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Fighting the producers' corner

Interview: John McVay, Pact.

At Pact’s small HQ just off the busy Euston Road, the in-tray of chief executive John McVay is piling up. In recent months, the producers’ alliance has found itself having to deal with multiple issues facing the indie production sector, from a C5 payments crisis to a call by the BBC dg to overhaul the terms of trade.

However, McVay, an articulate, engaging Scot who’s not afraid to voice robust opinions about the TV business, says his most immediate concern is that commercial broadcasters spend more money on programmes now that ad revenues are improving.

“Austerity programme budgets” are only sustainable in the short term, he argues, saying broadcasters need to start investing to drive innovation and refresh their schedules. Otherwise, he adds, the public – and advertisers – “will start thinking it’s all a bit samey.”

These austerity budgets are particularly harming smaller production companies, he believes. During the downturn, broadcasters looked for cost-effective, long running series of a kind often delivered by superindies. This meant less slots for single or short run factual shows, a traditional preserve of smaller indies. “It’s put real pressure on our smaller companies,” says McVay.

McVay stresses this point, one senses, because he’s keen to tackle the belief that his superindie members are the ones making life difficult for smaller indies. Indeed, superindies have received plenty of negative coverage for their domination of the sector. The Edinburgh TV Festival, for example, hosted a session this year called “All Superindies Are Bastards.” But, McVay argues, the superindie phenomenon is a reflection of broadcaster demand for big, long running franchises that can be delivered by producers with scale.

And he hits back at suggestions that the superindies have simply become rich off the back of the terms of trade, the agreements that allowed TV producers to own their own IP. Former ITV boss Michael Grade regularly called for the terms of trade to be torn up, believing them to be a bad deal for broadcasters. BBC dg Mark Thompson added to the pressure in August saying that the ‘scale and ownership’ of the indie sector meant it was time to re-examine the terms of trade.

McVay says broadcaster attempts to portray the terms of trade as terrible to their business is simplistic. “The world is much tougher if you are an indie producer than it was 10 years ago. But the rewards if you get something right are far greater.” Thompson’s comments were “disappointing”, says McVay. “They showed a level of ignorance of what the circumstances are. They [broadcasters] always portray it that the terms of trade are somehow a fix, that they are locked into a bad deal.” The truth, argues McVay, is that Pact has negotiated changes to the terms of trade on a regular basis.

Against this background, McVay explains Pact’s position. Broadcaster budgets, he thinks, will have fallen by about 25% between 2007-2012, led by the BBC’s decision to cut budgets by 5% a year in real terms. This has partly been soaked up by indies becoming more efficient. Indies have also stepped into the gap to fund bigger deficits, ranging from 5% to 50% of budget. Pact estimates that producers are now putting up to £220m a year into programmes.

“So the whole falsehood that commercial broadcasters spin that they are taking all the risk and they don’t get any benefit – actually indies are taking risk as well.” Scrapping the terms of trade, he believes, would mean that, overnight, indies in the UK would not be able to raise deficits. “Are the broadcasters really telling us that they could go out and raise that money tomorrow? I don’t believe they can because when they did have the rights, they weren’t very good at it.”

McVay thinks the terms of trade have helped create an entrepreneurial indie sector that delivers globally renowned programmes to broadcasters. “Why would you want to damage that,” he says. “And the broadcasters share in every single penny we make, in perpetuity,” he says. Many commercial broadcasters, he adds, disbelievingly, haven’t bothered to invoice for this share, which includes a 15% split of international revenues. “The whole concept that it is a one way street with indies walking away with all the goodies is just nonsense – it is just politics, it is not true.”

That said, he points out that Pact’s relations with C4 and ITV have improved markedly since their new managements took over. Not so with C5, with McVay decrying their “bullying tactics” over payment terms.

Negotiations about ‘finessing the terms of trade’ so they are fit for the world of VoD and web enabled TV began this summer with C4 and the BBC. There’s also been discussions with ITV about coming to the table too. But, with a new Communications Act likely at the end of 2012 or the start of 2013, McVay draws a marker in the sand: “We will never give up on producers owning IP,” he says.

This interview was taken from the December issue of Televisual.

Posted 22 December 2010 by Tim Dams

Attenborough soars in 3d

Review: The private cinema at London’s Mayfair Hotel reverberated to the sound of lengthy applause last night as the credits rolled on the world premiere screening of David Attenborough’s Flying Monsters 3d.

Attenborough was on hand to present the film about pterosaurs, which plays on Sky’s new 3d channel on Christmas Day and represents the broadcaster’s most high profile foray into 3d production.

The film is, in a word, stunning. Produced by Atlantic Productions, it showcases the capabilities of 3d in recreating the lost world of the pterosaurs - flying dinosaurs with a wingspan of up to 45 feet who lived 200 million years ago.

Attenborough wrote and presented the film and his presence lends it a natural and calm authority.

But the real success of the film lies in its use of 3d to help viewers understand how these creatures evolved, how they looked, how they moved and the environment they lived in. The 3d isn’t flashy or over the top - it’s there to educate and inform as well as entertain.

In one of many technically accomplished sequences, confusing flat fossil specimens are meticulously transformed into fully formed, 3d pterosaur skeletons.

“I hope that we haven’t been too obvious in the way that we use 3d,” said Attenborough afterwards. “I hope that we had enough faith in what 3d does, not just to whiz out and come back at you.” He added that 3d helped to convey a reality that 2d wouldn’t be able to achieve.

Attenborough said it had been a “great shock” to make a natural history film in 3d. “Normally on a trip into Africa, there is me, a cameraman, a sound recordist and sometimes a director - four tops. Well there were 12 people just to handle the camera. Four people were required to carry it.”

He paid particular tribute to the team at Atlantic and vfx outfit Zoo who created the 3d images.

But he predicted that 3d wouldn’t be a format that would be used for everyday viewing. “I don’t think 3d is going to become wallpaper TV. Partly because with the technology as it stands, you need glasses. When you put them on, it is very isolating. I think that 3d is going to be for event television.”

Attenborough and Atlantic are now making another 3d film for Sky, about penguins in South Georgia. “The thought of the Penguin films is to have the penguins, and sea elephants and albatrosses - but also be underwater with penguins, great shoals and fleets of penguins. I am sure will be absolutely mind blowing. I am also sure it will be about as demanding technically as you could conceive for any programme.”

Posted 15 December 2010 by Tim Dams

Cautious approval for local TV

There’s clearly good money to be had in producing weighty reports on the state of the TV industry.

No less than three major reports on broadcasting are published today.

- Nicholas Shott’s long awaited report for Media Secretary Jeremy Hunt on the viability of local TV stations is out today. You can find the full report here. In a nutshell, Shott’s team concludes that local TV could be commercially viable - but only when IPTV gains sufficient market penetration (see below for more detail).

- Never to be outdone on report writing, the BBC has unveiled the final conclusions of its Strategy Review. It pledges a financial review to help it find the savings it needs to make in light of the recent licence fee settlement, and says it will be more open on costs for its services, talent and senior managers. There’s also a typical BBC commitment to put ‘distinctiveness’ at the heart of programme commissions. The report can be found here.

- Finally, the House of Commons Culture, Media and Sport Committee has produced its Channel 4 annual report. It concludes that the previous management ‘overplayed its hand’ when it claimed C4 had a major funding gap, saying that C4’s recent decision to pursue a strategy of self reliance is the right one. And it says that former boss Andy Duncan was paid too much. The report is here.

In fairness, all three reports are worth reading as they reveal much about the direction of travel at the BBC and Channel 4.

But Shott’s report is the most significant, as it gives Hunt a greenlight to press ahead with his cherished plan to introduce a network of local TV stations in the UK in the face of widespread industry cynicism about the idea.

The key line in his report states: “In the long term, local TV can be commercially viable, as and when IPTV gains sufficient penetration.”

Shott, who was initially cool in his assessment of the prospects for local TV in an interim report in the autumn, now seems to think it can work.

He says that’s because the prospects for IPTV have improved in recent months, with Ofcom’s decision not to investigate the launch of YouView in 2011 and the government’s announced plan to roll out superfast broadband to every community by 2015.

IPTV, it’s clear, is the future for local TV. Its non-linear nature means viewers can access the content they want, when they want it. And it’s far more economic than DTT.

He concludes that there’s scope for launching ten to twelve local TV services in the UK and that the cost to do so would be around £25m a year.

A national advertising sales contract between all stations could raise a minimum of £15m, leaving a gap of £10m a year. This could be closed thanks to the BBC’s pledge to acquire locally generated news content for up to £5m a year. And Shott also thinks that local ad revenues could exceed £5m a year. In time, profits could be ‘acceptable’ rather than huge.

Posted 14 December 2010 by Tim Dams

2010: TV's eventful year

Relief. That seems to be the single word that sums up the past year for many in the broadcast and production industries. The sense of relief is almost palpable, coming as it does after a nightmarish 12 months in 2009.

“In 2009, commercial TV was in a dark place,” says ITV director of television Peter Fincham. “Revenue went down very sharply. It created a very, very challenging environment for planning for the future. But in 2010, to some degree, the clouds have parted and we have seen a bit of sunshine.”

The facts bear out Fincham’s words. Average weekly viewing figures in 2010 are at a decade high, according to early Barb figures. TV advertising revenue will be 14% up by the end of the year, says WPP’s media buying outfit Group M. And pay-television subscriptions are running at a record level, with BSkyB crossing the 10m milestone.

The event TV phenomenon
One of the key drivers of all this growth has been the ‘event TV’ phenomenon. Entertainment shows like The X Factor, Strictly Come Dancing and Britain’s Got Talent were, of course, big last year. They are even more popular this year, with Strictly performing strongly and The X Factor final peaking at 19.4m viewers. “The big entertainment bubble just keeps getting that bit bigger,” says director of BBC Vision Jana Bennett.

But it’s not just entertainment. Across drama, politics and sport, event television has reconfirmed TV’s ability to bring the nation together at the same time. ITV’s Downton Abbey and BBC1’s Sherlock attracted huge audiences of 10m and 9m respectively. And the World Cup and the Prime Ministerial debates drew in 16m and 10m viewers.

“Live TV audiences have gone up, even though we are in a world of lots more social media, twittering and video on demand,” says Bennett.

Fincham adds: “2010 has been a year that restores people’s faith in mainstream television in many ways.”

He says there’s a direct link between quality and big audiences. “Downton Abbey perhaps shows most clearly that you don’t underestimate the tastes of the public. They want quality, they want really good programmes. In a fast changing world, the enduring taste people have is for well made programmes in a very wide range of genres.”

In fact, Downton Abbey stands as a kind of TV beacon for many this year – possibly because its quality stands in stark contrast to so many tired looking, formulaic formats that dominate the schedules.

Veteran producer John Lloyd, creator of QI and producer of Blackadder and Spitting Image, describes it as a “superbly made piece of modern, popular television. ITV has had the guts to say ‘does everything have to be downbeat, contemporary and downmarket? Let’s do Edwardian England. And let’s do it well.’”

Audiences want quality
Lloyd thinks it points a way forward, away from “ripped off formats” and towards programmes of “expertise, style and quality” that producers can be proud of. Lloyd’s words chime with the thinking of Jana Bennett at the BBC, who adds: “There’s a quest out there for the new, the different and the very high quality – there’s an appetite for new things.”

It’s also notable how audiences have looked for distractions to endless news stories about recession. Stuart Murphy, director of programmes at Sky, says his commissioning team sat down at the beginning of the year to talk about how to respond to the recession on screen. “We were slightly nervous about trying to show people how to cope with the recession – in fact, we thought it best to ignore it.”

With some justification, he believes. The big TV theme of the year for Murphy is that people have wanted to laugh and to be entertained. He notes how E4’s The Inbetweeners broke out to become a huge hit, as did shows such as Glee. Sky benefited from this trend too, with An Idiot Abroad and Pineapple Dance Studios performing particularly well. It’s not just about comedy though.

Murphy thinks “kindness” and “warmth” are important in the current climate. He’s been surprised at how “uncomfortable, even nasty” The X Factor has become this season, and speculates that Daybreak’s launch problems lie in the fact that it lacks the warmth of GMTV.

The broadcasters' year on screen
On screen, the BBC has seen a big comedy push result in well-received shows such as Miranda, Rev, The Trip and Whites. It’s also been a strong year for science led by flagship docs like Wonders of the Solar System. New dramas such as Sherlock, Five Days and Five Daughters have also stood out.

On the commercial channels, broadcasters were held back by their parlous financial state and a lack of investment in new and original shows became very apparent. Critics weren’t the only ones to notice. International buyers were complaining at this year’s Mipcom programme market in Cannes that there was less original British programming to choose from.

Downton Abbey aside, ITV’s schedule is heavily propped up by bankers like its soaps, big reality shows, comedy such as Harry Hill’s TV Burp and returning dramas like Lewis and A Touch of Frost. That said, Fincham points out that a new doc strand, Perspectives, launches next year as does a raft of new drama.

Over on C4, it’s a similar story. Familiar formats around cooking, property and body image abound. New drama like This is England 86 and Mo has been few and far between – but have performed well when they’ve hit the screen. Next year looks more promising for C4 with a slew of original new shows to slot into the very big gap left by the departure of Big Brother.

The end of an era
The demise of Big Brother marks not just the end of an era for C4 and but of a programme that changed TV forever. It also marks the demise, says Sky’s Stuart Murphy, of a certain kind of show on which the next generation of TV talent trained. “It was The Word, The Sunday Show, Rough Guides, The Big Breakfast and then Big Brother – a whole generation of TV talent trained on shows like that.”

Not everyone will miss Big Brother though. In terms of ratings, the series limped to a close. John Lloyd comments: “When you hear people from the RTS telling you what an interesting social experiment Big Brother is – well, please, tell them to fuck off. It is roadcrash television. It’s about laughing at people. It’s manipulated by cynical people. A real social experiment with Big Brother would be to leave the people alone, leave the cameras running and you would find that people get on – like the Chilean miners. One or two might have been isolated, but they would emerge firm friends.”

Regime change at commercial broadcasters

Behind the scenes, it’s been a year of regime change and rebuilding at the main broadcasters. Both C4, ITV and C5 saw new managements take charge. C4’s new chief executive David Abraham moved quickly to restructure the broadcaster and announce more investment into areas such as film, comedy and drama. Producers sound impressed with his vision for the channel. Abraham recently gave a presentation of his future plans for C4 to the Pact council. Says Pact chief executive John McVay: “When he left, we were a bit wowed. It’s really nice having a chief executive from C4 who is economically literate, understands advertising and has a vision about where he is going.”

And ITV’s new bosses Adam Crozier and Archie Norman have enjoyed a year of growth on the back of strong ad revenues and ratings. McVay rates ITV’s new leadership, describing them as a “rational, reasonable group of people” and says that producer relations with ITV have improved since Crozier took over.

Channel 5, of course, has experienced a corporate bloodbath since Richard Desmond’s Northern & Shell acquired the business. It’s busy reinventing itself with celebrity-led programming focusing on popular culture, which is only to be expected from a TV channel owned by a group that runs OK! Magazine, The Daily Star and The Express. But it’s run into serious trouble in its relations with producers, after a serious spat over payment terms with Shine Group and other indies.

Meanwhile, it’s been a year of rapid change at BSkyB. It acquired and rebranded the Virgin Media channels, launched a 3d channel and struck a big programming deal with HBO. Rupert Murdoch’s News Corp is now fighting to acquire the entire business, eliciting protests from rival media owners.

The BBC’s brutal year
But the BBC has perhaps had the most momentous year of all. The corporation sailed through the recessionary years of 2008-9 with stable funding, while its envious commercial rivals floundered. In a sense, the BBC paid the price in 2010 for its years of plenty. A constant stream of BBC criticism from politicians and the media, centring on high salaries and inefficiency, culminated in a surprise 16% funding cut as part of the government’s Spending Review.

BBC execs highlight the positive in the deal, though. Jana Bennett describes it as a “tough settlement” but one which gives the BBC “certainty about our funding model for the next six years.”

The internationalisation of production
It’s been a challenging year for producers, although more positive than 2009. Most indies say the TV market is currently flat or going through a slight upswing as ad revenues improve. “2010 has been better,” said Shed Media chief executive Nick Southgate in Televisual’s Production 100 survey. “That’s partly because 2008/2009 was so bad that anything is better than then. We’ve had increased turnover in the UK over the last year from it being flat the year before, which is emblematic of the uptick in the market. People are feeling a bit better and that maybe the worst is over. But it’s still incredibly hard and competitive.”

The really notable feature about the independent production market in 2010, however, has been how it has internationalised. The consolidation trend has continued, with the likes of All3Media snapping up Optomen for a reported £40m. But most of the ownership changes this year have had an international element to them. Global groups such as Zodiak Entertainment acquired RDF Media, while US studios Warner Bros and NBC Universal took over Shed Media and Monkey Kingdom respectively.

UK indies also expanded oversees, with the likes of Shine Group launching new operations in Europe and Australasia, having already made significant inroads into the US. Says Jana Bennett: “The internationalisation of production continues, and that is running to the movement of talent internationally and the movement of ideas and formats.”

Smaller producers have found the going tough in the UK market, hit by declining budgets and fewer commissions from the major broadcasters. In response, they have also looked outwards, diversifying to find new broadcaster clients in the US or to raise money from international co-producers.

Bristol based Icon Film typifies the trend. It’s had great success with long running series River Monsters from US broadcaster Animal Planet. “Icon Films has grown consistently over the past year – despite tougher, meaner, leaner budgets and deal terms. A wide base of customers have cushioned the blow,” says Icon md Laura Marshall.

A year of technological upheaval

The stand out technological trend of the year has been the interest in 3d production. A year that began with Avatar becoming the fastest film ever to earn $1bn at the box office, has also seen Sky announce and launch its 3d channel in the UK. 3d was the key talking point at kit shows such as NAB and IBC, with the big post houses all investing in 3d.

However, the feverish enthusiasm that swirled around 3d at the start of the year has settled down into a more realistic acceptance that it’s a premium rather than everyday technology. Meanwhile, the reality of lower budgets has led to greater efficiencies in production.

Interest in file-based workflows has picked up, with even the biggest shows such as Coronation Street adopting the technology. Cameras such as Canon’s DSLR models have proved hugely popular with cost-conscious producers.

The post sector, which endured a traumatic 2008-9, has remained relatively stable in 2010. It wasn’t free of casualties, with the likes of Barcud Derwen, The Club and Concrete going under. But it was nothing like the bloodbath of the previous few years, and many companies said they prospered in 2010 having spent much of 2009 reducing costs. Overall, there’s a sense of caution going forward.

This mood was best summed up by ITV’s Adam Crozier recently: “The economic outlook for 2011 is uncertain and we continue to plan on a cautious basis,” he said. Measured optimism is apparent, though. 2010 has been a “year of rebuilding” and “survival tactics”, concludes Jana Bennett. “We’re now in recovery.”

Posted 13 December 2010 by Tim Dams

How to create a TV app

What’s the key to creating and monetising an app successfully?

Here’s the views of four experts, who’ve worked on the launches of some high profile apps for programmes such as Supernanny, Britain’s Got Talent, Top Gear and Doctor Who.

Mel Alcock
CEO, EMEA, FremantleMediaEnterprises
An app should not only be entertaining but a genuine extension of the TV show. It should use what makes the show popular as the cornerstone and offer fans a truly engaging experience. Game shows and reality shows do well as they are naturally engaging and have an inherent interactivity. I don’t think you can put a price on a successful app, it is all dependant on what you want the app to do. They can be a great source of revenue but they are also a great promotional tool. The very first app for Britain’s Got Talent was a huge success. Over half a million viewers downloaded the free app and it topped the app charts throughout the series.

Jilly Cross
Head of business development, ETV Media Group

Apps aren’t cheap in terms of both developer costs and time, so a robust ROI model is essential. Apps that make money tend to fall into one of two camps, utility or game play. TV formats with content across one or both of these will create a higher perceived value, making consumers more likely to pay either for the app or for updates. You also have sponsorship or ad revenue streams to consider. Promotion is often an overlooked area – linking an app with a new series is a no-brainer, but setting up other on and offline marketing channels is crucial to success.

Daniel Heaf
Digital director, BBC Worldwide

BBC Worldwide will launch paid-for mobile and tablet gaming apps off the back of Top Gear, Doctor Who and Teletubbies this Christmas. Keys to success are tight editorial integration with the TV show to ensure it feels like a natural extension of the brand, deep and highly visible cross promotion with our commercial services and finally offering something unique and bespoke. Games are just one area we’re experimenting with and it’s still early days – there is still plenty of innovation left in the ecosystem. I believe companies to keep an eye on are those thinking about navigation and recommendation apps.

Simon Meek
Head of digital and multiplatform, Tern TV

The key to creating a great app is to first take a giant step back and ask the simplest of questions: ‘why am I doing this?’ If the response is that ‘everyone else is doing it’, well that’s as good a reason as any not to. The other response that should send alarm bells ringing is the ‘we’re going to make huge amounts of money’, and even worse if that sentence is coupled with referencing the success of apps like Angry Birds or Flight Control. The important thing is not to try and do more than you can afford. If your app falls short of the mark, digital audiences are quick to criticise, and if the product is buggy or just not that good, a poor user rating will quickly seal the fate of an app.

Posted 10 December 2010 by Tim Dams

2010 set for TV viewing high

One of the standout trends of 2010 is just how much television people are watching.

With only a few weeks of the year left to go, one can comfortably say that 2010 will break viewing figure records.

Average weekly viewing figures are consistently ahead this year compared to every year going back to 1992, when audience measurement outfit Barb’s records begin.

Graphs are always a bit painful to look at online, but it's worth clicking on the link to this one (from Barb's website). At the top, there's a big red line representing average weekly viewing figures for 2010. It sails above all the other squiggly lines bunched together underneath, which cover the years 2001-2009. A bit like Usain Bolt in the 100m, 2010 is out there all on its own, way ahead of the pack.

The year starts strongly, with people watching an average of nearly 34 hours of TV each a week - almost two hours more than the nearest comparable year.

The difference is most clearly marked in the late summer and autumn.

So what’s going on? At a time of strong competition from the internet, social media and gaming, it’s remarkable that TV viewing levels are not just holding steady but are actually growing.

Does the economic downturn mean that people are going out less and watching more TV? Is it simply that there is more TV and there are more channels to watch? After all, Sky subscriptions have soared past the 10m mark this year.

Here’s the views of ratings expert Philip Reevell, md of City Broadcasting, who blogs about TV at Reevellsratings: “I don’t think it’s possible to under-estimate the importance of ITV’s programming surge, particular this autumn. With a portfolio of The X Factor, Downton Abbey, I’m a Celebrity and 50 years of Coronation Street, the channel has created a huge amount of talk-about programming.

“It has put television at the centre of the tabloid news agenda, more so than ever, and the huge figures for X Factor provide a massive boost to the idea of watching television. I’m sure that this has helped with the overall time spent watching television – it’s seen by people as something to do which they will be talking about with their friends and colleagues.

“More generally the increase in overall viewing reflects the sense that viewers who might have spent money on going out are now being more cautious and staying in to watch more TV. But I’m sure it’s as much a matter of television being popular, rather than simply being a more cost effective form of entertainment.”

Indeed, it’s been a year of big ‘event TV’ - from the World Cup, the PM leadership debates, the last Big Brother, strong soaps, to a reinvigorated Strictly Come Dancing on the BBC. Proving that TV, despite stiff competition, has lost none of its ability to draw in mass audiences.

Posted 08 December 2010 by Tim Dams
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    Tim Dams is editor of Televisual magazine....
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