Streaming TV giants including Netflix, Amazon Prime and Disney+ could face tighter regulation in the UK under new government proposals. With methods of watching “TV” changing, viewing today is about consumer choice: when, where and how are the choices of the viewer and no longer purely the choice of the broadcaster.
To address this new paradigm though, should a pro-business government consider market forces and a light touch rather than trying to impose tighter restrictions on VoD services that will ultimately lead to a poorer consumer experience, wonders John Griffiths?
The worst possible outcome could result in operators withdrawing from the market leading to less consumer choice, loss of UK jobs and much needed revenue for the UK government. John Griffiths, CCO at Spicy Mango discusses how this increased regulation could have the opposite results the government intends by limiting innovation and creativity, and not level the playing field as they expect.
The regulation headache
The rules that apply to on-demand program services (ODPS) as Ofcom calls them are significantly less onerous than those that apply to traditional broadcasters, especially the BBC and the government’s proposed review is something that has been a long time coming.
With the UK government considering the imposition of tighter regulations, the challenges faced would create technology, process and commercial upset for nearly every provider. Monitoring the compliance of new regulations across all on-demand services from Netflix to iPlayer and 4OD, will bear an equally significant challenge on the regulator, and one which would need investment and new technology to resolve.
Most ODPS platforms have only the minimum features to manage the regulatory elements that they must comply with today. This is because current regulation was largely put together in a linear (live) broadcast world and doesn’t transpose neatly to the on-demand world. For example, the watershed for the broadcast of certain content, does not lend itself to a service where the viewer can choose when to watch the program.
A level playing field
Legislation and regulation often struggles to play catch up to technological innovation in general, and this is equally true regarding the consumption of on-demand video content. When the delivery mechanism is broadcast over digital, terrestrial, cable or satellite to your traditional TV, this is subject to a schedule defined by the broadcaster and so the regulations are the same across the board for all broadcasters. The rules set out by Ofcom ensure that these licensed operators are all subject to the same treatment and must meet the same standards. For UK based on-demand programme services they must register their service with Ofcom but are subject to different rules to the broadcasters. So, what can be done in order to make it fairer to all services delivering video to consumers regardless of delivery platform?
On-demand service providers, such as Netflix, whose European headquarters is located in the Netherlands, is not covered by UK regulations (they fall under the control of the Dutch regulator). They are perceived to have an advantage over broadcasters and ODPS’s in the UK by being able to show content with no regard to the rules that govern a broadcaster or on-demand service provider based in the UK.
The reality is, perhaps, not quite as portrayed by some media and the government. In order to earn the trust of consumers and show corporate responsibility, Netflix undertook a massive exercise to age classify its entire UK catalogue in line with British Board of Film Classification age ratings. There was no regulation or law that forced them to do this but an understanding that they have a duty of care to their subscribers to warn them of potentially harmful or upsetting content.
Introducing new onerous rules is most likely to result in consumers suffering in the long run. With a need to adhere to complex regulations, service providers will face increased costs in order to comply and this could result in increased prices for consumers, less innovation in services and less investment in new content. A better approach is to ensure that the existing rules are adapted to be applied across the board by all, which would mean that consumers can still enjoy great live broadcast content and on demand programmes.
There is also an element of consumer responsibility too. On-demand services can only do so much to protect their viewers. For example, rules are in place for on-demand services to limit access to restricted content but could regulators tighten these rules further? If the platform has complied with the rules and guidelines, then the onus has to be on the consumer. The technology in place is not foolproof and parental controls and age verification can be circumvented by clever children, thus potentially leading some younger audiences to have access to restricted content. However, this is not down to the platform showing the content, this is a personal responsibility that parents should be taking more seriously to protect their children.
Rules and regulations can be highly beneficial to both creating and managing a competitive environment. But going too far leads to businesses bending, breaking or ignoring the rules, and if the regulator has weak enforcement capacity then nobody wins.
As a consumer, we want easy access to the best content at our fingertips, which means that we need to ensure that we use the tools and settings provided by the service providers to protect ourselves.
The UK government must clearly define the problem they are really trying to solve before imposing complex new regulations that are more likely to hinder the market, rather than improve the consumer offering and experience. Just a thought, but what about instead of restricting new entrants and stifling innovation, perhaps consider relaxing the constraints on the BBC to allow them the freedom to compete in a free market?
John Griffiths is CCO, Spicy Mango