UK gov’t opts to maintain terms of trade

Eight months after calling for a terms of trade review, the UK's culture secretary John Whittingdale (pictured, left) has opted to make no changes to the set of agreements between British indies and broadcasters. (Pictured, right: Pact chief exec John McVay)
May 27, 2016

The UK’s culture secretary John Whittingdale has opted to leave the country’s terms of trade as they are.

His decision comes eight months after announcing that broadcast regulator Ofcom would be conducting a review of the UK’s terms of trade. At the time, Whittingdale cited a previous Ofcom review containing concerns about a changing production landscape due to consolidation and overseas acquisitions.

Ofcom published their most recent findings in late December, noting that the changes “do not appear to have had as great an impact on the delivery of the objectives of the regulatory regime as may at first be thought.” The regulator added, however, that if the status quo was maintained, it would be important to keep the TV production sector under review.

Now, Whittingdale has confirmed that no changes will come to the terms of trade.

“The independent television production sector in this country is a fantastic success story, generating around £3 billion in revenue each year,” he said in a statement.

“I have considered carefully Ofcom’s report on the television production sector and decided that the regulations continue to be effective and play a key role in supporting a diverse and vibrant production sector. We have therefore decided to make no change.”

The terms of trade are a set of agreements enacted in 2003 that allow UK indies to retain control of a share of IP rights for programming created for British broadcasters.

While the agreement has satisfied both broadcasters and indies, the recent tide of consolidation in the UK has provoked pubcasters such as Channel 4 to call for an upheaval of the terms.

Responding to Whittingdale’s decision, John McVay - chief executive of British independent producers association Pact – said in a statement that he was “very pleased” with the outcome.

“I am personally very pleased that John Whittingdale has considered the extensive evidence that was provided by Ofcom and ourselves, and in spite of a constant complaint to change the Terms of Trade by Channel 4 he has decided that they are not only meeting their original purposes, but also remain necessary in today’s fast moving UK market.

“I hope that following this comprehensive review and the Secretary of State’s clear decision that it is clear to all that there is no case to answer,” said McVay.

Laura Mansfield, chair of Pact and MD of Outline Productions, added, “The Secretary of State has shown that he not only makes informed decisions based on evidence, but that he also backs small businesses like mine across the UK.”

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