Pact CEO warns of indie closures if UK’s C4 privatised

John McVay

John McVay, CEO of UK screen trade association Pact has warned that local indies will lose commissions or even go out of business if government plans to privatise broadcaster Channel 4 go ahead.

Speaking ahead of today’s publication of two new reports examining the impact of the Covid-19 pandemic on the country’s indie production sector, McVay commented: “Clearly we are in recovery from the pandemic and any changes to Channel 4’s ability to make and own and control its own programming will deny opportunities to producers who’ve been affected. They won’t get commissioned because those commissions will be given to in-house production.”

Warning that the pandemic had significantly increased the risk to small indies unable to secure commissions, he explained: “If you are someone who had a bad pandemic and Channel 4 was probably one of your main customers, you may find that door is not open anymore and that may just make things much worse – in-fact, that could be the end of your business if those opportunities aren’t there.”

Channel 4 hit It’s A Sin

Dip in production revenue

The annual Pact Census and a specially commissioned COVID Long Term Impact Study were both published today, revealing overall declines in revenue and commissioning spend in the UK TV production sector, despite some increases in specific areas.

The census, which has been conducted by consultancy firm Oliver and Ohlbaum since 2008, recorded a 14% decline in overall UK TV production revenue in 2020 to £2.9bn – the lowest figure since 2017.

International revenues in the sector remained above £1bn for the second year running – despite falling by 13% – and were driven by international primary commissions and sales of finished programmes.

Meanwhile, revenue generated by commissions from on-demand services such as Netflix and Amazon Prime grew year-on-year, although at a much smaller rate than recent years, up by 6% to reach £356m. Domestic TV revenues, however, were in decline, dropping by 13% to £257m due to a reduction in primary commissioning spend from the UK – the lowest since 2011.

Second revenues were up to over £500 million, with Pact attributing the rise to indies looking to make money by other means while productions were paused or cancelled because of the pandemic.

Return to form

Entertainment commissions overtook drama last year as the most valuable genre, accounting for one third of UK spend in 2020, despite drama having experienced several consecutive years of growth.

McVay suggested that this was “directly related to the effects of the pandemic in terms of people’s ability to film.”

However, he noted that there has since been a “rapid return to drama production, to the point where it is very difficult to get enough crew right now, because we are [now] experiencing a drama boom” and added that Pact expects drama figures to return to previous spending levels next year.

Spending on factual programming also increased by 5% due to being easier to produce during the pandemic than scripted productions.

Overall, however, spending on new commissions “declined significantly” last year and accounted for just 30% of total spend. Public broadcaster the BBC was the largest spender on new commissions, while Channel 5 proportionally spent the most and ITV and Channel 4 both slightly increased their spending on new programming.

FTA commissioning strength

In the separate impact study of 156 UK indies, conducted by consultancy firm 3Vision on behalf of Pact, meanwhile concluded that the sector is “still some way off from recovering to pre-pandemic levels” though the introduction of measures such as the Government Production Restart Scheme meant many indies were able to survive through the crisis.

The study revealed that 74% of the respondents were targeting SVOD commissioners over FTA channels, which nevertheless remained the biggest commissioner for UK productions at 48% of overall commissions. Meanwhile 65% of respondents aimed to diversify and develop other areas of their business as a result of the pandemic.

A quarter of all respondents also reported that they had a show cancelled between April 2020 and March 2021, with the majority having one cancellation. Production companies based in the Nations were more likely to have a show cancelled than those based in England.

“The industry has taken a big hit from the pandemic and we are still in the recovery phase. The Government’s Production Restart Scheme has played an important part in that recovery and it may take many years for the industry to build back to where it was prior to the pandemic,” said McVay.

“In particular smaller, out of London companies have been detrimentally affected by the pandemic and with the future sale of Channel 4 on the cards, it’s those indies – who see Channel 4 as one of their primary buyers – who are going to suffer most.”