their content is available on free-to-air and pay-TV platforms, as well as on-demand.
3. COBA members are arguably the fastest growing part of the UK television industry, and are increasing their investment in jobs, UK content and infrastructure. They make this investment without support from the licence fee or indirect support from statutory prominence.
• Scale: In the last decade, the sector has increased its turnover by 30% to more than £5 billion a year. This is rapidly approaching half of the UK broadcasting sector’s total annual turnover, and has helped establish the UK as a leading global television hub.[1]
• Employment: As part of this growth, the multichannel sector has doubled direct employment over the last decade.[2]
• UK production: In addition, the sector has increased investment in UK television content to a record £1.1 billion per annum, up nearly 75% on 2011 levels.[3]

Response

Public Service Television

1. The draft Bill offers PSBs a number of benefits such as prominence for on-demand services and carriage arrangements without any additional obligations. These benefits come at a cost to the wider industry – such as excluding other services from sports rights. It is therefore vital that the Bill provides Government and Ofcom with the powers to hold PSBs to account. We ask the Committee to bear in mind the impact of loosening certain PSB obligations in the 2003 Communications Act, the last time the legislative framework for Public Service Broadcasting was subject to such a radical overhaul. As ITV was no longer required to show a specific amount of children’s content, it was able to dilute its offering from eight hours per week to fewer hours and more repeats. This has had longer term consequences, contributing to the difficulties in the children’s genre today, resulting in public intervention such as the contestable fund for children’s content and the recent increase in the children’s and animation tax relief.

2. Where the new system will be based on Ofcom reports on overall delivery (“taken as a whole”), this may potentially make it difficult for Ofcom to require a specific provider to increase, or even maintain, its offering in any one genre or on any one service. It may even lead to difficulties holding a particular provider to account. Additionally, we see no need to change from appropriate prominence to significant prominence, as suggested by some PSBs. Appropriate is well understood as a term in this regard, and gives the regulator due power and flexibility. Significant risks tying the regulator’s hands.

3. In terms of scope, the definition of “TV selection services” is vague. A similar definition, TV-like services, led to years of uncertainty and disputes when applied to the VoD sector. DCMS has assured us that the scope in this area is intended to be narrow (such as limited to certain devices such as connected TVs), yet this wording seems to go further.

4. We welcome the inclusion of the requirement to make public service content “readily discoverable”. This is important in ensuring that public service content is discoverable within on-demand services provided by public service players ­– otherwise, it is highly likely that the most commercial content will dominate PSBs’ own players. However, public service content is a wide criteria, encompassing highly commercial soaps and entertainment shows as well as news and factual content. The current wording is likely to mean genres such as news are drowned out by more commercial public service content. We therefore suggest an amendment that requires providers to make readily discoverable “what appears to Ofcom to be an appropriate range of public service content.” This will allow for sufficient flexibility amongst providers, whilst ensuring that Ofcom has the power to make sure core public service content is readily discoverable. Comparable protections exist today, with PSBs required not just to make news content but to show it in peak, i.e. when it is most likely to be watched.

5. Finally, as a matter of principle, it seems to us misguided to exclude all other parties from showing listed events even if they meet the criteria of being widely available and free at point of use. This change restricts potential competition and audience choice. In so doing, it undermines competitiveness and the UK’s ability to attract inward investment. It also does not help future proof the development of the industry – although today only the PSBs meet the 95% access requirements, longer term this may not be the case and there may be new and innovative services developed in the future which UK audiences would prefer to use for these events. The decision to only provide the benefit to PSBs could disincentivize new services and restrict user choice and experience.

6. Just as importantly, it risks dampening investment in grassroots sports, due to lower revenues paid to rights holders. The benefits of a strong competition for sports rights in this regard are highlighted in cricket. Sky’s longterm partnership with the ECB has helped support strong growth in turnover, coupled with a substantial increase in the body’s investment in grassroots cricket. According to its annual financial statement, the ECB’s turnover for the year ended 31st January 2022 was £303m.[4] This is almost triple the turnover of £111m a year from a decade ago.[5] During this ten-year period, grassroots investment in cricket in England and Wales has increased significantly. Last year, the ECB made a donation to the England and Wales Cricket Trust of £44m for promoting community participation and other grassroots activity. Ten years ago, the annual amount spent on grassroots cricket was around £20m, less than half the current amount.[6]

7. The ECB is on record highlighting the close link between grassroots investment and its sports rights deals. Announcing a deal with Sky, the then ECB Chief Executive David Collier stated:

“We are fortunate to have recently secured long-term funding for all sectors of the game following the renewal of our broadcasting agreements which in some cases extend through to 2019. This income will help develop future generations of club and county cricketers and enable us to sustain the success enjoyed by both our England Men’s and Women’s teams in recent years.”

Channel 4

8. Both qualifying and non-qualifying independent production companies have benefitted from the uniqueness of Channel 4’s current operating model. This could be harmed if the level of in-house production could be changed, potentially at short notice. It is therefore a concern that the Secretary of State will have the powers to set and, crucially, change the level of in-house production permitted at Channel 4. We would prefer this be done by Ofcom, and only with prior public consultation. At the very least, it should be explicit that the Secretary of State must have due regard to the impact on the production sector of changes. This would help guarantee Channel 4’s independence from Government, as well as mitigate the impact on the external supply sector.

VoD

9. The introduction of a new VoD Code, based on the current Broadcasting Code (which was designed for linear services), should not be underestimated. VoD catalogues are inherently different to broadcasting channels, both in terms of size of catalogues, as well as the type of content that is included, which may not have been complied under a statutory code before.

10. It is important that the new Code reflects that. It is integral that the Code is drafted based on the VoD market; not based on a frame-work devices for linear channels that have only a limited volume of content each week.

11. We are concerned that the Secretary of State is being granted the power to determine the implementation period, which should be a matter of consultation with industry. Ofcom would be better suited to determine the length of this period, which we believe should an absolute minimum of twelve months. We also seek clarification as to the interplay between this code and other duties to which non-Tier 1 services are subject.

12. It is unclear to us which services will be classified as Tier 1, or which principles will be applied to determine them. This may lead to stifling new services or dampening competition by conferring an unfair advantage on some parties.

13. Library content: We do not believe the requirements in the Bill for VoD services should apply to library or existing content. Ensuring compliance for what may be thousands of hours of existing content is not practicable or proportionate, and may lead to a reduction in VoD catalogues for UK audiences.

14. Impartiality requirements: related to our point on library content, it is in our view disproportionate to require VoD services to comply existing content with the new impartiality rules. This has been noted by others in the context of election periods, when it would be impracticable and disproportionate to require the removal or revision of archive shows that might be relevant. It is also an example of the importance of differentiating between the Broadcasting Code, designed for a limited number of hours of TV per week, and a new VoD Code – any impartiality requirements for VoD services must be proportionate and practicable.

15. Age guidance: We strongly support the regime set out in the Bill. The draft Bill will require services to carry protections for minors that are clear, effective and comparable. We stress that, within this, services should be afforded flexibility in the guidance or protections they use (such as pin protections or age guidance). There is a rich variety of services in the VoD sector and audiences will have greatly different expectations from service to service. As a result, we believe the approach adopted in the legislation, which allows for different approaches while respecting the three principles set out above, is the best way forward and meets consumer expectations. Some audiences may prefer a system that explicitly refers to ages, rather than the BBFC’s PG or U ratings, for example.

16. We also strongly oppose making BBFC age ratings mandatory for VoD services. The BBFC’s audience research is deeply flawed if it used as evidence that audiences supposedly want BBFC age ratings to be applied to all VoD services. For example, its report from April 2021 explicitly excludes catch-up services when asking audiences if they would like BBFC ratings extended to VoD.[7] Furthermore, the BBFC research from 2021 only offers two named choices – between BBFC ratings and Dutch NICAM ratings. The question is in our view phrased misleadingly, setting out a false choice between one UK-based system (i.e. the BBFC) and ‘non-UK standards’ (NICAM). At no point do the questions inform the audience of alternative UK-based options, notably Ofcom, which already has a role in regulating all UK VoD services (subscription and catch-up) and regulates the well-known watershed system in linear broadcasting. As the regulator for VOD and TV, Ofcom should be the body for regulating VoD services, not a private entity such as the BBFC, especially if the goal is to better align VoD and TV. Giving the BBFC jurisdiction for VoD will mean there are effectively two regulators in this space, creating potential confusion for audiences. We note that when a dual system occurred in the VoD sector before, with ATVOD, Ofcom eventually decided it did not work well and closed it down.

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