Consultation outcome

Government response to the consultation on audience protection standards on video-on-demand services

Updated 28 April 2022

Summary

Video-on-demand services such as Netflix and Amazon Prime Video provide huge value to UK audiences, and in many cases make significant, and growing, contributions to the UK economy. Viewers now have access to thousands of hours of on-demand programmes at the touch of a button across hundreds of different video-on-demand services, each of different scale and ambition and audience reach.

However, these on-demand services are regulated far less robustly than traditional broadcast television. In some cases they are not regulated in the UK at all, and that creates risks to audiences and the lack of consistency across broadcasting regulation.

On-demand services, other than BBC’s iPlayer, are not subject to Ofcom’s Broadcasting Code, which sets out appropriate standards for content including harmful or offensive material, accuracy, fairness and privacy. This means that the TV-like content you watch is regulated differently depending on how you choose to watch.

Consumers enjoy the broad range of on-demand services available and we would not wish regulation to impede this experience or to make the UK a less attractive market in which to operate video-on-demand services.

That is why we launched a consultation to consider whether it is necessary to level the rules for traditional broadcasters and major video-on-demand services.

After considering the responses to that consultation, and as set out in the Broadcasting White Paper, the government now intends to legislate in a light touch manner to give Ofcom powers to draft and enforce a new Video-on-demand Code, similar to the Broadcasting Code, to ensure TV-like content, no matter how audiences choose to watch it, will be subject to similar standards. These changes will mean UK audiences will be better protected from harmful material and be better able to complain to Ofcom if they see something they are concerned about.

This world-leading regime will be aimed at larger, TV-like video-on-demand services to ensure that major services which engage UK audiences are subject to the same or similar obligations as UK broadcasters. This will also ensure that larger TV-like on-demand providers who are not currently regulated in the UK, but who target and profit from UK audiences, will now rightly come under Ofcom jurisdiction. The specific services that will be subject to enhanced regulation will be determined by the Secretary of State following a review by Ofcom.

This will ensure that larger on-demand streaming services will have the same or similar obligations as traditional broadcasters, including effective handling of complaints. Ofcom tools to regulate video-on-demand, such as information gathering and enforcement powers, will also be brought in line with existing broadcasting regulation.

In our light touch regime, increased conformity on protection tools and measures, such as age ratings, PIN codes and warnings, will not be made compulsory. Instead, Ofcom will be given an ongoing duty to assess on-demand providers’ audience protection measures. This will ensure that the systems put in place by video-on-demand providers are effective and fit for purpose, and allow Ofcom to secure change if needed.

Respecting issues of free speech and proportionality, smaller, lower risk on-demand services in the UK will continue under existing rules, ensuring services that have a smaller audience size and pose lower-risk to viewers, are not unfairly or unnecessarily penalised.

Consultation on audience protection standards on video-on-demand services

On 31 August 2021 the government launched an 8 week consultation on audience protection standards on video-on-demand services. In summary, the consultation considered whether UK audiences viewing TV-like on-demand programme content should receive the same or similar level of protections as if they were watching traditional television; and whether video-on-demand services not currently regulated by Ofcom and which target UK audiences should be brought within UK jurisdiction.

The consultation closed on 26 October 2021 after receiving a total of 68 responses. 29 responses were from video-on-demand providers, broadcasters and other media and industry organisations, 29 responses were from individuals, and 10 responses were from charity, lobby or academic organisations. During and following the conclusion of the consultation the Department undertook a further period of engagement with on-demand providers, broadcasters and interested individuals and organisations to gather further information and data on the questions set out in the consultation.

Determining the system for video-on-demand regulation and setting the thresholds for enhanced regulation

The consultation considered what type of regulatory system should be used for video-on-demand services. Overwhelmingly, submissions from organisations were in favour of maintaining a notification system, where on-demand providers are required by law to notify Ofcom before their service begins, and to let them know if their service closes or undergoes significant changes. Some on-demand providers argued that the current system is proportionate and effective, and many organisations evidenced that they had encountered no issues so far with the current notification system. It was clear from responses that, in general, members of the public were not familiar with the differences between notification and licensing systems and had no strong views either way. A few organisations were in favour of a licensing system due to its consistency with a level playing field approach, as this is the system used for broadcasting, and the extra due diligence which a licence application provides.

On whether video-on-demand regulation should be more in line with the existing broadcasting regulatory system, a number of on-demand providers raised concerns that smaller providers would have to close their services due to increased costs. In addition they were also concerned that, due to smaller audience sizes and content being ‘un-TV-like’, the risk to audiences was smaller. Some respondents emphasised the importance of exemptions or different, lower, standards for smaller/niche services as it may be disproportionate for smaller video-on-demand providers to have to comply with certain regulations.

Conversely, some submissions also pointed out that smaller/niche on-demand services, due to their nature, may be more likely to cause harm. It was argued that smaller services may be more likely to publish risky or potentially harmful content, and therefore suggested that it may be more helpful to regulate based on potential to cause harm rather than metrics such as the size of the organisation or content library.

Concerns were raised by a number of providers and organisations that any decision to enhance regulation must be proportionate to the risk of harm. A few respondents disagreed with enhancing regulation at all, pointing to the risk of regulatory overreach and restrictive regulations, or arguing that video-on-demand services are already subject to adequate rules.

Of the feedback provided by on-demand providers and broadcasters on which services should be subject to enhanced regulation, common suggestions for measurable parameters to dictate regulatory scope were audience size, turnover, UK subscriptions and level of risk. Some respondents suggested that Ofcom would be best placed/more appropriate, rather than the government, to decide on relevant parameters.

### Government response on the regulatory system and appropriate thresholds for enhanced regulation

The public consultation response and separate stakeholder engagement clearly evidence that industry predominantly prefers, and is already familiar with, the current notification framework. Whilst both the current notification system and a new licensing system would both be expected to deliver the overarching government objectives of improving regulation, a licensing system would have a greater financial impact on video-on-demand providers with minimal additional benefit. Consultation responses also raised concerns that a licensing system would be disproportionate as it could necessitate a more restrictive system, where on-demand providers would need to re-apply for the right to provide a service in the UK.

Considering the above, the government’s preference therefore is for a light touch regime to keep the current regulatory notification system in place where possible. Legislative changes will be made to improve audience protections and to bring on-demand regulation closer in line with television, but the overall function of the notification system will remain the same. As with the current notification system, Ofcom will regulate video-on-demand services within scope of regulation, even if they have not notified or do not engage with Ofcom.

After considering the evidence and impact and benefits of enhanced regulation both to providers and UK audiences, it is the government’s intention to set a two-tier system for enhanced regulation, with the upper tier primarily aimed at larger on-demand services where the overwhelming majority of TV-like content can be found and where audiences are more likely to presume or expect a higher level of regulation. Considering issues of free speech and proportionality, smaller, lower risk on-demand services in the UK will continue under existing rules.

Whilst consultation responses suggested parameters that could be used to differentiate between the size and impact of services, importantly it did not provide evidence of where that level could be set. In addition, data is also currently limited to support an evidence-based decision; for example, there is no comprehensive industry standard measurement for on-demand audiences. However, Ofcom has recently undertaken similar research to inform their recommendation to the government on accessibility requirements on video-on-demand services. This included a consideration of proportionality around significant technical or operational obstacles, exemptions on low audience size and disproportionate cost.

Ofcom evidence from broadcasting regulation decisions points to some harmful content being more likely to appear on niche providers catering for a select audience, for example on religious or news content. Therefore it is necessary for regulation to also consider the potential for audience harm, as well as proportionality.

It is the government’s position that larger TV-like video-on-demand services must by default fall within the scope of enhanced regulation. However, in deciding who exactly should be in scope, it is our view that there is insufficient information confidently to set thresholds/parameters in legislation at this stage, and to do so would not allow for sufficient flexibility over the longer-term. Therefore, in our approach, the Secretary of State will be provided powers to designate which video-on-demand providers will be selected for enhanced regulation, following a report from Ofcom. Ofcom will be obliged to keep a publicly available list of these services. Whilst enhanced regulation will be aimed at larger TV-like on-demand services, considering the potential for audience risk some smaller services could pose, it is important that there is facility for these ‘smaller’ services to be brought within the scope of enhanced regulation by the Secretary of State if considered necessary, following a review from Ofcom.

The Secretary of State will be able to require further subsequent reports from Ofcom which will allow further designations in the case of new providers or if the on-demand market substantially changes. This would have the essential benefit of making the system more adaptable and future-proof. To carry out any review, Ofcom will need increased powers to require information from providers (for example in relation to audience size), as this information is not currently uniformly available.

Ofcom will also be given powers to gather information from on-demand providers, in line with current powers they have for broadcasting regulation. This will enable them to carry out enhanced functions to review the level a regulatory tier could be set and hold video-on-demand providers to account on new obligations (set out in more detail below).

Bringing larger non-UK TV-like video-on-demand services that target UK audiences into UK jurisdiction

On non-UK video-on-demand services, there was broad support from consultation responses for the proposal to bring services which provide on-demand services to UK audiences within Ofcom regulation. Of the responses received from organisations, around three quarters supported this proposal. From members of the public, there was an even split between those agreeing and disagreeing.

Some organisations set out that UK audiences expect high standards and that those standards should be enforced through regulation, whilst other organisations emphasised the need for a level playing field between services that make content available to UK viewers, regardless of head office or editorial location. Some organisations proposed that non-UK video-on-demand regulation by Ofcom should be proportionate to the level of harm. A few respondents suggested regulation was adequate as non-UK providers already had to conform to rules made in their countries of origin.

### Government response on bringing non-UK video-on-demand services under Ofcom regulation

It is the government’s intention to bring larger non-UK based video-on-demand services that actively target and profit from UK audiences under the scope of enhanced Ofcom regulation, by treating them the same way as large UK services. The government is deeply concerned that UK citizens do not currently have adequate regulatory protections from these on-demand services.

The majority of content on larger non-UK services does not seem to pose a high risk to audiences at present, as these services have their own audience protection measures in place. However, and importantly, there may be greater risks that emerge in the future and there is no facility for UK audiences to raise content complaints with a UK regulatory body if they have seen something they are concerned with or has caused them harm. As evidenced recently, including by direct correspondence to the Department, this has shown to be a major concern for some on-demand viewers.

It is the government’s view, in line with its light touch approach, that it would not be practical or necessary for Ofcom to identify and regulate the hundreds of on-demand services outside the UK which can technically be accessed by UK audiences to the same scale it regulates video-on-demand services based in the UK. Smaller services may be difficult to identify without international agreement and it would be unnecessary to apply UK standards to content that is not directed towards UK audiences, and which the overwhelming majority of UK audiences would be unlikely to regularly come across. Of larger on-demand services not regulated in the UK, Apple TV+ and Netflix currently stand out as the largest services that directly target UK audiences.

It will be essential that any regulation of non-UK based services is adaptable to market changes and future entrants to the UK market. As with setting a tiered system in the UK, it would be challenging to set fixed parameters considering limited data and rapid changes to the scale of on-demand services. Considering this, in line with the two-tier system proposed, the Secretary of State will designate non-UK on-demand providers under the scope of enhanced regulation following a report from Ofcom. As with the review of UK services, this will consider audience harm as well as other metrics like overall size and UK audience numbers.

Whilst larger non-UK based services may adhere to UK regulation and Ofcom decisions or directions voluntarily, in the government’s view it remains nevertheless important that Ofcom has similar, and sufficient, regulatory powers. It is envisioned that the same suite of powers (as set out later) covering information gathering and enforcement will cover both UK and non-UK services.

Creating an Ofcom Code for top-tier video-on-demand services

On questions regarding the Broadcasting Code, of those consultation responses providing a clear yes/no answer, responses were evenly split between agreeing and disagreeing that aspects of Ofcom’s Broadcasting Code should be applied to video-on-demand regulation. Charities and lobby groups raised a number of specific harm concerns on current gaps in on-demand regulation which should be closed, and explained that this would be achieved if on-demand services were regulated under the Broadcasting Code. For example some evidence was provided that stronger depictions of suicide and self-harm were shown on-demand which might not be shown on linear television in such detail.

Many of the broadcasters who submitted responses evidenced that they already use the Broadcasting Code (where appropriate) for their on-demand services, and some respondents acknowledged that UK audiences may mistakenly expect content viewed on video-on-demand services to meet the same compliance standards that they take for granted on television and BBC iPlayer (which is already regulated under the Broadcasting Code).

On-demand providers who did not have broadcasting platforms generally indicated that they did not support proposals to apply elements of the Broadcasting Code to their services. They highlighted the more stringent audience protection measures they have in place and that elements of the Broadcasting Code, such as the watershed, were not suitable for on-demand services and online distribution. They also emphasised that audiences were at less risk because they actively select what they watch and can make more informed choices. Some evidence was provided that on-demand services that do not provide UK broadcast channels could face significant initial and ongoing costs from having to review entire libraries to confirm that they are compliant with a new standards Code.

Responses that specified which sections of the Broadcasting Code should apply to on-demand services were generally supportive of including rules around: protecting under-18s, harm and offence, and protections on crime, disorder, hatred and abuse. Specific areas that were identified as less appropriate for on-demand services were rules on elections and referendums, religion, news impartiality and the watershed, as they considered it would be more difficult to implement and potentially risk reducing the content available on services.

### Government response on creating a Code for video-on-demand-services

After reviewing the evidence provided, it is the government’s intention to direct Ofcom to set a new Code designed for video-on-demand services designated under the scope of enhanced regulation (both UK and non-UK) with the same or similar overarching objectives as the Broadcasting Code, but with rules and guidance tailored to the requirements of on-demand distribution.

The government is concerned that current video-on-demand rules do not reflect the wider protections found under broadcasting, which includes, for example, rules to protect audiences from harm caused by misleading health advice, pseudoscience documentaries on climate change and COVID misinformation. This new Code for on-demand services under the scope of enhanced regulation will better protect audiences from harm and importantly ensure they can complain to Ofcom who will be able to take action if necessary.

The intention is to bring across existing broadcasting legislation where possible, and to adjust for video-on-demand where necessary (or helpful) to ensure they function effectively. As with the Broadcasting Code, Ofcom will be required to keep it under continual review and make changes where they consider appropriate. It is viewed that on-demand providers, broadcasters and audiences would likely benefit from similar rules and guidance where practical, but that will be determined by Ofcom following public consultation. On-demand services not designated will continue under existing rules.

Some specific elements of the Broadcasting Code are less practical to apply to on-demand, notably the watershed, which limits more adult material being broadcast before 9pm would not be effective due to the content being actively chosen ‘on-demand’ throughout the day rather than a live stream. Also elements that are only applicable to radio would not need to apply (Ofcom does not regulate on-demand radio services). Advertising provisions were originally excluded from this consultation - these elements should continue under existing rules and will be considered through the Online Advertising Programme.

The current intention is for all existing on-demand provisions and rules to carry on applying to all video-on-demand services, including those designated for enhanced regulation. This will ensure no watering down of protection for audiences and also enable services to align to EU based rules for European audiences. This proposed system will need careful consideration by Ofcom when developing rules and guidance to reduce unnecessary complexity and the double-layering of obligations.

To support video-on-demand services, further consideration will be made on practical ways to reduce costs to on-demand providers of regulatory change, for example those who have large libraries of content, potentially by introducing a reasonable implementation period for compliance with enhanced regulation.

Giving video-on-demand services under the scope of enhanced regulation the same obligations as broadcasters

Responses to the consultation on whether video-on-demand services should have additional obligations in line with broadcasting regulation were more evenly split. From those who suggested there should be additional obligations on on-demand providers, which included the majority of broadcasters and some on-demand services, there was a broad consensus that these should be related to content standards, rather than, for example ensuring fair and effective competition.

There was also some support for new obligations that relate to equal opportunities and training to support diversity in the sector. This was disputed by some providers who suggested they were already committed to developing the workforce in these areas and legislative requirements were not necessary.

In responses that opposed additional obligations, there was an argument that video-on-demand services are subject to adequate existing rules and have consistent and effective voluntary complaints procedures in place. Some responses raised concerns about how additional obligations may amount to censorship and stifling freedom of speech, innovation and media plurality.

### Government response on giving on-demand services the same obligations as broadcasters

It is the government’s intention to implement a light touch regime but to bring in equivalent obligations between UK broadcasters and designated video-on-demand services where appropriate. Enhanced content regulation will require some obligations on top-tier services to ensure adequate communications and complaints handling. In the main it is expected that larger on-demand services will already have these systems but nevertheless these obligations will ensure Ofcom has adequate regulatory oversight and can take action if systems are inadequate. In addition the retention of recordings rule, which is the length of time of which Ofcom can request a copy of the content to use in its investigations, will be raised for all Ofcom regulated video-on-demand services to 60 days, up from the current 42.

The government will consider further the merits of introducing a new obligation on major video-on-demand providers to promote equal opportunities, as is already the case for traditional broadcasters.

Following the Digital Economy Act 2017, the Secretary of State has the power to impose requirements on video-on-demand providers for the purpose of ensuring that on-demand services are accessible to people with disabilities. This includes requirements in relation to subtitling, audio description and sign language. Following Ofcom proposals published in July 2021, the government is working with Ofcom to develop legislative proposals to address the divergence in provision of access services between broadcast and on demand services and will engage with relevant stakeholders to ensure that legislation is clear, proportionate and fit for purpose.

An effective regulator needs a suite of powers and sanctions available to deal with all situations - from the relatively minor to the more serious. It will be essential therefore that Ofcom has the right balance of tools and powers to effectively protect audiences and enforce compliance by video-on-demand providers following any change in regulation. It will also be important that on-demand providers are not just subject to the same regulatory standards as broadcasters, but also the same or equivalent procedural processes and consequences, where practical.

The government’s intention therefore is that statutory sanctions that can be applied on linear broadcasters should also be available to apply to on-demand services where possible (i.e. financial penalties, powers to force compliance with decisions etc), except regarding revocation of a licence, as on-demand services will not be licenced (see section above). Instead Ofcom will be provided with a tool equivalent to its power to revoke a licence to broadcast - we will enable Ofcom, as a last resort, to restrict video-on-demand services’ ability to appear on UK platforms.

For broadcasters and video-on-demand providers, the maximum fine per breach of a rule is already the same at £250,000 or an amount up to 5% of the organisation’s applicable qualifying revenue, whichever is the greater. The government considers these fine levels to be adequate to provide a disincentive to organisations to breach Ofcom rules.

Providing Ofcom with an obligation to assess top-tier video-on-demand providers’ audience protection measures

The consultation considered whether the current protections used by video-on-demand services were sufficient. Of the responses that gave clear answers, over half set out that they considered current protections were appropriate and/or surpassed regulatory expectations. Of those who agreed, the majority were broadcasters and on-demand providers, who in general pointed to the success, quality and innovation of their own current audience protection tools. From those who responded arguing that current protections were insufficient, many of these were organisations or individuals that had specific interests or expertise in enhancing audience protection measures or were charities/lobby groups who had specific concerns over harmful content.

On whether there should be increased conformity of protection tools to provide more consistency for UK audiences, it was more evenly split. Of those who thought there should be, many of the reasons given were for consistency for the viewer and improved understanding of the level of protection they can expect. Some responses suggested that such conformity should be the wholesale application of British Board of Film Classification (BBFC) age ratings, whilst other organisations supported additional conformity but suggested that providers would be best placed to consider appropriate systems themselves.

Broadcasters in general were against mandatory age classifications and prescriptive mechanics, as they considered them ineffective on TV-like content and out of line in relation to broadcasting regulation, where age ratings and tools are not mandatory at present. Overall, there was a sense across the responses that there should be some more consistency of principles, but against the application of very specific tools that may be at odds with their current offerings and lead to disproportionate costs without improving audience protection.

On whether age classifications/warnings systems (such as the age classification system operated by the BBFC) should be mandatory, responses were again evenly split. Of those in favour of BBFC age ratings specifically, many responses were from organisations directly supporting the BBFC’s work, or from charities and lobby groups against specific harmful content. These responses broadly set out the benefits of BBFC’s age ratings to UK audiences and the importance of a single age classification system that represented UK viewpoints on appropriateness of content. Some lobby groups spoke in favour of consistent classifications and warning systems, but did not specifically mention the BBFC by name.

Of those against standardised systems, the majority pointed to the potential cost and resource burden of applying standardised classification systems (including BBFC) and likely significant practical barriers to rolling out any mandatory ratings. Some responses were strongly opposed to the BBFC system, particularly questioning the effectiveness and restrictiveness of ratings and the suitability of applying ratings to forms of programming which the BBFC do not already routinely classify, such as daytime and documentary news shows.

Notably, responses provided limited evidence on what specific harm there is for audiences through existing audience protection systems across the larger on-demand services. The BBFC’s research did demonstrate some public support for consistency of ratings across on-demand services. There were also some examples provided where on-demand services had given different, mostly lower, age ratings than the BBFC for the same content. However, more disparate examples were shown to have been quickly remedied by on-demand services and there was no evidence demonstrating any direct harm had been incurred.

On evidence of impact to providers, mandating a consistent system of warnings or age ratings would present a significant one-off cost of updating providers’ interfaces and reviewing libraries of content to comply with new systems. There would also be significant costs from having to implement ongoing new compliance processes and restructuring existing compliance teams. Some services argued that this likely cost was unjustified given that their more nuanced systems already provide sufficient protection, and in some cases they believe more information and protection than an age rating system such as that of the BBFC.

Some services indicated that a costly and onerous system could result in the reduction of innovation and investment in new audience protection. A potential knock-on impact was also evidenced on services with smaller content budgets, where significant additional costs could result in a reduction of the amount of commissioned content. For some smaller providers, this additional cost could also make it unprofitable to provide a service. Services also indicated that higher subscription fees were possible as these costs could be passed onto consumers. Others argued that because the on-demand market is highly competitive, any commensurate rise in fees would potentially have a negative impact on any given service’s subscriber base.

### Government response on audience protection measures

Current UK regulation sets out, in simple terms, that video-on-demand services must ensure that under-18s will not normally see or hear material which might impair their physical, mental or moral development or to see or hear prohibited content or content that incites hatred or violence. To achieve this, video-on-demand providers apply a range of parental controls and information through their services. However these systems are not standardised across services and can lack familiar, trustworthy signposting and guidance, which BBFC research has suggested may cause concern and confusion for viewers and possible exposure of unsuitable content to younger viewers.

In effect, current regulation places a role on Ofcom to ensure regulated on-demand services have adequate protections in place, though this is primarily restricted to younger audiences. Ofcom have recently published new guidance which gives advice to on-demand providers on the measures that services can use to protect young audiences, including: age ratings; content warnings and information; parental controls, including restricted mode settings and PIN protection; and age assurance. Ofcom does not currently recommend any specific system or measure.

It is the government’s view, in line with a light touch approach and based on the evidence provided on the effectiveness of current audience protection measures and the overall evidence of impact on video-on-demand services and audiences, that it is not necessary to impose specific protection measures, such as age ratings, on providers, at this time. The government is concerned that mandating specific measures would not bring content regulation in line with broadcasting, potentially limit innovation in improving existing measures and developing new audience protection systems, and could place a disproportionate cost on providers. On BBFC age ratings specifically, the government continues to view these as best practice for content exhibited to UK audiences on account of being widely recognised by the public, underpinned by a transparent set of standards, and informed by regular consultation with the UK public. The government is keen to encourage video-on-demand services to consider applying BBFC age ratings to their content; but it is of the view that the existing evidence does not warrant mandating their use.

Over time this might change, however. Therefore to ensure systems are appropriate for future audiences, Ofcom will be given an enhanced ongoing duty to assess all on-demand providers’ audience protection measures to ensure that the systems put in place are effective and fit for purpose. Ofcom will also be given powers to provide guidance, report, and deal effectively with any future rogue providers. This will include all Ofcom regulated video-on-demand services, not just those within the scope of enhanced regulation.

In addition, it is expected that audience protection measures for on-demand services subject to enhanced regulation will also be improved through other regulatory changes; for example, through better content warnings and guidance, as video-on-demand providers will need to expand their protection systems to consider all audiences (not just young audiences) and also link to rules and guidance set out in a new Video-on-demand Code.

Next steps

The government will, working with Ofcom, further develop the regulatory framework needed to implement the changes to video-on-demand regulation set out in this response. This will require legislation which will be taken forward as the Parliamentary timetable allows.