BBC & Pact Set Out Policy Framework for BBC Studios

LONDON: The BBC has reached an agreement with the British trade association Pact regarding the BBC Studios proposal, setting out a framework that will "strengthen the U.K. production sector and bring substantial benefits in terms of opening up new commissioning opportunities to competition."

The new charter and agreement pertain to the relationship between BBC Public Service, BBC Studios and BBC Worldwide. The proposals are that there should be no cross-subsidy from BBC Public Service and BBC Studios; a separation of the finances and operations of BBC Public Service and BBC Studios; and fair transfer pricing. Also, there should be an "arms' length commissioning," with commissions offered to BBC Studios subject to the same range of published tariffs and terms as are available to external producers.

The BBC and Pact support the continuation of the separate 25 percent independent production quotas for BBC One and Two, with some additional flexibility to allow each quota to be met in aggregate over a two-year period.

As previously set out, the BBC Studios proposal will not include network TV commissioned content for children's, current affairs and sport. For current affairs, the BBC proposes to reduce the current in-house guarantee on eligible hours from 50 percent to 40 percent, extending the independent guarantee from 25 percent to 40 percent. For children's, the BBC proposes to reduce the in-house guarantee on eligible hours from 50 percent to 40 percent and extend the independent guarantee from 25 percent to 40 percent. For sport, the current in-house and independent guarantees would stay the same. Content made by BBC Studios would not count as "in-house" and therefore wouldn't count as part of in-house quota.

James Purnell, BBC's director of strategy and digital, said: ''We welcome the agreement reached with Pact. Creative competition is in the best interest of audiences and BBC Studios is an essential part of the BBC's future."

John McVay, the chief executive of Pact, added: "Pact is pleased that we have been able to negotiate a progressive agreement with the BBC that will result in even more competition at the BBC for the best programs regardless of who makes them. This will build on the success of the WOCC and ensure BBC license-fee payers continue to enjoy the best of British."