Indie producers say the prospects for 2014 look good, with more money expected to flow into production and greater opportunities to win commissions in the UK and abroad.
SET TO GROW
On balance, the outlook looks positive for TV producers in 2014. In particular, there’s an ever growing number of broadcasters for producers to take their ideas to, whether in the UK or internationally. Put simply, more broadcasters are commissioning more programmes.
The terrestrials remain key customers. But Sky is now the fastest-growing source of investment in original British programmes, while other players like Discovery, Nat Geo, UKTV and Scripps have boosted their spend in the UK.
Indies look set to continue enjoy strong growth in international markets too, winning an increasing number of commissions from broadcasters in the US and other territories.
“The UK is seen internationally as the most dynamic and most creative TV market on the planet,” says Pact’s John McVay. “And that is because of the competition between all our broadcasters to entertain and engage audiences – and that is good news for producers.”
Sales to international markets are on the rise too. Studio Lambert, for example, has sold two of its formats, Gogglebox and Undercover Boss, to be remade in China. Shows like Midsomer Murders, meanwhile, are sold to over 150 territories. Some indies now earn over 50% of their income from outside the UK, adds McVay.
“The environment is still incredibly competitive,” says Atlantic Productions CEO Anthony Geffen. “But we see opportunities for ourselves and other indies across different platforms, not only from broadcast but also from our theatrical (Imax/Giant Screen), publishing, video on demand and apps business areas. We are also developing content with brands and we see this as a growth area of business.”
More money is expected to flow into TV in 2014. In the UK, TV advertising revenue is improving – and is predicted to hit a record high of £3.9bn by the end of 2014, according to GroupM forecasts.
The hope for indies is that this will filter through to broadcaster programme budgets next year.
Pact chief executive John McVay says commercial broadcasters need more than ever to invest in programmes: “They’ve got to maintain their programme budgets because the world is even more competitive than it was in 2008 and 2009 when the recession started. Most things fail because you don’t invest properly.”
Certainly, ITV and Sky have more money to spend on original commissions after recently losing out on the £900m rights to European football to rival BT.
Yet margins are likely to remain very tight in the UK for indies. “Producers are continuing to experience an erosion of the margins on their production budgets, and that is not helpful,” says Novel Entertainment CEO Mike Watts, who also fears BBC budget cuts at CBeebies and CBBC.
“The continuing pressure on budgets will remain the biggest challenge, so indies need to be creative about the ways films are financed,” says Atlantic’s Geffen. This means an increasing need to find co-production finance, or even money from outside the broadcast space.
The new tax credits are also set to become an important part of the financing jigsaw for drama and animation producers. Indeed, as our drama report (page 44) reveals, UK drama indies are set for a surge in business as a result.
Boom chief executive Lorraine Heggessey also urges broadcasters not to cut budgets to the bone. “The BBC underinvested for a while in Strictly and it started to look like a real poor relation to shows like The X Factor. Then they realised they needed to up the budget, and look at it now – it’s getting amazing audiences.”
There’s high hopes that 2014 will deliver a fresh new format or show that will break the mould, particularly in entertainment, after years of series like The X Factor, I’m A Celebrity and Strictly ruling the roost. “We are waiting for the next wave of programming,” says Heggessey. “Particularly in entertainment or a big factual entertainment competitive format, we’ve been poised for it for a few years.”
There’s a feeling among broadcasters too that it is time for the next big thing. “A lot of us broadcasters are in the same bloody pond and everyone is doing variations of the same big thing,” says Channel 5’s Ben Frow. “And I am really keen to jump out of that pond and create things that feel different to the other channels.”
The appetite is for something new is felt at Channel 4 too, says chief creative officer Jay Hunt. “I think Channel 4 specifically has to deal with greater churn than other channels. Because we deliver such a young audience, the schedule is voracious. There is a constant appetite for the new and the different and hits last less time than they do on channels with older audiences.”
Sky’s Stuart Murphy, meanwhile, says there’s an opportunity for a smart, broad studio sitcom – a UK version of 30 Rock or Frasier. “Nobody is doing it, so there is an opprtunity for us.”
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