Producers’ trade body, Pact, has issued a response to the Government’s statement on Channel 4 being given freedom to make and own its own content.

A Channel 4 statement, from Sir Ian Cheshire, Chair of Channel 4, said that “any move Channel 4 may make into in-house TV production will be gradual, build on the existing diversity in the market and with the intention to avoid any market shock. By way of illustration, we would expect five years after launch, the total of external commissions will still substantially exceed in-house production spending.”

Pact said that it was pleased that the Government backed Pact’s calls for the new Channel 4 arms-length commercial subsidiary to be properly regulated independently by Ofcom and UKGI.

Since the beginning of the year, Pact has worked to convince the Government to consider a regulatory system – similar to that of BBC Studios – to ensure more transparency around how a new production arm will operate in the market.

We welcome the Government’s proposal that Ofcom will in future be required to report on how Channel 4’s production arm is operating in the market in its regular review of UK Public Service Broadcasting.

Pact is pleased that the current out of 50% London quota will be committed to by Channel 4 Corporation ensuring that any changes to this voluntary quota would have a higher threshold to satisfy, and we also welcome the increased indie quota from 25% to 35%.

We are, however, disappointed that Government has decided not to cap how much in-house production the new subsidiary could win as we originally proposed.

Finally we are pleased that that Government will no longer pursue plans to change the definition of an indie producer, which would have potentially damaged investment in the sector and created an additional burden on both independent producers and commissioning broadcasters.

Pact Chief Executive, John McVay OBE, said: “Pact welcomes the fact that Government has listened to many of our proposals to ensure the regulation of Channel 4’s commercial production arm. However, we would call on Channel 4 to carefully consider any move into in-house production given the current difficult market conditions.”

Alex Mahon, Chief Executive of Channel 4, said: “In the complex and highly competitive future we foresee, 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. Throughout our history, they have had the opportunity to build their companies by launching shows with us and owning their own IP. That partnership has been, and I am sure will remain, the lifeblood of our creative sector. Indeed, in a world where fewer rights are owned by indies, it must remain so.

“That is why we are exploring this right offered by the government, but we will also raise our formal qualifying indie commitment to the sector by 40% should we take up this opportunity – the largest commitment of any UK broadcaster. So, if we do choose to build an in-house production unit, it will be only after careful consideration of the effects of our approach. Most of all, we are only too aware how hard times are across the sector with the impact of the advertising downturn and will always have that at the forefront of our minds in our commissioning strategy.

“In addition, Channel 4 remains entirely committed to representing the whole of UK and to growing our impact across the country, including reaching our commissioning and spending targets in the Nations and Regions, achieving 600 roles outside of London by the end of 2025 and doubling our 4Skills budget to £10 million in 2025.”

Jon Creamer

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