Televisual’s exclusive annual report into the TV indie sector, the Production 100, is out now with Avalon in the number one spot.
Avalon posted a turnover figure of £223m. The top 100 indies collectively turned over £1.9bn over the past year.
RAW TV was voted the producers’ producer in the report’s annual Peer Poll in which indies vote for the rivals they most admire.
The survey also asked respondents to name the broadcasters that are the best, and worst, to work with. The BBC was voted as the best UK broadcaster and Netflix the best streamer to deal with over the past year.
All3media International and Drive jointly took the crown as the indies’ best rated distributors.
Below is the introduction to the survey. The full 56 page report is out now in the Autumn issue of Televisual Magazine
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AFTER THE UNPRECEDENTED PRODUCTION HIATUS OF 2020, THERE’S A REAL SENSE OF RECOVERY ABOUT THE INDIE TV SECTOR. TIM DAMS REPORTS ON THE FINDINGS OF 2021’S PRODUCTION 100
Last year’s Production 100 was all about the devastating impact of Covid-19 on the indie sector, and was carried out at a time when most production had ground to a halt.
This year, by contrast, the story is all about the recovery from Covid-19. Many production companies say business has bounced back, amid unprecedented demand for new programming from content-starved broadcasters and streamers.
However, it’s not a straight-forward recovery. Ask most indies how they are faring and they will reply, “It’s busy, but…” The word ‘but’ presages a long list of challenges that they – and many of their contemporaries – are facing. These include: rising costs as a result of Covid protocols; wage inflation amid talent shortages; struggles to secure talent, kit and studio space; a frazzled and exhausted workforce; growing competition; squeezed PSB budgets; battles to hold on to rights; and delays amid production bottlenecks.
“Because many productions were placed on hold over the last 16 months, production is ramping up massively across the industry,” says Thames. “This is good news for those who have lost work, but it means off-screen talent is very scarce at the moment. Rates are rising accordingly, although not yet matched by rising budgets.”
“It’s incredibly busy by all accounts – so very competitive with a huge skills shortage,” adds Oxford Film and Television.
Plimsoll says: “Coming out of a bumpy period, the UK production sector is bouncing back. However the much discussed privatisation of Channel 4 is a cause for concern.”
Looking ahead, Shine Television speaks for many when it says: Business is “pretty good, although it will be another hugely challenging year.”
THE TOP 100
The turnover of the top 100 indies stands at £1.9 billion this year. It’s difficult to compare this figure with last year’s survey as there isn’t one; such was the havoc wrought by the pandemic that Televisual didn’t ask producers to supply turnover figures for the 2020 Production 100. Still, it is significantly lower than the £3 billion turnover that the top 100 posted in 2019, before the pandemic.
The fall is, of course, largely because of the pandemic. In particular, the turnovers of many drama companies plunged over the past year as they were unable to get their big budget shows into production.
However, the fall is also due to the changing cohort of companies in the Production 100. IMG, 2019’s top ranking company with a turnover of £462 million, no longer takes part because its parent company Endeavor Group Holdings listed on the New York Stock Exchange in April, and the Group does not break out income from its individual companies.
IMG’s absence means that Avalon is now the top ranked production company in the UK. The Taskmaster, Spitting Image and Last Week Tonight with John Oliver producer has had its biggest ever year, despite the pandemic, with 11 new commissions. With its operations spanning talent management through to production and distribution, Avalon’s turnover hit £223 million for the year.
Gogglebox and The Circle producer Studio Lambert has shot up to second place thanks to a £90.6 million turnover.
Gangs of London indie Pulse Films – which spans TV, film, music and commercials production – has also had a big rise to third place on the back of a £68.7 million turnover.
Objective Media Group has also climbed the rankings. Back in 2019 it was in 36th place, but this year it’s fourth thanks to series such as Netflix’s Feel Good and ITV’s The Million Pound Cube.
Other indies to have done well this year include His Dark Materials producer Bad Wolf which has made the top 10 for the first time. Tiny World indie Plimsoll and Friends: The Reunion producer Fulwell 73 have also cracked the top 20, while risers include Normal People indie Element Pictures and The Masked Singer producer Bandicoot. Animation house Blue Zoo has also climbed the rankings, as has Wildseed Studios and Brinkworth.
As always, the UK market remains key to most indies. Some 53.7% of an average indie’s production revenues are derived from UK broadcaster clients. But this is down significantly since 2019, when the figure stood at 60.5%.
The international market is increasingly important, now accounting for 29.4% of an indie’s turnover. Streamers such as Netflix, Disney+, Apple TV+, Amazon, and Discovery+ have become ever more significant as a source of business. “Streamers are piling into the UK market,” says Raw.
“The globalisation of TV production is providing an opportunity for growth,” says Love Productions.
Blink Films, meanwhile, says the UK market is squeezed but “we have seen significant growth in the streamer market opportunities available to us and this is now forming quite a high proportion of our turnover.”
Adds Dragonfly: “There are so many new players in the market and all of them are interested in UK companies, and have deep pockets and a long list of commissioning needs.”
The UK market, of course, is a lynchpin for most indies. “After a slow 18 months, it feels like UK channels are commissioning in earnest,” says Initial. True North, meanwhile, points out that lots of new commissioners have been appointed post pandemic “who are energetic and excited to create new hit shows.”
Even though the industry is in recovery, Covid remains the biggest talking point among indie producers. That’s hardly surprising – its effects have been so far reaching and profound.
Perhaps the biggest surprise is how many indies have come through the pandemic intact. More than anything, Covid-19 has demonstrated the remarkable inventiveness and resilience of indies. A number have closed, many have eaten deep into their cash reserves and made use of furlough schemes – but most have survived. The July 2020 launch of the Film & TV Restart Scheme is lauded as key to getting the industry going again, although not all shows have been able to take advantage of it as they fall outside its scope.
Many have experienced significant delays as result of Covid-19. “All of our production slate for 2020 was paused with a knock on effect on our revenues,” says Element Pictures. “This has a significant impact on resource management for 2021 as we effectively manage two years of production slate in one.”
Thames, meanwhile, had to postpone series 15 of Britain’s Got Talent to 2022, causing a significant financial impact.
Workerbee says that Covid-19 has pushed back productions into 2021, making the 2020 financial year very difficult to balance. “Production budgets created before the pandemic are still in play and underfunded.”
HCA Entertainment says Covid delayed its productions for 20 weeks last year. But by following broadcaster protocols, HCA has since managed to deliver a range of shows like Find It, Fix It, Flog It, The Motorbike Show and Shed and Buried. “But we haven’t been able to film abroad, so shows that have been contracted for over a year now – like Riding Route 66 and The History of Black Bikers for ITV4 – won’t be filmed till next year.”
Many say that relationships with broadcasters have, if anything, improved. “We’ve all become partners through these challenges and undergone them together,” says Outline.
Raw, meanwhile, says that broadcasters have been “amazing, supportive and realistic” to the challenges and financial impact which production companies have faced, citing Netflix and Discovery in particular. Kudos, meanwhile, picks out Sky and the BBC for being particularly collaborative and supportive. “We have had to invent new ways of working and solutions to new challenges, and have done it hand in hand with each of the broadcasters.”
Collective Media Group says that relationships with international broadcasters and SVODs (and to a lesser degree UK broadcasters) have been “much easier to build where interaction can happen over Zoom meetings rather than expensive international trips to pitch.”
Not all are so complimentary about broadcaster clients. Some say they have lent a sympathetic ear, but this hasn’t been reflected in delivery deadlines being extended or budgets being increased enough to take account of Covid-19 costs.
In fact, costs have emerged as a real bugbear in this year’s Production 100. Not all budgets have risen to take into account the 10-20% in production costs that shows have incurred as a result of Covid-19 protocols, delays and additional work.
“Covid safety costs including testing and PPE have led to budget increases on jobs already in production before Covid-19 hit, and [we’ve been] unable to get overages from the broadcasters in many instances,” says Pulse Films.
“Budgets are more challenging than ever,” says Outline. “Some broadcasters have been brilliant and really helped with the costs of Covid, while others have put all this financial uncertainty and pressure onto the indie – which is very tough and stressful to bear.”
“Our budgets have certainly suffered, having to factor in quarantining and testing both in this country and on the overseas shoots,” says Off the Fence.
Even without additional Covid costs, producers say budgets for PSB broadcasters in particular have been squeezed, either as a result of falling ad revenues at commercial channels or funding freezes at the BBC. Many say they need to bring in third party funding to get budgets to an acceptable level. “The continuing reduction in budgets is making some projects unworkable,” says Back2Back. Rondo adds that budgets for UK commissions “haven’t increased to keep pace and compete with the newer SVODs.”
Others think that there may be fewer commissioning opportunities in 2021/22 as broadcaster have had to reschedule so many series that have not been able to deliver for broadcast – dramas especially.
Many say that squeezed budgets and rising costs have hit margins, making it harder to keep people on staff and assist their career development, and to invest in new ideas – whether optioning a book or commissioning a script. “Broadcasters have to recognise that unsustainable tariffs will backfire,” says one indie. “People will leave the industry.”
Compounding the budget crunch, producers say they are working in a climate of galloping wage inflation for crew and facilities.
The rush back into production after lockdown has meant a big bottleneck as shows look to get made. As a result, experienced crew are thin on the ground, while facilities such as studios are booked up well in advance and equipment is difficult to source. All this has conspired to push up prices for talent and facilities. Pulse Films talks about hyper-inflation in rates: “The industry is very overheated with few crew and talent available.”
“The most challenging aspect of the business this year is unquestionably staffing,” says Bandicoot Scotland. “There’s an enormous shortage of experienced talent at every level.”
Sid Gentle Films, meanwhile, says that one of the biggest challenges it has faced “is finding available crew with adequate experience.”
Leopard Pictures says the boom in UK production has caused an industry wide shortage of talent, studios and equipment. “With a backlog of high end production and increased investment from the major content players, we anticipate continued pressure on all aspects of production over the next 12 months.”
Brexit has compounded the issue for several indies. “The amount of work happening in the UK at the moment is very healthy, but we are struggling to find crew,” says Wildseed Studios. “Brexit has been a real problem, especially in animation where so much of the talent that we seek to employ is from France and other EU countries.”
Footstep Productions explains that Brexit has had more impact than Covid on its output. “We have worked regularly for European broadcasters, but they are not commissioning because of uncertainty as to how the rules will work.”
A Productions adds that Brexit is having a real impact on recruitment. “Key talent is returning to the EU or unable to move here due to prohibitive costs for the employer in terms of sponsoring.”
Many cite the worrying shortage in production management staff – production managers, line producers, production execs and co-ordinators. As it is, Covid has put a huge workload on to these often unsung heroes of production.
“The additional work shouldered by production managers to implement Covid protocols on top of the growing list of other requirements such as Albert certification is becoming a real issue and really adding to their workload,” says Interstellar.
Covid, explains Optomen, had added more pressure to the production management side of the business. “They are having to work twice as hard doing their normal jobs on top of managing Covid protocols.”
Indeed, a prominent concern to emerge from Production 100 feedback is about the wellbeing of staff and crew as they navigate increased workloads while juggling home schooling, and possible health or financial difficulties.
Baby Cow says Covid has had an adverse effect on nearly all production operations, from the ability to source and maintain crew, to scenario planning for insurance, contingency budgeting, managing broadcaster expectations, setting up Covid operations on set, managing insurance claims, rescheduling shoots and managing adverse budgetary impacts.
“The negative impact to the mental health and well-being of the crew – mostly felt across production, Covid supervisors and AD departments – has been significant,” says Baby Cow.
Love Productions, meanwhile, says it is “acutely aware of the stress and fatigue throughout the industry,” whether for staff, freelancers, suppliers and clients.
With a large percentage of their workforce working remotely, indies like Aardman say it has been hard to replace digitally the sense of community that it is used to at work, as well as the “impromptu conversation in the canteen which creates a spark for an idea or plan.” Angelica Films, meanwhile, misses face to face contact and laments the “lack of free flowing brainstorm opportunities.”
Like many, Impossible Factual points out that it has been “easier to get ‘face-time’ with buyers and commissioners when operating by video conference platforms.”
“The development team found remote harder this year as they felt Zoom and Teams calls had been slightly exhausted,” says Talkback. “Creative thrives far more in a room full of people together and the development process moves along far quicker as well.”
Beyond Covid, indies also reflect in the Production 100 on some of the wider issues that the industry is facing.
Many are concerned about the possible privatisation of Channel 4, and the impact that this could have on their business. “A healthy and competitive C4 that remains a publisher broadcaster is vital to the health of every UK indie – whether or not they are working for C4,” says one indie.
The uncertainty around privatisation is cited as a concern by the likes of Naked, Plimsoll, Studio Lambert and October Films. “The government arguments for privatising C4 make no sense and will reduce the number of suppliers in the sector,” says Studio Lambert.
Voltage thinks the UK production sector is facing “existential uncertainty”. Citing the possible sale of C4 and next year’s review of the BBC charter, Voltage says: “UK broadcasters are either destabilised by government interference or the threat of big spending SVODs launching in the UK and taking market share in key demographics plus talent drain.”
As it is, many indies are profoundly concerned at the increasing challenges of holding on to programme rights. The Terms of Trade has, of course, underpinned the sector’s growth and innovation since 2003. Indeed, many relied on their reserves from overseas sales to survive the pandemic when production halted.
Dragonfly says that the rights situation is becoming “less favourable overall as broadcasters erode the terms of trade,” citing C4’s increased use of Group M funding and the BBC’s longer rights window on the iPlayer. Meanwhile, “the streamers expect global rights for five years plus.”
Diversity also remains a key issue for the sector, after really coming to fore last year following the killing of George Floyd and the rise of Black Lives Matter. Many indies say they are struggling to recruit diverse staff and crew. “There is a severe lack of crew, especially diverse crew, in Yorkshire,” says Rollem. Spun Gold, meanwhile, says finding BAME talent, on and off screen has been a challenge, although it hopes this will become easier over time.
Amid all the challenges facing the sector, there are reasons to be positive. Most indies agree that we are living in a TV golden age of creativity and excellence, and say that they are enjoying a growth in global customers, particularly the streamers.
Changes to the UK landscape – including government plans for C4 and the BBC – are a concern, as is the huge competition between indies for commissions and talent, and inflationary pressures in the market.
But the outlook, at least, looks far more encouraging than it did this time last year.
Full the full report, see the Autumn issue of Televisual magazine
Subscribe at https://www.televisual.com/subscribe/
For Back Issues, please email firstname.lastname@example.org
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