Channel 4 and Pact agree landmark Terms of Trade deal for new digital era

11 June 2019

Channel 4 and Pact have today announced that they have signed up to a landmark new Terms of Trade agreement for a digital era.

The bespoke partnership puts in place a new framework for independent producers commissioned by Channel 4.   For the first time Channel 4 will for its licence fee have full flexibility to use programmes across its portfolio of channels and video-on-demand (VoD) services, including All 4, within the licence term without negotiating further rights.   It will enable Channel 4 to make its content available on linear channels and on-demand to suit how and where viewers want to watch it.

For independent producers, the new deal will give them full control and ownership of the secondary revenue generated by the IP they create – as they will retain all net receipts from international exploitation, and from exploitation in the UK after the expiry of the Channel 4 licence term. For the first time, the Terms of Trade will also apply to shows commissioned for E4.

Channel 4’s Chief Executive, Alex Mahon said: “This is a ground-breaking new partnership between Channel 4 and Pact which is about us both being fit for purpose to operate in the digital era. For the first time, it will give us the full freedom to innovate with how the content created in partnership with indies appears across on-demand and channels.   Channel 4 exists to support our creative sector and so it’s also incredibly significant that, unlike many of our new digital competitors, this deal is designed to ensure independent producers get to fully benefit from the IP they create. This is about Channel 4 being an ever more attractive creative partner.”

Pact Chair, Sara Geater said: “This is a deal mutually beneficial to Channel 4 and the independents in a fast changing market. It gives Channel 4 freedom to show programmes across their channel portfolio and control during the term of the licence in the UK territory, with the independents benefitting from more strategic scheduling of their programmes. This deal shows that the Terms of Trade continue to be fit for purpose and adaptable and are crucial for the continued success of the indie production sector both in the UK and globally.”

The new deal was negotiated by Channel 4’s Director of Commercial Affairs, Martin Baker, Controller of Business Affairs, John Moran and Head of Legal & Business Affairs, Sarah Mutkin with Pact Chief Executive, John McVay, Deputy Chief Executive, Max Rumney and Pact Chair, Sara Geater.

Under the existing Terms of Trade deal between Channel 4 and Pact, for its commissioning licence fee, Channel 4 is granted a prescribed set of rights with limited linear transmissions on set channels and seven-day catch up on its VoD services. Flexibility on when, where or how programmes are made available, including further repeats, use on other channels in its portfolio, and use on VoD services for the licence term require further payments or individual rights negotiations with producers. Channel 4 currently shares in the secondary value generated by producers’ exploitation of programmes under its Terms of Trade both internationally and in the UK for the lifetime of the programme.

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