Media Bill - Impact Assessments – Smart speaker regulation

United Kingdom

As part six of our seven-part series on the draft Media Bill (which can be found here), we covered the proposed “must carry” obligation on so-called “smart speaker” device providers (herein “Platform Operators”) to carry UK licensed radio. In this article, we will cover the Government’s impact assessments in relation to this section.

By way of brief reminder, the draft Media Bill provides that internet simulcasts of UK licensed radio stations must be made available on certain designated voice-activated connected audio devices at no cost to the radio station provider itself.

The impact assessment recognises that around 70% of audio listening on voice-activated connected audio devices in the UK is radio, and that such devices account for 14% of radio listening overall – which is ahead of industry expectations. 

The UK Government acknowledges that given the high levels of access and listening to radio on such voice-activated connected audio devices, regulation is not currently strictly necessary.  However, the Government’s concern is that this might not always be the case and therefore, the draft Media Bill is designed to ensure continued access to UK radio on such devices in the event of a shift of power between Platforms Operators and stations.

The assessment notes that access to radio is a particular risk with voice-activated connected audio devices given:

  • the absence of a directory or similar browsing functionality, meaning the radio stations are reliant on the Platform Operators for access;
  • the uncertainty over the monetisation strategy for Platform Operators and the risk that Platform Operators seek to capture some of the value generated by radio (such as by mandating first-party advertising in return for carriage);
  • the ever-increasing dependence radio stations will have on Platform Operators as the share of listening on voice-activated connected audio devices increases, and the likely drop in the perceived value of radio to Platform Operators;
  • the make-up of the UK radio sector (i.e. the large number of stations of various sizes and respective commercial bargaining power); and
  • the risk that Platform Operators re-direct users to a Platform Operator’s own (radio-like) services when a user requests access to a licensed radio station.

The impact assessment does not, however, contain an individual regulatory impact assessment for the “must-carry” obligation but instead includes an “illustrative and largely qualitive assessment” only.  This concludes that the impact on the market will largely depend on future voice-activated connected audio device usage and Platform Operator behaviour, given none currently charge for carriage. The UK Government also acknowledges that it expects Platform Operators to incur additional transitional and ongoing costs in complying with the framework but anticipates these to be small. 

The qualitative assessment also considers the potential benefit to customers, in the form of “protecting the existing social benefits of radio” by ensuring continued access to radio (including the plurality of news and increased awareness of community issues).

As no quantitative assessment is provided, the UK Government commits to continuing engagement with the industry with a view to publishing a formal impact assessment in due course.  It notes that this will be based on externally commissioned research, including a recent report from Radiocentre, an industry body for commercial radio.  That said, the UK Government notes that given the lack of maturity of Platform Operators’ monetisation strategies, it is unlikely to be able to fully quantify the effects on the media market.