The Office of Communications Act of 2002 initiated the birth of OFCOM, a new overarching regulatory body that took over the functions of the U.K.’s existing communications and broadcasting regulatory bodies. Among its many duties, OFCOM’s mandate is to regulate the electronic communications sector, encourage self-regulation and co-regulation, help accommodate the switch to digital, and nationalize the regulation of the public service broadcasters.
OFCOM set the stage for the 2003 Communications Act. Passed July 17 of last year, the Act is a far-reaching piece of legislation that sees the U.K. parliament relax TV network ownership rules and introduce a range of rules designed to readdress the balance of power between broadcasters and independent producers.
The main talking point for indies has been the requirement for all British terrestrial broadcasters (BBC, ITV, Channel 4, Five and Welsh-language network S4C) to create a code of practice to govern their terms of trade with independent producers. At time of writing, these Codes were on the verge of being signed. Their aim is to prevent the bbc and Channel 4, in particular, from using their power over the U.K. commissioning process to quietly coerce indies into using their in-house distributors – BBC Worldwide and Channel 4 International.
Instead, the Act makes it possible for an indie to secure a basic TV license fee, and then take its international and ancillary rights onto the open market where it can distribute them itself or sell them to a third party. The idea is that transparent access to the market will allow indies to secure a greater share of the revenue from their intellectual property.
Now, broadcasters will set a scale of tariffs for what they will pay producers – a kind of rate card for commissions. This price will not include reference to ancillary rights, which will be managed separately. This means indies can plan ahead and invest in development knowing what a network will pay and what rights they can retain.
Indie producer trade body pact was pivotal in winning other concessions. Key among these were the Act’s stipulation that the U.K.’s 25% independent production quota (which obliges broadcasters to take at least 25% of their content from indies) apply separately to BBC1 and BBC2. This means the Beeb can’t bump up low-cost BBC2 indie commissions to keep prestigious BBC1 commissions in-house.
The Act also has the power to measure the indie quota by value and volume. Again, the aim is to prevent broadcasters from giving indies long-running commissions with low budgets instead of the more profitable high-end productions, which often go to bbc departments and itv-owned Granada. The Act also introduces targets for regional investment for commercial network Five and a new regional target for Channel 4 – good news for companies situated outside London, such as Glasgow’s IWC, Mersey in Liverpool, Manchester-based Red, Two Four in Plymouth and Bristol-based Tigress.