New research by Barclays has revealed that the media industry is feeling more confident about job creation than other sectors. Does this mean the TV business is set for a job hiring spree? Here's the views of four senior figures from the business covering TV production, finance and technology.
Lorraine Ruckstuhl, Barclays
“With 66% of UK media organisations expecting to create new jobs in the next year, we are beginning to see signs of positivity and growth in the industry. Our research has revealed that on average only 58% of UK businesses are in a similar position, so we can clearly infer that this sector is feeling more optimistic than many others. What’s more, recently introduced tax breaks for animation and drama production in the UK are likely to provide an additional boost to the TV industry, and companies across the sector are increasingly likely to invest in new talent as a result.”
Debbie Manners, Keo Films
“A ‘hiring spree’ is probably overstating the case for the indie sector. A recent Broadcast indie survey suggests there has been significant growth for many companies over the last year which is encouraging. And we know from experience at Keo that growth in creative TV businesses is driven by the talent of the people we employ. But TV companies often carry heavy overheads – which are difficult to cover for most indies who have to win much of their business from scratch every year. So independants are likely to remain careful to employ only the best talent – and exactly what they need.”
Les Zellan, Cooke Optics
“From our perspective, the UK production market seems very buoyant. We’ve had a big increase in orders from UK companies in the last year, and in particular we’re seeing a lot of films, TV documentaries and high-end dramas such as Downton Abbey using Cooke lenses on digital “film” cameras for a cinematic look. To cope with demand, we have increased our assembly workforce by over 25% since 2011, including two apprenticeships. We make each lens by hand; it’s a very skilled craft that takes time to learn, but by increasing the workforce we’re bringing young people into the industry and passing that knowledge on.”
Andrew Sheldon, True North
“Yes! At True North we’re confident about the coming 12 months – we’ve got our fullest ever order book. Last year our team peaked at around 70 people, and I think we’ll pass that in the coming 12 months. There’ll be more jobs – but the key thing is who will fill them? We do our own post so we need great editors and assistants as well as key production staff… Shiver, who also work out of Leeds, are doing well and attracting staff, and MediaCity has soaked up more good people in all the key grades. Against all the odds, there’s even a small blip in activity in Manchester too (!) We’re expecting a competitive few months as we try to secure the best staff in key positions.”
A game changer.’ ‘A shot in the arm.’ ‘A huge opportunity.’ ‘An enormous step forward.’ ‘Transformative.’ Chancellor George Osborne’s budget announcement last month of a new tax incentive for high-end TV drama and animation has been met with the kind of positive reviews that TV execs could only dream of.
Osborne announced that the new tax relief would be modelled on the successful film tax credit system, which is worth up to 20% of a budget, with the ambition that it is up and running by April 2013 subject to European state aid approval.
Further details are few and far between. But meetings are already booked in and taking place as the Treasury and the TV industry try to hammer out a working tax relief system.
Oli Hyatt, chairman of Animation UK, which lobbied for over three years for tax relief for animation, says that Treasury officials were on the phone within 20 minutes of the announcement to start booking in meetings. John McVay, chairman of producers’ alliance Pact also confirms that the Treasury were in touch very promptly to schedule meetings.
What’s unsure is if the Treasury can stick to the April 2013 timetable. Ideally, the process would run as follows: six weeks of industry meetings to shape the tax credit starting at the end of March; a period of public consultation over the summer; and then European regulatory approval in the autumn with the tax relief ready to go live in April 2013.
“I have already had lots of calls from producers saying can I put it [the tax relief] in my budget for April 2013. But I’m having to say, I don’t really know because we don’t have any details yet,” cautions McVay. “There isn’t anything in the Chancellor’s statement which isn’t positive but the process tends to take a bit longer than everyone thinks.”
In particular, the industry wants to make sure that the new legislation contains no loop holes that might allow the tax credit to be abused and exploited. The last time the industry enjoyed any form of tax relief – in the form of the sale and leaseback scheme introduced by the Labour government – it was abruptly closed off in 2002 as a result of widespread abuse which infamously saw soaps claiming relief meant for high-end drama and film.
There are other factors that will complicate the passage to the new tax credit system. Firstly, it’s possible that a distinct tax credit may be modelled for each of the three sectors – high-end drama, animation and video games – identified by the Chancellor. Each sector, reckons Hyatt, is rather distinct from each other, with the video games industry in particularly functioning in a very different way to TV. “The Treasury will model it on the film tax credit, but they are not religiously going to force something that doesn’t work and will model a new thing for each industry,” he says.
Europe could also be a potential stumbling block. The EU is wary of measures that distort the workings of the single market. And this relief will clearly put the UK in a strong position to attract inward investment from drama and animation projects compared to some rival European nations. That said, many other EU countries – such as Ireland and Hungary – boast their own incentives and the UK’s will arguably help level the playing field.
On the plus side, the film tax credit, which has been up and running for five years, provides a strong basis for drama and animation tax credits, says Liz Brion, head of media tax at Grant Thornton. “A lot of the framework is already there.”
The film tax credit, she notes, provides “an absolute maximum” of 20% of budget. But, often, it is below this as a film cannot meet all the criteria required to access the full relief.
The film tax credit, for example, is available to UK film production companies for films that meet a cultural test administered by the BFI, and is based on qualifying UK production expenditure.
At the very least, Brion says she hopes that the TV tax credit is engineered so that it is producers and their shows which get the benefit. But, will it simply lead to broadcasters lowering their budgets by up to 20% and effectively banking the benefits? Or might it mean broadcasters with inhouse production arms choosing to make more dramas inhouse to take advantage directly of the relief? And will it mean that US studios like Warners and HBO, which have so vocally welcomed the relief, can simply make their shows much more cheaply as a result? “The profits for producers might be from more trading rather than the benefit of the tax relief,” notes Brion.
However, Pact boss John McVay thinks that interventions by his organisation earlier this year will mean that producers will remain key beneficiaries. “The early work I saw had set budget levels at a point where broadcasters would have discounted their budgets by the value of the tax credit.” So the proposed budget level for qualifying dramas was raised to £1m. This means that broadcasters will still likely have to pay their traditional drama licence fees of £600k-£800k. Says McVay: “There will be no benefit to broadcasters if they reduce their budgets by the value of the tax credit. Producers will be put in the same difficult position of closing the finance, and broadcasters would not get any benefit because the drama might not get made. If they want to get it made and they were going to pay £600-800k anyway, they might as well pay it and then the producer can give them a production worth £1m. So it is good for broadcasters – they will get the indirect benefit on air of the tax credit.”
The predictions are that the new tax credit will lead to a surge in business for drama and animation producers (Pact is also pushing for the tax relief’s remit to be extended to children’s production too.)
Titanic producer Nigel Stafford-Clark says that he would have shot his £10m mini-series in the UK rather than Hungary and Canada if the tax credits had been in place.
“One of the problems UK broadcasters and producers have been facing is that we didn’t have anything to put on the table when it came to attracting productions into the UK or getting our productions financed. We had the licence fee from broadcasters, but that is all we had.”
The new tax credit, he adds, will be “enormously important” in getting UK shows made and in attracting English language shoots to the UK. This in turn should lead to a string of knock on benefits for ancillary businesses, such as studios, post production houses and talent working in the industry.
Oli Hyatt, md of animation outfit Blue-Zoo Productions, says he has already had offers of work worth millions now that the tax credits have been agreed. “It’s a huge game changer for us. We will be the go-to country for animation.”
And, hopefully, the benefits should be spread around the country. Yorkshire, for example, has regularly attracted films and dramas such as Wuthering Heights, Red Riding and The Damned United to shoot in the region. It has struggled to compete with the tax offers of rival countries, but hopes the new tax credits will change that.
Hugo Heppell, head of investments at Screen Yorkshire, says: “There’s no doubt that the cost savings and tax breaks in places like Eastern Europe or Ireland have offered a major competitive challenge. These new tax breaks combined with our new £15m Yorkshire Content Fund should mean the region can offer a financial package second-to-none for UK and overseas drama producers.”
Meanwhile, business affairs consultancy Industry Media says it has acted for the lead producer on 30 TV dramas over the past two years. Of those, more than a third were filmed outside the UK, including runaways Death in Paradise, Zen, Primeval and Titanic. Sometimes the script demanded this, as in the case of Wallander shooting in Sweden.
Industry Media’s Simon Vyvyan says: “But if those factors don’t exist and it’s a simple choice between accessing, say, the section 481 tax relief in Ireland or this new tax credit in the UK then, as lovely as parts of Ireland are, I cannot imagine many of my clients choosing to cross the Irish Sea unless the script is set there.”
From the unlikely success of Mrs Brown’s Boys to the box office bonanza enjoyed by The Inbetweeners, it’s a buoyant time for British comedy.
Shows such as Stella, Fresh Meat, Rev, Miranda, Friday Night Dinner, Pram Face, Twenty Twelve and Stewart Lee’s Comedy Vehicle have enjoyed critical acclaim. Noel Fielding’s Luxury Comedy and Foneshop have won a loyal tribe of fans, while mainstream hit Harry Hill’s TV Burp is bowing out on a high, Michael McIntyre and Peter Kay are mixing TV with stadium tours and Peep Show is still going strong and about to go into its eighth series. That’s not to forget other favourites including The Trip, Grandma’s House, Trollied, Benidorm and This is Jinsy.
Undeterred by the UK’s economic situation, broadcasters have been ploughing investment into comedy in recent years in search of channel defining hits.
Sky has famously ramped up its output from a standing start, investing heavily in a huge slate of comedy. Channel 4 has trebled its output in the last two years to help fill the gap left by Big Brother, while Comedy Central has been commissioning its first original British content and UKTV has just pledged to invest “several millions” in comedy. Even ITV, whose few comedy credits include Benidorm, is looking a bit more interested in the genre. It’s just ordered a comedy pilot starring Russell Tovey.
Advertisers like Fosters are also directly funding online comedy series such as Baby Cow’s Mid Morning Matters with Alan Partridge.
“Comedy is the ‘it’ genre at the moment,” says BBC controller of comedy commissioniong Cheryl Taylor. “From having been something that broadcasters shied away from and being seen as a market failure genre, it has exploded and is the genre du jour.” Sky’s head of comedy Lucy Lumsden adds: “It’s an extraordinary time for comedy.”
“I can’t remember a time when so much comedy was being made,” adds Graham Smith of development consultancy Grand Scheme and a former comedy commissioner. “It’s a great time to be making comedy because there are so many places to take it.” It means that leading comedy production companies, such as Big Talk, Objective and Rough Cut, are very, very busy.
Broadcasters, it seems, very much recognise the value of comedy compared to genres like factual entertainment and entertainment. Even though it’s an expensive upfront investment, comedy can pay long term dividends. As Friends proved, broadcasters can practically build a channel by repeating a hit comedy series. A successful comedy has a very long shelf life.
However, the decision by broadcasters to order more and more comedies is creating strains in the marketplace. “Production talent is thin on the ground,” says Channel 4 comedy commissioner Nerys Evans. “When you go to a production company and you want something made, you’ll find their ‘A’ team will be busy on something else.”
In particular, Sky’s move to order long runs of shows, like 27 more episodes of Trollied, is having a distinct knock on effect. Evans says: “We’ve discovered that the list of comedy directors, which is always small, and comedy producers, which is even shorter, and the freelance people who you can go to who are brilliant with scripts and see a series through – they are being sucked into very long productions.”
It’s a point echoed by the BBC’s Cheryl Taylor, who says comedy is now a sellers’ market. “Comedy writers and producers are quite a small gene pool...and the gene pool will probably take a couple of years to expand, as more directors, producers and drama writers try their hand at comedy because they know there will be a market for it.”
The demand for onscreen talent is just as acute. And it’s not just from rival broadcasters. Comedy is now big business, with top talent commanding millions of pounds from stadium tours. Talent has long migrated from comedy to drama and then on to films, as the careers of Ricky Gervais and Ali G prove. But the theatres of the West End are an increasing draw, with the likes of James Corden, Lenny Henry and Olivia Colman performing on the stage.
“There’s a massive number of well established comedy personas acting in the West End. In terms of booking people in for a series, this has caused a big problem for supply,” notes Taylor. “The comedy genre, and everyone in it, seems to be enjoying an all time popularity high. That is great, because it feels buzzy and buoyant, but we are all going to have to be on our toes and think ahead and commission earlier.”
The marketplace for comedy might have improved, but the production climate has not necessarily got better. Broadcaster budgets are tight, particularly at the BBC, where they have gone down between 10-20%. And talent costs are rising. As a result, there’s a discernible trend for comedy producers to follow in the wake of the drama community by seeking co-production funding to make up broadcaster shortfalls. The BBC’s Episodes is a co-pro with Showtime, while Life’s Too Short was co-produced with HBO. “Being ingenious about where you find co-production money will be quite a big factor going forward,” says Taylor.
BBC1 has been busy ramping up its sitcom output, and now has five on its slate – Miranda, In with the Flynns, the upcoming Citizen Khan, Not Going Out and Mrs Brown’s Boys. The strategy seems to be working, with a sitcom like Mrs Brown’s Boys really paying off compared to single camera pieces like The Royal Bodyguard.
In fact, Mrs Brown’s Boys is arguably the big comedy hit of the year. Although it has divided critics and even the country (it is more popular with older audiences and outside southern England), the second series has proved a huge success with consolidated ratings of over eight million. Cheryl Taylor puts its success down to being a ‘proper family show’ (in fact, most of the cast are related to its star Brendan O’Caroll) – with a “compelling family narrative and Brendan as this entertainment engine, charging around giving huge laughs and a very high gag rate.” She thinks it appeals to viewers the BBC has struggled to reach in the past. “People are really enjoying a brazen, cheeky and possibly old fashioned show,” she says. “Maybe in times of austerity, people want to be reassured.”
Looking ahead, Taylor says she’s looking for a “really modern, fresh, single camera piece that feels like Outnumbered and to some degree Modern Family and that is big on laughs. And I’d love a precinct show – a Dad’s Army or Vicar of Dibley type – which is something we haven’t got.” She is also looking to develop a couple of broken comedies or sketch shows on BBC1 and BBC3.
The move of Miranda to BBC1 has also opened up some opportunity on BBC2. Alongside the channels’ “authored, pause for thought pieces” like Rev and The Trip, Taylor says she is possibly on the lookout for a few studio shows that appeal to the channel’s “adult audience who also like big laughs.”
Meanwhile, BBC3 under Zai Bennett has embarked on a big comedy push and is increasingly defined by comedy such as Pramface, Him and Her and the upcoming Bad Education, Some Girls and The Revolution Will Be Televised. And despite DQF budget cuts, Taylor says that BBC4 is still in the business of comedy – citing upcoming Brian Cox starring series Bob Servant Independent, about an opportunistic, would-be politician.
Over at Sky, the comedy revolution that was kicked off by Lucy Lumsden following her arrival from the BBC in 2009 is in full swing. Inaugural series Spy, Trollied, This Is Jinsy, The Café and Mount Pleasant have all been recommissioned for a second run. New shows by or with Chris O’Dowd, Charlie Brooker, Joanna Page, Matt King, Kathy Burke, Sally Phillips and Julia Davis, are all in the works.
It’s a phenomenal range of output and Lumsden says Sky does feel very much ‘under the spotlight’ because of its concerted push in to the genre. “I’m very concerned not to dilute the quality just for the sake of having lots of hours of comedy – we are very picky.”
She thinks that Sky comedy, which plays across Sky One, Sky Living and Sky Atlantic, has helped the broadcaster reflect modern Britain much more, rather than just being about bringing in the best shows from the US. Indeed, she jokes that Sky comedy has ‘conquered’ most bits of the country, noting that Starlings is set in Derbyshire, Stella in the Rhonddha Valley, Trollied in Warrington, Mount Pleasant in the suburbs of Manchester and The Café in Weston-super-Mare.
Channel 4 comedy commissioner Nerys Evans stresses that her remit is “to take chances and to be able to be more risky and look for alternative voices and viewpoints” – unlike the broader comedy on offer at the BBC and Sky.
She cites Foneshop, which is coming back for a third series. “It’s so genuine and authored. The people that like Foneshop think it is the best show ever. We don’t necessarily want everyone to like it because then we would be doing something wrong. We are looking for tribes and giving them a show to identify with, even if it is a smaller demographic or group of people.”
On top of returning shows such as Friday Night Dinner and Peep Show, she says there is a raft of shows to come in 2012, some of which have been unearthed through C4’s pilot schemes, Comedy Lab and Showcases. C4 has also just launched Comedy Blaps, a new vehicle for piloting short comedy online. In fact, C4 has just commissioned its first pilot from a Blap – which Evans describes as a “brilliant little petri dish for growing talent.”
There’s also some broader fare to come, including The Angelos Neil Epithemiou Show, which follows a C4 call for comedy which can attract wider audiences.
“We’re very proud of how authored things are here,” says Evans. “We trust writers to write what they want to write and then we get behind them.”
This article is taken from the March issue of Televisual