TV industries around the world are bracing for change as governments look to reform regulations around content – and the UK is no different. TBI explores how the flurry of activity this week is set to impact producers, broadcasters and streamers much further afield.
The UK government’s reforms to the country’s content landscape were formally unveiled earlier this week, with the effects set to be felt for decades to come.
On the surface, they are a UK-focused set of proposals. But the implications will be felt around the world, with operators looking to work in the country – and UK-based firms with international outlooks – all set to be affected.
BBC Studios future
Channel 4’s future privatisation inevitably drew most attention this week (see more of that below) but the broadcasting White Paper released by the UK government this week also highlighted a slew of areas in the industry that will be impacted.
Among these was the “commitment” to support local pubcaster the BBC in “diversifying” its income streams commercially to become “less reliant” on the licence fee, the existing method of funding the corporation and its programming, which is currently under scrutiny.
The paper notes that an increasing number of UK households are choosing not to hold a TV licence as they turn away from live viewership, which means either the fee needs to rise to compensate, or other funding models are found to continue supporting the corporation at even just the current level.
Indeed, the BBC is already aiming to cut £285m ($375m) from its budget by 2027/28 following the freeze placed on the licence fee earlier this year, with the corporation’s director general Tim Davie previously noting that: “Inevitably, if you don’t have £285m you will get less services and programmes”.
Without a way to make up this shortfall, purse strings are tightening, impacting the corporation’s commissioning strategy and, some have speculated, potentially leading to the closure of linear channels as it seeks to balance the books.
The real focus now is on the pubcaster’s commercial arm, BBC Studios, which has already been touted as one way to offset falling licence fee payments, with exports rising to £800m in 2021/22. The broadcaster has admitted that “super-inflation” of drama production is squeezing budgets ever tighter, making production and distribution arm BBCS a vital resource.
The government, meanwhile, recently agreed to increase the BBC’s commercial borrowing limit from £350m to £750m, pending the agreement of “appropriate oversight mechanisms”, to support the BBC in accessing capital and investing in “ambitious growth plans” as it weighs up the merits and pitfalls of disengaging the corporation from the licence fee.
BBCS, meanwhile, has been playing in the DTC streaming field with BBC Select and ITV Studios JV BritBox, and this looks likely to become a potential growth area.
The White Paper celebrated the UK’s booming TV sector, but there was also a notable mention regarding so-called super-indies.
The government’s plan to investigate the status of super-indies, following years of growth that have seen some production groups expand to become bigger than the broadcasters that commission them, is certainly one area to watch.
Too much success might just be too much for the government to ignore, with the paper highlighting plans to look into the introduction of a revenue cap for ‘qualifying independent’ producer status to make sure it remains effective for promoting growth in the sector.
Just how these reforms might feed through remains to be seen, but while the specifics are yet to be outlined, the implications of potential change on the UK’s group-dominated landscape could be huge.
Another proposal heralded in the paper was the creation of a simplified remit for public service broadcasters, with a focus on creating shows that reflect British culture and support local production firms.
The government wants to ensure that pubcasters create “more culturally relevant content that reflects the United Kingdom, and the values we share”.
It isn’t immediately clear what this means, but the government said it pertains to programming that explores “the lives and concerns in different parts of the UK, from Bangor to Bognor and Dunmurry to Dunblane,” as well as more support for regional and minority language broadcasting.
While ‘hyperlocal’ content is currently in high demand globally, and shows such as Doctor Who, Luther and I May Destroy You continue to perform well abroad, there may be questions over how global streamers in particular – which have become a key coproduction partner for broadcasters such as the BBC – fit into a world where UK shows are unequivocally ‘British’.
Despite industry protestations, the Paper also confirmed commercially funded public broadcaster Channel 4 is to be privatised.
Culture secretary Nadine Dorries has fervently stated her case for selling the channel, going so far as to criticise detractors of the plan as a “leftie lynch mob” that “refuses to accept what is best for British TV.” Channel 4 CEO Alex Mahon, meanwhile, is among a slew of industry insiders who are firmly opposed to the planned sale.
Despite the furore, however, it does appear that the sale is to go ahead and ITV, Sky and Discovery are all reportedly among those interested in buying the channel, which is expected to be sold for around £1bn ($1.3bn).
The big question is now what the channel’s future holds and that very much depends on who buys it. Mahon has previously shared fears that the channel, known for its diverse and challenging content, would lose its ability to commission such bold programming if sold to a private owner, highlighting how shows like critical hit It’s A Sin and Black To Front have previously rejected by “every commercial broadcaster.”
In the White Paper, meanwhile, the government notes Channel 4’s “excellent relationships with independent producers right across the UK” and asserts that this will not change, stating: “We expect a new owner to want to grow and develop those relationships, even as it begins to produce and sell its own content.”
Diversify for growth
To the above point, one major addition to the White Paper is that the UK government says it will remove existing restrictions on Channel 4 so that, once sold, the broadcaster can “diversify its revenue streams” by producing and selling its shows.
This represents a major shift from its present operations, with Channel 4 currently employing a publisher-broadcaster model that allows producers to retain and monetise rights from shows produced for the channel, something that has been credited with helping to fuel ongoing growth in the UK’s production industry.
However, this raises questions as to the impact on those above much-touted “excellent relationships” if a newly privatised Channel 4 ramps up in-house productions, reducing the number of commissions from domestic producers reliant upon the work.
This could, however, open up new co-production opportunities with international partners as the new owner looks to spread their global content wings.