Pact response

Pact chairman John McVay

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Pact chief executive John McVay writes:

Michael Grade is mistaken in stating at the Royal Television Society event yesterday that ITV have been "singled out" in having to comply with the 25% independent production quota and terms of trade.

All licensed PSB broadcasters are required to comply with the 25% quota and the subsequent Codes of Practice that were introduced by the 2003 Communications Act. Prior to the 2003 Communications Act, ITV were subject to a ruling by the OFT (which remains in place) that ITV could only licence programme from its suppliers which, at the time included all of the separate ITV licensees and the independent sector.

Since the introduction of the 2003 Communications Act, all PSBs, including ITV, have enjoyed a share in the commercial revenues of the independent producers, in perpetuity. This means that they have exactly the same terms as the other PSB's broadcasters and have actually gained revenues that they never had previously. ITV are therefore not singled out for any worse treatment than others. The current programming budget for ITV1 of £1 billion that Michael refers to covers all the programmes they commission in house and independent.

If independents have increased their share of commissions, this is clearly more to do with their ability to deliver the great ideas and talent that ITV need. Surely Peter Fincham wants to work with the best programme makers, both in-house and independent. The independent production quota does not prevent ITV production from coming up with the better ideas.

Pact is not unsympathetic to the challenges facing ITV, but seeking to get Ofcom to remove the 25 % quota is a tired refrain from Michael which has little if any effect on the challenges facing ITV.

In their recent PSB phase 2 report "Preparing for the digital future" report, Ofcom state "We have also rejected a request for Ofcom support in pressing the government for a reduction in the quota for independent TV production on ITV1. We believe commissions from independent producers add diversity to ITV's schedule and do not agree that this represents a significant opportunity cost to ITV plc".

Therefore, ITV is better off commissioning Independents, because Independents deliver some of the highest rating programmes for the schedule and advertisers, ITV get a share in the commercial revenues from those programmes and independently-produced programmes don't represent a cost to ITV plc.

Grade has also said yesterday that he would prefer that ITV only had a "10% quota and no terms of Trade, just like Sky". The answer is, of course, staring Michael and the ITV shareholders in the face: hand back the PSB license and he will achieve both objectives.

If ITV want to continue to enjoy the regulatory benefits and assets of being a PSB then they have also got to accept the responsibilities that go with them. If not, then the answer is to hand back their license and let the BBC and Channel 4 by the leading PSB broadcasters in the UK.