Risks and assumptions This impact assessment is based on the assumption that the rules governing independent producers at the national level will not change. This IA is based only on the rules as they will operate within the new local TV framework.
Option 1: Do nothing It is possible that limited budgets could prevent local TV services from attracting sufficient interest from independent producers in commissions; this could result in local broadcasters failing to fulfil their quota obligations, leaving them open to potential sanction.
Retaining the 25% cap on the stake an independent production company can hold in a local TV service might limit the number of applications for local TV licences in some areas.
Option 2: Remove the ownership ceiling which currently prohibits independent producers from owning more than a 25% share in a local TV licensee without losing their independent status; and dis-apply the 10% independent production quota for local TV services Removing the ownership ceiling should incentivise more independent producers to participate in local TV.
Early indications from PACT (the UK trade association representing and promoting the commercial interests of independent creative content producers) suggest that while it is not opposed to the proposed changes, the sector would be wary of changes that could harm ‘independent’ status. Some existing broadcasters may have an in principle objection to independent producers owning a licence enabling them to broadcast in the UK (albeit only a local licence).
The current proposals would allow an independent broadcaster to own as many local station licences as it wanted, but only on condition that its local TV broadcasting did not become its main business activity, i.e. did not account for more than 49% of its revenue. This condition is proposed in order to ensure that the definition of the concept of independence remains consistent with the purposes of the AVMS Directive.
The independent production sector would not benefit from guaranteed “new money” coming to the sector from a range of new local TV service providers seeking to commission at least 10% of their output from independent producers. Independent producers may object to this proposal as a result. However whilst the proposal does not guarantee income for the sector neither does it prevent independent producers from seeking these commissions.
Niche national services may consider that local TV services with potentially sizable audiences may have an unfair regulatory advantage if local TV channels have a comparable audience share but no quota obligations.
Micro-business Micro-businesses are not exempt from this Impact Assessment as the proposed measures are de-regulatory. Burdens are not being imposed through these measures. Micro-businesses which are independent producers could benefit from the increased ownership ceiling, allowing them to have more of a stake in local TV broadcasters should they wish.