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BBC quotas to be scrapped after TV mega-mergers

Tony HallThe BBC will scrap the mechanism by which it divides up in-house and independent production quotas following the mass of mega-mergers happening in the indie sector.

The shake-up – described as one of the largest in the BBC’s 92-year history – is designed to create a “level playing-field between BBC producers and independent ones”, which will include allowing BBC Production to produce for rival networks for the first time.

In a speech at London’s City University this morning, the BBC’s director general Tony Hall said the Window of Creative Competition “has begun to forcibly corral producers into three separate tribes” – the BBC, vertically-integrated indies and small independents.

The WoCC currently works by guaranteeing 25% of commissions to qualifying indies, 50% to in-house production and the other 25% as competitive tender.

The likes of All3Media, Endemol and Shine will all fail to meet conditions to qualify as indies due to recent M&A activity, and can therefore only compete for the quarter of commissions open to all.

All3, for example, is being acquired by Discovery Communications and Liberty Global, while 21st Century Fox and Apollo Global Management are merging Shine and Endemol with the US’s Core Media Group.

While the WoCC has produced “many desirable outcomes”, Hall said that “in this new environment, ‘managed competition’ produces an increasingly distorted market”.

“Under the current rules some big, global producers no longer count as fully independent so their shows can’t go in the 25% of BBC television airtime guaranteed to independent producers,” he added.

“So a big long-running independently-produced series like MasterChef has had to move into the 25% window of creative competition that’s open to everyone. That squeezes out creativity and innovation.”

As a result, he is planning to open up the system so indies could compete for up to an extra £400 million (US$684.9 million) of commissions, while simultaneously allowing BBC Productions to begin producing for rival broadcasters locally and internationally for the first time.

A key priority for BBC Production will be making it a more commercially-focused outfit unconstrained by current guidelines that only allow it produce for BBC channels. This would likely see closer collaboration with the BBC’s commercial arm BBC Worldwide.

Hall also pointed to increased consolidation in the broadcast sector, with Viacom acquiring Channel 5, and BSkyB looking at buying Sky Italia and Sky Deutschland as signs of a new market ecosystem.