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Pact Membership 101: Terms of Trade – what are they and why should you care?

Thanks to our temporary free membership offer, we’ve recently welcomed lots of new indies into the Pact fold. So we’re running a series of articles to give new members a low down of the work we do and the resources and support we offer. We hope it also provides a helpful re-cap for existing members, too.

First up, the Terms of Trade… what are they and why should you care?

In 2003 the Communications Act was passed. This was the legislation which paved the way for the Terms of Trade between the UK’s independent producers and public service broadcasters (PSBs).

The Terms of Trade meant that for the first time indies could retain the rights to their programmes, allowing them to generate additional revenue from their Intellectual Property (IP) beyond their original commission and put this back into R&D to help grow their businesses. The Terms only apply to ‘true indies’. That is, those which are wholly independent, and not a label owned by a PSB or US studio, or part of a super indie group.

Pact had campaigned for their introduction, and this moment was critical in the transformation of the UK independent production sector from a cottage industry to the global powerhouse that it is today.

In 2003, UK indies were worth around £850m to the British economy. Today, the sector’s revenues are worth over £3bn.*

But it hasn’t all been plain sailing since then. The Terms of Trade have been subject to review on no less than five occasions, most recently in 2015. Each time, Pact has lobbied and campaigned successfully on behalf of UK indies to keep them in place.

As the market has shifted, the Terms of Trade have been able to adapt to the new landscape and remain fit for purpose. In 2019, for instance, Pact and Channel 4 agreed a landmark new Terms of Trade deal for the digital era, meaning they would govern not only the Channel 4 and More4 services but also E4. And in May this year we agreed an historic new iPlayer deal with the BBC.

Almost twenty years on from the introduction of the Terms of Trade and the independent production sector is unequivocally a UK success story. Prior to the COVID-19 crisis the indie sector was thriving, making critically acclaimed programmes watched by audiences across the globe.

If we are to continue that success during and beyond COVID-19, we need to ensure that these hard won rights for indie businesses are protected, which is something that Pact remains 100% committed to doing.

Find out more about Pact’s policy and campaign work here.

*Data from the 2019 Pact TV Production Census. Pact is currently seeking responses from members for the 2020 TV Production Census. The deadline for responses is Wednesday 1st July. Find out more here.