New rules for streaming giants head into final Parliamentary stretch

The Media Bill is a broad piece of legislation which will, amongst other things, makes changes to the way in which video-on-demand services are regulated in the UK. On 28 February, the Media Bill will have its second reading in the House of Lords, having been passed by the House of Commons. In this blog, we discuss the implications the Media Bill will have for the video-on-demand sector in the UK, as well as the next steps. 

Background to the Bill 

In 2003, Parliament passed the Communications Act, which updated the legislative framework for broadcasting in the UK. The broadcasting landscape has changed somewhat in the twenty-one years since. The most pronounced change is a widespread shift from so-called ‘linear viewing’ (watching TV programmes as they are broadcast live) to watching programmes on demand. 

In 2019, the House of Lords Communications and Digital Committee published a report which called on the government to support the UK’s public service broadcasters (the traditional ‘terrestrial’ channels) to remain financially viable in the era of competition from streaming services such as Netflix and Prime Video. In 2021, the House of Commons Digital, Culture, Media and Sport Committee published a report which said that primary legislation was needed to replace the 2003 act. The committee called on the government to address the way that platforms which distribute lots of public service broadcaster content operate in the UK. It argued that the public service broadcaster content being hosted on other streaming services such as Netflix or Prime Video should be clearly labelled as such.  

In 2021 Ofcom, the UK’s media regulator, published a list of final recommendations on the future of public service media, arguing that the legislation governing broadcasting needed to be overhauled for the digital age. In 2022, the government responded by publishing its broadcasting white paper. Its proposals included bringing larger TV-like video on demand providers which target and profit from UK audiences under Ofcom’s jurisdiction. The Media Bill is the government’s attempt to bring the proposals made in the broadcasting white paper into legislation. 

The Media Bill explained 

The Media Bill has three key aims: reform the framework for the regulation of public service broadcasting; make changes to on-demand programme service regulation in the UK; and make changes to the legal framework for the regulation of radio. The Bill is divided into seven parts. Part 4 contains the provisions which provide Ofcom with new regulatory powers to draft and enforce a Video-on-Demand code. 

The Bill will give Ofcom powers to draft and enforce a new video-on-demand code to ensure TV-like content will be subject to similar standards to material on public service broadcasters. The new regime will be aimed at the largest, most TV-like video-on-demand services to ensure that major services which engage UK audiences at scale are subject to the same or similar obligations as UK broadcasters.  

Clause 37 of the Bill creates a new legal category: non-UK on-demand programme services. These are services which are not based in the UK and which do not make editorial decisions in the UK, but whose programmes are made available to people in the UK. Within this category, the Bill creates a subset of services which will be subject to enhanced regulation: Tier 1 Services. The Bill will give Ofcom the power to review the audience protection measures of on-demand service providers. Ofcom must produce a report on the operation of the video-on-demand market and share it with the Secretary of State for Culture, Media and Sport before making the first set of regulation. There will be a 12-month grace period before the new provisions apply. 

Key debates and next steps 

The bill was subject to pre-legislative scrutiny, a practice whereby a relevant parliamentary committee provides feedback on the legislation before it goes through the usual legislative stages. The House of Commons Culture, Media and Sport Committee, which was responsible for conducting the pre-legislative scrutiny, recommended expanding the scope of the regulations to cover all on-demand platforms, not just those with large UK audiences. During the second reading debate in the House of Commons, MPs from several  parties stressed the need for further scrutiny of the video-on-demand code. The Bill managed to clear the Commons without too much controversy, with the only successful amendments being tabled by the government to make minor technical changes to the text. 

Due to the fact that the government does not have a majority in the House of Lords, scrutiny of the Bill may be more intense in the upper chamber. Unlike the Digital Markets, Competition and Consumers Bill and the Data Protection and Digital Information Bill, both of which are currently with the Lords, the Media Bill enjoys broad cross-party support and should therefore be passed relatively quickly. Once it has, Ofcom should begin its work looking at the video-on-demand market in the UK. Companies operating in the space should look to engage with the regulator on the design of the video-on-demand code if they want to ensure that it does not hinder their business models. 

Inline Policy helps innovative companies at the cutting edge of their field to understand and influence policy and regulation. If you have any questions about the Media Bill or any other piece of UK tech regulation, please contact matthew.niblett@inlinepolicy.com.