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PPA disputes ‘media tax' for video services

The PPA, the association of UK magazine and periodical publishers, has expressed concern over a ‘damaging’ levy on video content, saying that ATVOD fees could curb digital innovation.

ATVOD, the regulator for ‘on-demand programme services’, has determined that short video clips collected together on a section of a publisher’s website fall under the definition of 'TV-like' services, as set out in the Audiovisual Media Services Regulations.

As such publishers must register with ATVOD and pay a fee, last year set at £2,900, which the PPA says could threaten the viability of certain video services on publishers' websites.

In its response to a consultation on proposals for 2011/2012 ATVOD fees the PPA has said it is firmly of the view that short video clips on publishers’ websites are not TV-like and therefore do not fall within ATVOD’s remit. This is reinforced by the fact that the introduction to the AVMS Directive, from which the AVMS Regulations derive, states that electronic versions of magazines and newspapers are excluded from scope.

Several decisions regarding whether a publisher's video content is subject to the regulations are currently being appealed to Ofcom.

The PPA is also concerned that ATVOD is proposing increased fees, despite already having the highest equivalent charges in Europe. Under ATVOD’s plans, those caught by the AVMS Regulations will either:

• have to pay a flat fee of £3,968 for each on-demand programme service; or

• pay an initial fee which could rise as high as £14,580 (depending on company turnover) for the first service, and then a reduced fee for subsequent services (with a cap of £25,000 per company).

By comparison, the next highest fee charged in Europe that the PPA is aware of is €800 per company, whether they offer multiple services or not.

The fee based on turnover proposed by ATVOD is fundamentally unfair according to the PPA, as it is based on the whole of a company’s turnover, not just that turnover generated from video on demand services. This means that diversified media businesses that may only provide a small amount of VOD are charged a high fee – effectively penalising them for generating revenue in unrelated areas.

Chief Executive of the PPA Barry McIlheney said: “Essentially the disproportionate regulatory fees being charged by ATVOD are damaging innovative digital businesses and putting them at a disadvantage compared to their European counterparts.”

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