Ofcom 2013 Consultation: Renewal of the Channel 4 license Response from Creative England

Transcription

1 Ofcom 2013 Consultation: Renewal of the Channel 4 license Response from Creative England Creative England welcomes the opportunity to respond to Ofcom s consultation on the renewal of the Channel 4 licence. Creative England supports the aim of the consultation to consider the appropriate licencing conditions in advance of the renewal of Channel 4 s licence. We are focussing our response on consultation question 1: Do you agree with Ofcom s view that the current licence conditions remain largely appropriate to securing Channel 4 s obligations? Creative England is largely supportive of C4 s approach to the independent sector. We welcome the fact that C4 is exceeding its volume and value quotas for out-of-london commissioning and using a broad swathe of different companies. However, we believe it would be in the long-term interest of viewers, the television production industry, and the Channel itself, if C4 were required to give some consideration to the independent production companies it contracts, as well as the individual programmes and series they produce. Of prime concern to us is whether current commissioning practices support the long-term sustainability of production companies outside London. We believe a more strategic approach to the meeting of C4 s quota obligations would promote a more sustainable, reliable and, ultimately, higher-quality and more efficient production industry in the regions. As a publisher-broadcaster, Channel 4 (C4) commissions all of its programming from independent companies and, as part of its public service remit, has a number of key licence requirements. One of these is;...to reflect diversity of life across the UK and ensure that at least 35% of original production is commissioned from outside London, and at least 3% of which should be from Northern Ireland, Scotland, and Wales (the Nations). 1 Creative England notes that C4 is exceeding its 35% volume and value quotas for out-of- London commissioning and using a variety of different companies. A summary of C4 s 2012 investment in the nations and regions reveals that; C4 exceeded its regional licence quotas (35%), with 48% of first-run hours on the main channel coming from outside the M25 and 7% coming from outside England. 1

2 In terms of spend (quota 35%), 41% was outside London and 5.4% was in the devolved nations. Across its portfolio of channels, C4 invested a total of 157m on programmes from companies based outside London. In total 35% of C4 s online commissioning budget was spent outside London and 6.7% outside England. C4 worked with 59 agencies based outside London, including games and apps developers in Dundee, Neath and even the Outer Hebrides. C4 has pledged 1.5 billion for commissioning creative content from TV and digital production companies in the UK's nations and regions in the next decade. This is described by C4 as a significant increase at a time when other commercially funded broadcasters are reducing investment levels. C4 intends to spend 100m annually on domestic television commissions from production companies outside London. C4 is intends to continue increasing investment in its digital media innovation fund, 4iP, which is budgeting to invest up to 50m across an initial three year period, much of it outside the M25. 2 Figure 1: Proportion of first-run originated output and spend on Channel 4 (main channel) which is made outside London Source: Channel 4 2

3 Figure 2: Percentage of Channel 4's expenditure across the TV channel portfolio outside London by region. Source: Channel 4

4 Channel 4 s investment activity plays a very substantial role in the UK s creative economy. Price Waterhouse Coopers estimates that Channel 4 s commissioning and other activities generated a total gross value added output of 1.9 billion in the UK creative economy in In terms of employment Channel 4 s investment supported 18,000 jobs across the UK. 3 However, as Stuart Cosgrove, Channel 4's Director of Nations and Regions, has commented: "We recognise there is still more we can do to strengthen nations and regions production in continuing to identify and nurture the UK's strongest regional talent." Creative England agrees. One practical way of doing so would be to require C4, in meeting its out-of-london quota obligations, to strike an appropriate balance between diversity of new voices and an approach that promotes the long-term development and sustainability of some of the companies that it contracts. This is of fundamental importance if the underlying purpose of regional quotas, which is to ensure a continuing diversity of regional views and voices, is to have any real meaning. As C4 s comments; Our public service remit extends beyond the value we offer to the viewing public to our contribution to the strength and diversity of the British creative economy. But some of C4 s current initiatives to support new and emerging talent, such as the Alpha fund - a 2m development and production fund designed to support ideas, talent and emergent companies - commission solely on a project-by-project basis. As C4 states in its commisioning guidelines; We are keen to work on the best ideas and try to make them happen, rather than fund the range of a company s work. We understand that particularly for smaller companies, funding development is expensive, as well as important, but we d rather focus on the best idea rather than cover the overhead, that s why funding from the Alpha Fund is on a project by project basis. There is no limit to how many times in a year you can approach the team for funding, you just need to be armed with your best ideas March% pdf 4

5 Creative England appreciates the need to assess commissioning on a project by project basis; however, if C4 is to truly meet its obligation of contributing to the strength and diversity of the British creative economy, it could and should do more to provide the foundations upon which small creative businesses can be built. Furthermore, Channel 4 states; We will seek out each year a wider range of production companies than any other broadcaster. They will be drawn from across the UK. We will encourage new production and new media companies. Although it is commendable of C4 to maximise the diversity of its content suppliers, such an approach also creates a fundamental lack of security for small businesses that must rely on one-off productions to generate revenues. This has the knock-on effect of diminishing the ability of small firms to access finance and, concomitantly, their long term durability. Analysis of Ofcom s 2012 programme registry confirms that most regional companies were commissioned for stand-alone programmes, with the exception of a few established companies such as Nine Lives Media, 12 yards Productions, Dragonfly, Testimony films, Keo films and Endemol with its various subsidiaries. We recommend that in order to develop and sustain production outside of London in the long-term; 1. C4 should focus on a smaller number of geographically diverse production companies and develop a working relationship with them over time. This would generate more revenues; formats; longer series and, ultimately, help the businesses not only to endure, but also to grow. 2. C4 s website states; We are working with around 300 creative companies from across the UK every year and investing significantly in training and talent development throughout the industry. 5 C4 should take this further and, in partnership with Creative England and other social enterprises, should make small investments in emerging companies so that they have the security to innovate and be more attractive to other external sources of finance. Creative businesses are often small, fragmented and under-capitalised. They face substantial problems accessing finance, and remain a place of mystery and uncertainty as far as banks and many venture capitalists are concerned. They often lack basic business skills and have a poor understanding of the finance world. Great 5

6 ideas don't become great businesses by magic they need consistent support, investment and assistance in finding routes to market. 3. C4 should be supporting investment in the infrastructure and operational costs associated with the running of creative clusters outside London. Evidence suggests that such clusters can help generate jobs and safeguard the sustainability of small, independent companies. 4. Though C4 is meeting, and in many instances, exceeding its regional production quotas, it is not doing so evenly. Our analysis of Ofcom s 2012 programme title register revealed that C4 only commissioned 5 companies in the whole Midlands and East of England region. While recognising there is no quick-fix to that, and other comparable situations, we believe C4 could work in partnership with Creative England and others with the aim of achieving, over time, a more even spread of commissions across the whole country. This would enable C4 to hit higher, and crucially, more meaningful diversity targets. 5. According to Ofcom s Made outside of London programme titles register 2012, a programme must meet at least two of the following three criteria in order to qualify as Made Outside London (MOL): i. The production company must have a substantive business and production based in the UK outside the M25. A base will be taken to be substantive if it is the usual place of employment of executives managing the regional business, of senior personnel involved in the production in question, and of senior personnel involved in seeking programme commissions location in the data set out in this register; ii. iii. At least 70% of the production budget (excluding the cost of on-screen talent, archive material, sports rights, competition prize-money and copyright costs) must be spent in the UK outside the M25 spend in the data set out in this register; At least 50% of the production talent (i.e. not on-screen talent) by cost must have their usual place of employment in the UK outside the M25. Freelancers without a usual place of employment outside the M25 will nonetheless count for this purpose if they live outside the M25. 6 We agree that these criteria remain relevant. 6