Written evidence submitted by ITV Plc



Response to the DCMS Select Committee pre-legislative scrutiny on the Media Bill



Summary of ITV’s position


ITV welcomes this opportunity to give evidence to the DCMS Select Committee in relation to the pre-legislative scrutiny of the Media Bill.


We answer the Committee’s questions in more detail below but would make a few preliminary remarks about the Media Bill and its importance.


In summary, we warmly welcome the publication of the draft Media Bill which in most respects sensibly translates the policy intention of last year’s Broadcasting White Paper into legislative drafting. 


We also welcome the government’s decision to publish the Bill in draft for a period of technical engagement.   This makes sense since the market the Bill seeks to regulate is now far more varied, complex and in some areas novel than we have experienced before – a world away from the era of the 2003 Communications Act.   A period to make sure that the drafting works and will unequivocally deliver the policy intent makes a lot of sense and we’d hope will help to smooth the passage of the Bill through Parliament


Given the complexity and scale of the task, there are some areas where, in our view, the drafting of the Bill could deliver the policy intent even more effectively.  Accordingly, we’re engaging constructively with DCMS to highlight the limited areas where we believe the legislative drafting can and should be tweaked to deliver the policy intent.   We believe that most of those points are tweaks for clarity/workability and should not be controversial, though we do highlight a few of the most important and involved issues below.   DCMS has been constructive in the dialogue to date and we hope that there will be pragmatic ways to follow through on those conversations before a final Bill is published.


Must Offer, Must Carry and Dispute Resolution:  The Urgent Case for the Media Bill


PSB is no longer the simple linear offering envisaged by the Communications Act 2003. The updating of this legislation for the digital era is therefore crucial and now urgent.   We say this because online viewing (both linear streamed and on-demand) is growing rapidly such that our free online streaming service ITVX is ITV’s PSB contribution to the lives of many people in the UK.  In that context, we have, for example, a very prominent national and international news rail on the home page of ITVX, including new and innovative short form news content (for which we’ve had 6 million views alone since launch) as well as streaming the news live via ITVX and including news within catch up.   We are getting around 8 million views per month for news in all its forms via ITVX and are working on incorporating nations and regions news into ITVX too.


But the ability of PSBs to thrive in an online world should not be taken for granted. As internet delivered TV becomes more and more mainstream, so many of the trends we’ve seen from other internet markets are becoming clearer in TV.  These include the growth of very large and powerful content services such as Netflix, Amazon, Disney+ etc and in tandem the rise of equally powerful online aggregators such as Amazon, Samsung and Google.


The clear and present danger is that UK PSB services of very significant cultural, economic and democratic value to the UK:


(a) gradually disappear from view as global content players cut international deals with online platforms for prominence; and


(b) are forced to concede increasingly material percentages of their revenue to global online platforms simply to appear on the platform.  


The imposition of such terms by platforms will spell the end of commercial PSB in the UK in anything like its current form and will herald a significant de-investment in the UK’s TV ecology right across the UK.  Both of these risks became very obvious to us in the context of the launch of ITVX and they are intensifying.


Accordingly, for ITV the prominence, must offer, must carry and dispute resolution provisions of the Media Bill are fundamental to our continued provision of PSB at scale.   These provisions should ensure that the primary PSB online services are offered to the main internet TV platforms, that those platforms have to carry/include those PSB services, as well as giving prominence to them and the content within them.   In most cases we would expect to conclude a sensible and mutually beneficial commercial agreement with such platforms for carriage – a true commercial partnership - which is what we currently have for the long term with platforms such as Sky and Virgin Media for instance. 


However, it is also important that where a commercial agreement cannot be reached, for instance because one side insists on “cookie cutter” type terms that would simply see large transfers of revenue from PSB to platform simply for inclusion, that Ofcom has appropriate powers to settle disagreements, including, in extremis, by imposing terms


Much of the drafting in relation to prominence, must offer, must carry and dispute resolution looks sensible and effective.  However, we do have significant concerns that the Agreement Objective set out in Clause 362AI(5)(b)[1] in particular will not deliver the policy intent of encouraging commercial agreements[2] and safeguarding the future health of PSB and the UK creative economy more broadly.  In fact, that provision as currently drafted might well in some circumstances do the opposite resulting in seriously inequitable outcomes which could undermine rather than support commercial PSB and which Ofcom may not be able to stop.  In particular, the current provision creates the risk that the Platform could still try to insist on imposing its terms of business, seizing all the value in the PSB’s service beyond PSB cost and mandating their business model around advertising sales, technology etc onto the PSB, which would have little option given the Must Offer obligation.    We understand that ITV’s concern with this provision reflects the consensus position of the PSBs and is the biggest priority in our discussions with DCMS.  To aid discussion on this point, we set out below the alternative legislative drafting that ITV has proposed for this provision.


Once the current brief period of technical engagement is complete, we would urge the government to make available sufficient Parliamentary time before the next general election to ensure that the Media Bill becomes law this year or next.   To help achieve this objective, we would encourage as much cross-party consensus as is possible on the Bill and to that end the current pre-legislative scrutiny process by the DCMS Select Committee is a helpful contribution to this process.


Public Service Broadcasting


We set out below short answers to a number of the Select Committee’s questions.


Should the Media Bill provide a clear definition of what prominence in online services looks like?


There is a balance to be struck between the certainty of including definitions of different types of prominence in the Bill and the need to ensure that the regulatory framework around prominence can move and evolve as platforms and prominence do.  Whereas it was possible to use the concept of the EPG in previous legislation, the effectiveness of that intervention has declined as EPGs have become increasingly marginalised within more sophisticated user interfaces. It does not therefore seem prudent to set out in primary legislation a one size fits all approach to prominence based on the methods of displaying and accessing content online today.


The proposed approach in the Bill therefore seems to us to strike a sensible balance between a framework in primary legislation and substantial discretion to Ofcom via the Code they will have to draft.  The one question we do have is around how easy it will be for Ofcom to effectively create, via its code, a safe harbour for every platform (in all their variability) to comply with their prominence obligations.   


We do understand that there is a debate about whether the Bill should specify “significant” or “appropriate” prominence.   We are not convinced there is a huge difference between them since significant prominence could be appropriate and appropriate prominence could be significant.   Under the current regime for linear channels, Appropriate Prominence has been defined by Ofcom to guarantee the main PSB channels the top slots on EPGs for instance.


Are proposals allowing a Public Service Broadcaster to meet its remit by online programming as well as linear appropriate


Yes – there are already 3.8m households that are online only in the UK (i.e. they have no traditional broadcast TV signal) and this number is increasing all the time.   Furthermore, millions more people every day consume PSB content via the online services offered by the PSBs.  These consumption trends are only going in one direction.  Online delivery is particularly important if PSBs are to engage effectively with younger audiences, though increasingly people of all ages are consuming significant amounts of content online. Accordingly, it is entirely appropriate to transition to a world where the PSB remit can be delivered online.


There is one drafting point which does need to be refined in this context which is the current requirement (in the proposed new S.264(8A) of the Communications Act) in Clause 1 of the draft Media Bill, for on-demand content to be available for at least 30 days in order to qualify to contribute to the “Public Service Remit”.    This is fine for most content but not for news and many of our live daytime programmes because they rely on fair dealing copyright exceptions for the inclusion of third-party content and we do not believe they can be made available for more than 7 days (even if there was demand for them after that which in broad terms there isn’t).  There are different rights restrictions (with similar effect) in sport where we may not be allowed to keep content up for anything like 30 days.


The reasons this matters include a) the close link between the Public Service remit and prominence for public service remit content (see for instance 362AI(6)) and (b) as an input into Agreement Objective 362AI5(b).   Clearly we might well want to be able to get prominence for these programmes in principle and in practice notwithstanding the fact that they are not available for 30 days.


Is the Draft Bill sufficiently flexible to legislate for any future extension of the Listed Events Regime to include digital content?


The short answer is no.  This would be a sensible provision to include though it will need to provide some flexibility around definitions and implementation with discretion to ministers and to Ofcom to shape and change an appropriate regime over time.


Whilst otherwise the proposed Listed Events provisions make sense, there is one further drafting gap which does need to be corrected.   At present, the Media Bill only partially closes the current loophole which could see a TV streaming service that is not regulated (for instance because it is not listed on a regulated TV EPG, of which few have so far been designated, or listed in an EPG at all) buying the rights for a listed event and exploiting those rights on a Pay-TV basis in the UK entirely outside of the current Listed Events protections.   


The Bill does partly close this loophole, but only partly.  The heart of the problem is the use of the "Internet Programme Services" (IPS) definition in the proposed amended version of S98(1).  Because the definition of IPS doesn't capture "pure" streaming services with no connected on-demand service, it would seem to leave open the current loophole which would allow an unregulated live streaming service the freedom to buy rights for a listed event outside the current framework and then restrict access to it.




Are the requirements for the Tier 1 standards code proportionate?


Yes, we would support those requirements and a greater levelling of the playing field. 


Are Accessibility requirements for Video on Demand set at an appropriate level?


Yes.   We are already planning (and where possible are implementing) our work towards meeting the proposed obligations.


Do the Proposals in the draft Media Bill create any risks to the UK’s desirability as a market for VOD content?


No – if anything the opposite in the sense that there will be a more equitable regulatory regime between different services competing for the same revenue and hence a more competitive market overall. 


It can’t be right either for viewers or for industry to have some of the largest players in the UK VOD market under the jurisdiction of the Dutch or Irish regulators, applying standards that are less demanding than those that apply to UK regulated linear channels with whom they compete for revenue and audiences.


What should be the specific criteria for designating an on-demand programme service as Tier 1?


We believe that such decisions should be based on a mix of Streaming consumption, subscribers, Monthly Active Users and revenue.   These should be the key indicators of whether a service is sufficiently large that it should be designated a Tier 1 service.


General Issues


Is Ofcom able to deliver its new and updated obligations set out in the draft bill?


Yes, we believe it is well placed to do this.


Is the draft Bill flexible enough to address future developments in audience habits and new technology?


Yes, we believe it is.


Does the draft Bill provide sufficient protection for those without internet access or who prefer to use broadcast services?


Yes.   As we set out above, we believe that it is right that we transition to a hybrid system of PSB delivery which accommodates delivery online as audiences start to shift at scale online.


For the avoidance of doubt, however, for many years to come our PSB channel will deliver the highest audiences and the most revenue of our suite of different services (whether broadcast or online).  Accordingly, it will remain a critical part of how we will deliver our PSB remit too with all Ofcom quota mandated news carried on the broadcast channel (the Bill provides that news must continue to be delivered in this way), along with a mixed schedule of sport, drama, entertainment, factual and other programming, live and pre-recorded.   But more than this, the economics of the hybrid world will mean that the most high-profile and expensive UK commissioned TV content that appears on ITVX will also appear in due course on our free to air PSB and other free TV channels.  This is essential to the economics of content financing given that audiences are consuming TV in different ways.


Of course, more and more linear TV consumption will also be via live streaming, but of course this will be live streaming of the same channel that will be broadcast thereby accommodating those people who wish to watch live but via the internet.


Are the proposed powers to be given to the Secretary of State proportionate?


They are – it is incredibly important that the framework established by the Bill is flexible enough to be capable of continuing to support the delivery of the agreed policy outcomes without requiring primary legislation, even where the market and technology may change significantly.  


Does the draft bill sufficiently address failures of retrained EU law to operate effectively and other deficiencies arising from the withdrawal of the UK from the EU?


Yes, we do not have concerns in this area.


Are there any issues missing from the draft Bill within the scope of public service broadcasting, video-on-demand or radio?


No – we believe the priority now is to secure Parliamentary time for the Bill and secure its passage through Parliament as quickly as possible.


Do you have any recommendations for additional or amended drafting to the draft Bill?


As we mention above, we have had a dialogue with DCMS about some areas of drafting in the Bill which we believe could be improved and in places we have suggested some drafting changes.  We do not believe that these changes alter the policy approach but that they would simply make its achievement more certain. 


As we discussed above, perhaps the most critical suggestions we have made have been for the amendment of Agreement Objective set out in Clause 362AI(5)(b) mentioned above.   We consider that additional requirements should be added for the arrangements to be consistent with:

Accordingly, we have suggested that that Agreement Objective in the new section 362AI(5)(b) is amended to read as follows:


arrangements made between the provider of a designated internet programme service and the provider of a regulated television selection service are consistent with:

(i)                  a relevant commercial approach, having particular regard as appropriate to any previous or existing arrangements made between the provider of the designated internet programme service and a provider of a regulated television selection service or any similar arrangements (including any arrangements that existed before this section came into force); and

(ii)                the provider of the designated internet programme service being able to capture fully the benefits of its own contribution and, in any event, being able to meet costs reasonably incurred in fulfilling the public service remit for the licensed public service channel in question”.

The Agreement objectives will not be met in circumstances where the business of the Designated Internet Programme Service is weakened materially by an arrangement or agreement with the Regulated Television Selection Service.


As a necessary accompaniment to this, it would also seem to make sense to reflect the spirit of this change in the triggers for mandatory Ofcom intervention in the proposed new Section 362AR(3)(b) by adding a third trigger:


(iii) not be included on terms that are appropriate for meeting the Agreement Objectives”


We have mentioned above the two issues that have been raised around Listed Events.  Other drafting points we’ve also raised with DCMS include:





This will require a flexible approach to the definition of the Regulated Television Selection Service where potentially not all variants of what might be considered single platforms should be covered by the regime.  One way to achieve this might be to add in Clause 362AF (4) and (5) an additional assessment from Ofcom about the practicality and proportionality of the Must Offer and Must Carry obligations applying to a the whole or part of a particular Television Selection Service or a class of such services.  





[1] The Agreement Objectives set out in Clause 362AI(5) are key provisions which agreements between designated PSB Internet Programme Services and Regulated Television Selection Services must adhere to and which will govern the exercise of Ofcom’s dispute resolution powers.

[2] See for instance paragraphs 80-83 of the Memorandum from DCMS to the Delegated Powers and Regulatory Reform Committee on the Media Bill making clear the intention to facilitate commercial agreements as far as possible.

[3] We note that this second requirement is consistent with the approach taken in the EU’s Digital Markets Act in relation to arrangements with platforms (see in particular Recital 33 of the Digital Markets Act available here).  It is also consistent with the advice of Ofcom and the CMA to DCMS in November 2021 in relation to the Code of Conduct between platforms and content providers.

[4] See for instance the proposed new S.264(6) and (7) which effectively determines whether internet programme services can be designated.  See also the meaning of qualifying audiovisual content in the proposed new S.278B(2)(b) which determines whether content on a designated service can deliver a quota obligation.

[5] See the proposed new S.362AZ8(6) of the Communications Act at Clause 23(2) of the Media Bill

[6] Para 43 in the Memorandum to the Delegated Powers and Regulatory Reform Committee suggests this might be the proposal via secondary legislation once the Bill is passed (though that idea is not referenced elsewhere or on the face of the Bill).  Such a change would change the originations quota into a first run originations quota which it has never been before.  Such a new first run quota would have to be set at a much lower level than the current quota to reflect current delivery and what is economically viable.  But the unintended consequences of such a change would be that currently repeated UK content would no longer qualify and could therefore be replaced by other content including US acquisitions across PSB schedules, including in peak time etc.  That would seem contrary to the overall thrust of the Media Bill.  Furthermore not only is a first run quota not necessary given that market forces are driving investment in UK origination by the PSBs to attract viewers in competition to SVOD, it could also prove problematic to meet in years where revenues fall.  In particular, original first run content is expensive and PSBs have to be able to flex their costs to reflect the cycles of the TV advertising market.