Producers Alliance for Cinema and Television (PACT) – Supplementary Written Evidence (JTN0036)

Introduction

1)     Pact is the trade association which represents the commercial interests of the independent television, film, and digital media production sector in the UK.

2)     Pact works on behalf of its members to ensure the best legal, regulatory and economic environment for growth in the sector. Pact has around 500 member companies based across the UK and the majority of these are SMEs (small and medium sized enterprises) with a turnover of less than £50m a year.

3)     Taken as a whole, the TV industry around the world is worth $400 billion.[1] The UK independent production sector is one of the biggest in the world. UK independent production sector revenues have grown from £1.3 billion in 2005 to over £3 billion in 2019 largely driven by a growth in international sales.[2]

4)     The British independent production sector is successful internationally and is strong, along with the wider UK creative industries, at promoting the UK ‘soft power’ brand overseas. UK TV export revenues were an estimated £1.4 billion in 2018/19 and sales to Japan totalled £14m. [3]
 

5)     The UK is the second largest exporter of TV content in the world (after the USA)[4] and the biggest international exporter of programme formats (the templates for ideas which make a TV programme).

Overview

1.1           Pact is pleased that the Government have signed an economic partnership agreement with Japan. Japan is one of the key areas for growth due its population size and range of broadcast channels. It is also important that UK TV and film producers continue to have access to international markets during the ongoing pandemic. International revenues are a growing source of income for producers, with international revenues growing to £1 billion in 2019 for the first time ever.[5] With many in the industry feeling the economic effects of the pandemic, it’s important that producers have as many opportunities on offer to take advantage of.
 

1.2           Pact is pleased that the Government have retained many of the IP related provisions that were in the EU-Japan Economic Partnership Agreement. IP is producers most valuable asset and its vital that high standards of IP protection and enforcement are maintained going forward. We are also pleased that the UK-Japan agreement contains a new article on criminal remedies for certain IP rights infringement.[6] Previously there has been a number of high-profile formats[7], which appear to have been copied by international broadcasters. Not only are UK producers missing out on revenue from selling these formats abroad but taking legal action and advice is often expensive. Many SMEs simply cannot afford this, and with many production companies feeling the financial pressure of the pandemic, additional legal costs to protect IP adds even more financial pressure. Ensuring there are clear remedies in place to protect IP will also increase confidence of British producers who may be unsure about trading internationally.
 

1.3           The inclusion of IP enforcement in the digital environment is also a welcome addition to the UK-Japan agreement. With the sales of DVDs and videos virtually non-existent now, secondary sales to online service providers, such as Netflix, are increasing due to the change in viewing habits. The pandemic has also had an impact on people’s viewing habits. Ofcom estimate that 12 million online adults gained access to a new SVOD subscription during the lockdown.[8] However during this period, visits to film and TV piracy sites have also increased. According to a study by Muso global film piracy increased by 33% when lockdown was in place.[9] It’s vital that the digital environment receives the same level of IP enforcement and protection given the change in viewing habits and the amount of digital content now available internationally.
 

1.4           In our previous submission to the Committee, we stated the importance of ensuring that the audio-visual sector is excluded in all future FTAs. This will ensure that the Public Service Broadcasters, and the current framework of legislative and regulatory interventions are protected. Pact is pleased that the audio-visual sector has been excluded, in chapter 12 (subsidies) and chapter 8 (trade in services). Article 8.4 sets out the Committee on Trade in Services, Investment Liberalisation and Electronic Commerce’s functions. The UK-Japan agreement states that the Committee will be discussing matters relating to trade in audio-visual services. Discussion on ways to encourage greater cooperation between the UK and Japan’s audio-visual sectors is welcomed however, the article also states that the Committee will be discussing ‘the need for the inclusion of audio-visual services in the scope of this chapter’.[10] The agreement also goes on to state that the Committee will be ‘examining possible improvements to this Chapter, including a review on the scope of this Chapter in relation to audio-visual services.’[11] While there is no guarantee that AV will be included within this chapter after discussions, we reiterate the importance of the PSB system and the legislative and regulatory interventions. These interventions have made the UK broadcasting and production sector one of the most successful in the world and an inclusion of AV in any FTA could undermine and weaken these interventions. It is vital that these interventions are maintained especially as the sector begins to recover from the ongoing COVID pandemic.

3 November 2020