What next for the UK indie TV production sector?

 

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There are currently several real or potential negative policy outcomes faced by the UK independent TV production sector, including: decreasing public investment in content due to BBC cuts resulting from the Licence Fee deal; the potential privatisation of Channel 4 (which currently commissions its entire content from the indie sector but may change that model under new ownership); and, for the indie TV sector in Wales, the effects on their businesses of potential further cuts to S4C’s public funding.

Lastly there is the Terms of Trade review. It is widely accepted that protections in the 2003 Communications Act, which safeguard independent TV producers’ intellectual property (IP) rights, have over the last ten years enabled the UK indie TV production sector to become a multi-billion pound industry that exports programmes and formats worldwide. The resulting growth in skills and facilities, along with successive governments’ creative industry tax breaks, has also attracted overseas investment in UK content production.

The Communications Act effectively requires public service broadcasters (PSBs) to draw up Terms of Trade which allow producers’ to retain their IP rights, and also stipulates that any discussions about revenues from other exploitation (eg international sales, DVD, ‘secondary’ – ie cable and satellite – channels) are conducted separately.

But some PSBs, including the BBC and Channel 4, argue that the lack of ability to exploit IP is harming them financially and that the landscape has changed, with some indies now very large businesses and in some cases being bought up by broadcasters both in the UK and overseas. This is despite the fact that many of the aforementioned ‘super-indies’ no longer qualify for protection under the Act on Terms of Trade, or in terms of access to commissions which are part of the indie production quota of 25% of eligible hours.

The PSBs recently made the case to Ofcom to revise the Terms of Trade, but the media regulator’s third PSB review concluded in July that: ‘[we] do not, at this point, see a strong enough case at this stage for reform’.

So, surely a case of ‘everybody move on, nothing to see here’ ? … well no, because two months later the Government asked Ofcom to review the Terms of Trade again, causing advocates for the indie TV sector to take up once again the swords and shields of argument and statistics to make their seemingly already-proven case.

Ofcom has duly published terms of reference for the Terms of Trade review which correspond to the Government’s deadline of the end of this year. But many (not least those at Ofcom I suspect) will feel disquiet at not being given time for the normal procedure of 12 weeks’ consultation, followed by detailed assessment of the views received, to enable a suitably well thought-through conclusion.

The DCMS Secretary of State recently told the Culture Media & Sport Committee that “I am more keen to get [Charter Review] right than rush it in order to meet the deadline, so there is … the possibility that you could have a short extension to allow that to happen.” Applying such an extension might perhaps have avoided any perception, correct or otherwise, of Ofcom having to rush its work on such a crucial issue for the indie sector and by extension the UK economy.

Whatever time was provided for the Terms of Trade review, there’s compelling evidence already published by Pact and others pointing to the Terms of Trade’s success, making it hard for many to see how Ofcom could sensibly reverse its conclusion from the PSB Review.

Either way, the Government states that Ofcom’s conclusions will be treated as guidance rather than being automatically followed, causing concern on the part of some that what’s happening here is an example of ‘two wrongs’ syndrome: the BBC faces a net 10% reduction in funding, due to the recent Licence Fee deal causing the BBC to take on the cost of free over-75s TV licences. Due to planned investments, the BBC has said current services and content might have to find savings of up to 20% – a very large cut. So the thinking might be that altering the Terms of Trade, allowing the BBC to extract a share of indies’ IP, would help to compensate for that Licence Fee deal.

Leading on from this, it’s perhaps also being considered that if Channel 4 had greater powers over IP from the producers it commissions, it may make it a more attractive proposition to a potential buyer. But the government, and any potential owner of a privatised Channel 4, might note the fortunes or otherwise of ITV’s recent strategy of keeping more IP by taking a stake in some indies and by making more programmes in-house. ITV’s recent figures show that profits have indeed risen but that audiences are down – ultimately ITV relies on the latter to have a critical mass of viewing that attracts advertising and gives it a strong brand both here and overseas. So it’s a policy that may create short-term gain in exchange for long-term decline.

As someone who has worked both with broadcasters and the indie sector, I respect there is a balance to be struck. One of the first projects I worked on after leaving Pact in 2005 (having worked on the campaign to get the Codes of Practice into the Comms Act) was with Channel 4 regarding Ofcom’s review of online rights windows. Whilst Pact was arguing for very short windows for the broadcaster, I sympathised with Channel 4’s position that, with the producers having secured their overall rights, it was important that online windows allowed PSBs a suitable return on their investment in a programme.

But when it comes to the overall issue of producers retaining ownership of their IP rights, what’s at stake is the UK indie TV sector’s position as the biggest growth sector in our economy. And let’s not forget we are also talking about protecting a basic principle: that the company who came up with the idea, story, and talent to make a production work should be able to hold onto the IP that made the content worth watching. Failing to do so would simply deter people from taking their ideas to the BBC and others, or indeed entering the market in the first place.

So when you consider that: the indie TV production sector is doing so well; the Government has an unrelenting focus on growth; and that same government has introduced measures to help the creative industries, it feels strange for the sector to face several potentially negative policy outcomes.

We should never underestimate the internal lobbying and horse-trading that goes on within Government, particularly in these times of heavy overall reduction in public spending. At the aforementioned Select Committee hearing the DCMS Secretary also said he was making the case to the Treasury for public investment in the creative industries, and we can only hope he is successful – this at least might provide positive outcomes for the Channel 4 and S4C issues. And we must also hope he concludes that maintaining the principle of IP ownership for indies outweighs any arguments to the contrary.

What needs to emerge from all of these uncertainties is a creative sector which can still lead the world and of which we can all remain justifiably proud.