This Practice note discusses the Audiovisual Media Services Directive, which was created by amending the Television Without Frontiers Directive (89/552/EEC amended by 97/36/EC and 2007/65/EC) to reflect changes in the audiovisual media services field. It came into force on 19 December 2007 and member states were required to implement it by 19 December 2009. The codified version of the Directive (2010/13/EU), which supersedes the TVWF Directive and its amendments, came into force on 5 May 2010.
The TVWF Directive established a single market in television broadcasting services. It applied to television broadcasts made over wires and over the air (including by satellite) and explicitly did not apply to services provided on individual demand (Article 1(a)). The Directive:
Harmonised the laws on television broadcasting throughout the EEC (now the EU) and established the so-called "country-of-origin" principle by which television broadcasts are required to comply only with the laws of the member state from which they emanate.
Set minimum standards for the protection of minors.
Established rules on advertising and sponsorship.
Required television broadcasters to transmit a certain quota of "European" works rather than simply buying in programmes from outside the EU. (European works were defined as, broadly speaking, works originating or produced in member states.)
Established the remedy of "right of reply". This remedy allows people and other legal entities, such as companies, to require that any publication of inaccurate facts about them in the media, or any other publication of information which affects their legal rights, is publicly corrected.
The TVWF Directive was implemented in the UK by the Broadcasting Act 1990, the Broadcasting Act 1996 and the Communications Act 2003 (Communications Act). Licensing and regulatory arrangements are overseen by the communications regulator Ofcom (which, in 2003, took over the roles of a number of pre-existing regulators, including the Independent Television Commission and the Broadcasting Standards Commission) and the BBC Trust. Member states could impose more detailed or stricter rules on television broadcasters operating under their jurisdiction. In the UK, the relevant rules are contained in Ofcom's Broadcasting Code (originally published in 2005 and revised in December 2009).
The European Commission proposed updating the TVWF Directive after a public consultation process that highlighted its shortcomings as follows:
Increasing convergence of technologies and markets meant that viewers could choose to watch programmes that were the same as, or similar to, those broadcast on television via services which, because they are transmitted using technologies outside the scope of the TVWF Directive, fell outside its scope of regulation. This led to an unfair situation in which television broadcasters who were regulated by the TVWF Directive were in direct competition with media service providers who were not.
The regulation of content provided on-demand (and by way of other services not regulated by the TVWF Directive) was harmonised only to a very limited extent, so such services did not experience the benefits of the internal market on matters covered by the TVWF Directive, and could potentially be required to comply with local regulations in each member state in which they were transmitted. (There was, however, harmonisation of other aspects of on-demand services under the Electronic Communications Framework Directive (2002/21/EC) and the E-Commerce Directive (2000/31/EC)).
Traditional television broadcast advertising revenue was declining because of two factors which made television a less attractive medium for advertisers:
increased competition from alternative audiovisual media services, which had reduced traditional television viewing time; and
the increased ease with which viewers could use digital techniques to skip adverts - personal video recorders such as Sky and Freeview boxes store programmes and permit viewers to skip spot advertising breaks.
The Audiovisual Media Services Directive (AVMS Directive) dealt with these issues by:
Extending regulation to all audiovisual media services. The intention was that this would create a level playing field for competition between all audiovisual media services offering the same or similar "television-like" services. This includes extending the country-of-origin principle to the services that did not benefit from it under the TVWF Directive.
Relaxing the rules on television spot advertising and clarifying that product placement is allowed in certain circumstances to enable commercial broadcasters to increase their advertising revenue.
For the avoidance of doubt, in this practice note, references to article and recital numbers are to those in the codified version of the AVMS Directive (2010/13/EU), which came into force on 5 May 2010, replacing the TVWF Directive and its amendments.
The TVWF Directive only regulated services that were transmitted in certain specific ways: that is, over wires or over the air (including by satellite). By contrast, the AVMS Directive regulates "audiovisual media services" regardless of how they are transmitted.
An "audiovisual media service" is a service under the editorial responsibility of a media service provider, the principal purpose of which is the provision of programmes to inform, entertain or educate the general public by electronic communications networks (Article 1(a)). Audiovisual media services are either "television broadcasts" or "on-demand services".
A "programme" is a set of moving images, with or without sound, constituting an individual item in a schedule or catalogue whose form and content is comparable to that of television broadcasting (Article 1(b)). Recital 17 states that the notion of programme should be interpreted in a dynamic way, taking into account developments in broadcasting. The aim is to regulate on-demand services that are "television-like".
A "media service provider" is a person with editorial responsibility for the choice of content and who determines the manner in which it is organised (Article 1(d)).
A key element in the definition of audiovisual media services is the concept of "editorial responsibility". Editorial responsibility is "the exercise of effective control both over the selection of programmes and over their organisation either in a chronological schedule, in the case of television broadcasts, or in a catalogue, in the case of on-demand services. Editorial responsibility does not necessarily imply any legal liability under national law for the content or the services provided" (Article 1(c)).
The term "audiovisual media service" also includes "audiovisual commercial communications" (ACCs). ACC means images, with or without sound, designed to promote, directly or indirectly, the goods, services or images of a natural or legal entity pursuing an economic activity. Such images accompany or are included in programmes in return for payment or for self-promotional purposes (Article 1(h)). In other words, an ACC is any kind of audiovisual advertisement, and examples included in the definition are television advertising, sponsorship, teleshopping and product placement. It does not include public service announcements or charity appeals broadcast free of charge (Recital 31).
Audiovisual media services, other than ACCs, are either television broadcasts (linear services) or on-demand services (non-linear services).
A television broadcast (or linear service) is an audiovisual media service provided for simultaneous viewing of programmes on the basis of a programme schedule (Article 1(e)). The viewer has no choice when to watch them: the broadcaster "pushes" the programmes out to the viewer. The new definition of television broadcast encompasses, among other services, analogue and digital television, webcasting and near video-on-demand. Simultaneous viewing also includes quasi-simultaneous viewing because of variations in the short time-lag which occurs for technical reasons between transmission and reception.
An on-demand (or non-linear) service is a service that allows viewers to determine what they watch and when, by "pulling" from a catalogue of programmes selected by a media service provider (Article 1(g)). Video-on-demand services are one example of this.
Some services fall outside the scope of the AVMS Directive. These are listed below.
Radio and other services with no audiovisual element are not regulated by the AVMS Directive. (Note that silent films are regulated because the definition of audiovisual media services includes programmes without sound.) (Recital 23)
After the Commission published its initial proposals, there was concern that the European gaming (that is, games of chance and betting) industry would be caught by the Directive and, being a highly portable worldwide industry, would move outside Europe to avoid them. However, the subsequent drafts clarified that services are caught only if their principal purpose is the distribution of programmes (that is, audiovisual content). Recital 22 clarifies that games of chance and online games are not normally caught because their principal purpose is not the distribution of programmes, that is, audiovisual content is incidental to their principal purpose. Theoretically, this leaves open the question of how video games will be treated if, as is increasingly common, they contain non-interactive "cutaway" video sequences, but in the UK, Ofcom, the communications regulator, has indicated that it would not consider that such sequences bring these games under the Directive.
There was also concern after publication of the Commission's initial proposals that user-generated videos, such as those published on MySpace and YouTube, would be caught. Recital 21 clarifies the position: a regulated audiovisual media service is a mass media service, that is, one intended for a significant proportion of the general public. Furthermore, a "service" under the Treaty on the Functioning of the European Union (TFEU) is an economic activity normally provided for remuneration. The definition of audiovisual media services does not cover primarily non-economic activities that are not in competition with television broadcasting, such as private websites and services generated by private users for sharing and exchange between communities of interest (but see Keeping up with services and technology). Private correspondence, such as e-mail, is also excluded on the basis that it has no mass-media element (Recital 22).
Recital 28 states that the Directive does not cover electronic versions of newspapers and magazines. Presumably this is because any audiovisual content they contain is incidental to their services and not their principal purpose (but see Arbitrary exemption for newspapers).
Editorial responsibility means the exercise of "effective control" over programmes and their organisation. Member states may specify what this means. For example, they may wish to clarify whether or not services that merely transmit or bundle audiovisual media services are caught. The AVMS Directive does not affect the liability exemptions in the E-Commerce Directive (Recital 25). These exemptions release service providers from liability for information where they are acting as a "mere conduit", "caching" information or "hosting".
These are excluded because they contain no moving images (Recital 23).
The AVMS Directive introduced a two-tier system of regulation, which places a greater regulatory burden on television broadcasters and lighter regulatory requirements on on-demand service providers. The Commission wanted to regulate the on-demand sector more lightly because it is mainly made up of newer industries, often comprising small and medium-sized companies that might not be able to cope financially with heavy regulation, or might as a result be driven outside Europe. The intention was that the heavier burden of regulation will fall on those television broadcasters who are used to being regulated under the TVWF Directive. However, the heavier regulation will also impact on new television broadcasts using webcasting.
The AVMS Directive set out a set of basic rules that apply to all audiovisual media services, and additional regulation that applies, as under the TVWF Directive, only to television broadcasts.
The AVMS Directive extended the country-of-origin principle to all audiovisual media services. This means that audiovisual media services transmitted by a media service provider under the jurisdiction of a particular member state have to comply only with the laws applicable to audiovisual media services in that member state (Article 2(1)). Audiovisual media services do not have to comply with the laws of any other member state into which they transmit. This simplifies regulatory compliance for media service providers who, within the EU, only need to ensure that they comply with regulation in the country in which they are established.
The method for working out where a media service provider is established under the AVMS Directive is the same as the method used to determine where a broadcaster is established under the TVWF Directive. The establishment of a media service provider can be calculated on the basis of the location of its head office and editorial decision makers, and, in certain circumstances, the location of its workforce also has to be considered (Article 2(3)). Where these provisions do not apply, for example where the media service provider operates from outside the EU, a media service provider is established in a particular member state for the purposes of the Directive if they use a satellite uplink in or satellite capacity appertaining to that member state (Article 2(4)).
As in the TVWF Directive, a member state has the right to require media service providers to comply with rules that are stricter and more detailed than those set down by the AVMS Directive (Article 4(1)). Because of the application of the country-of-origin principle, media service providers may wish to avoid such stricter rules by establishing themselves in another member state, and the AVMS provides mechanisms aimed at preventing "forum shopping" in certain circumstances. In the case of television broadcasts, the member state in which an offending media service provider is located may be asked by the member state into which the service provider is broadcasting, to ask the service provider to comply with the rules of the receiving member state and provide details of the results of the request. In certain circumstances, where the member state receiving the broadcast is not happy with the outcome of this process, it may adopt measures directly against the broadcaster, but only in consultation with the Commission. The UK has traditionally been home to broadcasters transmitting into other jurisdictions, and it is likely that the UK will receive requests from other member states under these provisions. Ofcom has indicated that it remains a strong supporter of the country-of-origin principle, and has said that although it will respond to requests by other member states to write to offending broadcasters as required by the AVMS Directive, it will not exert any other pressure on such broadcasters to cease their activities.
The requirement in the TVWF Directive for member states to ensure freedom of reception for television broadcasts has been extended to all audiovisual media services (Article 3(1)). For television broadcasts, member states may restrict freedom of reception where an audiovisual media service may harm children or incite hatred (Article 3(2)). A member state is able to restrict reception of television broadcasts only in collaboration with the member state in which the media service provider is established and the Commission. Normally, the objecting member state has to notify these bodies in advance and consult with a view to finding a settlement (Article 3(2)).
In respect of on-demand services, member states may in certain circumstances restrict freedom of reception on grounds of:
Public policy, in particular in relation to criminal offences.
The protection of public health.
Public security.
The protection of consumers, including investors.
(Article 3(4))
These are wider grounds than those permitted for television broadcasts.
Member states can also restrict access to on-demand services in urgent cases without fulfilling all the conditions (Article 3(5)).
The AVMS Directive introduced a new requirement for co-operation between national regulatory authorities and between national regulatory bodies and the Commission, in particular with reference to co-operation on dealing with service providers who broadcast offending material into other member states (Article 30).
Under the TVWF Directive, programmes and advertising had to be kept separate from one another. As the AVMS Directive has introduced the potential for product placement (where advertising cannot be "separated") the requirement has been changed, and, as a result, the AVMS Directive requires television advertising and teleshopping to be recognisable and distinguishable from editorial content (Article 19).
Member states have to ensure that all forms of ACCs (including, for example, sponsorship, product placement and teleshopping) on all audiovisual media services comply with a set of qualitative rules. These are set out in Article 9:
ACCs must not use subliminal techniques.
ACCs must not prejudice respect for human dignity; include or promote discrimination on grounds of race, sex, ethnic origin, nationality, religion or belief, disability, age or sexual orientation; encourage behaviour prejudicial to health or safety; or encourage behaviour grossly prejudicial to the protection of the environment.
ACCs for cigarettes and other tobacco products are prohibited.
ACCs for alcoholic drinks must not be aimed at minors or encourage immoderate consumption.
ACCs for prescription medicines are prohibited.
ACCs must not cause moral or physical detriment to minors. They must not directly exhort minors to buy or hire products or services by exploiting their inexperience or credulity, directly encourage them to persuade their parents to purchase goods or services, exploit the trust minors place in parents, teachers or other persons, or unreasonably show minors in dangerous situations.
Member states and the Commission must "encourage" the development of codes of conduct on the advertisement of junk food during children's programmes.
The rules relating to sponsorship of television programmes have been extended to all audiovisual media services and are set out in Article 10 as follows:
Content and scheduling (where applicable) must not be influenced by sponsorship in a way that affects the responsibility and editorial independence of the media service provider.
Sponsored programmes must not directly encourage the purchase or rental of goods or services.
Sponsored programmes must be identified as such.
Those whose principal activity is the manufacture and/or sale of cigarettes and other tobacco products cannot sponsor programmes.
Medicine manufacturers and sellers can only use their name or image to sponsor programmes; they cannot use prescription-only product names for sponsorship purposes.
News and current affairs programmes cannot be sponsored. Member states can choose whether to prohibit the showing of a sponsorship logo during children's programmes, documentaries and religious programmes.
Product placement is any form of ACC consisting of the inclusion of or reference to a product, service or trade mark so that it is featured within a programme in return for payment (Article 1(m)). The UK's view was that the TVWF Directive contained an implicit prohibition of product placement because of the requirement for advertising to be identified as such and to be separate from other parts of the programme service (Article 10(1), TVWF Directive). However, not all member states interpreted the Directive this way; for example, product placement was permitted in Spain under the TVWF Directive. In the UK, product placement is explicitly prohibited (in respect of “linear” television programmes) under the Ofcom Broadcasting Code (except, in certain circumstances, in programmes acquired from outside the UK and in films made for the cinema) (section 10.5, Broadcasting Code). The Broadcasting Code does, however, permit prop placement: that is, the use of products or services which have been supplied for less than value, as long as such use is editorially justified. There was nothing specific on prop placement in the TVWF Directive.
The AVMS Directive has clarified the legal position on whether product placement and prop placement are allowed, across the EU. The effect of the Directive is that member states may permit product placement for cinematographic works, films and series made for audiovisual media services, light entertainment and sports programmes, except in the case of children's programmes (Article 11(3)). Derogation is also permitted where goods or services are provided free of charge (Article 11(3)) (prop placement). Product placement is therefore not allowed in news and current affairs programmes and documentaries.
The move to permitting product placement caused concern among consumer groups and is therefore only permitted under the following strict conditions, which are intended to protect the viewer:
Content and scheduling of programmes must not be influenced by product placement in a way that affects the responsibility and editorial independence of the media service provider.
Programmes must not directly encourage the purchase or rental of goods or services.
Programmes must not give undue prominence to the product in question.
Viewers must be clearly informed of the existence of product placement by a signal at the beginning and end of a programme, and after every advertising break. Rather perversely, the effect of this rule may actually be to increase the attractiveness of product placement to advertisers because their brand will be mentioned to the viewers, without additional cost, at every advertising break. This may lead to increased product placement in programmes − presumably the opposite of the drafters' intention. The requirement to signal the presence of product placement does not apply to programmes which have not been produced or commissioned by the media service provider itself or an affiliated company. This is presumably to make sure that the new rules do not get in the way of service providers' existing practice of buying in and transmitting programmes containing product placement from outside the EU.
Programmes must not include product placement of tobacco products, cigarettes or prescription medicines.
No form of ACC, including product placement, may be surreptitious. The TVWF Directive required that television advertising and programmes be kept separate. By keeping the prohibition on surreptitious advertising, and introducing the requirement to clearly inform viewers of the presence of product placement in a programme, the AVMS Directive has sought to preserve the spirit of the separation principle even where product placement occurs.
The requirements in the TVWF Directive for television broadcasters to devote a certain amount of time to European works and a certain amount of time, or 10% of their budget, to European works created by independent producers, remain unchanged in the AVMS Directive (Articles 16 and 17). All member states met these quotas easily after the TVWF Directive was implemented, so they remain uncontroversial.
These quotas do not apply to television broadcasts intended for regional, rather than national, audiences (Article 18).
Quotas cannot be applied to on-demand services in the same way as they can to scheduled services. However, Article 13(1) contains a requirement for providers of on-demand services to promote the production of, and access to, European works. It is very difficult to understand how this might be enforced, although the Article gives some examples:
There might be financial contributions to the production and rights acquisition of European works.
A requirement for a "minimum share or prominence of European works in programme catalogues". Depending on how this was interpreted by a national regulator, such a requirement would either be trivially easy for a service provider to comply with (by including a large amount of European content whether or not any customers actually watched it), or else would seem to entail service providers disabling popular US content for a period of time at the end of each measuring period to ensure that European content viewing quotas were achieved. Neither interpretation is satisfactory and both would also be extremely bureaucratic for a regulator to measure and enforce.
Recital 48 also suggests that this can be achieved through the "attractive presentation of European works in electronic programme guides". Clearly this is a highly subjective test and, again, would be almost entirely unenforceable in practice.
Member states must ensure that audiovisual media service providers identify themselves with their name, address, contact details and, where applicable, their regulatory or supervisory institution (Article 5).
Member states must ensure that on-demand services which might seriously impair the physical, mental or moral development of minors are only made available in such a way as to ensure that minors will not normally hear or see such services (Article 12).
Member states must ensure that audiovisual media services do not incite hatred based on race, sex, religion or nationality (Article 6).
Member states must ensure that media service providers do not transmit cinematographic works outside periods agreed with rights-holders (Article 8).
Member states must encourage media service providers to ensure that their services are gradually made accessible to people with a visual or hearing disability (Article 7).
The AVMS Directive has increased the quantity of advertisement allowed in relation to most types of programme.
The TVWF Directive allowed broadcasters to show up to 12 minutes of advertising in any one hour, subject to an overall average of nine minutes an hour. It allowed member states to impose additional restrictions if they wished. The AVMS Directive retains the limit of 12 minutes per hour (Article 23), but this is no longer subject to a maximum daily average lower than 12 minutes.
The daily limit contained in the TVWF Directive was abolished on the basis that it remains largely theoretical, because no member state came anywhere near this limit and also because it was ineffective in controlling the use of advertising during prime time, unlike the rule controlling hourly advertising.
The rule in the TVWF Directive that there must be a gap of at least 20 minutes between advertising and teleshopping breaks within any one programme has been removed. Certain categories of programme, including series, serials, documentaries, current affairs and religious programmes will be able to contain advertising breaks at any frequency (subject to the 20% per hour limit and the requirements not to jeopardise the programme's integrity, to take account of natural breaks and not to prejudice the rights of the rights-holder (Article 20(1))). In these types of programmes, television broadcasters can add additional advertising slots without necessarily increasing the length of any one slot, and so can advertise for a higher percentage of time in any one hour. These changes are particularly liberating for documentary, current affairs and religious programme makers who, under the TVWF Directive, were only allowed to advertise every 20 minutes if the programme was longer than 30 minutes.
Under the TVWF Directive, films could only be interrupted once every 45 minutes plus once more if they run for at least 20 minutes longer than two times 45 minutes (that is, for an hour and 50 minutes). Under the AVMS Directive, films can be interrupted once for every period of 30 minutes.
Under the TVWF Directive, news programmes and children's programmes could be interrupted every 20 minutes if their duration was 30 minutes or longer. Under the AVMS Directive, commercial breaks are allowed in news programmes once every 30 minutes, and in children's programmes once for every 30 minutes if the programme is more than 30 minutes long.
Children's and news programmes are worse off under the AVMS Directive in terms of advertising revenue because the Directive only allows them to be interrupted once every 30 minutes instead of every 20 minutes, and in the case of children's programmes, only if the programme is longer than 30 minutes. However, advertising can still be inserted between programmes.
Advertising during religious services remains prohibited as it was under the TVWF Directive (Article 20(2)).
The AVMS Directive modified the European regulatory framework by lifting the three-hour daily maximum for teleshopping on channels that are not dedicated teleshopping channels. Teleshopping windows have to be clearly identified as such and be of a minimum uninterrupted duration of 15 minutes (Article 24). There are no changes to the rules allowing 24-hour dedicated teleshopping (including advertising) and self-promotional channels. In the UK, Ofcom has decided to remove the rule that restricts non-PSB channels to three hours of teleshopping and to allow PSB channels to schedule teleshopping for the first time, for up to six hours, between midnight and 6am. For more information, see Legal update, Ofcom statement on amount of TV advertising (www.practicallaw.com/6-386-1927).
It remains to be seen how these quotas will work for services such as mobile TV. Mobile TV providers expect viewers to watch snippets of less than 30 minutes at a time, with the result that the logic of rules established in relation to 30-minute programme slots is lost. See further under Effect on mobile TV (www.practicallaw.com/3-285-1978) below.
Under the TVWF Directive, programmes and advertising had to be kept separate from one another. This is no longer possible under the AVMS Directive because of the introduction of product placement. However, the AVMS Directive requires television advertising and teleshopping to be recognisable and distinguishable from editorial content (Article 19).
Under the AVMS Directive, a member state can prevent broadcasters having exclusive rights to certain events regarded by the member state as being of major importance for society, in the same way as they could under the TVWF Directive (Article 14(1)). Member states opting to exercise this right have to draw up a list of all such events and notify the Commission (Article 14(1) and (2)).
The AVMS Directive introduced a right for broadcasters to use coverage of events to which another broadcaster has exclusive rights, for the purpose of making short reports for news broadcasts (Article 15(1)). This only applies to "events of high interest to the public". Broadcasters may choose extracts from the transmitting broadcaster's signal (Article 15(3)) or gain access another way where national law permits, for example, by attending the event itself. Member states have to lay down the precise requirements for short extracts, such as how long they can be and when they can be transmitted in relation to the event itself.
The right of reply gives people and other legal entities, such as companies, the right to require that any inaccurate facts published about them in the media, or any other publication of information which affects their legal rights, should be publicly corrected. Under the AVMS Directive, the right of reply, which existed under the TVWF Directive, remains applicable solely to television broadcasts. However, the December 2006 Recommendation of the European Parliament and the Council on the protection of minors and human dignity and on the right of reply included guidelines for the implementation of a right of reply in relation to on-line media (see Recital 103).
As under the TVWF Directive, member states must ensure that programmes broadcast under their jurisdiction do not contain anything which might seriously impair the physical, mental or moral development of minors, particularly pornography or gratuitous violence (Article 27(1)).
Member states are required to encourage self- and/or co-regulatory regimes in the areas covered by the Directive. Such regimes have to be broadly acceptable to the main stakeholders in the member states in which the regimes apply, and provide for effective enforcement (Article 4(7)).
This provision acknowledges the role that industry can play in regulation, both in terms of the expertise it can offer and the importance of getting the regulated players on-side if regulation is to be effective. It also recognises that many of the emerging audiovisual media service industries have already adopted self-regulating arrangements.
This provision was a late addition to the draft Directive and was fought for hard by the UK which felt strongly that implementation of the Directive in the UK should be via one of these methods (see Implementation in the UK).
Media literacy refers to the "skills, knowledge and understanding that allow consumers to use media effectively and safely". Media literacy enables consumers to:
Make informed choices.
Understand the nature of content and services.
Take advantage of the opportunities on offer from new communications technologies.
Better protect themselves against harmful and offensive material.
(Recital 47.)
The Directive does not contain any substantive provisions on encouraging media literacy, but instead refers to the Recommendation on the protection of minors and human dignity and on the right of reply, which contains a series of possible measures for promoting media literacy (Recital 47). However, when the Commission reports on the application of the Directive under Article 33, it must consider levels of media literacy in member states.
Implementation of the AVMS Directive in the UK is predominantly through co-regulatory systems (see Self- and co-regulation) and work on implementation has been conducted jointly by Ofcom, the Department for Culture, Media and Sport (DCMS) and the Department for Business, Enterprise and Regulatory Reform (BERR).
In November 2009, the government made the Audiovisual Media Services Regulations 2009, which came into force on 19 December 2009 (the 2009 Regulations). The 2009 Regulations amended the Communications Act, the Copyright, Designs and Patents Act 1988 (CDPA) and the Wireless Telegraphy Act 2006 (WT Act). Further regulations, the Audiovisual Media Services Regulations 2010 (the 2010 Regulations) were made in February 2010, following a notification to the European Commission under the Technical Standards Directive (98/34/EC, amended by 98/48/EC), which did not produce any objections. The 2010 Regulations added further provisions to the Communications Act and the WT Act, and corrected some errors introduced by the 2009 Regulations. The 2010 Regulations come into force on 18 March 2010.
The main provisions introduced by the 2009 Regulations and the 2010 Regulations are as follows (reference can also be made to Legal updates, New UK regulations to implement Audiovisual Media Services Directive (www.practicallaw.com/5-500-7522) and New notification regime for video-on-demand services (www.practicallaw.com/2-501-6245)).
Regulating the content of video-on-demand services. The 2009 Regulations gave Ofcom powers to regulate certain UK video-on-demand services (those that can be classified as "on-demand programme services"), and to designate and delegate power to an industry-led co-regulatory body to regulate programme content in these services. The 2009 Regulations also gave Ofcom powers to regulate advertising in on-demand programme services, and to delegate these powers to a co-regulatory body. Ofcom retains "back-stop" powers to deal with serious breaches of the standards, and to intervene in the event of systemic failure. In March 2010, Ofcom appointed ATVOD (the "Association for Television On-Demand") as its content co-regulator (see Legal update, ATVOD appointed as video-on-demand regulator (www.practicallaw.com/5-501-7583)), and in August 2010, Ofcom appointed the Advertising Standards Commission (ASA) as the advertising co-regulator (see Legal update, ASA appointed co-regulator for VOD (www.practicallaw.com/6-502-9651)).
The 2009 Regulations also transposed the list of minimum standards for programmes and advertising in on-demand programme services from the Directive.
The 2010 Regulations introduced a requirement that businesses must notify the appropriate regulatory authorities if they are providing, or intend to provide, an on-demand programme service. The regulatory authorities can levy fees on providers of on-demand programmes services in order to cover the cost of regulation. In March 2010, Ofcom and ATVOD consulted on the setting of the regulatory fees to be paid by providers of VOD services that come within the definition of an "on-demand programme service" under section 368A of the Act (see Legal update, Ofcom and ATVOD consult on fees for VOD providers (www.practicallaw.com/8-501-8821).
The 2010 Regulations also introduced a power for Ofcom to require a provider of a satellite uplink service to cease or suspend uplinking of an on-demand programme service, where such a service has not been notified to the regulatory authorities. They also introduced a requirement for providers of on-demand programme services to keep copies of programmes for at least 42 days, to enable complaints about content to be investigated.
Scope. The 2009 Regulations introduced a definition of "on-demand programme services". The co-regulator can issue guidance on the interpretation of the definition and on the services that fall within its scope. Following consultation, Ofcom drafted a Scope Guidance document intended to help stakeholders and the co-regulator decide which services are in scope, which is now published on the ATVOD website (see Legal updates, Ofcom consults on regulation of video-on-demand (www.practicallaw.com/9-500-2099) and Ofcom statement on regulation of video-on-demand (www.practicallaw.com/5-501-1029)). Access providers, who do not provide any content themselves, will not be responsible for the content of those services, although the government expects that access providers will ensure that all on-demand programme services to which they provide access meet the minimum standards required for UK on-demand programme services.
Product placement.The 2009 Regulations include a definition of product placement and a list of the types of programmes in which it can and cannot be included.
Compliance requests from other member states. The 2009 Regulations included a requirement for Ofcom to respond to a request from another member state to ask a television broadcast broadcasting into their country from the UK to comply with the foreign member state's rules.
Non-EU satellite television channels. The 2009 Regulations inserted a new section 9A into the WT Act to implement the modification of the criteria used to determine which member state is responsible for non-EU satellite television channels uplinked from a member state or using satellite capacity controlled by a body within the jurisdiction of a member state. Previously, the member state responsible for the satellite capacity had jurisdiction over a non-EU channel transmitted via that satellite. Under the new rules, the member state in which channels are uplinked has jurisdiction, unless they are uplinked from outside the EU, in which case they still fall within the jurisdiction of the member state responsible for the satellite capacity. Non-EU satellite television channels that are uplinked from within the UK and which are not already within the jurisdiction of another member state will have to have a broadcasting licence from Ofcom. Providers of uplink services will have to stop uplinking a channel if Ofcom tells them the channel does not have a licence or is in breach, but providers will not have to check that a channel has a licence before agreeing to uplink it, and will not have to monitor broadcast compliance themselves. Ofcom has varied satellite-services licences for permanent and transportable earth stations to require licensees to comply with notices given by Ofcom under section 9A of the WT Act (see Legal update, Ofcom varies satellite earth station licences (www.practicallaw.com/0-502-0192)).
The 2009 Regulations made amendments to section 69 of the CDPA, to provide that copyright is not infringed for the purposes of supervision and control of broadcasts and other services, and paragraph 17 of Schedule 2, to provide that rights are not infringed by the making of recordings for the supervision and control of broadcasts and other services, to bring the CDPA into line with what is allowed under the AVMS Directive.
Other aspects of the AVMS Directive are being implemented by amending existing codes.
On 16 December 2009, Ofcom published a revised version of the Broadcasting Code, which, among other things, updated references to the TVWF Directive to the AVMS Directive, and introduced an amendment to Rule 10.5 to say that product placement is prohibited in all acquired children's programmes (produced after 19 December 2009) (see Legal update, Ofcom publishes revised Broadcasting Code (www.practicallaw.com/6-501-0524)). (Although product placement is prohibited under the Broadcasting Code, there was an exemption for acquired programmes, for example, those imported from the US. The AVMS Directive makes it clear that product placement is not allowed in any children's programmes, acquired or produced at home.) Ofcom is still to consult on further amendments to the Broadcasting Code to allow product placement in the categories permitted under the AVMS Directive that are not currently allowed under the Code..
The government has announced that it does not consider that it needs to take any action to implement the "short extracts" provision, because this is already permitted under the CDPA (see DCMS statement, 18 December 2009). Section 30 of the CDPA allows for "fair dealing" for the purpose of reporting current events.
Although the AVMS Directive appears to extend regulation to a lot of audiovisual material that was not previously regulated under the TVWF Directive, particularly on the internet, Ofcom has indicated that its intention is only to regulate audiovisual material on the internet that really does look and feel like traditional broadcast television, as opposed to material that is incidental to, for example, a game or a website selling holidays.
In March 2009, the UK government announced that it would not allow product placement for the time being (see Legal update, Government introduces regulation of video-on-demand and says "no" to product placement (www.practicallaw.com/9-385-2342)), but, in September 2009, the new Culture Secretary, Ben Bradshaw, reversed this decision.
In March 2010, the government published The Audiovisual Media Services (Product Placement) Regulations 2010 (2010/831), which amended the Communications Act with effect from 16 April 2010 to allow product placement in certain circumstances. However, the Broadcasting Code still prohibits product placement, and in June 2010 Ofcom published a consultation on amending the Code to allow product placement in the circumstances permitted by the Regulations (see Legal update, Ofcom consults on product placement rules (www.practicallaw.com/9-502-6571)). Product placement is also only allowed in UK-made television programmes where the production start date is after 19 December 2009.
As well as transposing restrictions on product placement contained in the Directive, the government introduced a number of additional restrictions following a consultation in 2009 (see Legal updates, UK government consults on product placement (www.practicallaw.com/0-500-7119) and UK government statement on introducing product placement (www.practicallaw.com/1-501-4440)). The Regulations prohibit product placement of a number of additional products and services including:
Electronic or smokeless cigarettes, cigarette lighters, cigarette papers or pipes intended for smoking.
Medicinal products.
Alcoholic drinks.
Infant formulae or follow-on formulae.
Food or drink high in fat, salt or sugar.
Gambling services.
See Legal update, UK product placement legislation published (www.practicallaw.com/4-501-8168).
In November 2008, ITV and Pact (the trade body for independent film and television producers) signed up to a code of conduct for product placement on television, should the government allow its introduction (see Legal update, ITV and Pact announce code of conduct for product placement (www.practicallaw.com/3-384-1851)), to show their support for the responsible use of product placement.
Product placement in on-demand programming was not previously regulated by EU law, and was not previously prohibited in the UK. The 2010 Regulations, though, had the effect of introducing (by way of a new section, Section 238H, of the Communications Act 2003) certain restrictions and conditions on product placement for on demand content. These restrictions mirror the requirements of the AVMS Directive discussed above.
In the UK, the limits set out in the TVWF Directive on the amount of advertising allowed apply to non-public service channels, but stricter limits exist for the public-service broadcasters (PSBs) (ITV1, Channel 4, Five, GMTV and S4C) who are subject to an overall average of seven minutes an hour generally and eight minutes an hour between 6 pm and 11 pm. Particular rules apply to GMTV.
In July 2008, following a consultation, Ofcom announced a new Code on the Scheduling of Television Advertising (COSTA) to replace the Rules on the amount and distribution of advertising with effect from 1 September 2008 (see Legal update, Ofcom publishes new rules on scheduling of television advertisements (www.practicallaw.com/9-382-8210)). Following a further consultation in October 2008, Ofcom introduced amendments to COSTA on the amount of advertising that should be allowed on television (including rules on teleshopping):
There will be no increase in the amount of advertising allowed on PSB or non-PSB channels, or in the limits on how much may be scheduled during the evening peak period (6pm to 11pm) on PSB channels. It will remain at an average of seven minutes an hour on PSB channels and nine minutes an hour on other channels. Most respondents to the consultation were against longer breaks, and most broadcasters wanted to keep the cap, for a mixture of commercial reasons and concern about the impact longer breaks would have on viewers. Ofcom will consider harmonising the rules for PSB and non-PSB channels, perhaps at an average of eight minutes per hour, and planned tol begin a review of this in spring 2010. This is on the basis that digital switchover (the switch from analogue to digital television) is diminishing the special status of PSB channels, with commercial PSBs facing increased competition from a multitude of digital channels, and a corresponding decline in advertising revenue (also affected by the recession).
There will be no increase in the number of advertising breaks allowed on public service broadcasting (PSB) channels (ITV1, Channel 4, Five and S4C1) for programmes of 60 minutes or fewer, but there is an increase in the number of permitted breaks in longer programmes to the same level as allowed on non-PSB channels.
The period from 7am to 9am on PSB channels will no longer be designated as "peak-time", and will be regulated as a non-peak period, which will mean that PSBs can broadcast slightly more advertising during this period.
More frequent breaks will be allowed in live events (such as sports fixtures), whether on PSB or non-PSB channels, where the timing of these events is outside the control of the programme provider.
For more details on these changes, see Legal update, Ofcom statement on amount of TV advertising (www.practicallaw.com/6-386-1927)
The Council of Europe (CoE) is in the process of amending the Transfrontier Television Convention, to bring it into line, so far as is practicable, with the AVMS Directive, in particular by extending the Convention's scope, so that it will no longer apply only to television but also to audiovisual media services, that is, both to television and to video-on-demand services.
A concern during the negotiation of the AVMS Directive was whether the terminology adopted was wide enough to cover future technological developments, the fear being that the fast pace of development and change in this sector may mean that the AVMS Directive is out of date by the time it is implemented. There was particular concern over whether the terms "linear services" or "television broadcasting" and "non-linear" or "on-demand" services were clear enough and broad enough. The Commission intended to regulate all "television-like" services and pinning down exactly what this means proved difficult, although the term "television-like" is not itself used in the operative part of the Directive. The House of Lords expressed concern that regulation of "television-like" services may lead to "like services" being regulated in a "like" manner (that is, the creation of a perfectly level playing field for all services, rather than regulation being lighter for on-demand services) (see Television without frontiers? Report with evidence).
The UK government and UK industry preferred not to see any extension of current regulation in this area, particularly to new media industries. Because of "light touch" regulation of these industries in the UK, many companies have chosen to locate here in preference to mainland Europe, and this has benefited the UK economy. Any increase in the regulation of these industries could lead to some small companies collapsing, others leaving the UK and relocating outside Europe and prevent other companies from setting up in the first place.
Much of the debate around the various definitions in the AVMS Directive resulted from the rise of new media services like YouTube during the drafting process. The final result aims, it seems, to avoid regulating the individual users of YouTube (who are not acting in a "professional capacity"). However, newer services show that the current definitions could quickly look antiquated. YouTube, for example, has begun to share advertising revenue with members who upload particularly popular content. At what point will such users become "professional", meaning that their content falls within the scope of the Directive? There is no clear answer.
There is a similar problem when considering the position of service providers operating user-generated content websites. If they simply allow users to post any content they wish then it is difficult to see how the service provider can be taking "editorial responsibility" for the compilation of programmes within a catalogue − and thus the AVMS Directive will not apply. However, once they start to intervene, for example by removing copyright-infringing material, or by directing viewers to particular content, at what point does the service provider start to exercise "responsibility for the compilation" under the Directive? Again, there is no clear answer, and the result is that it may not be at all clear when the AVMS Directive will, and will not, apply.
The AVMS Directive aims to be technology-neutral − in fact, one of the main reasons given for introducing it was to ensure that similar services are not regulated differently simply because one happens to be provided by conventional broadcast whereas the other is provided by another medium that falls outside the rules.
Unfortunately though, in introducing a distinction between linear and non-linear services, just such an arbitrary distinction may be created. A conventional Personal Video Recorder, like a Sky+ box, for example, works by allowing the viewer to record and store a copy of a programme locally on their set-top box. The viewer then selects which programmes to watch as and when it suits him. This is a linear service because programmes are transmitted to the viewer according to a schedule set by the broadcaster. However, a a service like the BBC's iPlayer works by storing copies of programmes remotely and providing them on demand to the viewer. This would appear to be more or less identical to the first service as far as the viewer is concerned, but yet would be regulated as a non-linear service simply because the copies of the programmes are stored remotely and provided on-demand.
There seems little reason why these two services should be regulated differently simply because of their mode of delivery.
The Commission intended to regulate the on-demand sector with a "lighter touch" than the television broadcast sector. In fact, some of the differences are format-driven as opposed to being driven by a desire for more or less regulation. For example, the requirement to promote European works is tailored to the different types of services, as are the regulations aimed at protecting children. Provisions targeted solely at television broadcasting, such as those on short reporting and advertising quotas, have little or no application in the on-demand world.
As explained above, electronic versions of newspapers and magazines are not covered by the AVMS Directive (Recital 28). However, it is not clear why newspapers merit a specific recital, and could not instead rely on the argument that their content does not constitute "programmes". The result is to create some uncertainty. If a newspaper's website offers audiovisual news items (such as footage of a riot) is it, or is it not, regulated? If it is exempt under Recital 28, this would discriminate against an identical website which is not associated with a printed paper. If, alternatively, it is exempt because its content is not a "programme", there is no need for the recital at all. If it is because, in this example, the footage is in some way incidental, then it is easy to imagine scenarios where audiovisual material was more than incidental, such as a regular "comment" piece or a daily ten-minute news summary − at some point, presumably, these would be classed as "programmes", in which case the recital only serves to cause confusion.
In the UK, since February 2007, online versions of newspapers have been regulated under the Press Complaints Commission (PCC) Code of Practice. Ofcom has said that it will regulate websites only where the PCC does not consider them to fall under the PCC Code. Presumably Ofcom takes the view that if the PCC is not going to regulate a site, then it is not an electronic version of a newspaper or magazine for the purposes of the AVMS Directive, and therefore does not benefit from the exemption. In December 2009, the PCC announced that it was extending its remit to include online-only publications (see Legal update, Press Complaints Commission's remit extended to cover online-only publications (www.practicallaw.com/4-501-0596)).
One of the Commission's stated aims was to provide legal certainty for on-demand audiovisual media services. The UK was sceptical of the need to regulate this sector at a European level on the basis that, on the whole, on-demand industries have been good at self-regulation and there does not appear to have been any significant distortion of the market due to there being different regulatory regimes in different member states. Although the UK could not stop the country-of-origin principle being extended to the on-demand audiovisual media sector, it did achieve an amendment requiring member states to encourage self- and co-regulation in the areas governed by the AVMS Directive.
In general, the rules on advertising have been relaxed under the AVMS Directive. The main aim of this was to give television broadcasters new opportunities to earn revenue from advertising. Organisations representing viewers are concerned that this will mean more advertising at the expense of the quality of the viewing experience. However, the theory is that increased viewer choice should naturally limit how much a broadcaster can get away with because if the advertising becomes too intrusive, viewers may stop watching.
While UK commercial television broadcasters may be happy about the relaxation of the advertising quotas it seems unlikely that the opportunities this presents for increased advertising revenue will be enough to solve the financial difficulties of some, which have worsened in the recession that has followed the September 2008 credit crunch. ITV saw its share price crash in the two years following April 2007, and Ofcom and the government have considered various solutions to the likelihood that Channel 4 cannot continue on its current financial footing. In the digital age and the recession, it may be that television broadcasters need to increase their use of more sophisticated advertising techniques such as those that can target adverts at particular viewers. Consumer groups will be unhappy about the loosening up of the advertising regime and in particular the introduction of product placement, but hopefully the strict guidelines imposed on the use of product placement will ensure that it is introduced in a way which is acceptable to these groups.
The AVMS Directive may have some unintended and adverse consequences on the emerging market for audiovisual content viewed on mobile devices.
In the context of a service which people only watch for around six minutes at a time, the rules (for scheduled television services) restricting the amount of advertising to no more than 12 minutes per hour, or the frequency of advertising breaks to no more often than every 20 or 30 minutes, do not make sense - most viewers would see no advertising at all, making the service uneconomic.
Similarly, and especially given that the economics of launching a mobile TV service are anyway questionable, imposing e-accessibility rules (for example, requirements to offer subtitles) could be very counter-productive.
Again, in this context, it makes little sense to regulate on-demand and scheduled services differently - consumers see very little distinction between the two types of services, because either way they will be choosing what to watch (for a few minutes only) from a menu.
The new short-reporting right could significantly undermine, for example, the market for exclusive mobile TV rights for sporting events. Since viewers are only likely to watch for a few minutes at a time, in most cases they will not see the need to locate the exclusive broadcaster's content, being instead quite happy with a "short report".
There remain some concerns about the introduction of the AVMS Directive.
The Commission argued that the new media industries could suffer from a lack of harmonised regulation by having to comply with lots of local rules but this had not been a problem in the past and in fact these industries flourished under the old regulatory environment.
There is also an argument that the main rationale for any regulation of this sector is fast disappearing. The original TVWF Directive was introduced at a time when radio frequency spectrum (www.practicallaw.com/6-107-7104), a vital component in traditional television broadcasting, was in scarce supply. In the digital age, television broadcasting no longer relies so heavily on spectrum, as a range of different modes of transmission are now used, and technical advances have made it possible to make greater use of the spectrum available. Ofcom would have preferred to see regulation lightened rather than increased, believing that increased competition provides the necessary checks and controls on audiovisual media service providers.
It will remain relatively easy to avoid regulation under the AVMS Directive by locating a service outside the EEA, particularly in the case of internet services. It may also be possible to avoid regulation by designing a service which does not fall within the terms of the Directive, because the definitions are relatively "soft". On the other hand, service providers may want to be regulated under the Directive, as this could be perceived as "guaranteeing" a certain standard of service or "quality mark".
Mike Conradi is a partner at Kemp Little LLP.
