In a marked change from news about the music industry lobbying for tax incentives, several articles in the last week have trumpeted UK’s film and TV production sector as ‘the best in the world’ (see

The comment refers to independent producers, and the creative power that these agents have in coming up with original and innovative content.

A key point here is regulatory reform that enabled producers rather than broadcasters to maintain copyrights for content they produce. In broadcasting, the copyright holder wields significant market power, and with traditional broadcasters already imbued with a domineering role due to the oligopolistic nature of broadcast licences, control of copyright gives these firms excessive market power (see Caves and Nakamura (eds) 2006, Digital Broadcasting).

The case above is an example of how allowing ‘upstream’ content producers to retain copyrights has allowed the industry to develop further, enhancing its international competitiveness and differentiation from producers in other nations. This puts the incentive to innovate back on the producer, and prevents a situation where creative talents are simply consigned to produce content for commercial broadcasters, who are likely to make fairly conservation decisions about content (see Hotelling’s Law).

Reducing the potential abuse of market power and providing producers with more incentive to innovate appears to improve the competitiveness and sustainability of the industry rather than tax concessions and other financial incentives that benefit incumbents. (Notably, the UK Government did however provide funding to assist the independent producers)