Memorandum submitted by the Producers'
Alliance for Cinema and Television (PACT)
THE ITV MERGER
PROMOTING COMPETITION
— PACT stated to the Competition Commission
during its inquiry that we are not opposed to a Granada/Carlton
merger per se, but do have some concerns regarding possible
effects that a single ITV company could have on competition in
the markets for the production and distribution of UK-originated
television programming.
— Given the BBC's existing dominance
in these markets, with the merger of Granada and Carlton then
the BBC and the new ITV plc will have between them a combined
share of about 70% in each market. Under such circumstances ensuring
that the UK independent sector is protected is even more important.
Otherwise the merger could be to the detriment of consumers, by
reducing price and creative competition in the market.
— Preservation of the current ITV networking
arrangements, which help to promote competition in the production
and distribution markets, will be vital to ensuring this remains
the case. It is extremely important also that the Network Centre
is independent and not subject to external pressures.
FAIR REGULATION
— Regulatory safeguards to maintain
the current ITV networking arrangements are extremely important
in preventing a single ITV from restricting or distorting competition.
The Communications Act lays down a proper process for any review
of the networking arrangements by Ofcom, which involves seeking
the views of those likely to be affected.
— The ITV Charter for the nations and
regions, which delivers investment for production outside London,
should not be adversely affected by any merger. Furthermore, we
would like to see the new company guarantee the continuation of
such investment, and at a guaranteed level. Ofcom has a duty to
look at different production centres.
— Currently ITV are pulling out their
network development teams. Success in the nations and regions
is predicated on talent retention and development. If ITV regional
centres are no longer developing network productions, we would
urge Ofcom to ensure open access to commissioning to assist regional
production companies. Ofcom also needs to ensure that it clarifies
the levels of regional programming investment by broadcasters
it regards as a "suitable amount".
THE NEED
TO ACT
NOW
— PACT would urge Ofcom to produce
sufficient regulatory guidance pre the PSB review by spring 2004.
PACT is concerned that without a clear framework the ecology of
the regional centres will be damaged if it is left it too late.
— In PACT's opinion if Ofcom leave
this too late the essential DNA of production in the nations and
regions will be eroded and Ofcom will be left to review the demise
of an industry sector (instead of working to encourage its development).
— ITV has not traditionally provided
open access events and commissioning information to the independent
sector. We would urge a merged ITV to work with PACT to ensure
fair access and communication throughout the independent sector.
NATIONAL AND
REGIONAL PRODUCTION
CENTRES
— Any newly-integrated commercial company
will rightly seek economies of scale following consolidation.
It is therefore easily conceivable that a single ITV would put
some strain on the survival of some of the existing dated regional
studio facilities.
— Production in general has already
begun to veer away from studios—the issue is becoming one
that is less to do with bricks and mortar than it is to do with
the protection of regional production—in essence we must
ensure that if a regional studio closes the status of that region
must be maintained and this does not reduce its ability as a regional
production centre.
THE PUBLIC
INTEREST
— And the protection of regional identity
and production is a key issue in respect of the public interest
of safeguarding range and diversity. Ensuring network production
is spread across a range of regional production centres is vital
to achieving this public interest objective.
— ITV's apparent withdrawal of their
network development departments from the nations and regions,
centralising under the control of an executive in London, gives
PACT concerns regarding the development of successful vibrant
regional production centres.
REGIONAL DEFINITION
— In this context, the definition of
what qualifies as a regional production becomes increasingly important.
This brings the importance of the definition of regional production
sharply into focus.
— In the current draft of Ofcom's propsed
regional definition the percentage of employment of regional talent
is set at 50% rather than PACT's desired 70%. Ofcom have committed
to a review of the definition in 2004. PACT believes that it is
paramount that Ofcom sets out a constructive timetable to achieve
70% as quickly as possible.
BACKGROUND—THE
COMMUNICATIONS ACT
It is important to look at the overall aims
of the Bill as a whole in terms of stimulating and, crucially,
sustaining regional production centres.
The background to the current stipulations within
the Bill could not be clearer. The ITC Programme Supply Review
(November 2002) concluded that one of the reasons an economically
healthy and competitive TV programme supply market is important
is that:
"It should help support a vibrant creative
sector throughout the UK, not just in London"
[ITC Programme Supply Review Report, Nov
2002, page 4, para 9]
it went on to say that:
"If we get this right, not only will viewers
benefit, but the future market potential for creative output from
across the UK could be immense"
[ITC Programme Supply Review Report, November
2002, page 4, para 11]
"As argued by many who submitted evidence
to the review, significant creative and economic benefits will
flow from production in the nations and regions. However, consistent
with strengthening the overall UK production sector, there must
be a new approach which encourages the growth of regional production
centres or clusters, rather than fragmentation of activity."
[ITC Programme Supply Review Report, November
2002, page 17, para 45]
As a direct consequence of these recommendations,
we thus have the following in the Communications Act:
"that a suitable proportion of the expenditure
. . . made in the UK is referable to programme production at different
production centres outside the M25 area;
"that the different programme production
centres to which that expenditure is referable constitute what
appears to be to Ofcom a suitable range of such production centres"
[Communications Act Section 286, "Regional
programme-making for Channels 3 and 5" (1) (c) and (d), also
Section 281 (3) (c) and (d), also Section 288 "Regional programme-making
for C4" (1) (c) and (d)]
Also, the general duties of Ofcom include having
regard to:
It is clearly in the public interest that the
UK has strong local economies, an aim in which the creative industries
in general, and TV production in particular, can play a major
part.
Throughout the Bill's passage through Parliament
the clear intention that one purpose of the Bill was to create
regional production centres has been reiterated. For example Baroness
Blackstone said on 25 March that:
"The amendments brought forward by the Government
in another place as a result of the Independent Television Commission's
review of the UK programme market strengthen Ofcom's powers to
regulate content with quotas to retain the vitality of our independent
and regional production industry."
[Hansard, House of Lords 2nd Reading of
the Communications Bill]
8 December 2003
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