The Existential Threat to UK Public Service Broadcasters from US Tech Groups
UK public service broadcasters (PSBs), including ITV, are concerned that the draft media law proposed by the UK government does not adequately define the rules for a fair trading relationship between PSBs and online TV platforms owned by large US tech firms. PSBs are facing an existential threat from the commercial demands imposed by US tech groups to broadcast their programs over the internet. The media bill, now awaiting passage through parliament, aims in part to assist PSBs in competing with major streaming services such as Amazon Prime. One of its goals is to make PSB services readily identifiable to viewers via smart TVs and streaming platform systems.
However, senior industry executives, including Magnus Brooke, director of strategy, policy, and regulation at ITV, posited that online TV platforms could set commercial terms constituting a global standard rather than a UK-specific one, leading to demands for more than 30% of revenues from broadcasters, command of customer data and advertiser relationships. This could mean that broadcasters are unable to innovate in terms of ad technology or have access to critical data, leading to negative impact across various PSBs.
Proponents of PSBs have highlighted their concerns regarding the bill in conversations with the Department for Culture, Media, and Sport, and the industry regulator Ofcom. The legislation provides Ofcom with a dispute-resolution mechanism, enabling it to step in if PSBs and streaming organizations do not agree on mutually beneficial commercial terms. Brooke said that the legislation needed to provide Ofcom with “enough strength and discretion to bring us to a place of winning victory the way we have with a Virgo or a Heaven.”
Major Challenges Facing PSBs
The UK’s broadcasting landscape faces significant changes, with the rise of streaming platforms such as Netflix and Disney+ and the growth of social media platforms such as Facebook and Twitter. These platforms now dominate online video consumption, leading to a decreasing number of individuals watching traditional linear TV. This shift in the way people consume content and the arrival of tech firms in the market presents huge challenges for PSBs, from revenue to content legislation.
The PSBs are under more significant scrutiny than ever before, with standing criticisms that the services do not appeal to younger audiences. A decline in the number of younger viewers constitutes a significant challenge to the future of PSBs. This is because as a result of it, they have limited opportunities for advertising revenue. The BBC, for example, has launched its iPlayer Kids application to attempt to attract younger audiences, but the success of these ventures is still uncertain.
The PSBs are also navigating an increasingly complex regulatory and legal landscape. The new broadcasting landscape is not only transforming the UK’s viewership patterns, but is also changing the regulatory environment in which PSBs operate. For example, the UK broadcasting regulator Ofcom has to take care of the consequences of online streaming providers that are occupying significant portions of their consumers. Such asymmetric developments disrupt healthy competition among TV broadcasters as well.
Conclusion
The current media legislation facing UK PSBs poses an existential threat to PSBs due to commercial demands from US tech groups, which could lead to requests for more than 30% of revenues from broadcasters as well as control over critical customer data and advertiser relationships. PSBs have voiced their concerns about the law with the Department for Culture, Media, and Sport, and the industry regulator Ofcom, adding that the bill needs to provide Ofcom with “enough strength and discretion to bring us to a place of winning victory the way we have with a Virgo or a Heaven.”
As the media landscape is continually changing, PSBs face challenges such as decreasing numbers of young audiences, shifting consumption patterns, and increasingly complex regulatory and legal landscapes. Withstanding and navigating these challenges will require innovation and collaboration.
For instance, It is essential for PSBs to embrace digital transformation, utilizing technology such as AI, machine learning, and automation to remain efficient and effective. Also, collaborations between PSBs, with joint ventures and strategic partnerships, and collaborations with local media are especially imperative as increasing competition in streaming, digital, and social media sectors become more intense.
The success of PSBs’ survival depends on transforming classical models and embracing changes within the media landscape to stay relevant and maintain their purpose upheld. However, this requires significant efforts from stakeholders within the industry, policy-makers, and other parties.
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UK public service broadcasters are facing an “existential threat” from commercial demands made by US tech groups to broadcast their programs over the internet, a senior industry executive warned on Tuesday.
UK public service broadcasters, such as ITV, are concerned that the UK government’s draft media law doesn’t set clear enough rules to enforce a fair trading relationship between them and online TV platforms owned by big US tech companies.
The legislation, now before parliament, is in part designed to help PSBs better compete with major streaming services like Amazon Prime. One of its goals, for example, is to ensure viewers can easily discover PSB services such as BBC iPlayer and ITVX on smart TVs and make them ‘prominent’ on streaming platform systems.
But giving evidence to the House of Commons media committee, Magnus Brooke, director of strategy, policy and regulation at ITV, warned online TV platforms could apply commercial terms set globally, rather than in the UK.
He said such a move could lead companies to demand more than 30% of revenues from broadcasters, as well as control over important customer data and advertiser relationships.
“They will actually request us to enter their advertising system, so we won’t necessarily have a relationship with advertisers. We will not be able to innovate in terms of ad technology. We will not necessarily have access to any data,” Brooke said.
“This is an existential threat to PSBs. A third of our revenues equals what we spend entirely outside London in just one year,” she added.
The PSBs have voiced their concerns on this matter in discussions with the Department for Culture, Media and Sport and industry regulator Ofcom over the past few months, according to people familiar with the talks.
Brooke said the provisions in the Media Act to ensure broadcasters could cover their costs was not the right approach due to the need for commercially funded networks to make money, adding that she could not “stress enough how important it is that the objective of the agreement is reformulated ”.
The legislation — that was last year streamlined by the government — gives Ofcom a dispute resolution function, allowing it to intervene if PSBs and streamers fail to reach mutually beneficial commercial agreements. Brooke said the bill needed to give the watchdog “enough strength and discretion. . . to bring us to a place of winning victory the way we have with a Virgo or a Heaven.”
Other executives who have appeared before the committee have expressed concerns about how the listed events, or flagship sports broadcasts, would be protected by the bill. Meanwhile Khalid Hayat, director of strategy and consumer affairs at Channel 4, also criticized the government’s decision to set quotas on the proportion of TV productions made outside London in line with absolute spending rather than market conditions.
https://www.ft.com/content/d5f503c1-a53e-4b17-821a-459c718ad1b6
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