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Production 100: indie growth hits a ceiling

After years of impressive growth, there is a real sense that the fortunes of the independent sector have begun to plateau. That’s the key message coming from producer feedback to Televisual’s Production 100 in 2015.

Against a background of an improving economy, the business climate for many independent production companies has been generally good in the past year.

UK producers have continued to make stand out programmes – from Wolf Hall through to Catastrophe and Terror at the Mall – for their UK broadcaster clients.

They are also continuing to pursue opportunities with US and international broadcasters. And deep pocketed digital players are commissioning major shows from UK outfits, like Left Bank’s £100m The Crown for Netflix and the ex-Top Gear team’s reported £160m deal with Amazon.

Behind the scenes, though, most producers have been grappling with a series of challenges. Some are day-to-day business issues that have been present for several years: tightening production budgets, rising costs as well as commissioning delays. But others are symptoms of a profound changes wrought by digital technology.

In both the key UK and US markets, established broadcasters have come under huge pressure in the face of declining audiences, with the phenomenon most pronounced amongst the young. In the UK, the BBC’s budget looks under threat ahead of a licence fee review that will focus on its purpose in the digital age.

Faced with uncertainty about their business model, many broadcasters have diversified into production. There have been major investments in production by the likes of ITV, Sky and Discovery. ITV Studios’ UK production turnover now stands at £459m, putting it at the very front rank of UK ‘mega- indie’ groups.

This only looks set to continue, as the BBC prepares to ‘liberate’  its production division to compete with indies for commissions at rival broadcasters. “Consolidation in the form of broadcasters buying indies and the BBC’s intention to launch their studios project will reduce market opportunities,” argues Firecracker chief executive Sue Oriel.

The sense of competition has also been fanned by a swathe of production start-ups from well-known execs branching out on their own, such as Little Gem, Hungry Bear, Curve Media, Znak&Jones, New Pictures, Plimsoll and 7 Wonder.

However, UK commissioning spend has been broadly flat since 2012, according to Pact’s latest industry census, while international revenues dipped last year. Total industry revenues stood at £2.9bn in 2014, says Pact. This picture of an industry that has, for now, reached a ceiling is confirmed by indie responses to the question of how they see the outlook for their business in the coming year. The majority, 43%, say their fortunes will remain the same.

Against this background of flatlining spend and a growing number of production companies, it’s little wonder that one of the most commonly used words in the Production 100 in 2015 is ‘competitive’.

Asked to describe the business climate of the past year, Kudos’ head of finance Jamie Mayers says:  “There’s been lots of opportunity but also massive competition.”

Fellow drama indie Red Planet says business is good, but acknowledges increased competition.

The business climate continues to be very competitive, adds North One general manager Andrew Simmonds – noting that indies have always had to fight for commissions.

Many smaller and medium sized indies admit the competitive nature of the industry is difficult to manage. “The past year has been tough,” says Outline md Laura Mansfield. “Broadcasters are increasingly risk averse, competition is fiercer than ever, and it’s getting harder to be a smaller fish swimming with sharks. We’re a mid sized company, with the overheads to service long running series, which means you are exposed when things go up and down.”

In the UK, there are familiar complaints that budgets continue to fall or reduce in real terms. The consensus among Production 100 indies is that they are down 2.6% on average over the year.

CPL business manager Alexandra Kallis says one of the key challenges is “making a profit thanks to the ever tightening UK production margins.”

Meanwhile, Blast! Films md Claire Bosworth says it is difficult “maintaining quality as programme budgets reduce.” Love Productions md Lety Kavanagh adds: “It’s been challenging to meet the ever changing needs of broadcasters, delivering bigger and bolder editorial ideas with smaller production budgets.” There is a real “tension between the need for increasingly attention grabbing creative with downward budgetary pressures,” says Optomen’s coo Helen Manley.

As a result, UK producers are increasingly having to pull in co- production partners to make up for budget shortfalls. Lining up co- production funding takes time, effort and money. “We seem to spend a vast amount of time trying to make up the shortfall in commissioner contributions with outside funding to get projects away, and very often taking the hit of the budget shortfall ourselves,” says Back2Back operations director Rebecca Notman-Watt.

Like many indie bosses, Boundless md Hannah Wyatt describes business as “very good”. But then comes a caveat: “Getting the commission is only half the battle. You need to be increasingly inventive in doing deals and to find creative funding models, especially around big ambitious ideas.”

The need to find co-pro finance used to be the preserve of drama and kids production, but is now commonplace in factual too. TJ Sherbrooke, head of development at Thumbs Up, says a key challenge is “finding deficit funding as broadcasters more frequently cannot fully fund.”

Meanwhile, Tern creative director Harry Bell is one of many who notes that rights income is being hit by the need to bring on board co-producers. “UK commissions via international co-pro or distributor advance is a huge new challenge. It also means the specialist factual space that the profits on secondary revenue sales have been swallowed up.” Tiger Aspect md Sophie Clarke-Jervoise adds: “With such large distribution advances needed to fund programmes, secondary income is declining.”

Budgets are being put under further strain by the rising cost of on and off screen talent amid increased competition for top talent.“There  are shortages of truly skilled people bringing upward pressure on pay that, in the face of downward pressure
on tariffs, mean most productions run on very little margin these days, unless volume is commissioned,” says Firecracker chief exec Sue Oriel.

In certain genres, such as drama, the problem is particularly acute. Tiger Aspect’s Clarke-Jervoise says: “The general increase in high end scripted production is pushing up crew rates and creating a shortage of good crews.” There is a particular shortage of drama producers in the industry, adds House of Tomorrow managing director Annabel Jones. Trying to retain top talent while broadcasters delay commissioning decisions is also a major issue for many indies.

Many companies producing outside London say the push by broadcasters to commission in the nations and regions is welcome – but that there is a shortage of talent. “Finding and retaining key talent in Scotland,” is an issue for Firecrest creative director Nicole Kleeman.

Plenty of indies say that the rising cost of office space in London is creating financial headaches which compound budget shortfalls. “Office rents in our part of north London are going through the roof,” says Islington-based Hardcash md David Henshaw. “The rising cost of rent in London has hit us hard – broadcast budgets do not keep pace with the cost of space,and we’ve had to do some clever thinking to restructure our space in line with our needs and budgets,” says Outline md Laura Mansfield.

Nevertheless, the UK is regarded by most indies as the market with most opportunities for them; the average indie generates 62.6% of its turnover from UK broadcaster commissions.

Factual, drama, sport and AFP/ branded content are viewed as the key growth genres according to many producers. “There continues to be a strong market for UK factual,” argues Shine TV head of commercial Kate Ward. “Broadcasters still want quality factual and current affairs content,” notes Brook Lapping head of production Andrew McKerlie. Discovery-owned Betty says that “the UK remains strong for us and specialist factual and adventure are the new growth genres.” Other indies say they are seeing growth in popular factual.

High barriers to entry mean sports indies are doing well. Sunset+Vine md John Leach says: “Sport output and demand continues to grow at the same time as broadcasters are producing less inhouse.”

Digital is a growth area for many indies, although revenues remain small. Digital revenues accounted for only 1.6% of the average indie. “The biggest growth area is in digital but because the licence fees tend to be much smaller the opportunity doesn’t add a lot to our turnover, as yet,” says  Kindle’s Jacqueline McGee. There are opportunities in licencing content to on demand platforms, as well as producing for digital platforms. “Since the closure of BBC3 was announced, the iPlayer now seems like a real place of opportunity for new programmes,” explains Zeppotron’s director of operations Debra Blenkinsop. “We’re seeing growth in the digital space,  in particular with our network of YouTube channels,” adds Remarkable director of production Susan King.

Greater investment into drama has had knock-on effects. It has not only made the genre more competitive, with a swathe of film producers and new entrants such as Studio Lambert pushing into non-fiction, but it has also hit genres like comedy and entertainment where spend is perceived to be falling.

Many say there is a distinct lack of entertainment slots at the BBC in particular. “It feels like fewer things are being commissioned generally in comedy entertainment across the board,” says Zeppotron’s Debra Blenkinsop. There are “considerably fewer opportunities in our genre,” notes Jon Rolph, md of comedy indie Retort.

Googlebox md Mat Steiner reports a “narrowing of entertainment opportunities.” The imminent closure of BBC3 is seen as a significant blow by many producers.

More broadly, many indies flag up concerns about the creative ambition of UK television, arguing that there is a flight to the familiar at beleaguered broadcasters with many of the same old brands dominating the schedules for year after year.

Not only does this mean that British television is becoming less distinctive, it means there are fewer slots for indies to pitch into. Broadcasters are also being cautious in the amount of episodes they commission: “It’s tricky to get first runs of eight episodes – four episodes are increasingly being suggested,” says Maverick chief creative officer Mark Downie.

Common to all genres, say indies, is a real problem with slow broadcaster commissioning. Complaints about the speed of commissioning have long been a feature of the Production 100, but this year they are much more noticeable. Delays in commissioning are cited as one of the key challenges for indies as varied as Maverick, Clear Story, CPL, Keo, Nutopia and Mentorn.

Many cite a round of changes in commissioning editors at key broadcasters this year, with plenty of upheaval at the BBC and C4 in particular. “Changes amongst all the broadcasters of key commissioners have proved difficult for development,” says Reef md Paul Hanrahan. The lead times from pitch to production can sometimes take 12-18 months, says Optomen’s Helen Manley.

Development is taking far longer than it used to. “Being put into paid development used to mean a commission was on the horizon, not any longer,” notes Firecracker’s Sue Oriel. Converting paid development into programming and series is cited as a key challenge by Boomerang md Gareth Rees.

Many producers cite problems with cash flow as result of waiting for decisions. “The speed of commissions coupled with increased costs in R&D has led to strains on cash flow,” admits Keo Films financial controller Christopher Day. “Nobody can make a decision which affects cashflow,” adds Back to Back operations director Rebecca Notman-Watt.

The international market is still viewed as a major opportunity for indies. Global expansion has been the big story of the past five years, particularly in the US. International production revenues now account for an average of 18.5% of indie turnovers, up slightly from last year’s 18%.

For some indies, the figure is far higher. Internationally focused outfits like Windfall, Nutopia, Wag, Left Bank, Sixteen South, Pacific and Arrow earn at least 70% of
their revenues from international broadcasters. The majority of indies say international production is the area they are seeing most growth in.

However, many report that the US market has slowed. Pay-TV operators in the US have been under pressure for the past year as ratings have fallen sharply, a phenomenon blamed on “cord-cutting” and cheaper digital options such as Netflix.

“The US market has been very tricky except for established programme brands because of the downward trend in real time viewing. We have heard from numerous
contacts that ‘it’s all over’ for cable/satellite channels with huge downward pressure on budgets becoming obvious in pitching sessions/deal memos coming through,” says Firecracker’s Sue Oriel. This is a point confirmed by other indies who say the US has ‘withered’ and is ‘less buoyant’. That said the US remains a substantial opportunity for those who are able to crack the world’s biggest TV market.

See Televisual's Reports and Section for the full Production 100 survey

Posted 30 September 2015 by Tim Dams

IMG tops Televisual's Production 100 survey

Sports producer IMG tops the Production 100, Televisual’s annual survey of the UK television production sector, for the third year in row.

IMG’s credits include an array of sports, from horse racing, snooker and Wimbledon tennis through to Premier League football.

Published in the September issue of Televisual, the Production 100 has ranked the leading production outfits in the UK every year since 1993.

Avalon TV, part of the Avalon Entertainment empire, comes in second place, with TV highlights this year including C4 comedy hit Catastrophe and BBC2’s Russell Howard’s Good News.

The X Factor and Britain’s Got Talent co-producer Thames is ranked in third place this year, while Bad Education, Peaky Blinders and Fortitude producer Tiger Aspect takes fourth position.

TOWIE producer Lime is fifth, while Educating the East End inide Twofour is ranked sixth. Sports indie Sunset+Vine is 7th, drama outfit Left Bank is 8th, Call the Midwife indie Neal Street takes 9th and Googlebox producer Studio Lambert is 10th.

Meanwhile, Twofour was voted the most admired indie by its fellow producers in the Production 100 Peer Poll, followed by The Garden and Love Productions.

The combined turnover of the top 100 production companies stands at £1.77bn this year, down from last year’s £1.93bn and 2013’s £2.1bn.

This points to a downturn in the sector, although strict year on year comparisons  are difficult to make as a small number of indies chose not to take part in the Production 100 each year. 

In their absence we conclude that the fortunes of the sector have plateaued this year. A number of larger producers – such as Avalon, Tiger Aspect and Hat Trick – have had a very good year, with turnover significantly up.

A handful of drama outfits – Left Bank, Neal Street and Red – have also seen turnover shoot up on the back of big budget commissions.

But many of the larger production companies have seen turnover dip, amid signs that growth is becoming harder to achieve in today’s market. Seven out of last year’s top ten have posted turnover falls.

Some of the slack has been picked up by smaller, independent outfits like Arrow, Wild Pictures, Burning Bright, Eleven Film, Minnow Films and Knickerbockerglory.

The top 100 are ranked according to the turnover of their UK operations.

See Televisual’s September issue for the full Production 100 survey.

(The cover image for the Production 100 was designed by Matt Lawrence, head of design at Envy.)

Posted 03 September 2015 by Tim Dams

Harry Enfield stars in TV diversity film

It’s worth having a look at this film starring Harry Enfield, which highlights the issue of diversity in television and is made for Creative Skillset.

The film was premiered at the Edinburgh TV Festival at a diversity networking drinks attended by TV execs and the Minister of State for Culture and the Digital Economy Ed Vaizey.

Harry stars as Haanes, a South African émigré who arrived in the UK in the late 1980s and then found work in television in this country. To say the very least, he has a rather backward and outdated view of the world – based around an era that we all thought had passed.

Nevertheless Haanes sees many things that he recognises in the Television industry in 2015…

Posted 02 September 2015 by Tim Dams

TV industry anger with Tories boils up at Edinburgh

The future and funding of the BBC has been the subject dominating this year’s Edinburgh TV Festival.

Armando Iannucci received a standing ovation after delivering a well-received MacTaggart lecture that called on creatives and the production community to rally to the support of the corporation in the face of government cutbacks.

Meanwhile, Culture Secretary John Whittingdale attempted to play down rifts with the corporation, using an interview here to insist the Tories were not driven by an ideological drive to dismantle the BBC.

A Leader’s Debate, styled on the televised political leaders debates ahead of the general election, also saw figures such as Sky’s Stuart Murphy and C4’s Jay Hunt speak up in support of the need for a strong BBC to help underpin the UK television industry.

The focus on the BBC follows weeks of political deal-making and debates about the corporation.

The government unveiled its green paper on the future of the BBC last month. At the time Whittingdale said the BBC’s operations had grown exponentially over the last decade and it was time to ask if its “range of services best serves licence fee payers”.

Last month the government also said the BBC had to cover the cost of providing free television licences for the over-75s, which could cost the corporation up to £700m.

Combined, the green paper and over-75s deal have created a sense that the BBC’s funding levels are under concerted attack from the Conservatives.

The fear factor was ramped up days before the festival by BBC director general Tony Hall, who warned that further cuts to the corporation’s funding and remit could result in more than 30,000 job losses across the TV industry.

The Edinburgh Festival has given the TV industry a strong platform from which to broadcast its opposition to cutbacks at the BBC.
For some, there is a sense that the BBC and its supporters may be tilting at windmills, in the phrase of media commentator Steve Hewlett.

In a session titled ‘The BBC: Under Siege' he asked if the people rushing to defend the corporation weren’t actually trying to target imaginary enemies.

After all, Whittingdale all but said yesterday that the BBC will continue to be funded by the licence fee when BBC Charter Renewal process concludes next year. He ruled out other funding mechanisms such as subscription, advertising and direct government subsidy. And the BBC has already negotiated that the licence fee will rise in line with CPI inflation, in return for striking the over-75s funding deal.

The incessant debates on BBC funding at the Edinburgh TV Festival can seem parochial.

But the £3.72bn the corporation receives from the licence fee is a vital source of funding for the UK’s creative sector, underpinning its success around the world. The BBC is also a crucial part of the civic identity of the UK.

For these reasons, many are frustrated that the government has now cut BBC funding twice in the past five years in deals struck behind closed doors with no public consultation.

And they are frustrations with the Conservatives that have all boiled to a head at this year’s Edinburgh TV Festival.

Posted 27 August 2015 by Tim Dams

Tories have no desire to destroy the BBC, says Whittingdale

If John Whittingdale came to the Edinburgh TV Festival with the intention of calming tensions between the government and the BBC, the Culture Secretary did a pretty good job of it in his Festival interview today.

Relations between the Tories and the corporation have been strained since the General Election in May, after which the new government announced that the BBC had to shoulder the estimated £700m bill for free licence fees for the over-75s.

Whittingdale played down fears that the Conservatives were determined to dismantle the BBC. ‘The idea that there is an ideological desire to destroy the BBC is just nonsense,” he said.

Whittingdale admitted the government had unwittingly created the impression of hostility to the BBC by announcing the over 75’s licence fee move so close to the publication of charter renewal. 

“The reason this deal was done was a very obvious one – the government has a priority which is getting the deficit down and this represents a significant contribution to that aim,” he said.

Whittingdale was asked about reports that Rupert Murdoch had met the Chancellor George Osborne ahead of the deal. He said any suggestions that Rupert Murdoch may have influenced the deal is “conspiracy theory gone mad.”

By the end of his hour-long interview with ITV News’ Alastair Stewart, Whittingdale had left his Edinburgh audience in no doubt that the licence fee is likely to be the government’s preferred funding method for the BBC for the next ten years.

He played down alternative funding methods such as advertising, state financing and subscriptions, adding that the latter would be too technically difficult to implement at the moment.

Speaking after the session, BBC director of television  Danny Cohen said he was “pretty encouraged by a lot” of what Whittingdale had said in his talk.

However, Whittingdale reminded the Edinburgh audience that he still has ways to clip the BBC wings, amid talk of whether the licence fee will be CPI inflation linked or if the government will move to decriminalise non-payment of the licence fee.

But he was broadly supportive of the work of the BBC. He said he didn’t think the BBC had a general bias to the left, adding that the corporation had not been partisan during the election.

He did, however, call on the BBC to take risks and to avoid producing shows that are “obviously indistinguishable from a populist, commercial programme.”

He cited The Voice as an example, noting that it had been the subject of a bidding war between the BBC and ITV.

Elsewhere, Whittingdale suggested the government might be prepared to privatise Channel 4, so long as its remit remained intact. He stressed that he ‘hadn’t received a bid for C4’ and that ‘the ownership of C4 is not under debate’. However, he added that the broadcaster could still deliver its remit if its ownership did change.

Whittingdale also gave the impression that he would not be averse to a possible US takeover of ITV, so long as any new owner continue to deliver on its remit.  US broadcaster Liberty Global has steadily been increasing its stake in ITV over the past year.


Posted 26 August 2015 by Tim Dams

Are we in the late stages of a TV production bubble?

Televisual publishes the latest in its long line of surveys of the independent production sector, the Production 100, in this month’s issue.

Taken together, the surveys tell the story of the buccaneering indie sector since 1993, chronicling its growth from a nascent cottage industry to a world renowned, export orientated sector which has attracted huge inward investment.

There have been plenty of ups and downs in this story, with fortunes made for a talented, hard working (and lucky) few along the way. Quite a few fortunes have been made in the past year too, following the sale of indies such as Twofour, Blast! Films and Neal Street.

In many cases the buyers are broadcasters such as ITV, Sky or Discovery, reflecting a trend for media companies to diversify out of broadcasting. Their reasons for doing so are becoming more pressing by the year. Traditional TV viewing continues to fall, with the greatest decline among the under-45s, reported Ofcom last month. Viewing to ITV-owned channels fell the most, it said, between 2013 and 2014. Over in the US, concerns about the viewing habits of young customers have led to a sharp sell off in media stocks, with the value of Walt Disney, Viacom and Discovery plunging.

Broadcasters clearly view production as good place to diversify into. And on past performance, it clearly is: the UK production sector has powered ahead in the past ten years, almost doubling its revenues since 2004.

But are broadcast buyers too late to the party? One of the key findings from this year’s Production 100 survey is that, while producers have generally had a good year, they are cautious about the outlook for the year ahead. The market is more competitive than ever, they say, as more people chase riches in production. Not only are broadcasters pushing into the sector, but also a slew of well-known execs have branched out on their own this year, launching start up indies.

Yet all these companies are operating in a market where UK commissioning spend has been broadly flat since 2012, while international revenues dipped slightly last year. This trend looks set to continue amid pressure on the BBC licence fee, and troubles in the US media market.

Indeed, some argue that the TV business is in the late stages of a bubble.  “There is simply too much television,” warned FX Networks boss John Landgraf  last month, arguing viewers were overwhelmed by options. Based on the feedback to the Production 100, talk of a bubble in TV production is probably overstepping the mark. But significant growth, of the kind enjoyed by the indie sector over the last ten years, is likely to be far harder to achieve. 

The September issue of Televisual is out this week.

Posted 25 August 2015 by Tim Dams

Production Technology Survey 2015: the results

Televisual’s annual Production Technology Survey 2015 is now available to read in full in the Reports and Surveys section of our website.

The survey reveals the cameras, editing kit and technology that programme makers are using for their productions – and what they think of it. 

Amidst a sea of competing new products, we’ve sought to establish which are the most popular technology brands and models in production today, as well as highlighting the key technology trends that are driving the market.

We’ve done this by asking senior production execs for their views about the technology they use in production.

We have focused on a number of key areas. We take the temperature of the camera market, revealing the most popular manufacturers and models, including Canon, Sony, Arri, Red and Panasonic.

Next, we focus on post production, looking at the merits of editing kit from the likes of Avid, Adobe and Apple.

We also look at the use of grading, compositing and cloud technology.

There’s also a whole section of findings on the take up and future of 4K.

Finally, we reveal the as-yet-uninvented technology that programme makers say they would like to see introduced to help improve or simplify their production processes.

Posted 21 August 2015 by Tim Dams

Where next for the indie sector?

The future direction of the indie production sector has come into sharp focus in recent weeks amid a slew of policy announcements, deals and financial results. From BBC budget cuts to strong ITV results, a Pact Census that hinted at plateauing revenues to a new deal for Top Gear, the events hint at a mixed outlook for indies in the next 12 months.

Pact’s annual financial census of the sector reported that total revenues fell by 4.2% in 2014 to £2.9bn. There are two key reasons for the fall, according to Pact. Overall commissioning spend by UK broadcasters fell from £1.76bn in 2013 to £1.63bn, with multi-channel broadcast spending significantly down. International revenues also fell from £939m to £891m, amid signs that the crucial US market is becoming flat and more competitive. It was the first time since 2007 that global commissioning levels had fallen, according to Pact.

Financial challenges
The financial challenges facing indies in their home market were underlined in Ofcom’s recent review of public service broadcasting. The regulator noted that investment in new UK content from the PSBs (BBC, ITV, C4 and C5) had fallen by around £440m in real terms, a decline of 15% between 2008 and 2014. The falls have been particularly acute in children’s programmes and in drama, it said.

Real term cuts to the BBC licence fee, the economic downturn, as well as the escalating cost of sports rights have led to downward pressure on original content commissioning since 2008.

This was a theme picked up by Arts Council boss Peter Bazalgette, speaking to the House of Lords Communications Committee in July. He noted that investment in original content across all UK broadcasters had fallen in the last five years, while the amount of money spent on sports rights had rocketed.  “Our investment in original programming...has declined over the five years from 2008 to 2013 from £2.6bn to £2.4bn and I view that with concern,” he said, in comments reported by The Guardian. “The new Premier League deal, because of the competition between BT and Sky, the cost of the rights went up above £5bn. The new Premier League deal will represent 25% of all the money spent on broadcast programmes, but it will attract 0.6% of the audience because it’s on a pay [TV platform].”

Fears about falling UK investment in original programming were exacerbated by the government’s announcement that the BBC will have to cover the £650m cost of providing free television licences for the over 75s – representing 17.5% of its £3.7bn licence fee revenue.

Pact has urged the BBC not to cut content spend as a result, fearing that other broadcasters may reduce expenditure too. Speaking at the launch of its Financial Census, Pact chair Laura Mansfield said: “When we’ve looked at the numbers before, it is the BBC that is the real pillar of the public service broadcast system. If you reduce the BBC spend it has a mirror effect across the other broadcasters and you see not just a reduction of spending, but you see a potential reduction of quality. We very much would want a limited reduction, and actually we’ve been campaigning for an increase.”

The case for growth
Not all broadcasters, of course, are cutting back. ITV boss Adam Crozier has said the broadcaster will invest more, particularly on drama, in a bid to shore up its viewing figures after a 4% slide in the first half of 2015. Like many commercial broadcasters, ITV has seen revenues and profits surge as the UK has pulled out of recession and it has diversified into international production. The broadcaster has money to invest.

Sky also posted a 5% increase in revenue in its annual results last month as the pay-TV broadcaster passed 12m subscribers for the first time.  Sky chief executive Jeremy Darroch called the UK its “engine of growth” after the territory delivered revenues of £7.8bn.

Following the success of original drama Fortitude, Sky has 35 productions in development, in production or on air in the next three years with 10 earmarked as pan-European “priority projects”. This includes its first co-production with HBO, The Young Pope, starring Jude Law and Diane Keaton.

However, many producers view with alarm the expansion of UK broadcasters’ inhouse production operations. ITV Studios has grown rapidly through a series of acquisitions in recent years. Wayne Garvie, chief creative officer, international production, at Sony Pictures Television recently described a vertically integrated ITV as “potentially a big threat to the independent community,” Sky is also pressing ahead with a strategy of acquring independent producers, snapping up Blast! Films last month. And many indies express concern about BBC plans to allow its inhouse production division to make shows for rival broadcasters.

If the independent production sector is feeling the squeeze, there are a few hints of it in Televisual’s upcoming Production 100, our annual survey of TV indies.

The full survey is published in the September issue of Televisua, but early responses reveal a sector that appears in good health. Budgets are ever tighter and competition remains fierece, and indies say slow decision making by broadcasters continues to put a strain on business. Yet the majority of indies say the business climate has been good over the past year, with plenty of opportunity in the UK market and abroad. The word that many use to describe the outlook for the year ahead is ‘positive’.

Indies were also given something to cheer about last month when Ofcom ruled that there is no need, for now, to reform the terms of trade, which have underpinned growth in the sector for over ten years.

Also, Amazon Prime’s headline grabbing deal with the former Top Gear team for three 12-part series underlined that competition for top quality content is only expanding as the market becomes increasingly global.

Posted 18 August 2015 by Tim Dams
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