Following Ofcom’s third review of public service broadcasting earlier this year, the Secretary of State has asked Ofcom to carry out a review of the operation of the television programme production sector.

Ofcom reports that television programme production generates annual revenues of roughly £3 billion and an increase in the consolidation of independent production and the acquisition of major UK producers by international media corporations (e.g. Bertelsmann / FremantleMedia, Liberty Global / All3Media) has led to reduced certainty for public service broadcasters as to the future of the production supply market.

Ofcom considers that there may be  a risk that further integration between broadcasters and production companies could reduce competition for public service broadcasting commissions.  The market for such commissions is also facing radical change, with the BBC recently considering the scrapping of its format-based commissioning team structure in favour of “genre commissioning”.

Independent production regulation comprises two main interventions that apply to public service broadcasting: (i) a production quota, such that a minimum of 25% of time allocated to qualifying programmes must be allocated to independent productions; and (ii) codes of practice, whereby the provider of a licensed public service broadcasting channel must maintain a code of practice regarding the commissioning of independent productions.  This regulation supports media plurality and stimulates the growth of small- and medium-sized businesses by balancing the interests of independent producers with the rise of integration and market consolidation.

Ofcom’s review will focus on: (i) the change in market dynamics; (ii) the effectiveness of the current regulatory regime; (iii) the impact of regulation on public service broadcasters; and (iv) options for reform.

Ofcom intends to publish a final report before the end of the year and is keen to engage with interested stakeholders now.