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Why do US studios like UK TV?

09 March 2011

US studios have bought up vast swathes of the UK production sector, with the likes of News Corp, Warners and NBCU acquiring superindies such as Shine Group and Shed Media Group.

Why are they targetting UK production so aggressively? Here's the opinions of four leading UK execs on the subject:

Thomas Dey
Chief executive officer, About Corporate Finance

The volume of films from US studios has fallen, whilst the costs have risen. This is as a result of consumers demanding more from their viewing experience, and the Studios preferring big branded films that are sure hits. As a result they are looking for other income streams. HBO has demonstrated that long running, high end TV series can be lucrative and the commercial outcome easier to predict than middle budget films. The UK TV production industry has consistently demonstrated its ability to produce long running TV series and equally important, have retained the ongoing rights to such series. The positive impact is the introduction of well funded, global players into a slightly bruised UK industry. The worry is they are hierarchical conglomerates, which culturally might clash with entrepreneurial spirit of UK production.

Mark Oliver
Chief executive, Oliver & Ohlbaum Associates

The UK is one of the main sources of global TV formats, which is one of the fastest growing parts of the global TV sector. US investors are interested in securing IP to programmes they can sell to networks and cablenets in the US (which has a proven appetite for UK formats such as Supernanny, Undercover Boss, MasterChef etc) and as a route to developing local production businesses around the world to exploit those formats globally (MasterChef Australia, MasterChef NZ etc) and to secure more ready-made distribution rights for the global sales teams (selling American Idol to ITV2 etc).

Sue Oriel
Managing director, Firecracker Films

The move by US studios on UK producers is as motivated by business interests as it is by creative ones. The UK sector is populated with highly motivated individuals forming companies to produce and exploit saleable output. The rights position in the UK is more generous than the US (where rights are rarely retained by creatives), so a successful UK company will have programmes to exploit worldwide through sales or format licensing. In the US, talent tends to be an individual issue with fewer talented show-runners starting their own businesses. These two things represent a huge opportunity for studios anxious to globalise.

Nick Southgate
CEO, Shed Media (acquired by Warners last year)

It is clear that Warner Bros think that the UK is a very important market for production. I know they had been interested in playing a role over here for a long time and had been searching for the right partner. I’m glad they found it with Shed. Having a strategic partner like Warner Bros is very valuable in this industry, a partner that understands that value creation comes through linking creativity and business. Warner Bros is committed to the further roll out of its network in other territories, which only goes to strengthen both businesses’ power in the UK. They have been very supportive of our creativity and culture and are encouraging us to add to it with the expertise that a major studio has to offer.

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