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.

The fee 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.

Nookie TV was an R18 rated adult Internet TV service accessed in the UK via a set top box.

Unfortunately the service has now come to an end as explained on the defunct Nookie TV website:

Dear Subscriber:

Unfortunately, due to financial hardship, we are ceasing all operations and discontinuing NookieTV broadcast service as of May 15th 2010. We will not be asking our customers to return their IPTV equipment. Therefore no further action is required on your part.

Thank you for your past business.

Sincerely,

NookieTV

UK video-on-demand providers must pay a combined £375,000 to two bodies that will regulate their industry.

The Association for Television On Demand (ATVOD) was last week confirmed by Ofcom to co-regulate, along with it, the VOD sector.

Ofcom says 150 VOD services must pay the fees - but, despite reviewing the sector last year, it has not published a list identifying the companies affected.

Indeed, singling out those services which fall under the joint Ofcom-ATVOD auspice is tricky. The EC directive applies to TV-like services, which it says 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.

But what TV-like means is open to interpretation, as media continue to converge and innovate. After commissioning research in to the topic, Ofcom says the scope should extent to services that provide access to programmes that compete for the same audience as television broadcasts, and therefore, are comparable to the form and content of programmes included in broadcast television services. Only services that have editorial responsibility over their content are covered.

Specifically, Ofcom says catch-up TV websites and set-top box services, TV archives and movie VOD services [doesn't sound very TV-Like to me!] fall under regulatory scope.

Ofcom has opened a consultation with three options for raising the money:

• Option A: Charging based on services' revenue, so as not to disadvantage smaller providers.
• Option B: A mixture of revenue-based fee and a flat £1,000 fee.
• Option C: A flat £2,500 fee. [Ofcom preferred option]