ITV calls for “urgent” PSM legislation update
April 28, 2021
By Colin Mann
In its submission to UK broadcasting regulator Ofcom’s Small Screen: Big Debate consultation, commercial broadcaster ITV has warned that legislation needs a radical and urgent update for the global online era if the Public Service Media (PSM) system is to continue to deliver for the people of the UK, in the ways Ofcom’s research suggests that they want it to.
With the beginning of the renewal process for ITV’s, and the other commercial PSBs’, licences only months away, ITV stressed that it is possible to promote a thriving national PSM ecology together with all the benefits of global content services and platforms but only if policymakers are bold and ambitious in pursuing timely reform.
ITV said: “The current commercial PSB licences expire at the end of 2024, which superficially feels a comfortable number of years away. In fact, the statutory process for renewing those licences will begin well before that, likely in late 2021 or early 2022. The statutory timetable requires Ofcom to advise the Secretary of State by June 2022 (30 months before licence expiry) on the capacity of the commercial PSMs to contribute to the fulfilment of the purposes of public service television broadcasting at a cost that is commercially sustainable.
“Before this statutory process can sensibly get underway the PSMs and Ofcom will need some certainty as to what the statutory regime is going to be and hence the viability of the PSM licences for the long term. The reform of the regime for prominence, inclusion and fair value is a key component of that future viability for the board of ITV.
“Ofcom and DCMS need to work hand in glove in coming months to develop practical proposals for a regime for PSM that can be taken forward rapidly. Whilst it may not be practical for the legislation enshrining the new system to pass all its Parliamentary stages before Ofcom has to report to the Secretary of State, it is critical there is a clear statement by government of its settled intentions this year – most obviously via a detailed White Paper, leading to legislation on the future of PSM in 2022 at the latest.”
Against the backdrop of a radically changing market, ITV said there are five areas where Ofcom and government need to act to secure and future-proof the PSM system for the long-term:
Establishment of a new ‘PSM Operator’ Regime: replacing the current system, based on a myriad of different standalone legislative clauses in the 2003 Communications Act, all referring back to a list of linear broadcast channels – with a system that designates the organisations responsible, and entrusts Ofcom to oversee the implementation of the regime rather than inflexible primary legislation.
New primary and secondary objectives for ITV as a PSM in future: defining ITV’s specific role more clearly, focused on a primary statutory objective to serve broad UK audiences with high quality content (including news services at national, nations and regional levels) reflecting life in the UK, widely available for reception and for free. Below that high level objective could be a series of elements that would be expected as part of meeting that objective, for instance in national, nations and regions news of high quality, scale, reach and impact or around high levels of origination or reflecting the UK etc.
ITV also proposes a secondary statutory objective relating to production sector requirements, primarily production outside of London and commissioning from independent producers. It is proud of the positive economic impact ITV has had, in particular supporting a thriving independent production sector and the significant amount of production which takes place outside of London. “We want and expect that many of the same benefits would be delivered under a new regulatory model, particularly in terms of the scale of our commitment to making content outside of London and support of the independent production sector,” it adds.
It suggests that such an approach of primary and secondary objectives will better align with the views of audiences expressed to Ofcom, the likely competitive position and market provision, and ITV’s strengths as a digitally-led media and entertainment company.
A new settlement between PSM providers and platforms to secure prominence, inclusion and fair value: from the platforms that distribute broadcast, streamed and on-demand content from the PSMs. Such a regime should provide:
Effective guarantee of prominence: delivering Ofcom’s ‘top of list’ linear principles online.
Right of inclusion: securing access to those platforms to which prominence rules apply
Fair value for PSM content. Prominence isn’t enough on its own if global platforms can use their financial muscle to squeeze the value out of PSM investments (e.g. standard online platform terms often require content providers to agree a 30% ad revenue share). Regulation must guarantee us the opportunity to negotiate deals that fairly reflect the value of our risky investment in UK content to UK audiences.
A more agile and flexible regulatory regime to foster innovation and meet audience needs: reflecting the rapid changes in technology, the market and viewer behaviour, and the implications for what the PSM regime can deliver. We set out detailed thinking on the necessary new approach to regulation in our submission which at its core must offer more flexibility around the definition and delivery of obligations and a significant reduction in complexity.
ITV makes clear it is not proposing a significant diminution in its PSM delivery for audiences under this new proposed scheme. Moving to a regime determined more by the regulator – under clear and simple statutory objectives – than by detailed statutory obligation simply increases the discretion and flexibility for Ofcom and ITV to best react to changing audience needs and expectations as well as the changing economic and competitive position of PSM providers.
Such a system might have some similarities to that recently sketched out by Ofcom in relation to the BBC, with more ownership by ITV of the form of obligations and step-in rights for Ofcom in defined circumstances.
Sensible regulatory changes to offer more flexibility and modest enhancement to PSM economics: removing restrictions more suitable to the old linear analogue world of limited choice and PSB dominance.