Pact Concerned by Ofcom’s Plans to Extinguish Growth of UK Independent TV Production Sector

Pact is concerned that Ofcom’s proposals to revise the guidance for Public Service Broadcasters (PSBs) on Commissioning Codes of Practice could potentially damage the successful UK independent TV production sector that has grown from £1.5billion to £3.8billion since the Codes were introduced in 2003. The proposals, if implemented, will contradict the Government’s ambition to grow the UK economy, with the creative industries a key part of their growth plan.

Contrary to Ofcom’s assumption that the proposed changes will benefit both PSBs and indies, Pact disagrees that they will be beneficial for indies and for the growth of the sector.

The Terms of Trade were introduced to protect independent production companies from the dominance of the PSBs and create a more balanced power dynamic during negotiations. Despite the introduction of global streaming services and multichannel commissioners, the PSBs remain dominant in the UK market, representing 83% of demand in 2023.

Pact is particularly concerned that Ofcom is proposing to remove the prohibitions on the PSBs to seek ‘matching rights’ and that there should be no terms in contracts that make the deal conditional on the producer’s acceptance of a bundled deal. The removal of these prohibitions represents a fundamental change from the previous guidance and will impact the balance of negotiating power between the producer and the PSB, impacting on production financing and ultimately stifling competition and the growth of the sector.

The Communications Act 2003 states that Ofcom must, before issuing their guidance or revised guidance, consult the providers of the licensed PSBs as well as the persons who make independent productions or the persons representing them. We are extremely disappointed that due process wasn’t followed by Ofcom in consulting with us prior to the publication of the draft guidance.

Ofcom’s consultation states that “supporting a vibrant and diverse independent production sector is critical to the PSBs being able to fulfil their remits successfully.”

But Ofcom has failed to understand how the power dynamic works at the point of negotiation, and these proposed changes may lead to indies feeling pressure to acquiesce in order for commissions to go ahead. This in turn is likely to result in the warehousing of rights with no value, resulting in a lack of growth overall in the sector.

Pact Chief Executive, John McVay OBE, said: “Ofcom is looking to throw indies under the PSB bus with these proposals, taking the indie sector back 20 years. Instead of looking to promote growth, it is proposing to undermine the successful business model used in the sector, particularly by SMEs.”