The BBC and UK independent producers’ association Pact have reached an agreement on a policy framework around the formation of BBC Studios, including the tender of 40% of its in-house programming to external producers.
In an agreement released today (December 21), both parties vouch that the proposed policy framework “would strengthen the UK production sector and bring substantial benefits in terms of opening up new commissioning opportunities to competition.”
The agreement notes that the BBC should make “a minimum amount of 40% of the in-house guarantee” available to outside competition within two years of when permission is granted for BBC Studios by the Charter review process.
“The opportunities here would cover a range of genres and program types, with approximately the same average cost per hour as for BBC in-house business,” reads the statement. “The minimum guarantee would operate in a demonstrably fair, transparent and effective manner.”
Additionally, once the minimum guarantee is introduced – and while BBC Studios stays in the BBC Public Service – BBC Commissioning is to provide BBC Studios and third-party producers with “equivalent access to information about commissioning activity.”
Elsewhere, the framework notes that the BBC will transfer the production of “a volume” of established and returning series to BBC Studios upon its launch. Returning series would be subject to published tariffs and rights retained by BBC Public Service.
In addition, the BBC’s new Charter and Agreement should set out a policy framework for the relationship between the BBC Public Service, BBC Studios and BBC Worldwide. The agreement outlines that there should be no cross-subsidy from BBC Public Service to BBC Studios, and a “demonstrable separation” between the finances and operations of BBC Public Service and the production unit.
The BBC and Pact say they support the continuation of the separate 25% independent production quotas for BBC1 and BBC2 “with some additional flexibility to allow each quota to be met in aggregate over a two-year period.” The overall statutory independent quota, however, would continue to apply on an annual basis.
The plan for BBC Studios was unveiled by the pubcaster’s director-general Tony Hall in March, with the goal of allowing in-house producers to create programming for rival networks, and potentially reduce production quotas.
Former BBC England exec Peter Salmon (pictured) was named the inaugural director of the outfit in July. Last week, he outlined the management structure for scripted (drama and comedy); factual; entertainment, music and events; and natural history.
Pact previously raised concerns about the transparency, in-house guarantees and terms of trade around the proposed production spin-off.
“Pact is pleased that we have been able to negotiate a progressive agreement with the BBC that will result in even more competition at the BBC for the best programs regardless of who makes them,” said John McVay, chief executive of Pact, in a statement. “This will build on the success of the [Window of Creative Competition] and ensure BBC licence fee payers continue to enjoy the best of British.”