Gov’t rules ITV policies to be anti-competitive

The ITV web was thrown into disarray Friday, when the Office of Fair Trading rejected its new centralized system for commissioning programming as anti-competitive.

Independent TV producers welcomed the OFT’s decision as a major step forward for their business. But ITV bosses warned it would drive program prices down and create instability in ITV.

The OFT ruled that ITV’s proposed commissioning policy gave preferential treatment to ITV production companies over indies; OFT insisted on two major changes to favor indies.

It said indies, like ITV producers, must be allowed to enter contracts directly with the new ITV Network Center, which officially opened for business Dec. 1. Previously, indies were obliged to form partnerships with regional ITV companies to get their shows onto the network.

Early last week, ITV modified its position to allow indies direct access to the Center, but was still insisting that the contract itself would have to be struck with an ITV company (Daily Variety, Dec. 3).

The OFT also ruled that if ITV commissions a program from an indie or an ITV production company, it will be allowed to acquire only U.K. transmission rights, and then only for a maximum of five years with an option for an extra two years. ITV was proposing a standard contract of 10 years with a further five-year option.

Opinion varies wildly about the real long-term significance of the changes. Per John Woodward, chief executive of the indies’ trade body PACT, “Basically, this means money comes out of the ITV shareholders’ pockets and into the pockets of the independent producers.”

But Andrew Quinn, ITV Network Center’s chief executive, predicted that indies would lose out because ITV would no longer be offering 100% financing for programs, leaving producers to raise the deficit either from the almost non-existent secondary market, or from international deals.

“The effect of this is to push production back to the ITV companies,” Dyke said.

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