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APPEAL BY THE BUSINESS CHANNEL.TV AGAINST A NOTICE OF DETERMINATION BY ATVOD THAT THE PROVIDER OF THE SERVICE “THE BUSINESS CHANNEL” (WWW.THEBUSINESSCHANNEL.TV) HAS CONTRAVENED SECTIONS 368BA AND 368D(3) (ZA) OF THE COMMUNICATIONS ACT 2003
OFCOM DECISION
Section 1 - Introduction: Scope of this Decision
1. This document sets out Ofcom’s decision (“the Appeal Decision”) in respect of the appeal by Greystone Media Limited (“the Appellant”) against the determination (“the Determination”) by the Authority for Television On Demand (“ATVOD”) that the service “The Business Channel.TV” (ODPS00142) at
http://www.thebusinesschannel.tv (“the Service”) is (or was at the relevant time) an “on-demand programme service” (“ODPS”) for the purposes of Part 4A of the Communications Act 2003 (“the Act”).
2. In making this Appeal Decision, Ofcom has, in accordance with Ofcom’s relevant procedures,1 considered the evidence submitted by ATVOD; the evidence and submissions provided to us by the Appellant; relevant legislation including the Act and the Audiovisual Media Services Directive (“the AVMS Directive” or “the Directive”); previous Ofcom decisions on appeals regarding ATVOD scope determinations; Ofcom’s assessment of the site; and research commissioned by Ofcom into consumer behaviour and choices in relation to On-Demand Services2.
3. Ofcom’s Appeal Decision is that the Appellant was at the time of the Determination, and for the reasons set out below, in respect of the Service, the provider of an ODPS. Ofcom therefore upholds ATVOD’s Determination.
Section 2 - Summary of the Legal Position
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http://stakeholders.ofcom.org.uk/binaries/broadcast/tv-ops/vod/appeals-procedures.pdf
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This research includes “On-demand services: understanding consumer choices” at
http://stakeholders.ofcom.org.uk/binaries/broadcast/tv- ops/vod/Research_Report.pdf?utm_source=updates&utm_medium=email&utm_campaign=vod-research-oct12 which complements earlier research from 2009
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4. The AVMS Directive is a European Directive amongst the purposes of which is to provide a measure of fair competition across Member States between those providing:
a. traditional (linear) television broadcasting services; and
b. on-demand services that are essentially the same, or sufficiently similar, and which compete for viewers and advertisers.
It seeks to provide a level of protection in accordance with that which consumers of ODPSs might expect.
5. The Audiovisual Media Services Regulations 2009 gave effect to the Directive in the UK by inserting Part 4A into the Communications Act 2003 (“the Act”). Part 4A came into effect on 19 December 2009. It was amended by The Audiovisual Media
Services Regulations 2010, which came into force on 18 March 2010. Part 4 of the Act creates the statutory regime for the regulation of ODPSs.
6. A service is only an ODPS if it satisfies the defining criteria in section 368A of the Act. Key amongst these for present purposes is that in section 368A(1)(a),3 it states that:
“… a service is an “ODPS” if –
… its principal purpose is the provision of programmes the form and content of which are comparable to the form and content of programmes normally included in television programme services.”
7. As part of a co-regulatory regime, Ofcom has designated (the “Designation”)4 ATVOD as the “appropriate regulatory authority” to carry out certain functions under Part 4A of the Act. As part of that Designation, ATVOD has power to decide what is an ODPS. Where a service is an ODPS, its provider is subject to a requirement to notify ATVOD and pay a fee. The provider must also ensure the ODPS meets a limited number of regulatory requirements.
8. Ofcom’s Designation of ATVOD as the appropriate regulatory authority took effect on 18 March 2010. Those providing ODPSs as at that date were required to notify them to ATVOD by 30 April 2010. Those intending to start providing them after 18 March 2010 were (and are) required to notify ATVOD before providing the service. Ofcom
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The full provisions of s.368(1) are set out in Annex 1
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reviewed the Designation of ATVOD in August 2012 and confirmed ATVOD’s continuing Designation as co-regulator of editorial content on 14 September 2012.
9. By virtue of section 368B of the Act, Ofcom retains the power concurrently with ATVOD to determine what is an ODPS and any decision by ATVOD on such matters is “subject to appeal to Ofcom in accordance with Ofcom’s relevant procedures.”
10. As set out in those procedures5, Ofcom’s decision in any appeal, “… may:
a. uphold ATVOD’s decision;
b. quash ATVOD’s decision in whole or in part and remit the decision back to ATVOD with reasons for it to reconsider in light of those reasons;
c. substitute Ofcom’s decision for that of ATVOD...”
The statutory scheme in relation to Ofcom’s co-regulatory role and the statutory definition of an ODPS is further detailed in Annex 1 to this Appeal Decision.
Section 3- Determination under Appeal
ATVOD’s Determination
11. On 16 August 2010 ATVOD wrote to the Appellant informing it that the Service may fall within scope of an ODPS. On 17 March 2011 ATVOD informed the Appellant of its preliminary view that the Service was an ODPS, as it fulfilled each of the criteria set out in section 368A(1) of the Act. The Appellant did not provide representations in response to ATVOD’s preliminary view. Following further correspondence between ATVOD and the Appellant, ATVOD issued the Determination on 26 April 2011.
12. In particular, ATVOD’s Determination noted that the form and content of programmes on the Service was comparable to the form and content of programmes normally included in television programme services. It referred by way of example to individual episodes which formed part of two series, namely “Building a Greener Britain – episode 8” and “Reviving UK Manufacturing – episode 1”, noting their similarity in
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terms of content and production values to business news and documentary features commonly included in linear, broadcast television.
13. ATVOD also noted that the website stated that the programmes had in fact been broadcast on linear television on the Sky and Freesat platforms, and that the
connection with television was further reinforced by the inclusion of broadcast logos of Sky, ITV, BBC and Freesat, positioned on the banner at the top of the homepage.
14. ATVOD further considered that the provision of such programmes was the principal purpose of the Service. It noted that the text content of the site was “minimal and secondary to the audio visual offering”, and this was further supported by the means of navigation around the site.
15. ATVOD concluded that the Appellant was the provider of the Service and was in breach of the Act’s requirements to notify ATVOD under section 368BA and to pay a fee under section 368d(3)(za).
16. The Determination set out the Appellant’s right to request an appeal to Ofcom as set out in paragraph 6(ii), and 7(xvii) of the Designation. ATVOD also directed the
Appellant to Ofcom’s appeals procedures6. ATVOD further noted that if the Appellant chose not to lodge an appeal with Ofcom, ATVOD may proceed to issue an
Enforcement Notification under section 368BB(1)(a) or 368I(1) of the Act. ATVOD noted that they may also refer the matter to Ofcom for consideration of a financial penalty under section 368BB(1)(b) of the Act or of suspension or restriction of the Service under 368K of the Act.
The Appellant’s Appeal
17. The Appellant wrote to Ofcom on 6 February 2012 requesting an appeal of the Determination. The Appellant submitted that ATVOD had incorrectly determined that the Service is an ODPS fulfilling each of the statutory criteria set out in s.368A(1) of the Act, and particularly the criterion in s.368A(1)(a).
18. The Appellant’s significant points are summarised below as:
a. The Service consists of corporate videos which do not compete for audience or advertising with broadcast television and do not carry advertising or
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sponsorship. The purpose of the Service is not to provide audiovisual material, but to provide a website on which clients can market their services to each other, and third parties. This is done by means of corporate videos, which the clients commission, and pay the Appellant to produce and over which they had significant control.
b. The Service was not one in regard to which users would expect “any special regulation”, and in particular, by determining the Service to be an ODPS, the Service “and other corporate production companies ... would be in breach of the statutory requirement to maintain a distinction between editorial content and [that of] clients”.
c. Although the videos on the Service are marketed as “programmes” this was not intended to mean programmes in the same sense as intended by the Act.
d. Although the Service’s content was sometimesoffered as packages for broadcast on linear satellite television channels, this did not detract from the fact the Service itself is not an ODPS.
Section 4 – Ofcom’s Decision and Reasons
19. Ofcom’s Decision is to uphold ATVOD’s Determination that the Service was an ODPS at the relevant time. The Service has undergone some changes since ATVOD’s determination and Ofcom’s decision and reasons are based on its review of the Service as it appeared at the time of the appeal. Consistent with previous Ofcom decisions, it is for the Appellant to consider, on an ongoing basis and in light of this Decision, if changes to the Service at any time affect whether there is a requirement to notify it. Likewise, for ATVOD to consider whether the Appellant is complying with its notification obligations.
20. As set out above the principal grounds on which the Appellant referred its appeal to Ofcom relate to the first defining requirement of an ODPS in s.368A(1)(a). The Appellant did not dispute ATVOD’s finding that the Service met the other criteria of s.368A(1)7.
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21. Following the approach adopted by Ofcom in previous appeals, Section 368A(1)(a) of the Act provides for a composite definition, to be applied in light of the AVMS
Directive, to determine whether services are within the scope of regulation. It can be characterised as comprising of two parts:8 a “principal purpose part” and a
“comparability part”.
22. The first part concerns whether there is a service whose “principal purpose” is the provision of audiovisual material. The second whether, taken as a whole, the service is one whose principal purpose is providing programmes whose form and content is comparable with those normally included in broadcast television services. The latter is a question that focuses on the audiovisual material that comprises the principal purpose of the service and is sometimes referred to as considering whether the material is “TV-like.”
23. All parts of the test must be considered and met, however. There must be a service whose principal purpose is the provision of programmes the form and content of which are comparable to the form and content of programmes normally included in television programme services.
24. Dealing with the question of whether the Service’s principal purpose is the provision of audiovisual material, Ofcom notes that the Appellant raised the argument in its appeal submission, and in subsequent representations in response to Ofcom’s preliminary view on the Appellant’s appeal, that the provision of audiovisual material on the site was, in its view, secondary to what it regarded to be the principal purpose of the site, namely the promotion of the companies which were featured within the Service’s audiovisual content. Ofcom however agrees with ATVOD that the provision of audiovisual material is the principal purpose of the site for the reasons detailed below.
25. Ofcom notes that a degree of commercial purpose is apparent in some aspects of the Service. For example, the longer form documentary content, which we deal at greater length at paragraphs 35 to 41, is presented on the Service with the statement:
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As set out in further detail in Ofcom’s decision in relation to “Sun Video” at
http://stakeholders.ofcom.org.uk/enforcement/video-on-demand-services/sun-video-decision-appendices/
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“The Business Channel provides directors and senior executives in the public and private sectors with documentary programmes that not only go to the heart of how businesses can grow strategically, but through the power of film provide expert advice to help in the planning and specification of the right business plans and products. Click here to contact us...”
26. Ofcom considers, however, that despite these apparent commercial links, the provision of audiovisual content (including authoritative long form documentary content as discussed further below) dominated the Service in terms of the layout, navigation and design of the site as a whole. It was presented prominently on the home page, automatically played on entering the site and individual episodes could be played direct from the home page in a scheduled manner.
27. Additionally, what the Appellant argues is the “principal purpose” of the Service appears to Ofcom to be more accurately characterised as the Appellant’s business model or commercial motivation. That is, it pursues the provides audiovisual content in order to promote featured companies in an analogous way to advertising-funded broadcasters making audiovisual content available in order then to present
advertisements. But, from the perspective of a user of the Service, the principal purpose in both cases is the provision of audiovisual material.
28. Furthermore, Ofcom agrees with ATVOD that the text and links contained within the Service were minimal and ancillary to the main service of documentary content being offered.
29. Accordingly, Ofcom concludes that the provision of audiovisual content constituted the principal purpose of the Service, and the text and links did not amount to a substantive alternate principal purpose. The fact that this content might be funded through arrangements reflected in the inclusion of the promotional contributors and commentators sections had no bearing on the principal purpose of the Service.
30. The comparability part of the statutory definition of ODPS in s.368A(1)(a) is about whether (or to what extent) the audiovisual material, the provision of which was the principal purpose of the Service, was comparable in terms of form and content to programmes normally included in television programme services.
31. Ofcom recognised in its preliminary view that the Service included short form material as well as longer form, documentary-style content. The Appellant’s representations
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on our preliminary view, which we have considered carefully, made further points on this issue which supplemented its original submissions. In particular, the Appellant argued that Ofcom’s preliminary view had understated the breadth and importance of the short form content, and that such content was not, or not closely, comparable with programmes normally included in linear television programme services. It stated that the absolute number of short form videos on the Service far exceeded the number of long form programmes, and argued that the preliminary view had placed excessive focus on longer form programmes.
32. Ofcom considered the prominence of the shorter form material. It agrees with the Appellant that the absolute number of short-form programmes included in the Service at the time of its review (approximately 140 in total) was high compared with long-form content (13 programmes). However, in terms of total duration, the long-long-form content formed a substantial part (approximately 50%) of the total.
33. This was reinforced by the prominence of long-form material, which was featured under the “Programmes” tab. Shorter form material was accessed via the
“Contributors” and “Commentators” tabs, and typically consisted of short audiovisual packages in which individuals, some of whom had been interviewed in the longer form programmes, are interviewed about the products and services provided by their companies. Site users were able to click a link next to each audiovisual package that linked to the website of the respective contributor. This, in Ofcom’s view, established it in a context of being additional material, supplementary to the longer form
documentaries.
34. Ofcom therefore recognises that there was a range of material included in the Service, a significant amount of which was less closely comparable to programmes normally included in linear television services than the longer, documentary-style material. It took this into account in making an overall judgment in relation to comparability and the statutory definition of ODPS as a whole. However, it also recognises that the longer form content was significant and prominent.
35. Ofcom has viewed a range of the longer form programmes available on the Service (for example, episodes from the series “Reviving UK Manufacturing”, “Building A Greener Britain” and “The New Economic Powers”)9 andfound a number of features
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It should be noted that these were not the same episodes viewed by ATVOD but were chosen from the same “series” as the material viewed by ATVOD.
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of this material were of particular relevance. It has also reviewed the shorter form content referred to by the Appellant.
36. Each of the longer form programmes contained an analysis of a particular subject – such as business operations within the Bric Countries or Low Carbon Economy – and, whilst they could be viewed individually, they were catalogued as a set of series that could be followed in a logical progression through episodes such as “Developing a Low Carbon Economy; Episodes 1, 2 and 3”. Ofcom also notes that the programme content available on the Service varied from time to time and that not all of the
episodes from each series were available on the Service at the same time. However, given the nature of the programmes, the missing episodes did not detract from the users’ ability to watch the programmes as it might, for example, with a drama series, as each episode was a complete programme in itself.
37. Each programme developed its analysis across a period of time equivalent to a half hour linear programme slot, from an opening introduction to the subject matter, presented in a professional manner by a journalist who gave pieces to camera and commentaries in voice-over throughout the programme and conducted interviews with contributors, to a conclusion.
38. In Ofcom’s view, of particular relevance to the issue of whether the longer form programmes on the Service were “TV like” (within the comparability part of the definition of ODPS), was that generally such programmes on the Service:
a. Contained an opening sequence to library music and professional quality graphics which contained the businesschannel.tv logo and ended with the presenter sign posting viewers to the website if they want to learn more about what they have seen, closing with end credits. Each programme followed a logical narrative development, with the subject of each successive interview often developing from the subject of the preceding interview.
b. Were professional in appearance, using a professional editing style (e.g. the contributor’s interviews were edited with cut away shots giving the
programmes a polished finish and using professional standard library music throughout).
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c. Were closely comparable to programmes on linear television programme services such as CNBC and BBC World News10. These included business themed programmes, focussing on a particular sector of industry or
corporation, with a narrative, presenter, and a mixture of pieces to camera, intercut and illustrative shots, voice-over and expert contributor interviews.
39. Given these observations, this longer form documentary material was closely comparable, in terms of style, subject matter, duration and scheduling with content available on linear television and supports a conclusion they were “TV-like”. 40. Additionally, Ofcom notes that some of these programmes were “watch again”
opportunities for programmes available through linear television services and this was advertised on the Service. For example, there was a strap line informing users of the Service that “the Business Channel will be broadcasting programmes on SKY Digital and BBC/ITV Freesat networks”, and the programme “Reviving UK
Manufacturing”, had a strap line just above the video window that read, “Thursdays at 8.30pm on Sky 166 and Freesat 402”. Ofcom also viewed on 21 May 2012 “The New Economic Powers: Britain and Bric on Information TV” on the linear service Sky Channel 231. This programme was also available to view on the Service.
41. In other words, not only were the programmes comparable with programmes on linear television, but the programmes were in several cases repeats in complete form of programmes which had appeared on linear television. While agreeing with the Appellant’s contention that the mere fact the Service’s programmes are sometimes packaged for satellite television services does not in itself mean the Service is an ODPS, it is one relevant factor in determining comparability.
42. Ofcom also notes the Appellant’s representation that its content was able to
incorporate “a greater degree of commercial and promotional references” than would be allowed by the regulatory regime covering linear television. The wording of section 368A(1)(a) regarding “comparability” and “form and content” was discussed in an appeal to Ofcom concerning the ODPS “Playboy: Climax 3 Uncut”11. As set out in that decision, subsection (1)(a) requires the form and content of relevant
programmes to be comparable, but not necessarily identical to linear television. In
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Ofcom noted for example that in January 2012 CNBC ran a series of documentary style business programmes which focused on one product or corporation, such as “Coca Cola – The Real Story of the Real Thing” in which the presenter adopted an authoritative and objective journalistic style, but which still contained a considerable amount of commercial referencing.
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the context of the “Playboy: Climax 3 Uncut” service, which presented R18
equivalent12 material, whilst this was not identical to adult sex material available on television, as broadcast material is not permitted to be R18 equivalent, the broad category of adult sex material was shared by the two forms of programme. It did not matter that the material was “stronger and more explicit”; it only needed to be comparable.
43. As detailed above in paragraphs 31 to 34 Ofcom recognises that the Service also included a significant amount of shorter form content described as “commercial presentations”. It is relevant to consider this material in the context of deciding if the principal purpose of the Service was providing “TV-like” programmes within the meaning of s.368A(1)(a).
44. In this connection, Ofcom notes that, in the consumer research we commissioned13, consumers regarded short form material as less closely comparable with linear television than long form material. Whilst this research is not considered by Ofcom to be determinative, it does provide a useful insight into what consumers consider to be “TV-like”.
45. Overall, as noted above, Ofcom considers the shorter form material to have had a promotional focus (to a degree akin to advertising) and to be ancillary to, and
supportive of, the longer form programmes on the Service. Ofcom considers that the shorter form audiovisual was more likely to be arrived at, and understood in context, after the user had watched the associated long form content. The shorter form material was therefore supplementary to the longer form documentaries. This supports the view that the principal purpose of the Service was the provision of the longer form material. That material, as set out above, comprised programmes falling within the comparability part of the definition of ODPS (TV-like programmes).
46. Ofcom has considered the Appellant’s representation that this long form content was actually short form content “strung together” into “programmes” through the addition of titles sequences and presenter links.” Ofcom considers that this distinction cannot
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“R18 equivalent” in this document indicates unsimulated sex works the primary purpose of which is sexual arousal or stimulation
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Research commissioned in 2012 “On-demand services: understanding consumer choices” at
http://stakeholders.ofcom.org.uk/binaries/broadcast/tv- ops/vod/Research_Report.pdf?utm_source=updates&utm_medium=email&utm_campaign=vod-research-oct12
complemented earlier research from 2009 at ( http://stakeholders.ofcom.org.uk/binaries/research/tv-research/vod.pdf)
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be sustained. The relevant material has, even on the Appellant’s own submission, been made into relevant programmes.
47. Following the approach adopted by Ofcom in previous appeals14, having considered the content of the Service in terms of its form and content, Ofcom has also taken a step back, to consider whether the relevant audiovisual material was likely to compete for the same audience as linear television broadcasts, and whether the nature of that material, and the means of access to it, would lead users to reasonably expect regulatory protection with the scope of the Directive.
48. With regard to the question of competition, Ofcom takes the view that business documentaries often feature on linear services. The programmes available on the Service detailed in paragraph 35 covered a wide spectrum of economic subject matters, have the same type of analysis and exposition and high quality production standards of such business documentaries. Consequently, they could appeal to and compete for the same type of audience who watch business documentaries on linear television.
49. In its representations, the Appellant pointed out a number of features of the Service which, in its view, suggested it did not compete with linear television services. It pointed out its relatively modest volume of content and modest viewing figures (and short duration of average views) compared to some ODPS15, in particular those offering catch up opportunities for linear broadcast programming. The Appellant further stated that, compared to some ODPS, its content is refreshed with relatively low frequency and relied on the fact that the content does not relate to a well known linear television brand. The Appellant further noted that the Service was “not
generally used (or intended to be used) for leisure or entertainment purposes”. 50. Ofcom notes that there were features of the Service which may make it somewhat
less attractive to viewers than some other ODPS, including its subject matter and the frequency of updates. Recital 21 to the Directive states that the Directive is intended to cover services, “which are mass media, that is which are intended for reception by, and which could have a clear impact on, a significant proportion of the general
public.” Ofcom considers that this is not a reference to something like a viewing
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As set out in further detail in Ofcom’s decision in relation to “Sun Video” at
http://www.atvod.co.uk/uploads/files/Ofcom_Decision_-_SUN_VIDEO_211211.pdf
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The Appellant cited user data for the Service which indicated that for the month of November 2012 the Service had a total of 790 visitors, who remained on the website for an average duration of 1 minute and 59 seconds.
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figure threshold, but rather needs to be read in the light of the rest of Recital 21, which refers to “non-economic” activities including “private websites and services consisting of the provision or distribution of audiovisual content generated by private users.” There is no requirement in the legislation that services are limited to those with “leisure or entertainment purposes”.
51. The Service may indeed have relatively low viewing figures. However, it is Ofcom’s view having reviewed the Service that the comparability with linear television services, as described above, does lead to the conclusion that it competes with television broadcasts and that such users as it has would reasonably expect a degree of regulatory protection.
52. Accordingly, given all of the above Ofcom disagrees with the Appellant’s arguments that programmes included in the Service do not compete with television programme services, or that they are not “programmes” within the meaning of s.368(1)(a) of the Act.
53. Finally, we have considered the Appellant’s point that the Service is not one with regard to which viewers would reasonably expect “special regulation”. Whilst this issue is not determinative as to whether a Service is or is not an ODPS, it is noted that the AVMS Directive (particularly Articles 9 to 11) specifically provides for a minimum level of regulation in relation to an ODPS’s commercial content. This is reflected in the provisions of part 4A of the Act (sections 368F to 368H). The
regulation is proportionate and does not go beyond that which applies to comparable linear broadcast services.
Section 5: Conclusion
54. For the reasons set out above, Ofcom concludes, on a proper construction of s.368A(1)(a) and noting that the appeal did not raise issues regarding ATVOD’s Determination in relation to other subsections of s.368A(1), that the Service at the relevant time met the definition of an ODPS under s.368A(1). Consequently, Ofcom upholds ATVOD’s Determination that the Appellant was in breach of the advance notification requirement under s.368BA of the Act and requirement to pay a fee under s.368D(3)(za).
14 Annex 1: The Statutory Scheme
1. The provisions of Part 4A of the Act and of the AVMS Directive relevant to the present appeal are as follows.
“ODPSs”
2. As indicated above, section 368A of the Act sets out the meaning and defining criteria of an “ODPS”. Specifically, section 368A(1) provides that, for the purposes of the Act, “a service is an “ODPS” if:
a. its principal purpose is the provision of programmes16 the form and content of which are comparable to the form and content of programmes normally included in television programme services;17
b. access to it is on-demand;
c. there is a person who has editorial responsibility for it;
d. it is made available by that person for use18 by members of the public; and
e. that person is under the jurisdiction of the United Kingdom for the purposes of the Audiovisual Media Services Directive”.
3. Section 368A (4) defines the concept of editorial responsibility in terms of “general control”. It states:
“A person has editorial responsibility for a service if that person has general control –
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Section 405 of the Act defines “programme” for the whole Act (except in so far as the context otherwise requires) as including “an advertisement and, in relation to a service, anything included in that service.”
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Section 362 of the Act defines “television programme service” as meaning any of (a) a television broadcasting service; (b) a television licensable content service; (c) a digital television programme service; (d) a restricted television service.
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Section 368R provides relevant definitions for terms in Part 4A of the Act and, so far as material, provides (at subsection (4)) that “The services that are to be taken for the purposes of this Part to be available for use by members of the public include any service which— (a) is made available for use only to persons who subscribe to the service (whether for a period or in relation to a particular occasion) or who otherwise request its provision; but (b) is a service the facility of subscribing to
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(a) over what programmes are included in the range of programmes offered to users; and
(b) over the manner in which the programmes are organised in that range;
and the person need not have control of the content of individual programmes or of the broadcasting or distribution of the service”.
4. Section 368R (5) provides further detail in relation to editorial responsibility and the identity of the provider of an ODPS. It says:
“The person, and only the person, who is to be treated for the purposes of this Part as providing an on-demand programme service is the person who has editorial responsibility for the service (see section 368A (4))”.
Requirement of Advance Notification to ATVOD
5. Section 368BA (1) of the Act provides for an advance notification requirement on the part of persons providing an ODPS. It says, “A person must not provide an on-demand programme service unless, before beginning to provide it, that person has given a notification to the appropriate regulatory authority of the person’s intention to provide that service”.
6. For the purposes of that section, the “appropriate regulatory authority” is ATVOD, which has been designated by Ofcom under s.368B of the Act to carry out certain functions under Part 4A: see paragraph 5 of Ofcom’s designation of 18 March 2010 (“the Designation”).19 One such function is to determine whether providers of ODPSs have complied with the notification requirement in section 368BA: see paragraph 5(ii) of the Designation.
7. In order for ATVOD to fulfil that function, it has power under paragraph 6(ii) of the Designation to decide, amongst other things, what constitutes an ODPS in accordance with section 368A of the Act. Paragraph 6(ii) of the Designation also makes clear that any such decision is “subject to appeal to Ofcom in accordance with Ofcom’s relevant procedures”.
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16 Relevant provisions of the AVMS Directive
8. Section 368A of the Act implements the AVMS Directive insofar as that Directive defines the scope of on-demand services which should be subject to regulation. The Directive contains both operative provisions (Articles) and explanatory provisions (Recitals) which define and explain both the purpose of regulation and the scope of on-demand services that are subject to it.
9. In interpreting section 368A Ofcom has necessarily had regard to the relevant provisions of the AVMS Directive. Ofcom has done so because Part 4A of the Act is intended to implement the requirements of the Directive.
10. Of the relevant Articles of the AVMS Directive, Articles 1(1) (a) to (g), in particular, provide the basis for the definition of an ODPS in section 368A (1) and of editorial responsibility in section 368A (4). Most relevant for present purposes are Articles 1(1) (c) and (d). They provide definitions of “editorial responsibility” and of a “media service provider:”
“(c) ‘editorial responsibility’ means the exercise of effective control both over the selection of the programmes and over their organisation either in a chronological schedule, in the case of television broadcasts, or in a catalogue, in the case of on-demand audiovisual media services. Editorial responsibility does not necessarily imply any legal liability under national law for the content or the services provided;
(d) ‘media service provider’ means the natural or legal person who has editorial responsibility for the choice of the audiovisual content of the audiovisual media service and determines the manner in which it is organised…”.
11. As to Recitals of the AVMS Directive that describe the general purposes of the regulation for which it provides, Recitals 2, 4 and 11 are relevant. They explain that the Directive recognises that technological advances allow for the provision of audiovisual media services across national frontiers by a range of technological means. They say that aims of the Directive include completing the internal market and providing for at least a basic measure of regulation to apply to on-demand
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audiovisual media services that compete with traditional linear television broadcasting.20
12. Recitals 21 to 29 of the Directive, meanwhile, provide further explanation of its intended scope, and are particularly relevant to the interpretation of ODPSs under section 368A of the Act. In particular:
a. Recital 21 states that the Directive should cover only “mass media” services, “which are intended for reception by, and which could have a clear impact on, a significant proportion of the general public,” and should not cover services, “which are primarily non-economic and are not in competition with television broadcasting”.21
b. Recital 22 states that the Directive should only cover services where the “principal purpose” is the provision of programmes and, “... exclude all services the principal purpose of which is not the provision of programmes, i.e. where any audiovisual content is merely incidental to the service and not its principal purpose. Examples include websites that contain audiovisual elements only in an ancillary manner, such as … information related to a … non-audiovisual service”.
c. Recital 23 confirms that “audiovisual” covers silent moving images and accompanying text such as subtitles and EPGs, but stand-alone text-based services fall outside the scope of the Directive, “For the purposes of this Directive, the term ‘audiovisual’ should refer to moving images with or without sound ... While the principal purpose of an audiovisual media service is the provision of programmes, the definition of such a service should also cover text-based content which accompanies programmes, such as subtitling services and electronic programme guides. Stand-alone text-based services should not fall within the scope of this Directive... ”.
d. Recital 24 states that, “It is characteristic of on-demand audiovisual media services that they are ‘television-like,’ i.e. that they compete for the same
20
Recital 11, for example, says:“It is necessary, in order to avoid distortions of competition, improve legal certainty, help complete the internal market and facilitate the emergence of a single information area, that at least a basic tier of coordinated rules apply to all audiovisual media services, both television broadcasting (i.e. linear audiovisual media services) and on-demand audiovisual media
services (i.e. non-linear audiovisual media services).”
21
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audience as television broadcasts, and the nature and the means of access to the service would lead the user reasonably to expect regulatory protection within the scope of this Directive”. The recital also notes that, “In the light of this and in order to prevent disparities as regards free movement and competition, the concept of a programme should be interpreted in a dynamic way taking into account developments in television broadcasting”.
e. Recital 25 states, “The concept of editorial responsibility is essential for defining the role of the media service provider and therefore for the definition of audiovisual media services. Member States may further specify aspects of the definition of editorial responsibility, notably the concept of ‘effective control’, when adopting measures to implement this Directive. This Directive should be without prejudice to the exemptions from liability established in Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (Directive on electronic commerce)”.
f. Recital 26 states, “For the purposes of this Directive, the definition of media service provider should exclude natural or legal persons who merely transmit programmes for which the editorial responsibility lies with third parties”.
g. Recital 28 states that, “The scope of this Directive should not cover electronic versions of newspapers and magazines”.
h. Recital 29, as is indicated above, states that, “All the characteristics of audiovisual media services set out in its definition and explained in recitals 21 to 28 should be present at the same time”.
