By Patrick Mitchell and Alastair Mackichan
The larger operators of UK VOD services (such as broadcasters’ catch up services, and other on-demand TV and movie services) will again be required to pay an annual fee to meet Ofcom’s regulatory costs.
Ofcom became the sole UK regulator for editorial content (i.e. programming) on on-demand programme services (“ODPS”) on 1 January 2016. It took over responsibilities from the Authority for Television On Demand (“ATVOD”).
Section 368NA of the Communications Act 2003 provides the UK regulator with a discretionary power to levy fees on ODPS providers to cover its costs associated with regulating this sector. Following the transfer of functions from ATVOD, Ofcom chose not to charge fees for the 2016/2017 financial year on the basis that there were surplus funds from the old ATVOD regime. However, after conducting a consultation earlier this year, the UK regulator has now opted to re-introduce charges. These will be calculated on the basis of a tiered approach under which the annual fee will be determined by the ODPS provider’s annual overall turnover (i.e. not just its video-on-demand turnover) and will now be calculated by calendar year rather than accounting year.
The fees are lower that those charged by ATVOD and importantly ODPS providers with multiple offerings (usually under different brands) will not be charged more than once. This is a significant change from the ATVOD regime under which each offering was charged a fee although a group cap was available for ODPS providers from the same corporate group. Ofcom has acknowledged that the ODPS sector is still developing and will therefore keep the fee regime under review. Its current proposals are as follows:
|Annual Turnover of ODPS Provider||Annual Fee (estimated)|
|Less than £10m||£0|
|Between £10m and £50m||£2,073|
|Greater than £50m||£4,146|
Ofcom’s full statement on ‘Regulatory fees for on-demand programme services’ can be accessed here.