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13 January 2016

Ofcom: Review of the operation of the television production sector

The review of the operation of the television production sector (the Review) has been produced to provide a more detailed consideration of the sector following the publication by Ofcom of the third review of Public Service Broadcasting in July 2015, which was requested by the Secretary of State for Culture, Media and Sport.

This article summarises the suggestions for reform arising out of the Review, to alert producers/broadcasters to possible future changes that the Government may consider in this sector.

The Review has been undertaken against the backdrop of the objectives of the regulatory regime for this sector: "to promote cultural diversity and to open up the production system to new energies and voices; to stimulate the growth of small and medium sized enterprises (SMEs); promoting creativity and fostering new talent; and to tackle vertical integration within the UK programme supply market".

Additionally, it is important to consider the two key regulations that currently govern the TV production sector:

  • a quota which ensures that at least 25% of programming is commissioned from independent producers, and
  • Codes of Practice which public service broadcasters (PSBs) are required to publish setting out the principles they will apply when agreeing terms with independent producers.

Suggestions for reform in the Review

Definition of "qualifying independent producer"

The Review considers that benefits may derive from both tightening and relaxing the definition. To tighten the definition, a size cap could be introduced to ensure only SME producers qualify.

Alternatively, the definition could be expanded to include producers with a broadcaster-shareholder where it has a low audience share or is a small buyer of content.

Reform the independent production quota

Although the Review states that there is no real need for reform, it is suggested that the quota could be raised to increase opportunities and possibilities for small producers or reduced as the quota has been effective.

In relation to the latter however, it is suggested that there could be a negative effect of disincentivising producers from seeking to grow companies into successful medium sized enterprises.

Introduce different elements to the quota

The Review invites the Government to consider the importance it places on additional elements and suggests they could be incorporated into the quota as follows:

  • genre – a quota could be introduced regarding the number of small producers used in each
  • size of producer – the size of a producer could be considered a mandatory matter to consider when interpreting "range and diversity", and/or
  • producers in the nations and regions – geographical location could also be considered a mandatory matter to consider when interpreting "range and diversity".
Split of rights and revenue shares between PSBs and producers

The Review considers that aspects of the regime could be better designed to facilitate commercial negotiations in relation to how intellectual property rights and revenues are split between PSBs and producers (following the increase of catch-up and online provision of programmes), although there is little detail about how this could be achieved.

Overall, the suggested reforms do not appear to be dramatic. However, producers and broadcasters would be well advised to continue to keep an eye on developments, particularly as this is clearly an area of interest for the Government.

This article was written by Genevieve Morrall.

For more more information please contact Genevieve on +44 (0)20 7427 6736 or at