Recent developments in the media world have highlighted the need for proactive risk management.
The world of television has come under increased scrutiny in recent months following the scandal over faked phone-in competitions. Several programmes televised on the BBC, ITV and Channel 4 have come in for severe criticism for misleading the public, with production companies bearing the brunt of the furore.
As the media world continues to evolve and expand, so do the liabilities it entails. Indeed, the rapidly changing nature of the sector makes it even more necessary to be aware of the risks that it courts.
Emily Freeman, Executive Director of Technology Risks and Media Risks for Lockton Professions, explains: “There has been a revolution in how our news and entertainment content is delivered. It has changed the very nature of the risks associated with television media.
"The impact of technology on studios has been profound. It used to be possible to create a discrete universe of risks, but now a new convergence model has developed and insurers have to open up to cater for that.”
In the wake of the fake phone-in scandal, the BBC announced it would create an Editorial Standards Board to oversee standards in programmemaking through production companies. It is a logical step, taken to ensure beststandard practices across the board.
Alex Hindson, Associate Director of Aon Global Risk Consulting practice, says proactive risk management is the key for protecting brands and managing reputational risk in the world of media.
He says: “When you are dealing with media liability, you are dealing with a wide range of roles and functions [within television companies]. There is no media liability manager who is made responsible. As a result, there may well be flaws in the risk management process, because of a lack of joinedup thinking.”
With several production companies now moving content onto the internet, a plethora of new liabilities have arisen. Many of the traditional risks such as copyright, libel and digital rights continue to exist, but, says Hindson, they have evolved with the sector to become more complex.
Freeman says production companies are under additional pressure because media law is complex. “There is no static law governing the sector across the world,” she says. “So you can end up complying with a law in one country but distributing in another where the same law does not apply.”
With little legal precedent set, Freeman says media companies are moving into uncharted waters where litigation often presents uncertain outcomes. This, in turn, can impact on company reputations.
The key, Hindson says, is having the foresight to be proactive in risk management. “Many companies will have business continuity plans for IT breakdown or fire interruption, but they will not consider reputational risk. Yet at boardroom level this is seen to be instrumental to share price,” he says.
Media liability is an evolving risk,dealing in ever-more complex areas. Experts believe emphasis on risk management is essential to manage reputational issues. In the light of the recent phone-in scandals, it appears that television companies are beginning to wake up to the broader risks associated with modern media.
Broadcasters have been hit by a raft of incidents
• The BBC was fined £50,000 after a visiting child posed as a Blue Peter competition winner on BBC One in November 2006.
• The company behind the Richard & Judy competition ‘You Say, We Pay’ was fined £150,000 after viewers were urged to call a premium-rate number after contestants had been chosen.
• Scenes from a BBC One documentary, A Year With The Queen, were shown in the wrong order in a trailer to wrongly portray the Queen storming out of a photo session.
• During a Comic Relief competition in March, a member of the production team posed as the winning caller after a problem with the phone lines. GMTV’s Managing Director Paul Corley resigned after it was found that some callers to its premium-rate competitions had no chance because shortlists of potential winners were finalised before lines closed.
• A scene in The F Word was made to look as if chef Gordon Ramsay had caught several fish at sea, when a spearfishing expert had caught them beforehand.
