1. Channel 4 © 2006 1 The benefits of external commissioning in delivery of PSB Channel 4’s unique model of public service broadcasting  Publicly-owned broadcaster operating in the UK  Financed entirely by advertising and sponsorship Since its launch in 1982, Channel 4 has been required to source all original programming from external production companies, ie no in-house production The creation of Channel 4 led to the development of an independent production sector for the first time in the UK UK “indie” sector was further strengthened by subsequent introduction of 25% quota Channel 4 works with over 300 suppliers each year

2. Channel 4 © 2006 2 In-house and external commissioning by main UK networks BBC. Majority in-house production  Has historically struggled to meet 25% quota  Recently committed to increase in external commissioning (“WOCC”) ITV. Majority in-house production across former regional licensees  Recent consolidation into single ITV (less regional diversity)  Main long-running series (soaps etc) mostly produced in-house Channel 4. All original programming required to be sourced externally Five. All original programming sourced externally  Smallest UK network but owned by pan-European operator RTL

3. Channel 4 © 2006 3 Benefits of in-house production Editorial control  Guaranteed supply of programming  Can build centres of expertise geared towards fulfilling PSB remit  Ability to invest in R&D and internal training structures Financial control  Control over cost base  Full ownership of rights, including new media  Ability to reap benefits of success, e.g. merchandising and international sales (programmes and formats)

4. Channel 4 © 2006 4 Benefits of external commissioning Promotion of plurality and diversity  Programmes sourced from wide range of companies  Access to widest range of ideas and points of view –Includes people not “suited” to working in large bureaucratic structures  Independent producers have to fight harder to get a commission –Incentives to be more creative and innovative  Broadcasters with in-house production need to “feed” their departments –May favour in-house commissions even if external ones are better –Limits sources of ideas and can encourage over-reliance on status quo (ever more episodes of Coronation Street) Financial benefits  Avoids need for bureaucracy and infrastructure – though still need to invest in sector/talent development  Competitive pricing can help keep down costs

5. Channel 4 © 2006 5 Final thoughts Impact of consolidation of UK production sector  Still delivers wide range of high-quality programming  Greater professionalism  Arguably less diversity  PSB genres can be at risk Major concern for broadcasters: access to rights (new media) Question for production companies – do they still need broadcasters?