Clifford Chance

As public service broadcasters and radio face changing technology and evolving consumer habits, the Media Act 2024 aims to ensure an even playing field but also brings increased regulation to video-on-demand services. In this article we look at the key aspects of the legislation and Ofcom's road to implementation.

Overview

On 24 May 2024, the Media Act 2024 became law, reforming the framework governing public service broadcasting, video-on-demand (VoD) services and radio.

The Act aims to ensure that public service broadcasters (PSBs) such as the BBC, ITV and Channel 4 can continue to provide socially valuable television programmes for the public benefit against a backdrop of shifting technological developments and evolving consumer habits. It does this by:

• allowing PSBs greater flexibility in how they meet regulatory obligations;
• ensuring that online services provided by PSBs are accessible and prominent within connected TV devices; and
• instructing Ofcom to subject VoD services, such as Netflix, Amazon Prime Video and Disney+, to some similar standards and obligations as PSBs.

The Act includes several parallel provisions in relation to radio to ensure that UK radio stations continue to be accessible, including on digital platforms.

The Act also bestows powers on Ofcom, including additional information-gathering and enforcement powers. Ofcom has set out a roadmap to implementation and has been publishing consultations on specific provisions at a rapid pace: six between 11 December 2024 and 11 February 2025. Most recently, Ofcom published consultations on the 'Designation of Public Service Broadcaster Internet Programme Services' and the 'Statement of Programme Policy and Statement of Media Content Policy guidance', both of which closed on 25 March 2024.

Reason for reform

Traditional live broadcast TV and radio remain popular in the UK. According to a DCMS Committee report entitled 'The future of public service broadcasting' published on 17 March 2021, 85% of people still watch broadcast content every week. The government's broadcasting white paper published on 28 April 2022 found that total linear TV set viewing was 2 hours 33 minutes a day in March 2022 and that 89% of the UK listen to the radio every week.

However, PSBs and radio are facing new challenges. The Act's Explanatory Notes set out three main issues:

• Changing technology: The technology viewers use to consume televised content is changing, particularly with the increasing adoption of internet-delivered services. The government broadcasting white paper found that 79% of households with a TV set now connect it to the internet.
• Changing consumer habits: Consumers are moving away from linear viewing to on-demand viewing, watching different types of content and using different methods to do so. In 2024, Ofcom found that less than half of 16-24 year olds watch broadcast TV in an average week. In contrast, the DCMS report found that same demographic now spends almost an hour and a half a day on YouTube.
• Increased competition: New global players have emerged, notably subscription-based streaming services. According to the DCMS report, about 60% of households now subscribe to at least one such service.

The TV advertising market is also changing and, according to the DCMS report, between 2015 and 2020 linear TV advertising revenues fell sector-wide by 31%. This presents a particular challenge for the Channel 4 Television Corporation (C4C) – linear TV advertising constituted 74% of Channel 4's revenue in 2020.

Similar changes are affecting the radio sector. Although radio remains popular, it is increasingly accessed through digital platforms and via voice-activated connected audio devices. According to the government broadcasting white paper, 64.4% of UK radio listening takes place on digital platforms.

Summary of the Key Provisions

The Act amends the Broadcasting Act 1990, the Broadcasting Act 1996 and the Communications Act 2003 in an attempt to help public service broadcasting and radio adapt to this shifting landscape.  While the Act reduces the regulatory burden on PSBs by affording them greater flexibility in how they fulfil their statutory obligations, it gives Ofcom the power to increase the obligations on VoD services. Below is a high-level summary of the key provisions relating to PSBs, VoD services and radio. 

PSBs

Part 1: gives PSBs greater flexibility in how they fulfil their obligations to produce public service content. Previously, only programmes broadcast on certain TV channels counted towards PSB's public service content requirement. However, programmes made available via streaming services will now also count towards the requirement.

Part 2: gives PSB online services a privileged position on connected TV devices, which include smart TVs, set-top boxes and other streaming devices, to ensure that PSB online services are available and easily accessible on these devices.

Part 3: creates a new sustainability duty for C4C, obliging it to carry out its activities in a way that it considers most likely to enable it to maintain or increase the amount of activity done in pursuance of its primary functions, and to securely meet the costs of doing so. In practice, this new duty is akin to the directors' duty in s 172 of the Companies Act 2006 and requires C4C to consider its long-term sustainability alongside the fulfilment of its public service remit when making decisions.

VoD services

Part 4: requires Ofcom to carry out a review of audience protection measures (such as parental controls and content warnings) in use by all VoD services.

Part 4 also creates a new subcategory of VoD services, Tier 1 services, which will be subject to some similar standards and obligations to PSBs. A UK or non-UK VoD service may be a Tier 1 service if:

• it is used by a PSB other than the BBC to contribute to the fulfilment of its public service remit; or
• the Secretary of State designates it so following guidance from Ofcom.

In practice, identifying which VoD services are likely to be considered Tier 1 services will be difficult until further information is published by Ofcom. Tier 1 services will be subject to two codes which Ofcom is expected to prepare and publish:

• a standards code which will set out standards for the content of programmes to be included in Tier 1 services, including impartiality and accuracy requirements; and
• an accessibility code which will impose requirements on Tier 1 services to ensure their services are accessible to people with disabilities.

Radio

Part 5: removes many of the regulatory burdens that were imposed on commercial radio services in the 1990s. For instance, it removes the requirement on stations to provide specific genres of content. Part 5 also allows the UK licensing regime to extend to radio stations which are based overseas but service UK listeners.

Part 6: ensures that:

• UK radio stations are not charged by voice-activated connected audio devices, or 'smart speakers', for providing their services to listeners
• devices/platforms do not overlay their own content or advertising over UK radio stations' services
• UK radio stations are reliably provided in response to listeners' voice commands.

Additional powers for Ofcom

The Act also bestows a host of new powers and responsibilities on Ofcom.

Role in disputes between designated PSB services and connected TV devices

Part 2 of the Act encourages designated PSB services to enter into arrangements with connected TV devices to ensure that PSB services are given an appropriate degree of prominence. The Act sets out Ofcom's role in the event that the parties enter into a dispute about these arrangements or their operation. Such disputes may only be referred to Ofcom if there is otherwise no realistic prospect of the parties resolving the dispute, and Ofcom may require one party to pay the costs incurred by it or the other party.

Additional powers

The Act updates Ofcom's existing powers to allow it to monitor and enforce TV and radio services' compliance with the updated obligations set out in the Act. Its provisions give Ofcom the power to:

• make directions and impose conditions in relation to any service that a PSB has indicated it is using to fulfil its channel remit;
• require companies to provide it with information it needs, where proportionate;
• charge fees and penalties for their non-payment; and
• levy penalties as part of enforcement action.

In terms of Ofcom's enforcement powers, Ofcom can give 'provisional notices of contravention' where it has reasonable grounds to believe that certain companies have failed to comply with their obligations. Once the recipient of the 'provisional notice' has had the opportunity to make representations about the alleged contravention, Ofcom can provide a 'confirmation decision', which may require the recipient to comply with specific actions and/or pay a fine.

What next?

The Act significantly reforms the legal framework governing PSBs, VoD services and radio but many of its provisions are unable to take effect without further action from Ofcom. Its changes are likely to come into force gradually as Ofcom consults on the specifics of various new or updated obligations set out in the Act and  which entities will need to fulfil those obligations. It will be important for companies to track these developments to remain aware of which changes will affect them and when.

More broadly, the Act presents an opportunity for companies in the TV and radio sectors to consider the impact of the shifting technological, consumer and economic landscape on their businesses that prompted the Act in the first place.