DMB0016

Written evidence submitted by Nile

 

Pre-Legislative Scrutiny of the Draft Media Bill (2023)

Prepared for the Culture, Media and Sports Committee

 

Nile is a new streaming platform launching in 2024 targeted at 14-24-year-olds. It is the world’s first social streaming platform, creating a community-led streaming experience, alongside working with digital creators to create high-quality, television-grade content to serve to its audience.

 

Nile was founded by British entrepreneurs Brandon Relph and Lizzie Hodgson, with headquarters in the UK and a global focus on its operations and scale.

 

We are submitting evidence because we feel elements of the bill could have unexpected and unintended consequences for new media and technology companies in the UK. We believe it’s important for the committee to hear from new voices in the industry and we welcome the opportunity to make this submission.

 

Public Service Broadcasting

 

  1. We generally agree with the bill’s updates to allow PSBs to fulfil their quotas using online services.

 

  1. We disagree with the bill’s premise of giving prominence to PSB services in the UK on smart TVs, set-top boxes and streaming sticks (platforms), as we believe it gives an unfair advantage to incumbents and limits competition.

 

  1. All the current evidence Ofcom has provided demonstrates that PSBs already receive a high level of prominence within these platforms. Their long-standing brands, high-quality programming and current efforts have been successful. In areas they haven’t been, it allows competition to flourish and for them to remain competitive.

 

  1. We believe that PSB content should be separated from the services or ‘players’ themselves that are used to distribute that content. Platforms themselves should be able to innovate and find new ways to get high-quality content to audiences and not necessarily through the ‘players’ provided by the PSBs.

 

  1. In giving them prominence, it disincentives PSBs to invest in technology and to push boundaries with their content. Their ‘players’ don’t have the best user experience, and this removes an incentive for them to improve. There is a reason people watch PSB shows on Netflix.

 

  1. Nile has been created to serve an area of the public (14-24-year-olds) that we feel is underserved by PSBs. We should be able to compete equally for access to that audience. This bill looks to make that significantly harder as the protections in place for PSB do not apply to us. The government should have fair and open access for everyone to platforms or no one at all.

 

  1. In its current form the bill would make the digital space more anti-competitive for smaller streaming companies and new players in the media space. The bill’s requirements look to only benefit shareholders of privately-owned PSBs who don’t want to compete fairly.

 

  1. The bill could more broadly incentivise platforms and services to work more fairly and openly. This would be valuable to smaller players, like Nile, and to the PSBs. Ofcom could provide a role in this and look at how they currently regulate TV channels.

 

  1. We believe the changes made to Channel 4 could impact the independent production sector and competition within the UK production industry. To provide some remedy we suggest:

 

    1. Channel 4’s maximum quota for internal commissions should be enshrined in the bill. We believe a quota of between 10 and 15% should be adopted.

 

    1. Channel 4 should have key limitations placed on its ability to complete work for external broadcasters and streamers. It should not be able to complete work for other UK broadcasters and only for itself.

 

    1. Channel 4 productions should follow a similar separation of BBC Studios to the BBC; having a high level of separation from Channel 4’s commissioning teams, including their own separate staffing structure.

 

 

Video-on-Demand

 

  1. The accessibility requirements within the bill we believe are fair and proportionate and we welcome making content more accessible. We’d like to note to the committee that we believe that new technology will make this requirement easier to meet over time. Hopefully, the UK can lead the world in this area.

 

  1. Although we agree with the general regulations placed on Tier 1 services, the lack of clarity and definition on when a service would become Tier 1, worries us as a new service.

 

  1. Regulation should not impose ‘independent production’ quotas to all Tier 1 services, as this would harm competition.

 

  1. There will be significant direct and indirect costs incurred to become a Tier 1 operator, which would happen under very short notice (6 months) within this bill.

 

  1. Many new services, like ours, will be loss-making until they can build a certain scale, and a determination of Tier 1 status could suddenly mean a complete change in funding and strategy would be required. This would harm upcoming and new companies over large incumbents’ players; for example, an American studio building operation in the UK that has large financial capabilities.

 

  1. To remedy this, the new bill needs to make a more direct definition in the text of what a Tier 1 service would be rather than using an arbitrary judgement. This would allow us, the government and Ofcom to have a clearer picture of when thresholds have been reached to become regulated and to plan accordingly.

 

  1. Examples of how this could be determined include:
    1. A benchmarked number of paying subscribers within the UK
    2. A benchmarked number of registered users within the UK
    3. The amount of revenue generated by UK operations or global operations

 

  1. In determining Tier 1 eligibility, we believe Ofcom should be the sole party to add new members to the list, not the Secretary of State. We can’t see why a member of the executive would need to make this determination over that of an independent party, in line with general regulation in the UK and our Western European neighbours.

 

 

 

 

Radio

 

Nile does not operate or plan to operate in the medium-term any radio-related services, so has no comments to add.

 

 

General Issues

 

  1. We believe Ofcom has the necessary resources to deliver its new obligations. Ofcom must be clear on the difference in regulation between PSBs, other broadcasters and streaming-only platforms.

 

  1. As indicated above, we don’t believe the powers given to the Secretary of State are propionate when it comes to determining who is a Tier 1 service.

 

  1. We believe the maximum financial penalty which is determined against worldwide revenue is unfair. Financial penalties should be capped 5% of UK-related income.

 

  1. Our recommendations for amending are in five areas:

 

    1. The bill should reconsider and remove the prominence element given to PSBs on platforms. The government could consider more widely making access to platforms more equal for everyone, not just PSBs, potentially looking at how access to television get on air currently and moving that into the digital world.
    2. The bill should clarify and put stronger parameters on Channel 4 being able to produce its own content.
    3. How a service is determined to become a Tier 1 service should be clarified and placed within the bill. This should be fair and reasonable. 
    4. In line with general practice and convention, Ofcom, as an independent body, should make determinations, not the Secretary of State.
    5. The maximum capped fine should be set at 5% of UK income.

 

 

Our CEO or another member of the management team is available and willing to discuss anything detailed in this response.