http://www.icstis.org.uk/pdfs_news/SAGspeech_annualreport0607.pdfICSTIS ANNUAL REPORT 2006/7
Sir Alistair Graham, Chairman
• Thank you George.
• This Annual Report coincides with the end of my first year as Chairman of ICSTIS
and, as George says, it has certainly been an eventful one.
• We have introduced a new regulatory Code and have been asked by Ofcom to
prepare to take on 0871 regulation early next year.
• We’ve also seen a dramatic growth and a great deal of media interest in premium rate
services used in television programmes. We estimate that this sector alone is now
worth some £270 million a year.
• The media has always been about ‘participation’. Technological limitations usually
meant it was one way – from producer to citizen.
• Technology now affords better and richer two-way transactional dialogue and that will
not go away. People have always been, and remain at heart, social beings – they
have always wanted to engage with others.
• Technology now makes it possible for mass audiences – and not just geeks with the
latest gadgets – to engage with events, bring their views to bear and even shape
outcomes.
• It is no surprise that viewers and listeners enjoy taking part using their phones. It is
easy to do – nearly everyone has access to a phone and the cost is generally low
enough to not cause ‘bill shock’.
• However, there is an important fact that must not be overlooked.
• When viewers or listeners transact and make a payment, the relationship between
them and the content provider surely changes. Viewers or listeners now become
‘consumers’.
• With that comes the whole issue of consumer protection. Consumers have rights to
get a ‘fair deal’.
• This is separate from their rights to enjoy a broadcast experience free from harm,
offence or which intrudes on their privacy or other rights.
• I doubt whether enough thought has been given to this point by broadcasters.
• Clearly there have been problems recently with the means of delivery of ‘participation’
in TV and radio when combined with a telephone and premium rate charging. It need
not be this way.
• Premium rate is not broke – nor is it inherently wrong. However, something went
wrong, and the intense media and political scrutiny that followed was not surprising.
• So why did these problems actually happen? How can it be that so many services
appeared to have so many basic failings which damaged consumer trust?
• This question is central to the Ofcom’s own inquiry into the apparent failings of the
industry’s compliance.
• We welcome this inquiry and look forward to its findings. I am sure it will provide an
invaluable insight and point the way for all parties to address the issues to prevent
problems happening again.
• It is in this context that I can offer some thoughts from ICSTIS’ perspective.
• I believe there are three issues that are particularly significant.
• Firstly, the value chain for the delivery of premium rate services used in TV and radio
is spread across a range of companies with different cultures and different priorities.
• In such a complex chain, it became possible for all parties to lose sight of the critical
need to retain viewer and listener trust. The apparent absence of clearly agreed and
written contracts only compounds the problem.
• Secondly, cost and revenue pressures in both the premium rate and broadcasting
sectors have been squeezed. Less emphasis appears to be placed on compliance
costs – indeed, ways may even have been found to reduce them.
• Thirdly, the focus seems to have been on making ‘good television and radio’ rather
than on ensuring that the premium rate element of it was delivered correctly.
• If the gallery needed votes counting in a matter of seconds so a winner could be
announced live, it is hardly surprising that corners were cut. It appears that ‘the show
went on regardless’.
• These issues – and there may be others – are systemic. To simply claim that the
recent problems are merely the result of human error or ‘cock up’ is to miss the point.
• If you consider the reputation risks and brand damage that can be caused if things go
wrong, any systemic failings will need to be properly addressed by the industry if it is
to move on. The headlines of recent months only serve to destroy brands and trust.
• This brings me to our recent consultation and the broader question of how future
regulation will seek to define participation media.
• Our consultation on proposals to introduce licensing for broadcast premium rate
services closed on 12 June. We had a wide range of responses and, for the most
part, respondents thought the concept of licensing had merit and accepted the case
for further regulatory action.
• The consultation also went wider – it attempted to unpack the issue of regulatory
responsibility. It recognised the fact that broadcasters and production companies, not
just service providers, are integral to the provision of content and may also be liable
for problems where they arise.
• We also made clear that any final measures we introduce are contingent on the
outcome of the Ofcom inquiry which I mentioned earlier.
• At the same time, we and Ofcom are investigating a number of cases. These may
present a further opportunity to learn about the nature of problems and how any
systemic failures arose.
• As you’ll no doubt be aware, Ofcom have taken action against the BBC and Five.
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