The proposed new Media Bill: what does it mean?

Back in May, a new Media Bill was announced alongside the Queen’s Speech delivered by HRH Prince Charles. Whilst the Media Bill is still yet to be published, a new Prime Minister is in place and King Charles III has acceded to the throne. 

It remains to be seen whether these significant political and constitutional changes will impact the contents of the Media Bill once published. In the meantime the BBC and ITV signed a letter (also signed by Channel 5, STV and S4C) published in The Daily Telegraph stating that urgent changes are required to safeguard the sector and reminding the Government of its commitment to introduce the proposed Media Bill.

The broad details of the Bill are set out in the Growing the Economy to Address the Cost of Living section of the Queen’s Speech Lobby Pack and the government’s Vision for the Broadcasting Sector Whitepaper published by the Department for Digital, Culture, Media & Sport (DCMS). 

Key proposed changes include: the controversial proposed privatisation of Channel 4; updating the public broadcasting framework to better facilitate public service broadcasting to promote British on demand platforms and content; and, a new Video-On-Demand (VOD) Code which would apply to all VOD service providers including Netflix, Paramount + and Prime Video to be drafted and enforced by Ofcom.

The Writers Guild of Great Britain predicts that the Bill will have a “devastating impact” on creative workers, the Creative Industries and the wider UK economy, whilst Channel 4 has published proposals that they say will remove the need for privatisation.

One area of the Bill focuses on the rise in demand for subscription video-on-demand (SVOD) services. In 2021, the UK’s public service broadcasters (PSBs) spent just under £2.8bn on new content whereas Netflix alone spent an estimated $17bn in 2021. 

The share of total viewing for linear TV channels such as ITV and the BBC fell by more than 10% between 2017 and 2020 whilst the share for SVOD services such as Netflix and Amazon Prime Video rose from 6% to 19% over the same period. 

Although it should be noted that it has recently been reported that the UK SVOD market has declined by nearly 500,000 subscribers during Q2 2022 as a result of rising inflation forcing younger viewers to cut their expenditure and rely on free entertainment options such as BBC iPlayer. 

The UK has a unique broadcasting ecology, worth about £12bn a year which is responsible for 180,000 jobs across the UK (including film), and independent production in the UK is now booming - revenues have grown from £500m in 1995 to £3bn in 2020.

Whilst the draft Bill is yet to be published, according to the Queen’s Speech the main elements of the draft Bill will be:

• Ensuring that public service content is prominent, available and easily accessible across a range of platforms. The Queen’s Speech confirmed that the benefit of this change will be delivering a new public service remit for TV while making sure PSBs continue to service audiences across the UK with universally available, high-quality programming.

The Whitepaper confirms that this will achieved in a number of ways:

• Replacing the outdated set of 14 overlapping ‘purposes’ and ‘objectives’ that PSBs must contribute to with a new, shorter remit, focussed on culture, economics and democracy. PSBs must contribute to this remit and will be accountable for the extent of their contributions;
• Giving PSBs greater flexibility in how they deliver their remits, while ensuring there are effective powers available should intervention be necessary. This will make it easier for them to make their content available on a wider range of free-to-air platforms;
• Making the importance of programmes broadcast in the UK’s indigenous regional and minority languages clear;
• Following the end of the Contestable Funding Pilot (the Pilot) on 31 March 2022 (since 2019 the Young Audience Content Fund and Audio Content Fund have received almost £48 million of public funding and supported 220 hours of children’s TV content and 700 hours of radio,) the DCMS will conduct an evaluation of the Pilot. It will consider in detail whether a contestable fund model would in the longer term, provide additional value to the breadth and availability of high quality UK-produced public service content, which might better meet audience needs. The continuation of a Contestable Content Fund would be welcomed by producers and broadcasters alike.

Exactly how these changes will be implemented will be set out in the draft Bill once published.

• Updating the public broadcasting framework to better facilitate the delivery of public service broadcasting through digital platforms and promoting the production and distribution of distinctively British content.  The Queen’s Speech confirmed that the benefit of this change would be to ensure that public service broadcast content is always carried and easy to find for UK audiences on connected devices and major online platforms, including on smart TVs, set-top boxes and streaming sticks.
• In line with point 1 above, the Whitepaper provides for the introduction of a new prominence regime for on-demand television which will be proportionate and flexible and will ensure public service content is both available and easy to find on designated TV platforms which includes appropriate recognition for the unique relevance of the public service content produced by STV and S4C in particular areas of the UK. This will be achieved by a new principle-based legislative framework, whereby the providers of designated TV platforms – those used by a significant number of UK viewers as a main way of watching television content on demand – will be required to give appropriate prominence to PSBs’ designated on-demand services. TV platform providers which are in scope will be expected to include popular Smart TVs, pay TV operators, and global TV platform providers. This new regime is to be regulated by Ofcom, who will be required to develop and maintain guidance on the new framework.

Again, exactly how these changes will be implemented will be set out in the draft Bill once published.

• Giving Ofcom new regulatory powers to produce and enforce a Video-on-Demand Code to ensure VOD service providers which target and profit from UK audiences are regulated. The government will give Ofcom new powers to draft and enforce a new Video-on-Demand Code, similar to the Broadcasting Code and in line with its standards, to ensure VOD service providers, which target and profit from UK audiences, are subject to the rules of accuracy, fairness, privacy and harm which apply to traditional broadcasters. This will primarily be aimed at larger ‘TV-like’ video-on-demand services such as Netflix and level the rules between VOD services and traditional broadcasters. The Queen’s Speech stated that the benefit of this change will be protecting UK viewers using VOD services. The scope of the new regulatory powers to be granted to Ofcom are due to be set out in the draft Bill.
• Allowing for the conversion of Channel 4 from a statutory corporation to a new corporate structure that could be sold, and other changes concerning Channel 4’s obligations and remit to ensure the sustainability of the broadcaster. The proposed, new controversial changes are set out in the Whitepaper. Whilst the Queen’s Speech stated that the benefit of this change will mean that Channel 4 may continue to thrive and grow its impact for years to come as part of the wider public service broadcasting system, Channel 4 is resisting the proposed privatisation plans which it believes, risk losing the independent heart of the channel which also promises to support the government’s “levelling up” agenda by relocating roles outside of London to 600 and spending 50% of its commissioning budget outside of London.
• Updating the public service remit of S4C, the Welsh language television service, to include digital and online services. Removing the current geographical broadcasting restrictions so that S4C can broaden its reach and offer its content on a range of new platforms in the UK and beyond. The Whitepaper provides that the changes will allow S4C to broaden its reach and offer its content on a range of new platforms in the UK and beyond. The government will also legislate to support S4C (and the BBC) in moving away from the current, somewhat rigid, framework requiring the BBC to provide S4C with a specific number of hours of television programming, so that they can together agree an alternative arrangement that better suits the evolving broadcasting landscape and the changing way in which viewers access content.
• Repealing Section 40 of the Crime and Courts Act 2013 (the Act) which would (if commenced) force new publishers to pay the costs of any court judgment if they were not a member of the approved regulator, regardless of the outcome of the court judgment. The Queen’s Speech stated that the benefit of this measure will be removing a threat to the freedom and sustainability of the press. The Whitepaper does not touch on this proposed change. Section 40 of the Act forces newspapers not signed up to a Royal Charter approved regulator to pay both side’s legal costs in defamation and privacy cases, whether they win or lose. Further details of this change are due to be set out in the draft Bill. 

Whilst the government states that the reforms proposed by new Media Bill will update old legislation and unleash the potential of the UK’s creative sector, how this is intended to be delivered will not be known until the publication of the Bill. 

In any event, it is clear that there is some scepticism amongst businesses and professionals in the television sector and wider creative industries as to the proposals and their potential benefit to a world leading UK TV production sector.

If you would like any further information on any of the themes contained in this email please do contact Laura Harper, Partner laura.j.harper@irwinmitchell.com or Suzanne Thompson, solicitor suzanne.thompson@irwinmitchell.com

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