Select Committee on Culture, Media and Sport Appendices to the Minutes of Evidence


Supplementary Memorandum submitted by the Producers Alliance for Cinema and Television


  1.  The Producers Alliance for Cinema and Television (PACT) is the UK trade association that represents the commercial interests of independent feature film, television, animation and new media production companies. PACT has over 1,000 members, making it the largest representative group of screen-based content producers in the UK and the largest trade association in the film and television sectors.

  2.  PACT is also currently responsible for the Chairmanship and administration of the DTI sponsored "Digital Content Forum" (DCF) which is the representative body that bridges the gap between traditional publishing, graphic design, film and TV production, high-tech computer engineering and e-commerce entrepreneurs. The DCF has worked with Government on a range of initiatives and was responsible for Broadband Summit held in November last year.


  3.  PACT welcomes the opportunity to submit further evidence to the Select Committee. Our evidence is concerned with content production and how this sector of the market can be made more successful and competitive and can contribute towards the Government's aim to "make the UK home to the most competitive and dynamic media and communications market in the world".

  4.  PACT has submitted evidence on a regular basis to the Select Committee's inquiries concerned with television matters. We provided the Committee with a copy of "It's the Content Stupid", our formal response to the White Paper on communications reform. This evidence sought to emphasise the continuing importance of independent producers in the television market, and the need to ensure that communications markets develop in open and competitive ways.

  5.  PACT is particularly concerned about the advantages enjoyed by the main terrestrial broadcasters in the current market, which allows them easily to acquire and control programme rights. Control of programme rights gives broadcasters considerable market influence and market power and provides them with leverage in the emerging markets. We describe in detail how the market currently operates against the interests of independent producers later in this paper.

  6.  The Government is keen to promote uptake of digital television and broadband services and we fully support these moves. However, to be successful these new services will require high quality and appealing content that satisfies the interests of consumers. This means the UK needs a well-capitalised, competitive and dynamic content production sector. There must be sufficient incentives for content creators and adequate protection for their intellectual property. Without sufficient attention being given to the needs of content producers there is real concern that it could lead to a market that is less, rather than more competitive.

  7.  While the Government proposes to give OFCOM concurrent powers to regulate competition in the communications markets, it appears that current thinking is that these powers would be focused on issues such as conditional access systems, interoperability, electronic programme guides and telecoms issues. OFCOM will, of course, have wide discretion as to how to use its competition powers. PACT believes that it is important that forthcoming legislation should include:

    —  a specific duty for OFCOM to "promote" fair and effective competition in the production and distribution of content, including control of rights; and

    —  provision for OFCOM to oversee the operation of a "Code of Practice on Broadcasters' Commissioning of Content". This would be similar to the current regulation of the ITV Networking Arrangements by the ITC and the OFT. This arrangement would also be parallel to the arrangements introduced to protect the interests of suppliers to supermarkets, following the recent Competition Commission Inquiry.


  8.  PACT's previous written evidence to the Select Committee made clear our support of the Government's aim to "make the UK home to the most competitive and dynamic media and communications market in the world". PACT supports the creation of OFCOM and the proposal to give it concurrent powers to regulate competition. The delay in the Government bringing forward legislation has given us an opportunity to give further consideration to the kind of powers that OFCOM will need, if the Government's ambition is to be achieved.


  9.  The Government has already stated that it proposes to give OFCOM concurrent powers with the OFT to regulate competition in the communications industries. PACT welcomes this, and believes that the sector will benefit from having a dedicated regulator that can readily get to grips with some of the complex competition issues that are likely to arise. However, we consider that OFCOM will need more than just the concurrent powers provided for in the Competition Act 2000 and Fair Trading Act 1973. We note with approval the comments made by Oftel in its response to "Regulating Communications in 1999". Oftel said:

    "Some rules in addition to competition law are expedient to prevent the residual advantages of incumbents being exploited in a way which frustrates the development of competition or unfairly exploits the consumer. Competition law, with its emphasis on waiting until an abuse has occurred and focussing remedies on individual abuses, is inappropriate to deal with the long term and widespread advantages enjoyed by historically incumbent firms".

  10.  PACT considers that OFCOM should be provided with powers to regulate competition similar to those in the Telecommunications Act 1984 and the Utilities Act 2000. Taking OFTEL's powers as an example, these have enabled the telecommunications industry to move from being a state monopoly into one of the most competitive telecoms industries in the world. There are some specific duties set out in the 1984 Act. For example, Oftel was required to "promote" competition in the supply of telecommunications equipment.

  11.  PACT therefore proposes that:

    —  OFCOM should be provided with powers to actively "promote" competition, which should be similar to those contained in the Telecommunications Act 1984 and the Utilities Act 2000.

    —  The legislation should include a specific duty for OFCOM to "promote" effective competition in the supply and distribution of content for communications networks.

    —  The powers should be forward looking, allowing OFCOM to take a view on how the market can be made more competitive and dynamic, rather than them having to look for specific abuse afer the fact.

  PACT has instructed its lawyers to propose a suitable clause.


  12.  It is always likely that there will be some tension between the producers and broadcasters of content on intellectual property matters and we consider that such tensions could be held in check by the operation of a Code of Practice.

  13.  PACT believes that as the BBC, Channel 4 and some ITV companies are significant aggregators of the intellectual property rights to programmes, there should be some direct measures that prevent them from using such rights to restrict or distort competition in both television and other audio-visual markets. Control of rights has been a significant factor in allowing broadcasters to develop additional programme channels and move across into other delivery platforms such as the Internet.

  14.  In considering this matter we have looked at the existing arrangements for regulating the ITV Networking Arrangements. Our attention was drawn to the Competition Commission's deliberations on supermarkets and their suppliers. The Commission noted that some supermarkets had a significant market share, and where able to use their buying power to the disadvantage of their suppliers. The Commission concluded that a Code of Practice regulated by the OFT would provide a suitable remedy.

  15.  There are certain parallels between the positions of supermarkets and their suppliers, and the position of content producers and broadcasters. PACT therefore considers that the forthcoming Bill should include clauses allowing OFCOM to regulate a Code of Practice covering broadcasters' commissioning of content. As with the supermarkets case, this Code would not need to apply to all broadcasters, but should apply to those above a certain threshold. We think it would be appropriate for it to apply to all broadcasters whose combined audience share amounts to 5 per cent or more of the total television audience.

  16.  We consider that such a Code would provide a modern and flexible regulatory tool that would assist in the promotion of competition. It would provide for a more transparent market and is sufficiently light-touch and self-regulatory to fit with the Government's aims. It would not impose undue administrative burdens on broadcasters, but would provide for a better balance between the interests of broadcasters and its content suppliers.

  17.  Our view is that the Bill should make provision for such a Code, but that the actual provisions should be kept simple, to allow OFCOM full flexibility to review and amend the Code as necessary, to reflect changing market circumstances. The Code might simply provide that a broadcaster having more than a certain market share should send its proposals for commissioning content to OFCOM for approval. Before approving such arrangements OFCOM should have regard to its general duties to protect and promote the interests of consumers, including the promotion of competition. OFCOM might publish general guidance to broadcasters on what issues their proposals for commissioning content should address.

  18.  The intention of the Code should be to:

    —  Ensure equal access to programme-making opportunities

    In-house producers, independent producers and others, should all have equal access to programme commissioners, and the structures broadcasters' have in place should provide for this. The Independent Production Order provides independent producers with a share of the market, however, with broadcasters like the BBC treating the quota as a ceiling and not a floor, it does not guarantee equal access.

    —  Ensure publication and monitoring of terms of trade

    As with the Supermarket Code, the proposed Code of Practice should provide that terms of business are available in writing. The operation of those terms should be subject to monitoring by OFCOM in the same way as the ITV Networking Arrangements are monitored

    —  Ensure fair dealing

    Broadcasters should not be able to exploit the fact that a producer has started production to enhance their negotiating position. Nor should they be able to operate any other arrangements, such as the terms on which they will enter into licensing deals that have the effect of being anti-competitive

    —  Ensure no undue delay in payments

    Broadcasters should be required to pay producers promptly, both for commissions and any profit shares from secondary sales

    —  Regulate third party dealings

    In commissioning content, broadcasters should not be able to insist that the producer use certain suppliers or distributors. In particular, it should not be a condition of a contract that a producer must use the broadcasters' own distribution arm, and producers should be able to freely enter into any negotiations with any distributor

    —  Provide for a disputes resolution procedure

    The Code should provide for a disputes resolution procedure. This might involve a senior person within the relevant broadcaster, followed by a mediator, with OFCOM as the ultimate body to whom an aggrieved party could complain

    —  Provide a right of appeal to Competition Commission

    Interested parties might be entitled to appeal to the Competition Commission if it believes the Code of Practice is being applied in a way that does not satisfy the competition test. This would echo the provisions in Schedule 4 to the 1990 Act.


  19.  In order to illustrate our case and give some context to our arguments, we provide some background on the independent production sector for television. However, we believe that some of what we are proposing would also benefit a range of content suppliers across much of the audio-visual sector.

  20.  The creation of the independent production sector is one of our great British success stories. The sector has a reputation for creativity and innovation and is responsible for some of the best, most popular, and most challenging programmes on British screens. Independents have provided price and creative competition in the production market, which has helped to improve both efficiency and quality across the whole of television, to the benefit of consumers.

  21.  As a measure of the sector's success, the Committee may wish to note that:

    —  independents took more than 60 per cent of the BAFTA programme awards in 2001;

    —  UK independent productions won both the Golden and a Silver Rose at the renowned international television festival in Montreaux; and

    —  UK independent producers have also consistently won more of the USA's International Emmys than UK broadcasters.


  22.  The independent sector came into being with the creation of Channel 4, which unlike most channels is as a publisher/broadcaster and therefore does not make its own programmes. At the outset it was expected that Channel 4 would source its programmes from ITV production arms and independent producers. However, within a few short years independent producers had proved their worth and Channel 4 reduced its reliance on ITV companies as programme suppliers, because they judged that independents could deliver better and more innovative programmes at lower cost. Independents remain the major source of programme supply to Channel 4, accounting for some 80 per cent of Channel 4's originated output.


  23.  The sector received a boost following the 1986 Peacock Report into the Future Financing of the BBC. This observed that UK television production costs were high by international standards and noted the success of independent producers in supplying Channel 4.

  24.  Peacock recommended that the Government introduce independent production quotas for the BBC and ITV to increase competition and efficiency. In order to achieve long term structural changes in production, Peacock recommended that the quota should be set at 40 per cent but following heavy lobbying from broadcasters the Government decided on a quota of 25 per cent of "qualifying programmes".

  25.  Quotas were first introduced for the BBC and ITV on a voluntary basis in 1988. Statutory independent production quotas for all public service broadcasters succeeded these on 1 January 1993.

  26.  The 1989 "Television Without Frontiers Directive" also provided that all other broadcasters must, "where reasonably practicable" commission 10 per cent of "qualifying programmes" from independent producers.

  27.  There are now some 600 or so fully-fledged UK independent production companies making a range of programmes across all genres for UK and international channels.


  28.  Broadcasters have acknowledged the impact that independent producers have had on the market. When giving evidence to the Select Committee in 1998, the former BBC Director-General, John Birt (now Lord Birt) commented:

    "It is undoubtedly creative competition that has kept us on our toes; it has kept BBC Production on its toes and price competition has undoubtedly placed pressure on us to become more efficient . . . the independent production sector has certainly been a vital stimulus to greater efficiency"

  29.  Commercial broadcasters have also learned from the sector. Broadcasters like Carlton and Granada have structured their production arms so there is internal competition between different units, in an effort to emulate the "magic" brought about by small independent production companies.

  30.  Overall, production costs have fallen and channels like BBC1 and ITV1, which during the 70s and 80s used to rely on imported programmes in their peak time schedules, are much more focused on commissioning original UK programmes.


  31.  Despite the enormous creative success of the sector over its 20-year history, the sector has so far been unable to reach its full potential. The absence of well-capitalised independent production companies that can operate on a secure footing is a direct result of the way the current broadcasting market operates. Some of the most important factors that have prevented the sector developing include:

    —  The BBC interpreting the quota as a ceiling and not a floor, in order to protect its in-house production arms. Despite independent production quotas, the BBC, which accounts for some 40 per cent of the total television market, can still obtain more than 75 per cent of its originated programmes from its in-house production arms.

    —  ITV Network Centre still obtains the majority of its programmes from licensees' production arms, with Granada accounting for some 50 per cent of its original programming.

    —  Independents face competition from strong and well-capitalised in-house production units and intense competition from other independent producers.

    —  The small number of broadcasters who commission programmes, coupled with the existence of large in-house production arms and a large number of independent producers, has enabled broadcasters to dictate terms of trade that are favourable to them but to the disadvantage of independent producers.

  32.  This position has not only harmed the independent production sector, it also works against the consumer interest. It has prevented the structural changes that Peacock envisaged from taking place and means that the full effects of price and creative competition have not been realised. Consumers would be better served if broadcasters always bought the best programme ideas at the best prices, regardless of who the supplier is.

  33.  As a consequence the sector remains heavily under-capitalised. To date, with the exception of two animation companies, no independent producers have been in a position to seek a Stock Exchange listing in their own right. This has further consequences for the market:

    —  Few independents have the assets and capital resources that would allow them to invest in the research and development of new programme ideas.

    —  Even some of the largest and most successful independents largely depend on "cash flow" and need a constant stream of programme commissions with broadcasters funding programme development in order to survive.

    —  This "dependency" inhibits the ability of independent producers to properly compete in the production market. It also restricts the full benefits that could be gained through effective price and creative competition in the market.


  34.  The standard terms of trade offered by most broadcasters are commonly referred to as the "fully funded model", but which PACT prefers to call the "cost plus model" for reasons that will become clear later. The "cost plus model" was invented by Channel 4 in 1982 when the broadcasting market was very different, with just four programme channels and limited opportunities to exploit programmes overseas and through other media. It had the advantage of allowing small businesses to start with few capital resources, and at that time was well be suited for certain types of projects have a limited shelf-life and secondary market potential.

    —  Cost Plus terms result in the broadcaster acquiring most, if not all of the intellectual property rights (IPR) to a programme.

    —  Typically the broadcaster will agree to meet the agreed budgeted costs of the production of a programme and pay a production fee on top, to represent the producer's margin.

    —  The broadcaster will exploit the full rights to the programme, including the distribution of the programme to other UK channels and overseas broadcasters.

    —  In many cases producers will not receive any additional fees from such additional use or exploitation of IPR. Although arrangements exist for them to benefit from a minority share of net profits from any programme sales.

    —  Where programmes do produce net profits, income streams for producers still tend to be very limited.

  35.  The "cost-plus model" works against many producers because:

    —  it leaves independent producers without intellectual property rights, which they could use as an asset to attract investment and grow their businesses;

    —  it limits the ability of independents to earn additional income from the further exploitation of their programmes; and

    —  it makes the sector unattractive to investors such as venture capital firms.

  36.  PACT believes that the "cost-plus" is intrinsically unfair, and is one of the major reasons why the independent production sector remains under-capitalised. In order to rectify this situation PACT proposes that:

    —  Independent producers and others producing content, need a system that recognises that they have created valuable intellectual property and rewards them for each exploitation.

    —  Actors and Directors receive ongoing revenue from secondary exploitation of a programme so it is unfair that production companies receive nothing.


  37.  There is an alternative to "cost-plus" known as "licensed commissioning" which is best illustrated by the arrangements operated by the ITV Network Centre. This is as follows:

    —  The Network Centre pays for a licence to show a programme with two repeats within a five-year window.

    —  Licence fees usually amount to about 80-100 per cent of the costs of production, but do not cover costs associated with programme development.

    —  An additional fee is paid for each of the two repeat transmissions.

    —  All other secondary rights stay with the independent producer, which provides an asset and allows producer to make their own arrangements to distribute programmes in overseas markets, with better returns.

  38.  These arrangements are not perfect but those independent producers who have been able to meet their own programme development costs and take advantage of the ITV Network Centre deal have found it very advantageous. It has allowed them to grow their businesses more rapidly than those who are forced to rely on the "cost plus model" operated by the BBC, Channel 4 and some other broadcasters.

  39.  The terms offered by the ITV Network Centre result from a direct intervention by the OFT and the then Monopolies and Mergers Commission, following the award of ITV franchises after the Broadcasting Act 1990. Section 39 of the 1990 Act required ITV companies to co-operate in the provision of the ITV and for the Networking Arrangements to be regulated by the ITC after consultation with the OFT. The Act provided a competition test at Schedule 4 which the OFT must apply in considering the Networking Arrangements. The provisions were intended to protect smaller ITV companies, but also benefited independent producers. Independents were able to demonstrate to the competition authorities that the terms they were being offered by ITV were less favourable than those on offer to the production arms of ITV Licensees. The OFT determined that the Network Centre only required the primary right to broadcast a programme, and that therefore, independents should be able to retain the secondary rights.

  40.  The BBC and Channel 4 can use "licensed commissioning" but in practice such deals are rare. The BBC does all it can to discourage such deals by offering licenses that will typically cover only 40 per cent of the direct budgeted costs of production. That would mean the producer would have to make up the balance of the costs and earn a margin from secondary sales, which as the BBC knows, is unlikely to provide an income to match a 60 per cent production deficit. It is clear that the emphasis of the BBC, and to a lesser extent Channel 4, is to acquire the programme rights, rather than share a reasonable proportion of costs with the production company. Production companies would, of course, have to shoulder more risk, but would benefit from much greater rewards.


  41.  The retention of programme rights particularly by the BBC and Channel 4 gives them a huge competitive advantage over other channels. As a result of their audience shares, the main terrestrial channels can invest substantially in original production and commission programmes of better quality than other cable and satellite channels. By retaining the rights to such programmes, they can take full advantage of the opportunities offered by the developing multi-channel and multi-platform environment to launch their own services in competition with newer operators using those better quality programmes. This therefore makes it more difficult for new operators to compete effectively and raises the entry barriers to the market. This situation would be rectified if the market supported a wider range of content controllers who could sell their rights in an open and competitive market.


  42.  Control of programme rights has assisted the BBC in being able to launch its new digital public service channels, and its joint-venture commercial channels under the UK TV brand (such as UK Gold, UK Play etc). Typically a programme will progress from, for example, BBC1 to BBC Choice and then to a channel like UK Gold. Other channels that may be interested in buying BBC programmes are usually excluded from competing with channels like UK Gold. This prevents the development of a competitive market and restricts the availability of UK-produced programmes. This lack of competition means that programmes are unable to achieve a "market value" from secondary exploitation in the UK. It also means that other channels, which cannot access programmes through the UK secondary market, must rely on imported programmes.

  43.  The BBC used to sell some programmes to a range of UK commercial channels. For example, it used to sell children's programmes to Nickelodeon. This provided the BBC with additional income, and allowed an independent producer a share of net profits. Now, however, the BBC refuses to sell programmes to Nickelodeon in case it wants to use them on its new public service children's channels. Nevertheless, it does not propose to make any payments to independent producers for this further exploitation and so those producers who used to receive a small income from sales to Nickelodeon will now receive nothing.

  44.  Programmes that are retransmitted by the BBC on its digital channels or joint-venture commercial channels clearly have a value. However, the BBC refuses to recognise that value and provide producers with an additional payment. This inhibits their ability to develop new programme ideas, and means effectively that producers are subsidising the provision of the BBC's digital channels, and its joint venture channels.

  45.  Within the Digital Content Forum that there is widespread and deep concern about the BBC's position in the market. Aside from its dominant position in broadcasting, where it enjoys 40 per cent of the total television audience and just over 50 per cent of the total radio audience, its publicly funded and commercial websites receive far more traffic than any other UK-produced websites. It is the third largest publisher of consumer magazines in the UK and a major distributor of books, videos, DVDs, CDs, cassettes and other merchandise. It has become a major Internet Service Provider and has stated that it wants its commercial Internet site to become the major e-commerce site in the UK. The BBC takes an aggressive stance on intellectual property rights, and must be by far the largest single holder of UK rights in the audio-visual industries. It is by far the largest distributor of UK television programming for both the UK and overseas secondary markets, with BBC Worldwide boasting that it alone accounts for more than 50 per cent of the UK exports revenues for television. The BBC's tentacles spread far and wide and affect the competitiveness of many commercial organisations in the audio-visual field.

  46.  The Government did commission Professor Whish to conduct an audit of the BBC's fair trading policies and procedures,Whish reported that he found the BBC's policies and procedures to be sufficient to ensure that the BBC traded fairly. However, he also observed that the critical issue was how those policies and procedures were implemented, which was outside the scope of his remit. We believe that had Whish been able to inquire into implementation and take evidence from others, he would have found cause for serious concern.

  It is clear to most throughout the communications industries, that the BBC Board of Governors cannot reconcile their roles of guiding BBC policy with effective regulation, particularly as regards competition issues. PACT therefore believes that the case for OFCOM regulating the BBC is overwhelming.


  47.  Other channels, including E4 and ITV2 have to buy their programmes There are many other channels in the UK market that would jump at the chance to use programmes that had first been made for the major terrestrial channels. The Paramount Comedy Channel, for example, has bought comedies from Channel 4. However, they may find it harder to do so in future because Channel 4 may restrict the availability of its programmes because of E4.

  48.  The hoarding of programme rights by established broadcasters also has another effect on the market. The ITC/OFTEL/OFT joint consultation exercise on measures to promote digital television noted that "the lack of compelling programme propositions" was a major reason for consumer resistance to digital television. As each of those broadcasters seeks to exploit its own programme rights for their own ends, it means that the market supports programme channels of indifferent quality. To take an example, the programme propositions of UK Gold and Granada Plus are more or less the same—to give viewers a further opportunity to see successful UK programmes from the past. And yet UK Gold relies mainly on the BBC's back catalogue while Granada Plus naturally exploits the back catalogue of Granada and the other ITV companies which it has acquired. A more competitive market might support a channel that sources the best of our domestic programmes from the past regardless of which channels they were first shown on. Such a channel might be more appealing than either UK Gold or Granada Plus are at present. Similarly the Paramount Comedy Channel, which has some UK programming, has to rely mainly on American product. It would gladly buy more UK comedy series if it could access such programmes in the market. A more open and competitive market for secondary programme rights would enable it to do so.

  49.  If there was a more open and competitive market for programme rights it would have a number of benefits for the broadcasting industry and, more importantly, for the consumer. Such a market can only be brought about if there are more controllers of programme rights, who can sell into the market. Such an outcome could be achieved if more content producers were allowed to retain control over their programme rights. This would allow them the opportunity to sell such rights openly to the highest bidder. This would lower entry barriers to the broadcasting market, allowing new entrants to compete more effectively with existing incumbents for UK-produced content. This might also provide for more innovation in the types of programme services offered to consumers and lead to better quality channels. It would allow for the greater exploitation of domestically produced programmes reducing the reliance of some channels on imported programmes. It might also help to reduce the UK's trade deficit in television programming. It would also allow successful programmes to find their value in the market, providing greater revenues to producers that could be ploughed back into the research and development of new programme ideas. This in turn might provide more incentives for content creators allowing the development of a more competitive and dynamic content production sector and drive quality and innovation in the production of appealing content.


  50.  Thus far, we have concentrated on the position of independent producers in the television market. However, we know from our discussions within the Digital Content Forum that there is widespread concern about competition issues for other delivery platforms.

  51.  The BBC is a content provider in its own right with huge resources that no other UK content providers could hope to match. Its substantial presence on the Internet has the effect of limiting opportunities for others to provide services on a commercial basis. For example, local radio stations and local newspapers wanting to provide local information resources face stiff competition from the publicly funded web pages provided by BBC's local radio stations. Educational publishers now face competition from the BBC in providing online and other information resources for schools and colleges. Similarly, many face competition in providing text-based information services over mobile communications networks.

  52.  The BBC's control of rights also affects the potential of other content delivery platforms. "Home Choice", the video-on-demand service provided by Video Networks is largely dependent on the BBC as its major supplier of UK content because of its dominant position as rights holder of UK television programmes.

  53.  There is also a risk that other content delivery platforms with dominant operators could limit competition in the market. Sir Christopher Bland the BT Chairman has expressed a desire for the company to deliver television services over its existing telephone network in competition with cable operators. Given the size of its network and the slow progress towards local loop unbundling, BT could enjoy huge competitive advantages as a supplier and aggregator of content. Sir Christopher Gent is also on record as saying that when Vodafone launches its third generation mobile network, it will want to ensure that revenues go to Vodafone and not to the likes of Yahoo.


  54.  In this submission we have tried to illustrate how broadcasters have been able to use their control of rights as a significant lever to launch new television channels and other audio-visual services. Broadcasters have taken an aggressive stance on intellectual property rights with independent producers, which has resulted in the sector remaining heavily under-capitalised and unable to compete effectively. Control of rights also prevents new operators from gaining access to content through the UK secondary market, raising entry barriers and making it more difficult for them to compete. If this situation continues then the Government cannot achieve its stated aim of "making the UK home to the most competitive and dynamic media and communications in the world". Furthermore, the market as it stands is against the consumer interest, as it restricts access to UK-produced programmes and limits the ability of content producers to innovate and provide quality content.

  55.  We believe that giving OFCOM active powers to promote competition, with a specific duty to ensure that such competition develops in the production and distribution of content, will go some way to remedying this situation and provide for a more competitive market. Furthermore, we consider the Code of Practice for broadcasters, regulated by OFCOM. This would provide some balance to negotiations between broadcasters and their suppliers, allowing suppliers to retain more rights, gain further revenues and compete more effectively

January 2002

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