Channel 4’s move to in-house production will cost UK indie sector $4.9bn, claims Pact
John McVay, left, and Sarah Dillistone
UK producers’ trade body Pact has blasted Channel 4 (C4) for accelerating its controversial move into in-house production, claiming that the “devastating” strategy will cost the indie sector £3.7 billion (US$4.9bn) in lost earnings.
Earlier today, C4 announced the recruitment of BAFTA-winning executive producer Sarah Dillistone to head up the company’s newly created in-house production arm.
The high-profile hire ramps up C4’s much-derided plans to open new revenue streams by investing in intellectual property (IP). That move had been on the cards since the Media Act removed C4’s publisher broadcaster restriction, allowing it to pivot into in-house content creation.
Former CEO Alex Mahon officially confirmed the indie sector’s worst fears in May of last year, hailing the decision as “one of the most important changes” in the history of C4.
However, the public service broadcaster faced an immediate backlash from executives which said the plans would negatively impact the embattled UK indie production sector, which is already struggling from a severe domestic commissioning downturn.
Outgoing Pact CEO John McVay described it as “a bitter pill to swallow,” while Banijay UK CEO and chair Patrick Holland told last year’s Edinburgh TV Festival that the strategy was “for the birds.”
The criticism continued with Zinc Media Group CEO Mark Browning saying: “They’re going to spend shedloads on this vanity exercise,” and then-5 president Sarah Rose argued that: “It’s not what they [C4] were created for and it does not help the indie production community out there, which is having a torrid time at the moment.”
Undeterred, C4 has pressed ahead with the initiative. In her new role, Dillistone will be responsible for developing and executing Channel 4’s IP strategy, establishing a development team and building the business functions required to support in-house production.
The initial focus will be on factual entertainment, reality and entertainment, with the aim of creating returnable formats that can travel internationally and form a scalable IP catalogue. Production is expected to begin by early 2027, with the in-house unit free to pitch to Channel 4 as well as other broadcasters and platforms.
Responding to Dillistone’s appointment today, Pact’s McVay said: “The fact that Channel 4 is continuing with its plans for in-house production in the current economic climate is short-sighted.
“The market is already fragile and Channel 4’s entry into production will further impact market share. It is estimated that this shift to in-house production will lead to a loss of £3.7 billion to the sector over a decade, which will be devastating to the indie sector and the wider creative economy.
“Pact continues to have regular meetings with C4’s executive team and Ofcom and we will be monitoring the implementation of Ofcom’s guidelines and the development of Channel 4 in-house production.”
A Channel 4 spokesperson said: “Whilst we acknowledge Pact’s concerns, we are taking a careful, considered and gradual approach to our IP business planning, alongside an increased indie quota of 35%. The £3.7bn figure assumes Channel 4 is privatised and that 75% of all Channel 4 commissions across all genres are taken in-house – which is clearly not going to be the case.”
