This month Pact submitted its response to Ofcom’s consultation into the relationship between PSBs and the production sector, which is part of their wider review into the future of public service broadcasting and media in the UK, Small Screen: Big Debate.
Ofcom is suggesting a new framework is needed which gives PSBs flexibility in how they might meet their obligations. This could have a significant impact on indie businesses, as Ofcom is considering changes to some of the key elements that have helped our sector to grow from a cottage industry into a global powerhouse: the arrangements that frame the Terms of Trade (whereby indies retain the rights to their programmes allowing them to generate additional revenue from their IP); the indie quota; and the definition of an indie and qualifying programmes. This is despite the fact that there have already been two reviews into the Terms of Trade in the past decade, and on both occasions the current framework was found to be operating effectively. In addition to the Ofcom review, the UK Government is also looking at the future of PSBs and has set up its own panel.
Pact has responded to this current consultation ensuring that the voices of indies of all sizes and from across the UK are represented. We have asked Ofcom to present the evidence for the review, and to outline why the impressive success of the indie sector internationally is being called into question.
We have a mutually beneficial relationship with the PSBs, and want to see them flourishing. The success of UK indies depends on it. But whilst we appreciate they are facing significant new challenges from global streaming services, we strongly believe the current framework between PSBs and indies remains fit for purpose, and is the best defence against a globalising TV market. The Terms of Trade can react to technological developments and ensure that regular negotiations can happen between PSBs and indies to reflect changes in commissioning and consumption, evidenced by the deals we did with Channel 4 and BBC iPlayer over the last 18 months. The IP-based deficit funding model has helped lower costs for PSBs, giving them the flexibility needed to continue to commission and acquire high-quality content. Ultimately, content will always be king. If indies commission and make programmes that audiences want to watch, they will watch them. Including younger audiences.
Both the indie quota and the current definitions of an indie and qualifying programme continue to allow for a diversified workforce, with low barriers to entry and considerable opportunity for businesses to grow. The 25% quota was introduced in 1990 by the Conservative Government to encourage the PSBs to commission externally. It counters the balance of power that many of the PSBs continue to hold on our industry, controlling 77% of UK commissioning revenues. Change or narrow the quota, and there is a risk that PSBs would choose to rely on a small selection of larger producers with whom they are used to working, and return to favouring their own Studios for the rest. It would remove incentives for market entry by reducing opportunities to secure commissions and to grow, in what is already a challenging sector.
The current ecosystem is delicately, but effectively balanced. It is this environment which gives the UK indie sector its competitive edge, and has helped it to grow revenues by 30% in the past five years, to more than £3.3bn in 2019/20, as our Census showed. It has led to the creation of some of the most popular and critically acclaimed television shows in the world – Line of Duty, Great British Bake Off, Who Wants to be a Millionaire, Fleabag – loved by audiences in the UK and abroad. Our serious concern is that any changes could threaten the very environment that has enabled that creative and economic success.
Pact will continue to campaign over the coming weeks and months and will be doing all that we can to protect our members’ businesses.
John McVay, CEO of Pact