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  4. Pact Disappointed with Lower Made Outside England Quota; Urges Ofcom to Bring Forward Implementation Date
Press Release
04 Sep 2024

Pact Disappointed with Lower Made Outside England Quota; Urges Ofcom to Bring Forward Implementation Date

Pact is disappointed that Ofcom has decided against increasing Channel 4’s Made outside England (MoE) quota to 16%, instead opting to increase it to 12% from 2030, particularly as Ofcom has a new statutory duty to promote economic growth*.

In its response to Ofcom’s Re-Consultation on Channel 4 Licence Renewal, Pact also expresses its disappointment that Ofcom has failed to consider the regulatory changes brought about in the Media Act, which will affect the way in which Channel 4 can operate, and that separate nations quotas have been rejected by both Ofcom and Channel 4. Pact also believes that Channel 4’s voluntary 50% Made out of London (MoL) quota should be enshrined in Channel 4’s next ten-year licence.

Commenting on the Licence Renewal Re-Consultation, Pact Chief Executive, John McVay OBE said: “We are very disappointed that Ofcom chose not to move forward with a 16% quota. However, a 12% quota along with separate quotas within this for the nations and an earlier introduction date will mean businesses have certainty and will seek to invest in these areas, which are all important for the promotion of economic growth.

“Ofcom has an opportunity here to give a much-needed signal to the supply side of the market within the nations and regions that Ofcom trusts that indies can deliver for Channel 4.”
 

Made Outside England Quotas

Pact strongly disagrees with Ofcom’s proposal to retain Channel 4’s current MoE quota until 2030. Instead, Pact proposes that the 12% quota should come into force by 2027. Channel 4 will need a period to adjust to the increased quota and plan its commissioning strategy in the nations. However, the proposed 12% quota change is only 1.1% above Channel 4’s achieved spend levels in 2023, indicating that Channel 4 could easily reach this quota for 2027.
 

Media Act Regulatory Changes

Pact is also disappointed that Ofcom has failed to consider the regulatory changes in the Media Act. The ability for Channel 4 to move into production represents a fundamental shift in the way Channel 4 operates. For the first time, Channel 4 will be able to meet its MoL and MoE quotas through its own production arm and there is a risk that this will diminish opportunities for producers in the nations and regions, whilst also weakening the nations and regions content budget. The Media Act will also allow Channel 4 to fulfil their obligations and quotas via their online services and possibly their portfolio channels.
 

Separate Nations Quotas

Pact still considers it vital for separate quotas for Scotland, Wales and Northern Ireland to be introduced. A 12% quota for Channel 4, using a population-based ratio, would imply quotas of 6% for Scotland, 3.75% for Wales, and 2.25% for Northern Ireland. Channel 4’s current commissioning is skewed towards Scotland and Wales and Channel 4 would already be able to meet quotas for Scotland and Wales quite easily. Meeting the quota in Northern Ireland would require Channel 4 to boost commissioning activity in Northern Ireland based on their current commissioning ratios. However, Channel 4 could easily divert some of their spend on new London-based commissions to Northern Ireland.


Channel 4’s 50% Commitment

Ofcom’s latest consultation focuses on the MoE quotas. However, Pact reiterates the importance of enshrining Channel 4’s 50% voluntary commitment in its next licence. If Channel 4’s spend in 2023 had been at quota levels (35%) rather than their 50% voluntary commitment, spend outside London could have been £65 million lower, which would have had a substantial impact on the sector in the nations and regions**. Writing Channel 4’s voluntary commitment into their licence would help to mitigate the impact of any move into production, and future proof Channel 4’s commitment to the nations and regions and cultural diversity across the next licence period.
 

Ends.

*Since May 2024, Ofcom has a new statutory duty to have regard to the desirability of promoting economic growth when exercising certain regulatory functions. Ofcom must consider the importance of the promotion of economic growth and ensure any regulatory action taken is necessary and proportionate.

**Pact commissioned O&O research to look into Channel 4’s Made out of England and Made out of London quotas.

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