Annual fee confirmed for VOD providers

The Association for Television on Demand (ATVOD) has imposed an annual fee on all video on-demand providers, but critics remain concerned that small-scale operators could be unfairly penalised under the scheme.

ATVOD, which took over VOD regulation duties from Ofcom in March, yesterday announced that a flat-rate fee of £2,900 will be imposed on the services of all notified VOD providers in the UK, including the likes of SeeSaw, Blinkbox and Virgin Media.

The fee, which covers the period from April 1 to March 31 2011, is being introduced so that ATVOD can be "adequately funded to carry out its regulatory activities".

Last month, the United For Local Television (ULTV) group expressed concern that the approach could penalise small-scale VOD players unable to afford an annual fee.

Taking into account the concerns, ATVOD acknowledged that there could be "some (as yet unidentified) small-scale providers of actual or prospective ODPS [on-demand programme services] services who might find a fee of £2,900 prohibitive, and that such a fee would therefore not be justifiable or proportionate in relation to them".

ATVOD has therefore invited small-scale VOD providers, most likely local and community groups, to contact the regulator if they will have "genuine difficulties" in being able to pay the fee. All such providers must write directly to Ofcom before July 15.

Relevant details would include their actual or estimated revenue and turnover, along with information about the services they provide to users. If the evidence supports that they are unable to pay the fee, then ATVOD will "ensure that the fees imposed on them are justifiable and proportionate".

In its closing statement, ATVOD said: "We remain alert to the concerns, expressed by some respondents, that a flat-rate fee, as determined, would be likely to have a serious impact on small-scale and local community-based ODPS, although no such providers were identified to us by these respondents nor did any identify themselves to us in order to raise this issue.

"In order for us to consider whether there is a case for a different fee to be payable by small-scale ODPS we will need evidence from the providers themselves to support the broad assertions that have been made."

However, ULTV spokesman Daniel Cass remains unsure whether the measures laid out are sufficiently clear to provide a balanced fee structure for small-scale VOD providers.

"Ofcom appears to have made two contradictory statements. On the one hand Ofcom invites VOD service providers to declare if they have a low turnover so that they can potentially be charged a concessionary rate to the ATVOD levy as ULTV has been calling for," he said.

"However, another part of the same statement makes clear that Ofcom is unwilling to offer any concessionary rate based on low turnover. We are extremely concerned that these two statements are irreconcilable and will be seeking urgent clarification from Ofcom on its true position."