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October 2017
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Production 100 2010 Back to Reports & survey Listing

Indies go global

Tim Dams reports on the internationalisation of the independent production sector.

The past two years have been amongst the toughest ever in the short history of the independent production sector. Indies have seen broadcaster budgets plummet and commissioning levels decline.

And it’s affected producers large and small. “It has been increasingly difficult to get work commissioned over the last year,” says producer Nina Stevens of Brighton-based Back2Back Productions, which made Dom Joly and the Black Island for C4.

Jeff Dunn, president and CEO of international outfit Hit Entertainment, puts it into a global perspective when he says: “The UK continues to be a very challenging marketplace for everybody. We feel good about our business globally, but the truth is that the UK and Europe is our toughest region at the moment and that is economically driven.”

A key trend to emerge in this year’s Production 100 is how indies have survived – and in some cases thrived – by diversifying away from the declining UK broadcast market and into international markets. And they have largely achieved this in two ways: by pushing directly into the US market, and by ‘squeezing the pips’ out of their IP around the world, in the words of one superindie boss.

Figures from the 2010 Pact Census show that while primary UK commissions fell by 7.5% year on year, from £1,508m in 2008 to £1,395m in 2009, revenue from international activities rose by 28%, from £342m to £439m, and UK rights income was also up, from £107m to £115m.

Diversifying out of the UK

“The name of my game is no different to anyone else,” says DCD Media chief executive David Green. “It’s diversification. As a small superindie, we cannot depend any more on UK broadcasters and UK production fees.” DCD, says Green, aims to earn 50% of its revenues out of the US market by the end of 2011, up from 35% in 2009.

Two of DCD’s indies – September Films and Done & Dusted – already have sizeable presences across the Atlantic. September Films has long running series such as Billy the Exterminator on A&E and Bridezillas on WEtv, while Done & Dusted’s Victoria’s Secrets is on CBS.

There is much opportunity in the ‘fertile’ US market for British indies, adds Green, who says there are 53 network or cable broadcasters that have budgets equivalent to the BBC, ITV or Channel 4. “I’m surprised more UK companies don’t realise that and charge into the US market however they can.”

Tackling the US market
The signs, however, are that UK indies are now getting it. Bath-based Touch Productions lists a string of US commissions in its Production 100 entry, including Taking on Tyson for Animal Planet USA, Love in Numbers for TLC and Dallas DNA for Investigation Discovery US and Discovery UK. “We are doing well in the USA but are finding it hard to get commissions here,” says Touch’s chief executive Malcom Brinkworth.

Bristol based Icon Films, meanwhile, has had a good year, in large part thanks to long running series commission River Monsters from US broadcaster Animal Planet. “Icon Films has grown consistently over the last year – despite tougher, meaner, leaner budgets and deal terms. A wide base of customers and expanding genres has cushioned the blow,” says Icon md Laura Marshall. Indies working for US broadcasters, of course, do not have the advantages of the UK’s Terms of Trade.

But what America doesn’t offer in the way of rights, it makes up for in terms of volume. “There’s a misconception that you can only make money as a production company through rights and the exploitation of IP,” says DCD’s Green. “Well you can’t always get that IP in America, but you can build a very substantial business through volume which you can’t get in the UK.” September Films, for example, has been commissioned for 26 episodes of Bridezilla and 26 episodes of Billy the Exterminator.

Producing for the European market
Meanwhile, Shine Group has sought to exploit its own IP by backing and launching start up outfits in Australia and New Zealand, France and Germany to produce many of its own shows. In France, for example, it has just taken its UK hit MasterChef to air on TF1 – one of the French broadcasters biggest ever commissions.

It’s far better, says Shine Group’s president Alex Mahon, than simply licencing Shine’s UK formats to local producers who would otherwise “take quite a lot of the margin.” Shine is now a major global player, with a big presence in the US and Scandinavian markets through its acquisitions of Reveille and Metronome. Despite this, the UK is its most crucial market says Mahon, as it’s where its key ideas and formats are originated. “The UK absolutely continues to be the focus for us in terms of emerging creativity.”

Co-production funding
With UK budgets under pressure, plenty of indies are having to turn to the international market to raise co-production funds for their programmes. In fact, many indies replying to the Production 100 say that their biggest challenge for the year head is to stitch together co-production funding.

Windfall Films, which specialises in big budget co-productions such as Monster Moves and Big, Bigger, Biggest, says its single biggest challenge over the year ahead is , “securing money for our returning series with different co-production partners.” Head of production Kristina Obradovic goes on to cite, “the length of time that it takes to pull in financing given that most of our shows need to be co-produced in order to meet the programme budgets needed and commissioning decisions are taking longer.”

Leading drama outfit Left Bank Pictures also relies very heavily on international broadcasters to help fund its big budget shows such as Wallander. The business climate, says Left Bank managing director Marigo Kehoe, is “very tough. Licence fees are reduced and we are relying very heavily on international co-production partners and tax breaks in foreign countries.”

International sales
According to the Production 100 survey, the average indie derived 11.5% of its total turnover from rights exploitation, with 80% coming from TV production and the remainder from a variety of sources including new media (2.5%) and corporate production (2.4%).

Most of the larger superindies have their own inhouse distribution companies to sell their programmes around the world and to secondary UK broadcasters. The All3Media Group, for example, makes use of All3International, while Shed Group owns Outright Distribution.

The mid-sized and smaller indies tend to work with a variety of distributors. As part of the Production 100, we asked indies which distributors they used – and also to tell us which companies they rated and to explain their thinking. BBC Worldwide came out top in both cases – it’s the most used and most highly rated distributor according to indie replies. It’s scale and reach, and its good reputation with international buyers help explain its popularity.

RDF Rights, DRG, Outright Distribution, Passion and Target emerged as the next most used distributors according to the survey, while DRG, Passion, RDF Rights, Outright and DCD Rights were cited as the most highly rated distributors by Production 100 participants.

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