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Summary:

UK VOD operators must pay more for the privilege of being regulated, because their new co-regulatory body underestimated how much money it w…

UK VOD operators must pay more for the privilege of being regulated, because their new co-regulatory body underestimated how much money it would have available to do the job.

The Association for Television On-Demand (ATVOD) originally estimated running costs for its first year, 2010/11, would be £426,388, paid mostly be charging fees to VOD operators. But it says there is “uncertainty” over how many VOD operators will pay.

So first-year costs have increased by £41,000 and, despite a £40,000 injection by the Department for Media, Culture & Sport, the association is carrying forward a £52,757 deficit to 2011/12. That means estimated total year-two costs are not £467,620, as previously expected, but £520,377.

In this consultation paper, ATVOD and Ofcom now propose charging VOD operators the following annual fees…

Category Fee

Commercial operators

Flat fee of £3,968, or between £1,000 and £25,000 depending on turnover.

Non-commercial

Concessionary rate of £150, £250 or £500, depending on scale.

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Category Fee

Commercial operators

Flat fee of £3,968, or between £1,000 and £25,000 depending on turnover.

Non-commercial

Concessionary rate of £150, £250 or £500, depending on scale.

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The flat fee is an increase from year one’s projected £2,500 flat fee.

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.

But many smaller operators are frustrated that ATVOD’s pay-for regulations exist at all and want the whole thing scrapped – see their campaign. The consultation closes April 1.

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