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UK broadcaster Channel 4 will need to ensure that more than third of its programmes are made by independent producers as part of new rules that will allow it to make and own rights to its own productions for the first time in its 40-year history.
The UK’s media industry has been successful in the production and sale of TV programmes around the world, with shows such as ITV’s Love Island and Planet Earth and the BBC’s Doctor Who making considerable profits.
However, Channel 4 — a publicly owned, commercially funded public service broadcaster — had to outsource production of its shows under its original mandate, which was designed to foster a wider TV independent production sector. Those third party producers then typically retained the rights to those programmes.
But new rules have been drawn up to allow Channel 4 greater freedom to invest in the wake of the government’s decision last year to halt the sale of the broadcaster.
These include allowing it make its own programming for the first time, although executives have said that if they decide to launch in-house productions, it will happen slowly, given the potential for a backlash from the rest of the industry, which relies on the broadcaster as a source of business.
The news rules are contained in the media bill, which was introduced in parliament on Wednesday after being announced in the King’s Speech.
Culture secretary Lucy Frazer said in a statement to parliament on Wednesday that Channel 4’s independent production quota will be increased from 25 per cent to 35 per cent of qualifying programmes — which must be independently produced in the UK.
“This will ensure that Channel 4 continues to commission a significant amount of content from qualifying independent producers while still leaving sufficient room for non-qualifying independent producers, and potentially in the future Channel 4 in-house producers, to compete,” she said.
Channel 4 has committed to setting up any new production business as a separate company with its own board and governance arrangements. Ofcom will be given new powers to intervene if required.
The channel has also promised to continue to spend at least half of its budget for main channel commissions outside London.
Frazer said: “These measures will help ensure that the high levels of competition and plurality that characterise our production sector, and that have made it so successful, will be maintained.”
Alex Mahon, chief executive of Channel 4, said that “in-house production may well offer good long-term support for Channel 4’s financial sustainability, but it would never alter Channel 4’s fundamental belief in the importance of independent producers in the UK”.
She added: “If we do choose to build an in-house production unit, it will be only after careful consideration of the effects of our approach.”
The Channel 4 board will have a new statutory duty to consider the corporation’s long-term sustainability alongside the delivery of its public service remit. The broadcaster will also be able to access debt finance within its statutory borrowing limit.
