Pact says that Ofcom is “taking the indie sector back 20 years” by changing how producers can do deals with public service broadcasters and third parties.
The trade body for independent production and distribution companies was responding to new draft proposals from the regulator on commissioning codes of practice for Public Service Broadcasters (PSBs).
The consultation has come about as a result of the Media Act 2024 and Ofcom believes that the changes would benefit both PSBs and indies. However, Pact strongly disagrees.
“Ofcom is looking to throw indies under the PSB bus with these proposals, taking the indie sector back 20 years,” said Pact Chief Executive, John McVay OBE.
“Instead of looking to promote growth, it is proposing to undermine the successful business model used in the sector, particularly by SMEs.”
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The key issue for Pact is the removal of prohibitions on PSBs to seek “matching rights.” This means that if a production company managed to get a deal with a third party funder (distributor or streaming service, for example), then the PSB would have the option to match that deal on the exact same terms.
In a statement today, Pact said:
“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.”
It added:
“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.
“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extremely disappointed that due process wasn’t followed by Ofcom in consulting with us prior to the publication of the draft guidance.”
Further changes to the guidance include:
- taking out references to removing barriers to the development of new markets;
- stated that the Guidance and the Codes also apply to PSBs’ on-demand players where the PSB intends that content to count towards its independent productions quota;
- loosening the prohibition on linking the acquisition of primary rights to secondary rights.
- removing the prohibition on PSBs requiring matching rights
- replacing the obligation on PSBs to report annually on the matters covered by their Codes with an information retention provision obliging them to retain relevant information for 3 years.
Ofcom is consulting on the draft guidance and has invited responses from stakeholders by 5pm on 10 March.
