Hard TV times for producers: Television's brave new world should be theirs for the taking but independent production companies find the going is tougher than ever. Jason Nisse reports

IN THEORY, this should be a great time for television's army of independent production companies. A decade after the birth of Channel 4, which relies almost entirely on outside suppliers for its programmes, television faces a new era. Both the BBC and the reshaped ITV network have to take significant chunks of their material from independents.

That's the theory. In practice, times are hard and getting harder. Recession, inevitably, is at the root of things, but the independents also feel they are kicking uphill on a far from level playing field when it comes to doing business with their clients.

For many independents it has been an exhilarating decade. Seeking more freedom outside the bureaucracies of the BBC and the ITV companies, they set up shop, thought of ideas and flung them on to the desks of commissioning editors at Channel 4 and, increasingly, the established networks. Brookside, Birds of a Feather and Press Gang, the award-winning children's drama, are examples of products from the independent stables.

During the 1980s, a new sub- class of media folk emerged, living the peripatetic existence of journeyman artisans who might have three or six months' work on a tremendously successful project, and then find themselves on the dole for weeks on end.

Today the main industry body, the Producers' Association for Cinema and Television, has almost 1,500 members, ranging from one-person outfits to the 28 companies that last year made programmes for Channel 4 worth more than pounds 1m.

The efficiency and enterprise of the producers appealed to the Conservative government. The 1990 Broadcasting Act, which turned commercial television upside-down, decreed that both BBC and ITV should be buying at least a quarter of their programmes from independents by 1993.

Next year, the BBC should meet the quota and ITV will easily exceed it. Under the new system, there is no longer any obligation on an ITV contractor to make its own programmes, and two new groups - Carlton, which is taking over from Thames, and Meridian, which is replacing TVS - are committed to commissioning most of their output from independents.

So far so good. But the independents are finding that their relationships with the new ITV companies are far from sweetness and light. They are particularly unhappy with ITV's proposals for networking, though all would admit they are an improvement on the old system, where the five biggest ITV companies had guaranteed access to the network at fixed tariffs.

The Office of Fair Trading has found 29 potential competition questions that the ITV network needs to answer before it can implement the arrangements. It is concerned that by working closely with the network controller, the ITV stations will have access to commercially sensitive information that will give them, as producers, an unfair advantage over the independents. 'The cartel will remain a cartel and we'll only ever get the crumbs off the table,' one independent producer said.

The OFT has warned ITV that it will enforce changes on the networking arrangements if the problems are not solved. But however tough it is, there is scepticism that the independent producers will be able to make any money out of the contracts they win.

David Murrell, a consultant at the accountants KPMG Peat Marwick, has become increasingly gloomy about prospects for independents. Until recently he predicted that the sector would be worth pounds 750m next year, but has now reined his forecasts back to around pounds 500m.

He points to the increasingly tough market environment within ITV, where companies paid huge sums to keep or win their licences to broadcast. At the same time Channel 4, the traditional customer of independents, has held its programme budget at the 1991 level of pounds 184m for this year and next.

Chris Griffin-Beale, Channel 4's head of communications, said there was a chance budgets might increase if the channel did well when it started selling its own advertising. In any case, the margins are tight. Independents work to an agreed budget, on top of which they are paid a profit fee ranging from 10 to 14 per cent, depending on the size of the production.

That quickly evaporates as money is ploughed back to develop the next production.

Nor can independents receive a secondary source of income by retaining the rights to their productions and selling them to markets outside Britain, or to the growing cable and satellite networks. At present, the customer holds the rights - indeed the ITV companies are trying to insist on retaining rights for 15 years. They want to avoid the situation in the US, where producers retain rights and can sell the programmes on to cable TV. This has made producers all-powerful and nearly crippled the networks.

But there are signs that ITV companies are willing to do deals. The independent Red Rooster has agreed to sell a drama series, Body and Soul, to Carlton TV at below production costs. 'We are part-financing Body and Soul for a greater share of the profits and distribution rights,' Linda James, Red Rooster's managing director, said. In this way, the ITV companies are able to pass off the risk to the independent - if the series does not sell overseas, then Red Rooster will have to take the loss.

Another way out may be programme sponsorship. Sunset & Vine makes the Gillette World Sport Special, which is sold to 90 countries, including China and Russia, and is shown in the UK on Skysport. It also sold the first sponsored package programme to ITV, Pepsi Rock Sport, which was adopted by Granada TV. A sponsored programme is usually given or sold at a reduced rate, in exchange for a 'billboard' at the beginning and end of the show, and possibly a free advertisement during the centre break.

Colin Frewin, Sunset's chairman, believes that ITV companies will take more sponsored programmes, but only if they are of good quality.

But there is no escaping the fact that too many producers are chasing too few commissions from companies with very light wallets. Many independents will accept commissions on very tight budgets, just to get the work.

That process worries Sandy Hastie, one half of Richmond Films, which made Press Gang. 'The people who will fall along the wayside are people who are accepting commissions for such small budgets that they cannot afford to make the programmes,' she said.

For most independents, the road to television's new age will be a rough one.

(Photograph omitted)