John Davidson-Kelly, a Partner in Osborne Clarke’s Digital Media team, looks at Ofcom’s recent decision to uphold an appeal by Channel Flip Media Ltd against ATVOD’s determination that it was providing an On-Demand Programme Service (“ODPS”) and what this means for determining whether a video-on-demand service is an ODPS which is regulated under the Communications Act 2003 (the “Act”) and therefore who bears responsibility for advertising – the marketer and/or the ODPS provider.
The Channel Flip case specifically addresses the issue of ‘comparability’, i.e. whether programmes available on a service are ‘comparable’ to programmes normally included on television programme services. ‘Comparability’ is one of the criteria a video-on-demand service must meet if it is to be an ODPS and caught by the provisions of the Act. The Act contains certain rules relating to advertising with which ODPS providers must comply. Therefore, if a video-on-demand service is an ODPS, the ODPS provider is primarily responsible for compliance with these advertising rules.
In April 2011, ATVOD ruled that the Channel Flip service – which offered consumers on-demand access to short-form videos by well known TV personalities – was an ODPS and that Channel Flip Media Ltd was in breach of its statutory obligation to notify the service to ATVOD. Channel Flip appealed and the decision turned on whether the videos were comparable, in form and content, to those normally included in television broadcast services.
Ofcom overturned ATVOD’s determination, which means that the video-on-demand service is not within the scope of the Act. As such, responsibility for advertising lies with the marketer.
Ofcom’s decision sets out a clear set of factors which will be taken into account when determining whether videos on a service are comparable, in form and content, to those normally included in television broadcast services. In addition, the degree to which Ofcom’s decision was informed by a study published by Essential Research (“Essential”) in October 2012 (the “Research”), which can be found here, suggests that service providers can use the Research as a framework to determine whether their service is likely to constitute an ODPS.
When determining whether videos on a service are comparable, in form and content, to those normally included in television broadcast services:
1. the service as a whole will be considered – individual items of content should be put into context. One of the issues with ATVOD’s decision is that it focused on relatively few examples of content which were more closely comparable with television programmes than many of the other programmes on Channel Flip. Put into context they were not typical of the audiovisual material which it was the principal purpose of Channel Flip to make available to users. There is a separate question of what constitutes a service and a separate part of a website may be deemed to be a standalone service. ATVOD determined that ‘Everton TV’, which forms part of the Everton FC website, was a distinct service, the principal purpose of which is the provision of audiovisual material and this determination is subject to an on-going appeal.
2. all factors relevant to the comparability of the form and content of the material on the service with ‘traditional television programmes’ will be considered. Ofcom acknowledged that there were various similarities with television programmes (such as credits, familiar presenters and in some cases duration of up to 10 minutes) but concluded that in most cases the content was not sufficiently comparable to a class of programmes commonly seen on television and when taken as a whole users would not view the content on Channel Flip as an alternative to television programmes. In particular Ofcom took into account the form of the content, its production quality and generally short duration which it noted is not typical of comedy and light entertainment programmes on linear television services.
3. relevant parts of the Audiovisual Media Services Directive (“AVMS Directive”) will be taken into account, and particular consideration will be given as to whether the relevant audiovisual material is likely to compete for the same audience and advertisers as (linear) television broadcasting services (as stated in Recital 24). In other words, the AVMS Directive indicates that on-demand audiovisual services which, by virtue of the programmes they provide, are sufficiently similar to, and compete with, linear TV services, are the kinds of services that should fall within the scope of regulation. Ofcom decided that given the material on Channel Flip, there was not sufficient similarity between the service and linear television broadcasting services that they are likely to compete for the same audiences and advertisers.
Despite stating that the Research is neither exhaustive nor determinative, Ofcom appears to have placed heavy reliance on it in reaching its decision. The Research looks at services users see as competing alternatives to watching linear, scheduled television and places different services on a scale of comparability, setting out at one end services which were highly comparable and at the other end services which were not closely comparable. It helped Ofcom to determine, for the purposes of Recital 24 of the AVMS Directive, whether there is sufficient similarity between the service and (linear) television broadcasting services that they are likely to compete for audiences.
Although the Research will not in itself determine whether any particular service is an ODPS, service providers can use it as a framework to determine whether their service is likely to constitute an ODPS.
Quick summary of the regulation relating to advertising in both video-on-demand services not caught by the Act and regulated ODPSs
Advertising in both (1) video-on-demand services not caught by the Act and (2) regulated ODPSs is subject to the CAP Code. With the exception described below, the marketer bears primary responsibility for ensuring that its advertising complies with the CAP Code.
Some advertising in ODPSs is subject to regulation under the Act, in addition to the CAP Code. It is the ODPS provider, not the marketer that bears the primary responsibility for ensuring compliance with the provisions of the Act. The rules set out in the Act are reproduced in Appendix 2 to the CAP Code and apply only to advertising “included” in a regulated ODPS, which is advertising that can be viewed by a user of the ODPS as a result of the user selecting a programme to view.
The ASA will consider complaints that advertising falls short of the rules in Appendix 2 to the CAP Code. The ASA will take up complaints that fall under Appendix 2 with the ODPS provider. Complaints that fall under the other rules in the CAP Code will be taken up with the marketer.
Quick summary of the legal issue in the Channel Flip case and the relevant regulatory framework and legislation
Ofcom, together with ATVOD, is the regulatory authority for the editorial content of certain on-demand audiovisual services. One of Ofcom’s roles is to determine appeals against decisions by ATVOD as to whether a service falls within the scope of regulation. A service falls within that scope if it is an ODPS as defined in Part 4A, section 368A of the Act.
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 programmes the form and content of which are comparable to the form and content of programmes normally included in television programme services;
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 use 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”.
ODPSs must comply with the relevant provisions of the Act e.g. notify the service to ATVOD in advance (under section s.368BA of the Act) and pay a fee (under section s.368D(3)(za) of the Act).
In addition, the provisions of the AVMS Directive can be used to help interpret the statutory definition in the Act.
Channel Flip’s appeal revolved around Section 368A(a), which can be broken down into two parts: (i) the “principal purpose part” (i.e. is the principal purpose of the service to provide audiovisual material) and (ii) the “comparability part” (i.e. does the service provide programmes which are comparable in form and in content to the form and content of programmes normally included in television programmes). Both parts of this test must be met (together with the rest of the criteria in section 368(1) of the Act) for a service to be an ODPS.
Channel Flip didn’t dispute that the principal purpose of its service was the provision of programmes (i.e. the first part of the test), instead its appeal hinged on the comparability issue i.e. whether the content was comparable, in form and content, to those normally included in television broadcast services (the second part of the test).
Ofcom decided that, although some of the material on the Service shared characteristics with linear television programmes, when taken as a whole the Service was not sufficiently comparable with that of programmes normally contained in linear television programme services and that as a result the Service was not an ODPS for the purposes of the Act.
Channel Flip – a quick description of the service
At the time of ATVOD’s determination Channel Flip’s programming:
• included comedy material (e.g. “David Mitchell’s Soapbox”) and light entertainment (e.g. “Richard Hammond’s Tech Head”);
• occasionally featured well known presenters (such as David Mitchell or Richard Hammond);
• usually had pre-roll advertisements or sponsorship messages;
• had brief title sequences and end credits;
• was mostly short in duration (between 3-4 minutes) although a few were longer (e.g. “FC Dave” was about 10 minutes);
• was arranged into series and occasionally followed narrative, episodic approaches;
• was professionally made but evidently on a limited budget; and
• was not broadcast on traditional linear television.