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Regulation in a converged world

In the recent past, convergence used to be a term more commonly ascribed to the unfathomable criteria which Gordon Brown required to be met before the UK could join the Euro club - but no longer.

June 2013

Today, convergence is, in the words of the House of Lords, about the "technological phenomenon whereby the digitisation of content and its distribution have given audience the ability to access content on multiple platforms or devices". New century and a profound change of meaning.

Whilst there continues to be debate about how fast is the change that is brought about by media convergence, there is no doubt that this is happening and will impact everyone in the value chain from content creators through to end users in the years ahead.

film reels - traditional technologiesIn starker terms, for the media industries themselves, convergence means that the traditional technological boundaries that meant that publishing, movies, music and broadcasting were largely separate business silos have largely disappeared. Inevitably, such change creates opportunities (sic Spotify and Netflix) but it is also disruptive. YouTube has already declared itself bigger than television – arguably the biggest hype since a pop group from Liverpool declared themselves more popular than Jesus Christ. Whatever the hype, it is symptomatic that change is happening.

For most consumers, it is likely to be good news and for those who are computer adept, it may be boon time – television on the games console, games on television, newspapers downloaded to your tablet, movies streamed to the mobile and music well available on all devices and apparently largely for free. For existing media proprietors, the business strategy is likely to need an overhaul rather than a tune up. For some industry executives, it may be a look over the precipice, particularly if audiovisual content follows music and piracy becomes the preferred medium of exchange. "Pirates of the Caribbean" may have to be reshot as Pirate Bay or perhaps, more accurately, Pirates of the Back Bedroom and the role of Jack Sparrow recast with a Swede or a teenager in the lead.

Implications for broadcast regulation

For broadcast regulators, the starting gun has been fired on how to design a regulatory structure which is fit for purpose for such a changed business and technical environment. The House of Lords has recently published its report on the regulatory implications of media convergence, set against the backdrop of the UK Government's yet to be published proposals on amending the Communications Act. Following quickly behind, the European Commission has published a green paper on converged audiovisual world which may be the prelude to a new Audiovisual Media Services Directive. Whilst the House of Lords makes a series of recommendations on how the new media landscape should be regulated, the Commission is currently in listening mode and only raises a series of questions which it believes needs to be debated.

Choppy waters ahead

choppy watersConvergence raises a number of tricky issues for regulators but in my mind two spring to the front of the queue. First, regulatory responsibility will move front and centre into the home. In the fully connected world, the amount of audiovisual material streamed to a multiplicity of devices means that regulation as it has been practised to date risks becoming obsolete. Secondly, it is silly, as the House of Lords points out, for the same piece of content to be regulated differently and by different regulators, depending on how it is delivered. Whilst technological neutrality is trumpeted as a regulatory goal, in practice it still often misses the target. The current distinction between television and television-like services is a fudge and its sell by date may not be far away. I am not convinced that viewers in the home make the distinction between push back (traditional television) and lean forward (VOD/internet television) that regulators often claim. In any event, such a distinction is illusory going forward when the content will be delivered to the same and no longer different devices. In such an environment, the continuing effectiveness of such beacons for content regulation as the 9:00 pm watershed may be questionable.

What the House of Lords recommends

The House of Lords has made several recommendations about how to regulate television content in both the short and medium term. These include:

Short term
  • amend the existing broadcast licences to ensure that standards similar to those set out in the Ofcom Broadcasting Code will apply suitably amended to any service using the same channel name or brands;
  • encourage OTT (Over The Top) operators like Netflix to comply with a suitably amended version of the Ofcom Broadcasting Code in return for being able to kitemark their service.
Long term
  • move non PSB (Public Service Broadcasters) broadcasters to a notification-based regulatory system;
  • establish scope for Ofcom to introduce a common regulatory framework for television and television-like content and giving Ofcom authority to designate a co-regulator for that purpose;
  • all services should adopt a standard age-based classification system and if possible, this should be adopted Europe-wide.

I think the recommendations are sound and go a long way to recognising the changing environment which will prevail. To add to the debate, I set out below my views on how the future regulatory structure could look. They are largely a variation of the House of Lords' proposals.

Ofcom as a kitemark

Flying a kitI have in the past, been sceptical about the regulatory kitemarks, but perhaps I was wrong.  In terms of the European regulators, there is no doubt that Ofcom stands out as "best of breed".  Therefore, I would have "Ofcom" as the kitemark.  There would be a number of variations of the kitemark that an audiovisual media service provider could select depending upon the level of regulation that they commit to in respect of a particular service.

All service providers would, in addition to any regulatory fee, pay Ofcom an annual kitemark fee.  These categories could include:

  • Ofcom Gold – the highest regulatory standard which would apply to BBC1, BBC2 and BBC3, BBC4 and any other broadcaster enjoying privileged access to a scarce resource (such as frequency) at a reduced or nil cost and any other broadcaster that elects to comply with the standard in exchange for perhaps a reduced regulatory fee and other privileges (see below);
  • Ofcom Silver – services which have to meet lesser regulatory standards (such as having more advertising, less restrictive sponsorship announcements or more liberal product placement rules) but maintain higher content standards;
  • Ofcom Bronze – enjoy the same privileges as Ofcom Silver but have a more slimmed down content requirements;
  • Ofcom Blue – basic minimum standards; and
  • Ofcom Red – adult services.

Ofcom Red services would not be available on any DTT (Digital Terrestrial Television) platform until after 22:00/23:00 hours.  Ofcom Red and Blue services would also have to age filtering mechanisms (such as pin/credit care protections).  In addition, the industry would have to come up with an app which would allow a particular telephone or email address (i.e., mum) to be notified whenever a registered device accesses a Red service.

Further, if there is any unregulated service (i.e., an internet delivered service from outside the EU) then, if there is a sufficient public concern (e.g., a million online complaints), Ofcom could force ISPs, etc. to block access to such services.

Prominence on EPG listings

One of the current issues under debate is how to deal with prominence or positioning on EPG (Electronic Programme Guide) services going forward.  Currently, this goes to the PSBs.  One proposal under discussion is that EPG prominence is based on UK production spend.  To encourage service providers to opt for Ofcom Gold, any service which meets this regulatory standard would be entitled to EPG prominence. However, failure to maintain the Ofcom Gold standard would mean the service provider would lose not only any financial benefit it receives, but also lose the listing preference.  It would also have to rebrand the service as Ofcom Silver, etc.

A points system

NumbersTo maintain a particular standard, service providers would have to ensure regulatory infractions are kept within a certain level of points over a rolling three year period.  Repeated breaches would incur higher points and self-reporting and guilty pleas would incur lesser points, etc.  If a Red or Blue service slips below the number of points necessary to carry the Ofcom kite mark, you would have to remove the kite mark and risk the service not being carried on cable, satellite, mobile or DTT platforms.  ISPs could be required to switch off access to such service.

Conclusion

Like the House of Lords' recommendations, my recommendations are aimed with a carrot and stick and they are for the future too – but the future may be closer than any of us think.

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Mallet and paper
Tony Ghee

Tony Ghee


Tony Ghee looks at the House of Lords' recent recommendations on how the evolving media landscape should be regulated and makes some suggestions of his own..

"Like the House of Lords' recommendations, my recommendations are aimed with a carrot and stick and they are for the future too – but the future may be closer than any of us think."

"Whilst there continues to be debate about how fast is the change that is brought about by media convergence, there is no doubt that this is happening and will impact everyone in the value chain from content creators through to end users in the years ahead."