On 1 January 2016, Video on Demand censor ATVOD was sacked and Ofcom became the sole regulator for on-demand programme services ( ODPS ) under Part 4A of the Communications Act 2003 (the Act ).In this document, we are consulting on a new regulatory fees regime under section 368NA of the Act, to apply from the 2017/18 financial year onwards. Our preferred proposal is to adopt a fees structure that shares the costs of regulating ODPS only between the largest providers.
We have also provided an estimate of the 2017/18 fee that would be sufficient to meet, but not exceed, the likely cost of Ofcom carrying out the relevant functions in the financial year 2017/18.
Ofcom sets out what VoD companies had to pay under the year of ATVOD:
- (a) ATVOD’s estimated costs for the year were just over £487,000 and the fees collected were just over £488,000.
- (b) The 40 largest ODPS providers each paid over £5,000 and accounted for over 93% of fees.
- (c) ATVOD differentiated between those in the largest group, with the largest Super A providers paying £10,893 each for single outlet services and £14,135 for multiple outlet services (with a group cap available where there were multiple providers in one corporate group). A Rate providers paid £5,010 for single outlet services and £6,502 for multiple outlet services.
- (d) None of the remaining 77 providers (the long tail ) paid more than £815, and 40 of these paid £204 or less. These providers accounted, in total, for under 7% of fees.
By contrast, Ofcom’s estimate of estimated costs is £114,000 and this will be raised from Video on Demand companies as follows:
- Companies with total turnover greater than 50 million: £4146
- Companies with total turnover 10 to 50 million: £2073
- Companies with total turnover less than 10 million: no charge
Ofcom noted that a proportionally smaller charge for the small companies may not be cost effective to collect and may discourage companies from registering for censorship either by illegal avoidance or by moving offshore.
A consultation on this preferred option and several others is open until 29th March 2017.