Was thesun.co.uk’s “Sun Video” section regulated by ATVOD?

Topic: Online advertising

Who: Was thesun.co.uk's "Sun Video" section regulated by ATVOD (formerly the Association for Television on Demand)?

Where: UK

When: 21 December 2011

Law stated as at: 26 January 2012

What happened:

In February 2011, ATVOD, the co-regulator of TV-like video on demand services, issued a determination that the "Sun Video" section of The Sun's website was an "on-demand programme service" ("ODPS") within the meaning of the Communications Act 2003 (the "Act") (the "Determination").

News Group Newspapers Limited ("News Group") appealed to OFCOM against the Determination on the grounds that (1) the video section was not an ODPS within the meaning of section 368A(1) of the Act; and (2) even if the video section was a service, its principal purpose was not the provision of TV-like programmes as set out in section 368(1)(a) of the Act.

OFCOM upheld News Group's appeal and set aside ATVOD's Determination.

In response to OFCOM's decision, ATVOD have now withdrawn similar determinations in relation to other newspaper and magazine websites such as Telegraph TV, The Independent Video and Elle TV.

Regulation of TV-like video on demand services

A finding that website content classifies as an ODPS is a significant step. It means that the content is caught by amendments to the Act which were driven by the EU Audio Visual Media Services Directive 2010/13/EU. This was seeking to ensure that "TV-like" services in the EU did not escape regulations otherwise applicable just because they were disseminated online.

An ODPS provider is obligated to notify ATVOD of its service, pay the relevant fee and ensure that its service meets the regulatory requirements. It is the responsibility of the service provider to assess whether their service is subject to the regulatory framework.

A service is deemed to be an ODPS if it satisfies the criteria set out in section 368A of the Act:

(1) Is the service an "on-demand programme" service?

A service is an "on-demand programme" service if it meets all of the following criteria:

• the service includes TV-like programmes whose form and content are comparable to the form and content of material normally included in television programme services;
• users are able to select and receive individual programmes using an electronic communications network, such as the internet and view the selected programme at their own leisure;
• the programmes comprising the service are subject to the exercise of editorial responsibility; and
• the service and any subscription service is available to the general public.

(2) Does the entity with editorial responsibility for the service fall within the jurisdiction of the UK?

A service provider will fall within the scope of the UK's jurisdiction if:

• its head office is in the UK and editorial decisions in respect of the service are made in the UK; or
• its head office is in the UK or editorial decisions are made in the UK and the other function is carried in an EU member state; or
• its head office is in the UK or editorial decisions are made in the UK and the other function is carried out in a non-EU country, however, a significant proportion of its workforce is involved in the provision of the service in the UK.

ATVOD's determination in respect of The Sun's website

In October 2010 ATVOD notified News Group of its preliminary view that the video section of The Sun's website may be an ODPS in respect of which News Group had failed to notify ATVOD. When it made its Determination in February 2011 the grounds for ATVOD's finding included:

• "the video section constituted a service in its own right, albeit a service which sits alongside an electronic version of a newspaper";
• "the video content is aggregated on a discrete section of the website providing a catalogue of viewing options";
• [a] single website or domain may contain more than one service";
• "the viewer is not invited to consider the content as subsidiary or ancillary to the online version of the print newspaper";
• "Sun Video is presented as a consumer destination in its own right";
• "the programmes provided within Sun Video service can be viewed, enjoyed and made sense of without reference to the newspaper offering";
• "a thematic or topical connection to the (online or offline) newspaper offering is not sufficient to make the video service an integral and ancillary part of the online version of the magazine [sic], given the presentation of the service as a video on demand service in its own right"; and
• "the programmes themselves are comparable to the form and content of programmes normally included in television programme services, in that they follow the conventions of TV programmes, with edited opening sequences, on-screen captions, music soundtrack and presenters".

News Group appealed on the grounds that (1) the video section was not an ODPS within the meaning of section 368A(1) of the Act; and (2) even if the video section was a service, its principal purpose was not the provision of TV-like programmes as set out in section 368(1)(a) of the Act.

News Group argued that:

• the principal purpose of the videos was to supplement the text article and that this was borne out by the extensive cross-linking between the videos and the full text articles; and
• the purpose of arranging the videos into the video section was merely part of enhancing the browsing experience and an "integral part of the online newspaper service."

News Group also drew OFCOM's attention to the statutory exclusions, referred to by ATVOD in its "Guidance on who needs to notify", that "electronic versions of newspapers and magazines" and "audio visual content merely incidental to the service and not its principal purpose" are excluded from the scope of the Act.

News Group were also of the view that there was no statutory definition of "service" and that it was necessary to define the scope of the service in order for the definition of an ODPS set out in section 368A(1) of the Act to apply.

OFCOM's decision

OFCOM upheld News Group's appeal and set aside ATVOD's Determination on the grounds that the reasoning and evidence on which ATVOD had relied upon in the Determination were not sufficient for it to decide that the video section of The Sun's website was an ODPS.

In its decision OFCOM noted that, in the Determination, ATVOD had placed too much emphasis on the video section of The Sun's website. In doing so, ATVOD did not adequately consider the overall content of The Sun's website and the relationship between it and the audio visual material in the video section. In its consideration of the material on The Sun's website, ATVOD was also required to determine whether there was anything in the audio visual material that constituted a service whose principal purpose was the provision of TV-like programmes.

OFCOM acknowledged that there was evidence of significant changes to The Sun's website between the time ATVOD had analysed it and OFCOM's decision. OFCOM also agreed that there was evidence that the video section had some of the characteristics that might be expected of an ODPS. However, on balance, such points were not sufficient to support a decision that the video section of The Sun's website was an ODPS.

In respect of News Group's submission that there was a need to define the scope of the service for the statutory definition of an ODPS to be applicable, OFCOM disagreed with this segmentation of the definition. OFCOM stated that there are two interconnected elements, firstly, to identify the principal and any ancillary purpose(s) of what is provided and whether this is the provision of audio visual material and secondly, to establish whether the service is akin to television.

Why this matters:

OFCOM's decision provides helpful clarity on the application of relatively new regulations to the provision of TV-like video on demand services. The finer details of OFCOM's decision will prove useful to entities operating audio visual web services as it sets out the scope of section 368 of the Act.

In light of OFCOM's decision, ATVOD have acted promptly to withdraw determinations in relation to other newspaper and magazine websites on the basis of the similarities of their audio visual content to the video section of The Sun's website.