Updated: Publishers, Broadcasters Must Pay £10,350 For Having VOD Regulated

Following a consultation, ATVOD, which was appointed last year to regulate VOD along with Ofcom, has unveiled 2011/12 fees that are an average 5.5 percent below what it had originally proposed, after industry opposition and after realising it has more money than expected…

[NB: ATVOD has corrected this table – the rate for additional B-rate services is £400, not £800]

Although commercial VOD publishers have won a switch from last year’s flat £2,900 rate to a sliding rate based on revenue, they have not successfully argued that the due payment should be based on the revenue of their website rather than of their holding company.

That means newspapers, magazines and broadcasters who publish video are all on the hook to pay the £10,030 £10,350 fee per year. In the similar case of LiverpoolFC.tv, for example, the VOD service will have to pay at least £10,030 £10,350 because money earned by Liverpoool Football Club from tickets, merchandise etc puts it in the top tier.

“That’s the only metric on which there’s any certainty,” ATVOD CEO Peter Johnson tells paidContent. “A lot of the on-demand programme services are value-added propositions, bound up with a subscription for a broader range of content. Some are running at zero revenue or are loss-leaders and, often, their revenue data simply doesn’t exist in verifiable form.

We don’t believe that this is a perfect solution – we recognise the flaws and that there will be companies who have large turnovers but whose VOD service is a small part of that will feel aggrieved. But we are faced with sub-optimum options. So we will work with the industry to work out a long-term solution.” ATVOD’s announcement describes the current arrangement as an “interim measure”.

Non-commercial publishers including charities (and now S4C) have won a £50 discount, but are still compelled to pay £100 per year to cover ATVOD’s costs.

ATVOD says it is lowering fees because it has found an unexpected £10,219 surplus following its first year, rather than the £52,757 deficit it had projected. As well, Ofcom and the DCMS are, respectively, both lowering and referring repayments due to them by ATVOD, and ATVOD’s coffers have been swollen by fingering 20 more VOD publishers (150) for mandatory payment than it had expected in year one.

ATVOD was last year named to co-regulate some UK VOD services, since European Union members were charged with doing so by the European Commission’s 2007 Audio-Visual Media Services directive, which says “TV-like” services “must not contain any incitement to hatred based on race, sex, religion or nationality”; “must provide appropriate protection for minors against harmful material” and “sponsored programmes and services must comply with applicable sponsorship requirements”.

“TV-like” is open to interpretation but we know that web video platforms like YouTube (NSDQ: GOOG) are exempt and that the rules generally apply to TV broadcasters’ own VOD services like 4oD and ITV (LSE: ITV) Player. These services must nominate themselves to pay – ATVOD and Ofcom are working on the basis that 130 will do so in 2011/12.