Should the Terms of Trade with Independent Producers be reviewed?

A speech made by Colin Browne, Chairman of VLV, to the Westminster Media Forum Conference on the Next Steps for the TV and Screen Production  Sector in the UK on April 27th 2021.

I’m grateful to have the opportunity to participate in the discussion on this important subject. 

We at the VLV approach this subject through the prism of audiences – the citizens of the UK. It’s clearly beneficial for audiences that the production industry thrives. It ensures a greater plurality of suppliers to UK broadcasters, thus enabling a greater range of UK-specific content for audiences here. We would argue that the Public Service Broadcasting (PSB) system in the UK has been fundamental to the success of the production sector. But the introduction of the new streaming services, while clearly providing greater choice for consumers and opportunities for the production sector, has upset market conditions and destabilized the PSB system in the UK. While the new players may commission UK content, this seldom truly reflects national interests or national culture, because the streaming services are global and understandably commission content which will sell in as many markets as possible; and they also tend to commission content from the larger global independents, which doesn’t help smaller UK producers.

So how do we keep the benefits of public service broadcasting and counter the trend towards less UK-specific content, while welcoming the increased choice for audiences?

We believe this can best be achieved through support for the PSB system. PSB is a deliberate policy intervention by government, designed to support a system which provides a wide range of UK-orientated content which may not be commercially viable but is considered to be of value to society – news, children’s programmes, UK current affairs programmes, drama which reflects UK concerns and regional and national content. The commissioning of such content by the PSBs not only helps inform, educate, and entertain UK audiences, it is provided for everyone at the same time, so it is equitable. It also supports the UK economy and production sector. According to PACT, the PSBs spent £1.3 billion on independent productions in 2019 – far more than any other broadcasters. We believe the production of UK content and the production industry is at risk because the future of PSB itself is at risk. The threats are both financial – with BBC income down more than 30% in real terms since 2010 and a long-term decline in advertising for the commercial PSBs; and structural, in that they no longer have guaranteed prominence or carriage across the new platforms.

The PSB review is currently considering how the government can best support the PSB framework. We look forward to seeing Ofcom’s conclusions and we welcomed the recommendations of the recent DCMS Select Committee Report on this subject.

We believe reform is needed – prominence regulations to ensure the PSBs retain their reach; advertising regulation which is platform neutral and which allows them better to compete with online platforms; and regulation of the carriage terms on other platforms so they are not disadvantaged.

The PSBs in return need to demonstrate that they are worthy of this support. The benefits of production need to be spread more evenly across the UK. We welcome the recent initiatives by the BBC and C4 in this respect. However, they need to work harder to ensure they accurately reflect the UK population in their output and in their employment practices. Progress has been made but it continues to be too slow.

In the shorter term, the government needs to continue to support the PSBs and the companies which provide content for them to ensure they survive the pandemic and its aftermath. The creative industries are economically valuable to the UK and it makes sense to invest in them now to ensure we have a properly trained workforce going forward.

One perhaps more controversial issue are the Terms of Trade between the PSBs and independent producers, which Ofcom is also considering. When introduced in 2003, the PSBs were far more powerful than producers and the scales needed to be tipped in favour of the producers, especially  smaller and often start-up companies. That balance of power has now been moved towards the producers, many of which are global companies more powerful than the PSBs. The VLV believes the terms of trade need to be revised so that the PSBs are able to retain a greater share of IP rights and are able to survive in the global marketplace.

In summary, therefore, we believe that a strong and healthy PSB system is absolutely in the interests of the production sector. The Government needs to move fast to ensure adequate funding of the publicly owned PSBs and to reform regulation to support the PSB system, in the ways I have detailed.

We believe this would be the best outcome for audiences and citizens in the UK – and for the production sector.