on screen and on air talent an assessment of the...

ON SCREEN AND ON AIR TALENT

AN ASSESSMENT OF THE BBC’S APPROACH AND IMPACT

A REPORT FOR THE BBC TRUST

APPENDIX XII –CHARTS FOR REPORT

Redacted Version

BY OLIVER & OHLBAUM ASSOCIATES

APRIL 22nd 2008


SECTION A – INTRODUCTION AND SCENE SETTING

SECTION B - THE ECONOMICS OF ON SCREEN AND ON AIR TALENT

SECTION C - THE UK MARKET FOR ON SCREEN AND ON AIR TALENT

SECTION D - THE ROLE, POSITIONING AND PERFORMANCE OF THE BBC

SECTION E - ASSESSMENT OF MARKET IMPACT AND VALUE FOR MONEY

FIGURE A.1. – O&O METHODOLOGIES EMPLOYED

PROCESS DETAILS

BBC INTERVIEWS 20 INTERVIEWS50 PEOPLE

EXTERNAL INTERVIEWS 27 INTERVIEWS35 PEOPLE

MACRO ECONOMIC TRENDSINCOME POLARISATION TRENDSTOP TALENT IN OTHER ENTERTAINMENT INDUSTRIESIMPACT OF GLOBALISATION AND DIGITISATION

VALUE SURVEY 2,000 ADULTS136 STAR NAMES, 14 GENRES TESTED

TALENT TRACKING TRACKING TV CAREER PATHS OF CURRENT ROSTER OVER 20 YEARS170 INDIVIDUALS ACROSS 6 SUB-GENRES

BBC SPENDING TRENDSSPENDING BY MEDIA AND GENRE SINCE 2004/2005TALENT SPENDING FOR 400 STRANDSTALENT INFLATION RATES SINCE 2000/2001

BBC PROCESSES AND STRATEGY DOCUMENTS ANALYSIS OF PAYMENTS APPROVAL DOCUMENTATIONREVIEW OF PROPOSAL, REVIEW AND APPROVAL PROCEDURES

MARKET PRICE AND INFLATION BENCHMARKING RADIO BENCHMARKING EXERCISEINTERVIEWS ON COMMERCIAL TV VALUATION METHODS

COMMERCIAL VALUATION MODELLING DEVELOPMENT OF COMMERCIAL VALUATION MODEL FOR TOP TALENTBASED ON INCREMENTAL ADVERTISING REVENUE

SPEND VERSUS AUDIENCE ANALYSISASSESSMENT OF GENRE, SLOT AND SUB-GENRE COST PER VIEWER AND LISTNER HOUR BENCHMARKS

REGRESSION ANALYSIS ATTEMPT TO ISOLATE THE LINK BETWEEN TYPE AND LEVEL OF TALENT WITH AUDIENCES BASED ON RATINGS DATA

FIGURE B.1. – EXAMPLE PROGRAMME CHARACTERISTICS BY GENRE

DRAMA

SPORTS EVENT

CHAT SHOW

QUIZ SHOW

TV COMEDY

RADIO CHART SHOW

• SCRIPT

• HUMOUR

• LEVEL OF INSIGHT/ REVELATION

• FORMAT

• UNCERTAINTY OF OUTCOME

• SCRIPT

DESIGN/ NARRATIVE

• LOCATION

• SITUATION

• ISSUES DEALT WITH

• SUBJECT MATTER

• LEVEL OF DIFFICULTY

• SITUATION

• MUSIC POLICY

RELEVANCE

• SYMPATHETIC

• BELIEVABLE

• TEAMS INCLUDED

• CONTESTANTS INVOLVED

• GUEST INTERPLAY

• EMPATHY WITH CONTESTANTS

• EMPATHY

• INTERPLAY

RELATIONSHIPS/ CHARACTERISATION

• KEY LIVE EVENT

• QUALITY OF ACCESS

• PRIZE MONEY

ACCESS TO KEY EVENT/ MATERIAL

• PACE

• SET DESIGN

• EDITING

• LIGHTING

• NUMBER OF CAMERAS

• ANALYSIS

• DIRECTION

• SUPPORT MUSIC

• SET DESIGN

• SET DESIGN

• ACCURACY

• TEMPO

• DIRECTION

• PACE AND TIMING

EXECUTION

• LEVEL OF DIFFICULTY

• VOTING AND POLLING

PARTICIPATION

• LEAD ACTORS

• SUPPORT ACTORS

• HOST

• PUNDIT

• HOST

• HOST

• ACTORS

• SUPPORT ACTORS

• DJ

LEAD TALENT/ SUPPORT TALENT

LANDMARK FACTUAL

• SCRIPT

• NARRATIVE POSITION/ POLEMIC

• FAMILIARITY

• CONTEMPORARY AREA OF INTEREST

• UNIQUE FOOTAGE

• UNIQUE INFORMATION

• PRESENTER

FIGURE B.2. – TALENT AS AN AUDIENCE AND VALUE DRIVER

GENRE

PROGRAMME CHARACTERISTICS

TIMESLOT

CHANNEL BRAND AND DEMOGRAPHICS

INHERITANCE/ PROMOTION

TALENT

DESIGN/NARRATIVE/ FORMAT

RELEVANCE

RELATIONSHIPS/ CHARACTERISATION

ACCESS

EXECUTION

PARTICIPATION

VIEWER VALUE

AUDIENCE SIZE

AUDIENCE DEMOGRAPHICS

PROGRAMME CHARACTERISTICS POSITIONING “ASSET” IMPACT ON VIEWERS/CONSUMERS

FIGURE B.3. – IMPORTANCE OF TALENT BY PROGRAMME TYPE

IMPORTANCE OF PRESENTER & SUPPORTING TALENT OR GUESTS: MEAN AND STANDARD DEVIATIONS- SELECTED PROGRAMME TYPES

MEAN

STANDARD DEVIATION

MINUS ONE STANDARD DEVIATION

10

20

30

40

50

60

70

80

90

100

CHA

T SH

OW

HO

ST

CHA

T SH

OW

GUE

ST

DRA

MA

LEA

D A

CTO

R

DRA

MA

SUP

PORT

ING

AC

TOR

SATU

RDA

Y N

IGH

TSH

OW

HO

STSA

TURD

AY

NIG

HT

SHO

W G

UEST

CO

OKE

RY S

HO

W C

HEF

CHA

RT R

AD

IO D

J

CHA

RT R

AD

IO G

UEST

S

PAN

EL G

AM

E PR

ESEN

TER

PAN

EL G

AM

E G

UEST

QUI

Z PR

ESEN

TER

MUS

IC &

SPE

ECH

RAD

IO D

J

MUS

IC &

SPE

ECH

RAD

IO G

UEST

LIFE

STYL

E &

MA

KEO

VER

PRES

ENTE

R

SERI

OUS

FA

CTU

AL

PRES

ENTE

R

NEW

SREA

DER

NEW

S &

SPO

RT R

AD

IOPR

ESEN

TER

NEW

S &

SPO

RT R

AD

IOG

UEST

SPO

RTS

TV P

RESE

NTE

R

SPO

RTS

TV P

UND

IT

IMPORTANCESCORE

SOURCE: O&O VALUE SURVEY, JANUARY 2008

MAIN REASON

VERY IMPORTANT

QUITE IMPORTANT

NOT IMPORTANT

PLUS ONE

FIGURE B.4. – IMPORTANCE OF LEAD TALENT WITHIN ENTERTAINMENT GENRE


IMPORTANCE OF PRESENTER/HOST (SATURDAY NIGHT ENTERTAINMENT, CHAT SHOWS, QUIZ SHOWS, PANEL GAMES)

QUIZ SHOWS

SATURDAY NIGHT ENTERTAINMENT

CHAT SHOWS

PANEL GAMES20

40

60

80

100

120

140

0 1-5 6-10 11-15 16-20 21-25 26-30 31-35 36-40 41-45 46-50 51-55 56-60 61-65 66-70 71-75 76-80 81-85 86-90 91-95 96-100

INTERVALS OF IMPORTANCE SCORES

NUMBER OF RESPONDENTS

NOT IMPORTANT QUITE IMPORTANT VERY IMPORTANT MAIN REASON

FIGURE B.5. – PROPORTION OF RESPONDENTS GIVING HIGH POPULARITY/LIKEABILITY SCORINGS TO NAMED TALENTPROPORTION OF SCORES OVER 75 - INDEXED TO TOP PROPORTION

(SATURDAY NIGHT ENTERTAINMENT, CHAT SHOWS, QUIZ SHOWS, PANEL GAMES)

SATURDAY NIGHT ENTERTAINMENT

CHAT SHOWS

QUIZ SHOWS

PANEL GAMES

10

20

30

40

50

60

70

80

90

100

1ST 2ND 3RD 4TH 5TH 6TH 7TH 8TH 9TH 10TH 11TH

RANKING OF NAMED PRESENTERS/HOSTS BY SUB-GENRE

POPULARITY SCORE INDEX (100=TOP SCORE ACROSS ALL 136 NAMES)

5TH RANKED PRESENTER

8TH RANKED PRESENTER


FIGURE B.6. – TIERS OF TALENT WITHIN GENRE AND SUB-GENRE

TV

RADIO

DRAMA/COMEDY

NEWS

GENRE EXAMPLE SUB-GENRE TIER 1 TIER 2 TIER 3

TIERS WITHIN SUB-GENRE

ENTERTAINMENT

FACTUAL/ KNOWLEDGE

CHILDREN’S

SPORT

MUSIC LED

MUSIC/SPEECH

DRAMA/COMEDY

SPEECH/MAGAZINE

REGULAR DAILY/ WEEKLY

SPECIALIST/ EVENING

DRAMA

RADIO 1RADIO 3RADIO 2RADIO 1

CURRENT AFFAIRSCONTINUOUS NEWS

MAIN BULLETINMINOR LIVE EVENTMAJOR LIVE EVENT

HIGHLIGHTSMAGAZINE

DRAMA

FACTUAL/ MAGAZINE

COOKERYLIFESTYLE/ MAKEOVER

FACTUAL ENTLANDMARK FACTUAL

ENT SHOWSCHATPANELQUIZ

OTHER COMEDYSITCOMSSOAPS

DRAMA SERIESLEAD ACTORS IN DRAMA SERIES AND SERIALSLEAD COMIC PERFORMERS

HOSTS/PRESENTERS ON MAJOR NETWORKS

SERIES “AUTHORS”HOUSEHOLD NAME PRESENTERS

LEAD PRESENTERS IN MAIN MAGAZINE STRANDS

HOSTS/PRESENTERS FOR MAJOR SPORTSLEAD REGULAR PUNDITS FOR MAJOR SPORTS

SUPPORTING ACTORS IN SERIES AND SERIALSLEAD ACTORS IN “SOAPS”SUPPORT COMIC PERFORMERS

LEAD PANELISTSCELEBRITY PARTICIPANTLEAD MUSIC GUESTSHOSTS/PRESENTERS ON MINOR CHANNELS

SUPPORT PRESENTERSLEAD PRESENTERS ON MINOR SERIES/DIGITAL CHANNELSNARRATORS/ VOICE OVERS

SUPPORT PRESENTERS ON MAIN STRANDS

OCCASIONAL PUNDITS, MAJOR SPORTSPRESENTERS AND PUNDITS, MINOR SPORTS

WALK ON PARTSMINOR PARTSNEW COMIC PERFORMERS

OTHER PANELISTSMINOR CONTRIBUTORS

EXPERT CONTRIBUTORSINTERVIEWEES

OTHER CONTRIBUTORS

MINOR PRESENTERS/PUNDITS ON MINOR SPORTS

LEAD NEWS PRESENTERSLEAD ON-SCREEN EDITORS

BREAKFAST DJsDRIVE TIME DJs ON MAIN NETWORKS

LEAD NAMES IN REGULAR WEEKLY STRANDS

LEAD COMEDIANS IN PANEL GAMES

LEAD PRESENTERS ON NETWORK DAILY/WEEKLY STRANDS

CORRESPONDENTSMINOR EDITORS

OTHER DAYTIME DJs ON MAIN NETWORKS

SUPPORT PRESENTER

LEAD ACTORS IN DRAMA OR COMEDY RADIOSUPPORT COMEDIANS IN PANEL GAMES

PRESENTERS ON SPECIALIST WEEKEND OR EVENING SHOWSLEAD PRESENTERS ON REGIONAL LOCAL RADIO

JUNIOR CORRESPONDENTS

NIGHTIME DJs ON MAIN NETWORKSMUSIC LED DJs ON LOCAL RADIO

LOCAL RADIO DJsNETWORK CONTRIBUTORS

SUPPORT ACTORS

OTHER CONTRIBUTORS

RADIO 2RADIO 3

COMEDYPANEL GAME

FIGURE B.7. – TALENT LIFECYCLE PERFORMANCE AND FEES

FEE RATE PAID

VALUE TO VIEWERS

FEE RATE/ VIEWER VALUE

TIME

CAREER PEAK

REINVIGORATION

SOURCE: O&O INTERVIEWS

CAREER LAUNCH

CAREER SLUMP/”REST”

FIGURE B.8. - BBC VALUE AND PRICE SETTING – 3 examples

20

40

60

80

100

120

140

OPPORTUNITY COST TO TALENT

VALUE TO BBC RIVAL

BROADCASTER

VALUE TO BBC

VALUE OF REPLACMENT

PRESENTER TO BBC

EXAMPLE A EXAMPLE B EXAMPLE C

VALUE INDEX

80

100

120

90

110

80

120

90

120 120

60

110

BBC PRICE = 105 BBC PRICE = 115 BBC PRICE = 95

(FOR REPLACEMENT PRESENTER)


VALUE TO BBC RIVAL

BROADCASTER

VALUE TO BBC

VALUE OF REPLACMENT

PRESENTER TO BBC


VALUE TO BBC RIVAL

BROADCASTER

VALUE TO BBC

VALUE OF REPLACMENT

PRESENTER TO BBC (WITH OPPORTUNITY

COST OF 90)

FIGURE C.1. – THE UK ON SCREEN AND ON AIR TALENT MARKET – estimated value 2006/2007

620388

450

46

220

50

1050

100

310

340

345

500

1000

1500

2000

2500

3000

3500

4000

TOTAL PROGRAMME PRODUCTION PRIMARY PAYMENTS TO ON- SCREEN AND ON-AIR TALENT

REPEAT, SECONDARY AND ANCILLARY PAYMENTS TO ON- SCREEN AND ON-AIR TALENT

TOTAL INCOME TO ON-SCREEN AND ON-AIR TALENT FROM UK TV AND RADIO

£2,390M

NETWORK TV PRODUCTION (INC SPORT &

MUSIC)

NEWS PRODUCTION

REGIONAL OUTPUT

PRODUCTION

RADIO PRODUCTION

OTHER (FREMANTLE, IN- HOUSE SATELLITE TV ETC)

ITV

BBC TV IN- HOUSE TV

NEWSREGIONAL

£3,385M

£584M

£172M £757M

ESTIMATED UK ON-SCREEN AND ON-AIR TALENT SPENDING-2006/2007£M

INDEPENDENT PRODUCERS

SOURCE: BBC, COMPANY ACCOUNTS, O&O ANALYSIS

RADIO

FIGURE C.2. – COMPETITION FOR AUDIENCES OVER TIME – audience share by main channel

UK CHANNEL AUDIENCE SHARES, 1998-2006

29.5 28.4 27.2 26.9 26.2 25.6 24.7 23.3 22.8 22.0

11.3 10.8 10.8 11.1 11.4 11.010.0

9.4 8.8 8.5

1.2 1.72.1

2.5 2.9 3.4

31.731.2

29.3 26.8 24.1 23.722.8

21.519.7 19.2

0.6 0.91.2

2.33.2 3.9

10.310.3

10.510.0

9.8 9.49.6

9.69.6 8.6

0.8 0.70.8

1.3 2.4 3.2

4.35.4

5.75.8 6.3 6.5

6.6 6.4 5.7 5.20.8

12.9 13.9 16.5 19.0 19.7 20.6 22.3 23.6 24.7 25.3

10

20

30

40

50

60

70

80

90

100

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

AUDIENCE SHARE (%)

OTHER THEMATICS

FIVE

C4 SPINOFFS

C4

ITV SPIN-OFFS

ITV1

BBC SPIN-OFFS

BBC 2

BBC 1

FIVE SPINOFFS

SOURCE: OBS, BARB

% SHARE CHANGE

12.4%

1.7%

1.5%

-8.6%

-6.9%

FIGURE C.3. – COMPETITION FOR AUDIENCES – demographic differentiation

DEMOGRAPHIC POSITIONING OF MAIN NETWORKS AND THEMATIC CHANNELS, 2006% ABC1

SOURCE: BARB, O&O ANALYSIS

BBC2

BBC3

BBC4

ITV1ITV2

ITV3

FIVE

E4

FIVE US

BBC1

ITV4CHANNEL 4

MORE4

FILM4

FIVE LIFE

SKY

SKY ONE

LIVING

30

35

40

45

50

55

60

65

30 35 40 45 50 55 60AVERAGE AGE

OLDER - UPMARKETYOUNGER - UPMARKET

YOUNGER - DOWNMARKET OLDER - DOWNMARKET

FEMALE MALE

FIGURE C.4. – COMPETITION FOR AUDIENCES – demographic positioning by genre

DEMOGRAPHIC POSITIONING OF MAIN GENRES – ITV1, C4 AND BBC1


ARTS

CHILDRENS

ARTS

CHILDRENS

MUSIC

RELIGIOUS

SPORT

CURRENT AFFAIRS

DOCUMENTARIES

DRAMA: SERIES & SERIALS

DRAMA: SINGLE PLAYS

DRAMA: SOAPS

ENTERTAINMENT

FILMS: CINEMA

HOBBIES & LEISURE

MUSICNEWS/

WEATHER

RELIGIOUS

SPORT

CURRENT AFFAIRS

DOCUMENTARIES


DRAMA: SINGLE PLAYS

DRAMA: SOAPS

ENTERTAINMENT

FILMS: CINEMA

HOBBIES & LEISURE

MUSIC

NEWS/WEATHER

RELIGIOUS

SPORT

ARTSCURRENT AFFAIRS

DOCUMENTARIES


DRAMA: SINGLE PLAYS

DRAMA: SOAPS

ENTERTAINMENT

FILMS: CINEMA

HOBBIES & LEISURE

NEWSWEATHER

28

33

38

43

48

53

81828384858

%OF AUDIENCE <35

% ABC1

YOUNGER - DOWNMARKET

YOUNGER - UPMARKET OLDER - UPMARKET

OLDER - DOWNMARKET

FEMALE MALE

C4

ITV1

BBC1C4 ZONE

BBC1 ZONE

ITV ZONE

FIVE ZONE

MAIN BATTLEGROUND

FIGURE C.5. – OVERALL LEVEL AND SCALE OF COMPETITION TO THE BBC FOR TALENT

LEVEL AND SCALE OF DIRECT COMPETITION TO BBCOVERALL

ITV C4 FIVE OTHER

TV DRAMA

ENTERTAINMENT

COMEDY

LANDMARK FACTUAL

SPECIALIST FACTUAL

LIFESTYLE/MAKEOVER

CURRENT AFFAIRS

CHILDREN

SPORTS JOURNALISM

DAYTIME/TEATIME TV

FIGURE C.6. – COMPETITION FOR AUDIENCES – channel 4 changing programme mix

CHANNEL 4 OUTPUT BY GENRE - 5PM TO 11PM, 2001-2006

32.45

124 193 280192 150

161

112136

88

85130 28 38 36

148

12494 169

232261

289245

88

129135

172150 126

217

153 89

106 105105

26

1333

36 3330

99

152

83

88 93109

266

243

247

251 257250

531275

526

202 168193

2254

3135 55

52

35 2733

32 3836

196 172178 194 194 244

21 31 15

10

20

30

40

50

60

70

80

90

100

2001 2002 2003 2004 2005 2006

FAMILY SHOWS

CHAT/QUIZ

OTHER ENT.

FACTUAL ENT

HOBBIES & LEISURE

SOAPS

DRAMA SERIES& ONE-OFFS

IMPORTED DRAMA

NEWS

DOCUMENTARIES

CURRENT AFFAIRSARTS & RELIGION

SPORT

FILMS

COMEDY

CHILDRENS

ENTERTAINMENT

DRAMA

FACTUAL

30.7%37.1%

39.2%45.8% 46.5% 45.2%

16.7%

17.9% 10.1%

13.1%13.0% 13.1%

46.1%33.6%

41.2%

29.8% 29.1%28.6%


%

258

135

FIGURE C.7. – COMPETITION FOR AUDIENCES – key demographic battlegrounds - entertainment

DEMOGRAPHIC POSITIONING OF MAIN GENRES – ITV1, C4 AND BBC1 – ENTERTAINMENT AND SUB-GENRES


%<35

VARIETY

ANIMATION CARTOONS

ANIMATION PUPPET

CHAT SHOWS AUDIENCE PART

CHAT SHOWS INTERVIEWS

FAMILY SHOWS

LOTTERY SHOWSUPDATES

OTHER COMEDY

QUIZ SHOWSPANEL GAMES

SITCOMUK

SPECIAL EVENTS

VARIETY

ANIMATION CARTOONS

ANIMATION PUPPET

CHAT SHOWS AUDIENCE PART

CHAT SHOWS GENERAL

CHAT SHOWS INTERVIEW

FAMILY SHOWS

OTHER COMEDY


SITCOM UK

SPECIAL EVENTS

VARIETY

ANIMATION CARTOONS

CHAT SHOWS GENERAL

FAMILY SHOWS

OTHER COMEDY


SITCOMUK

SPECIAL EVENTS

25

30

35

40

45

50

55

1525354555

% ABC1

YOUNGER - UPMARKET OLDER - UPMARKET

YOUNGER - DOWNMARKET OLDER - DOWNMARKET

C4 IN ITV1 ZONE

ITV1 IN C4 ZONE

FEMALE MALE

C4

ITV1

BBC1

FIGURE C.8. – UK TV REVENUE GROWTH RATES – all TV versus main network players

UK TELEVISION INDUSTRY REVENUE TRENDS, 1998-2006

TOTAL GROSS TV REVENUE(INC PAY TV)

BBC/COMMERCIAL NETWORK REVENUES(INC SPIN OFF CHANNELS)

CAGR1998-2002

8.0%

4.3%

CAGR2002-2006

4.4%

1.4%

2,000

4,000

6,000

8,000

10,000

12,000

1998 1999 2000 2001 2002 2003 2004 2005 2006

£M

- PAY TV GROWTH

- COMMERCIAL RECESSION

- LICENCE FEE UPLIFT

- PAY TV GROWTH

- COMMERCIAL TV STAGNATION

- LICENCE FEE GROWTH

- PAY TV GROWTH

- COMMERCIAL TV GROWTH

SOURCE: OFCOM, BBC ANNUAL REPORT, O&O ANALYSIS

FIGURE C.9. – UK TV REVENUE GROWTH RATES – BBC versus commercial networks

CAGR1998-2006

0.2%

4.6%

CAGR2002-2006

0.2%

2.8%

UK BROADCASTERS, REVENUES, 1998-2006

500

1,000

1,500

2,000

2,500

3,000

3,500

1998 1999 2000 2001 2002 2003 2004 2005 2006

£M

BBC TV LICENCE FEE REVENUE*ITV PLUS C4 (INCL. SPIN OFFS)

ITV, C4 AND FIVE

-0.5% -0.3%

- COMMERCIAL BOOM - COMMERCIAL RECESSION


- COMMERCIAL NETWORK STAGNATION


SOURCE: OFCOM, BBC ANNUAL REPORT, O&O ANALYSIS*TV PROPORTION OF LICENCE FEE INCOME AS CALCULATED BY OFCOM

FIGURE C.10. – YEAR ON YEAR REVENUE GROWTH RATES – BBC versus commercial TV

UK BROADCASTER REVENUE GROWTH RATES, 1999-2006

7%

-1%

6%

15%

4%

1%2%

5%6%

-11%

3%

-2%

4%

7%

-7%

5%

-15

-10

-5

5

10

15

20

1999 2000 2001 2002 2003 2004 2005 2006

ANNUAL GROWTH RATE %

BBC LICENCE FEE REVENUE

ITV, C4 (INC SPIN-OFFS)

- COMMERCIAL RECESSION




- COMMERCIAL BOOM

COMMERCIAL NETWORK (INC SPIN-OFFS)

ADVERTISING REVENUE

3%

6%

-12%

1%

-3%

4%

6%

-8%

FIGURE C.11. – UK NEW PROGRAMMING SPEND TRENDS – by commissioning outlet

UK SPENDING ON UK TV ORIGINATIONS, 2001-2006

11891359 1311 1044 1312 1281

1424

13971394 1337 1322 1419

68

70 98 117 161182

2001 2002 2003 2004 2005 2006

£M

CAGR2001-2003

20.1%

2.3%

CAGR2003-2006

22.9%

0.9%

-1.1% 0.6%

5.0% - 0.8%

COMMERCIAL NETWORKS (INCL. SPIN OFFS AND REGIONAL OUTPUT)

BBC NETWORK ORIGINATIONS (INCL. SPIN OFFS AND REGIONAL OUTPUT)

OTHER THEMATIC CHANNELS2681

2826 2803 2798 27952882

SOURCE: OFCOM, O&O ANALYSIS

FIGURE C.12. – ITV ENTERTAINMENT TALENT TRACKING – current talent roster

22

98

6

3

66

7

7

23

1

21

2

1

12

8

11

ENTERTAINMENT TALENT VINTAGE: ITV1, 2007“WHERE WERE THEY BACK THEN?”

5

10

15

20

25

2007 PREVIOUS SHOW 5 YEARS AGO 10 YEARS AGO 20 YEARS AGO

NUMBER OF MAIN PRESENTERS

NOT ON TV

VARIOUS CHANNELS (minor roles)

THEMATICS

FIVE

CHANNEL 4

BBC

ITV1

222222 22 22

SOURCE: IMDB, SPOTLIGHT, O&O ANALYSIS

TIME/CAREERTODAY

1

ON RADIO

1

FIGURE C.13. – CHANNEL 4 ENTERTAINMENT TALENT TRACKING – current talent roster

8

2

1

1 3

4

1

5

1

2

2

1

1

1

2

5

ENTERTAINMENT TALENT VINTAGE: CHANNEL 4, 2007“WHERE WERE THEY BACK THEN?”

1

2

3

4

5

6

7

8

9


NUMBER OF MAIN PRESENTERS

NOT ON TV

C4 SPIN OFFS

THEMATICS

ITV1

BBCCHANNEL 4

8 8 8 8 8


TIME/CAREERTODAY

FIGURE C.14. – CHANNEL 4 COMEDY TALENT TRACKING – Current talent roster


16

7

5

1

2

3

1

3

1

3

2

1

2

3

1

1

4

9

14

COMEDY TALENT VINTAGE: CHANNEL 4, 2007“WHERE WERE THEY BACK THEN?”

2

4

6

8

10

12

14

16


NUMBER OF ACTORS/ PERFORMERS

NOT ON TV

VARIOUS

THEMATICS

ITV1

BBC2

BBC1

CHANNEL 4

16 16 16 16 16

1 ON RADIO

TIME/CAREERTODAY

FIGURE C.15. – TV BATTLES AND TALENT POACHING – 2004 to 2008

TALENT/CONTENT TIME LINE 2004-2008

ITV extend Who Wants to bea Millionaire? deal to 2009

Alan Titchmarsh starts ITV show

Tim Lovejoy joins BBC

BBC buy terrestrialrights to Heroes

Five wins rightsto Neighbours

Des O'Connor joins C4

Zoe Ball moves to ITV

Gabby Logan quits ITV for BBC

David Dickinson joinsITV from BBC

Launch of Five Life

Launch of Five US

Nicholas Owen switches ITN for BBC News

Sky One win rights for series 3 and 4 of Lost

Simon Amstell moves to BBC from C4

Graham Norton signsnew 3 year contract at BBC

Jonathan Ross signs3 year extension with BBC

Launch of BBC HD

Nigella Lawsonjoins BBC

Paul O'Gradyleaves ITV for C4

Steve Rider leaves BBC for ITV

Eamonn Holmes joinsSky News from GMTV

Launch of More 4

Des Lynam joins C4

Daisy McAndrewjoins ITV from BBC

Nick Robinsonleaves ITV for BBC

Trinny and Susannah move to ITV from BBC

Graham Norton moves to BBC

Launch of UKTV Gardens

Launch of UKTV People

Launch of FX channel

Sky buys series 3 and 4 of 24

Trisha Goddard leaves ITV for Five

Michael Parkinsonleaves BBC for ITV

C4 acquiresrights to The Simpsons

Launch of Living 2

Launch of ITV3 & ITV4

Launch of UKTV Documentary

John Suchet joins Five

Tess Daly moves to BBC

Launch ofCITV channel

Launch of Bravo 2

BBC talent salaries leak

Five acquires rights to Fireman Sam

Ruth Watson movesto C4 from Five

Natasha Kaplinskymoves to Five from BBC

Five to airNeighbours

OCT-03 JAN-04 APR-04 AUG-04 NOV-04 FEB-05 MAY-05 SEP-05 DEC-05 MAR-06 JUL-06 OCT-06 JAN-07 APR-07 AUG-07 NOV-07 FEB-08 JUN-08

RED NODE - MOVEMENT OF TALENT AMBER NODE - CHANNEL LAUNCHGREEN NODE - MOVEMENT OF CONTENT

MOTD returns to BBC

Fiona Bruce to host Antiques Roadshow

Launch of Virgin 1

Dermot O'Leary presents X Factor

Dermot Murnaghan joinsSky News from BBC

Kirsty Young to host Crimewatch from 2008

Richard & Judy to leave C4In June 2008

FIGURE C.16. – RADIO MARKET DIFFERENTIATION – market positioning in London – 2006/07

VIRGIN

talk SPORT

CLASSIC FM

BBC RADIO FIVE LIVE

BBC RADIO 4

BBC RADIO 3

BBC RADIO 2

BBC RADIO 1

CHOICE FM CAPITAL GOLD

HEART

LBC 97.3

SMOOTH FM

MAGIC

KISS FM XFM

CAPITAL FM

FEMALE MALE

20%

30%

40%

50%

80%

90%

100%

10 15 20 25 30 40 45 50 55 60

AVERAGE AGE OF LISTENING

% ABC1 LISTENING

LONDON RADIO STATION COMPETITIVE POSITIONING- (LEADING SERVICES ONLY - LISTENING AMONG 10 TO 65 YEAR OLDS ONLY)

BBC LONDON 94.9

60%

70%

LONDON POPULATION AVERAGE

YOUNG

CURRENT COMMERCIAL HEARTLAND

KEY BATTLE GROUND

BBC HEARTLAND

YOUNGER UPMARKET OLDER UPMARKET

OLDER DOWNMARKETYOUNGER DOWNMARKET

SOURCE: RAJAR, O&O ANALYSIS

SIZE OF CIRCLE = AUDIENCE SHARE

FIGURE C.17. – COMMERCIAL RADIO REVENUE GROWTH VERSUS BBC RADIO SPENDING GROWTH – 2001 to 2006

UK RADIO REVENUE GROWTH RATES, 2001-2006

-7%

4%

9%

3%

-2% -1%

-16%

14%

0%

4%

-1%-3%

-7%

13%

2%

7%

-1%

5%

-20

-15

-10

-5

5

10

15

20

2001 2002 2003 2004 2005 2006

ANNUAL GROWTH RATE (%)

COMMERCIAL RADIO

BBC NETWORK SPEND

BBC LOCAL/NATIONAL SPEND

SOURCE: BBC ANNUAL REPORTS, OFCOM, O&O ANALYSIS

FIGURE C.18. – TV BATTLES AND TALENT POACHING – 2000 to 2008

RADIO TALENT (BREAKFAST AND DRIVETIME) TIME LINE 2000-2008

R1 Bfast - Sara Cox replaces Zoe Ball

Virgin Drivetime - Nick Jackson replaces Nick Abbot

Virgin Drivetime – Pete & Geoff replace Nick Jackson

Virgin Drivetime - Daryl Denhamreplaces Pete & Geoff

Virgin Drivetime – Kelly-Anne Smithreplaces Daryl Denham

R1 Bfast - Chris Moylesreplaces Sara Cox

R1 Drivetime - Sara Cox replaces Chris Moyles

R1 Drivetime - Scott Mills replaces Sara Cox

Capital Bfast - Johnny Vaughan replaces Chris Tarrant

XFM Drivetime - Luciojoins XFM from Kerrang

Capital Drivetime - Richard Bacon replaces Dr Fox

Magic Bfast - Dr Fox replaces Graham Dene

Magic Drivetime - Graham Denemoves to Drivetime

XFM Bfast - Lauren Laverne replaces Christian O'Connell

Virgin Bfast - Christian O'Connell replaces Pete & Geoff

Virgin Drivetime - Martin Collins replaces Kelly-Anne Smith

R2 Drivetime - Chris Evans replaces Johnny Walker

Capital Drivetime - Lucioreplaces Richard Bacon

XFM Drivetime - Richard Bacon replaces Lucio

Smooth Drivetime - Martin Collins joins Smooth

Virgin Drivetime - Ben Jones replaces Martin Collins

XFM Drivetime - Paul Tonkinsonreplaces Richard Bacon

Smooth Bfast - Russell Pockett joins

XFM Bfast - Alex Zane replaces Lauren Laverne

XFM Drivetime - Ian Camfieldreplaces Paul Tonkinson

Virgin Drivetime - Neil Francis replaces Ben Jones

XFM Drivetime - Rick Shaw from Kerrang replaces Ian Camfield

Virgin Drivetime - Nick Jackson replaces Neil Francis

Smooth Bfast - Graham Dene to join Smooth (replacing Russell Pockett)

Heart Bfast - Jamie Theakstonreplaces Jono Coleman

12/99 03/00 06/00 10/00 01/01 04/01 07/01 11/01 02/02 05/02 09/02 12/02 03/03 06/03 10/03 01/04 04/04 08/04 11/04 02/05 05/05 09/05 12/05 03/06 07/06 10/06 01/07 04/07 08/07 11/07 02/08 06/08

FIGURE C.19. – HOW COMMERCIAL TV SETS TALENT FEES – by exception

NO SPECIFIC ACTION

SUB-GENRE “TARIFF” RANGE

PROGRAMME COST PER VIEWER

HOUR BENCHMARKS

EDITORIAL SPECIFICATION VERSUS COST

(format, location, key artists etc)

RETURNING SERIES INFLATION

TALENT COSTS BECOMES AN ISSUE

MORE DETAILED COST PER VIEWER HOUR ANALYSIS

DEMOGRAPHICS AND CHANNEL BRAND BENEFITS

TALENT COST - BENEFIT i.e.

COMMERCIAL VALUATION

INCREMENTAL AUDIENCE

REVENUE IMPACT

“PROFIT” IMPACT

TARGET KEY TALENT

PROGRAMME COMMISSIONCOMMISSION ASSESMENT SPECIFIC TALENT VALUE ASSESMENT

DIRECT TALENT CONTRACT

WITHIN RANGE ABOVE RANGE

IN EXPECTED RANGE ABOVE EXPECTED LEVEL

RIGHT BALANCE TOO RELIANT ON TALENT

WITHIN EXPECTED LEVEL HIGHER THAN AVERAGE

STRATEGIC BENEFITS

IDENTIFIED

PRODUCTION PARTNER

IDENTIFIED

FIGURE D.1. – BBC’S RECENT TALENT SPENDING TRENDS – total spending (in-house production)

SOURCE: BBC BUSINESS AFFAIRS AND RIGHTS, O&O ANALYSIS

100

200

300

400

500

TOTAL PROG SPEND

TALENT SPEND

TOTAL PROG SPEND

TALENT SPEND

TOTAL PROG SPEND

TALENT SPEND

IN-HOUSE TV(EXCL NEWS, SPORT AND MUSIC)

NEWS NETWORK RADIO (EXCL NEWS)

BBC PROGRAMME AND TALENT SPEND BY ACTIVITY 2006/07

% OF ALL PROGRAMME

SPEND15.5% 14.9% 15.1%

£490M

£76M

£194M

£29M

£205M

£31M

BBC ON-SCREEN AND ON-AIR TALENT SPEND, 2004/05 TO 2006/07 (CAGR = 3.6%)

73.7 75.9

24.0 28.029.3

16.2 15.616.8

28.928.9 28.631.3

27.8 25.9

33.214.6 13.6

14.4190.0 186.2

204.0

50

100

150

200

250

2004/5 2005/6 2006/7

£M

FIGURE D.2. – TALENT SPENDING – importance by genre

TALENT SPEND AS A PROPORTION OF TOTAL PROGRAMME COSTS BY GENRE, 2004/05 TO 2006/07(BBC IN HOUSE SHOWS ONLY)

5

10

15

20

25

SOAPS, SERIES & SERIALS

QUIZ SHOWS/ PANEL GAMES

COMEDY SINGLE PLAYS

POLITICAL/ SOCIAL

ARTS* NEWS FAMILY SHOWS

RELIGION* HOBBIES & LEISURE

CONSUMER CHAT SHOWS*

DOCS CHILDREN'S SPORT

TALENT COST AS PROPORTION OF

PROGRAMME COST (%)

2004/05

2005/062006/07

2006/07 AVERAGE 15.5%

2004/05 AVERAGE 13.1%

*SMALL SAMPLE

SOURCE: BBC

FIGURE D.3. – BBC TV NUMBER OF CONTRACTS BY SIZE OF CONTRACT - 2007

BBC VOLUME OF TALENT CONTRACTS BY RANGE OF PAYMENTS, 2006/07TOTAL = £171M*

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

£0 - £1,000 £1,001 - £5,000 £5,001 - £10,000 £10,001 - £50,000 £50,001 - £100,000 £100,000+

NUMBER OF TALENT CONTRACTS

VOLUME OF CONTRACTS

* DOES NOT INCLUDE ALL TOP CONTRACTS (E.G. CENTRAL CONTRACTS)

SOURCE: BBC CONTENT DATABASE

LOW VALUE/STANDARD AGREEMENTS MIDRANGE TOP 150

EXCLUDES TALENT ON STAFF CONTRACTS AND SHORT TALKS

FIGURE D.7. – BBC TV TALENT PAYMENTS – distribution of spending by range band

BBC TALENT: VALUE OF CONTRACTS, 2004/05 TO 2006/07

33

14

8

6

32

38

16

75 6

45

10

15

20

25

30

35

40

£10,000-50,000 £50,000-100,000 £100,000-150,000 £150,000-200,000 £200,000-250,000 £250,000-300,000

VALUE OF CONTRACTS

(£M)

2004/05

2006/07

SOURCE: BBC BUSINESS AFFAIRS AND FINANCE, O&O ANALYSIS

CONTRACT VALUE RANGE

FIGURE D.8. – BBC TV HISTORIC TOP TALENT FEES PER HOUR INFLATION

SOURCE: BBC TALENT INFLATION SURVEY 2006/2007, O&O ANALYSIS

% YEAR ON YEAR INFLATION

2000/2001 2001/2002 2002/2003 2003/2004 2004/2005 2005/2006 2006/2007

- COMMERCIAL TV RECESSION




- COMMERCIAL BOOM

BBC TV TALENT INFLATION (KEY AND LEAD TALENT) - FEES PER HOUR – RETURNING STRANDS ONLY 2001/02 TO 2006/07

FIGURE D.9. – BBC TV KEY VERSUS LEAD TALENT FEES PER HOUR INFLATION

SOURCE: BBC TALENT INFLATION SURVEY, O&O ANALYSIS

BBC TV TALENT INFLATION (KEY AND LEAD TALENT) - FEES PER HOUR – RETURNING STRANDS ONLY

% YEAR ON YEAR INFLATION

LEAD TALENT

KEY TALENT

2001/2002 2002/2003 2003/2004 2004/2005 2005/2006 2006/2007

- COMMERCIAL TV RECESSION




FIGURE D.12. – BBC MAIN NETWORKS CURRENT ROSTER OF TALENT BY VENUE – channel with previous show


67

85

62 65

19

3

5

12

7 3

43

5

9

4

5

5

24

15

CURRENT BBC 1&2 ROSTER - PREVIOUS SHOW

10

20

30

40

50

60

70

80

90

100

ENTERTAINMENT FACTUAL COOKING/LIFESTYLE COMEDY

NOT ON TV

THEMATICS

BBC SPIN OFFS

CHANNEL 4

ITV1

BBC1 & 2

27 33 21 34%

1 ON RADIO

NUMBER OF PRESENTERS IN

2007

FIGURE D.13. – BBC MAIN NETWORKS CURRENT ROSTER OF TALENT BY GENRE – where they were five years ago?


48

65

38

56

11

5

9

11

3

5

3

4

3

4

5

3

5

6

4

2119

8

43

3

CURRENT BBC 1&2 ROSTER: 5 YEARS AGO

10

20

30

40

50

60

70

80

90

100


NOT ON TV

VARIOUS CHANNELS

THEMATICS

FIVE

BBC SPIN OFFS

CHANNEL 4

ITV1

BBC1 & 2

27 33 21 34%

1 ON RADIO


2007

FIGURE D.14. – BBC MAIN NETWORK CURRENT ROSTER OF TALENT BY GENRE – where they were 10 years ago?


48

58

1926

15

5

6

4

3

9

3

7

3 35

26

36

76

21

CURRENT BBC ROSTER 1&2 : 10 YEARS AGO

10

20

30

40

50

60

70

80

90

100


NOT ON TV

VARIOUS CHANNELS

THEMATICS

FIVE

CHANNEL 4

ITV1

BBC1 AND BBC2

27 33 21 34%


2007

CONTRACT THROUGH FAST FEE

WITHIN PRODUCTION

BUDGET

ANNUAL FEE INCREASE**

ABSOLUTE VALUE OF FEE*

TALENT COST

BECOMES AN ISSUE

ASSESSMENT OF TALENT’S CURRENT

STATUS

MARKET KNOWLEDGE

CURRENT/ PREVIOUS FEE

HISTORY

ENGAGEMENT TYPE, TERMS AND

VOLUME

STANDARD FEE RATES

DECISION MAKING

VISION BUSINESS

INVESTMENT GROUP

STAGE ONE STAGE TWO

WITHIN RANGE

ABOVE RANGE

>3%

<£1K

<3%

DESIGNATED PRODUCTION STAFFRIGHTS TEAMS

NOTE: FOR BBC SPORT THE THRESHOLD IS A 2% INCREASE AND PERSONNEL WILL VARY I.E. EARLIER DIRECTOR/CONTROLLER INVOLVEMENT

CONTRACT OFFER/

REJECTION

<£500K

>£500K

DG FINANCE COMMITTEE

<£3M

>£3M

CONTRACT OFFER/

REJECTION

STAGE THREE

PERSONNEL

PRODUCTION TEAMSRIGHTS NEGOTIATORPRODUCTION EVECUTIVESSENIOR PRODUCTION STAFF

PERSONNEL

CHANNEL CONTROLLERGENRE COMMISSIONERSENIOR BUSINESS AFFAIRS MANAGERTRG RIGHTS MANAGERHEAD OF RIGHTS & BUSINESS AFFAIRSDIRECTOR GENERALPRODUCTION HEAD

PERSONNEL

>£1K

** TYPICALLY THIS PROCESS FOLLOWED FOR RENEWING MID RANGE, HIGH LEVEL & LONG TERM CONTRACTS

TRG INVOLVEMENT NEGOTIATION

CONTRACT OFFER/

REJECTION

REJECTION

* THESE ARE TYPICALLY STANDARDISED PAYMENTS TO PANELLISTS, MUSICIANS OR PRESENTERS. ANYTHING BELOW £1K IS DEALT WITH BY PRODUCTION TEAMS USING THE ‘FAST FEE SERVICE’

FIGURE D.15. – BBC TALENT FEE REFERRALS PROCESS

FIGURE E.4. – COMMERCIAL VALUATION METHODOLOGY

STEP BY STEP VALUATION PROCESS

VALUE SURVEY

PROGRAMME BY PROGRAMME

AUDIENCE DATABASE

NET % RESPONDENTS WHO WOULD WATCH LESS IF NAMED TALENT

NOT INVOLVED

RELEVANT STRAND AUDIENCE

DEMOGRAPHIC SKEW

TOTAL REVENUE

UPLIFT

TARGET PROFIT MARGIN

c25% TO 30%

COMMERCIAL VALUE PER HOUR

CPT PREMIUM OR DISCOUNT

DEMOGRAPHIC REVENUE

ADJUSTMENT

AUDIENCE UPLIFT @ 50%

RELEVANT NETWORK CPT AND AD SLOTS

AUDIENCE REVENUE UPLIFT

X

=

=XX

+/- =

=

LESS

FIGURE E.6. – NET IMPACT ON AUDIENCE – value survey/replacement scores

58.6 58.5 57.050.8 50.7

47.6 47.3 46.7 44.8 43.9

23.1 21.5 21.6

25.319.8 23.8 24.2 22.7 25.9

21.9

18.3 20.0 21.4 23.829.5 28.7 28.5 30.6 29.3

34.2

LIKELIHOOD TO CONTINUE WATCHING IF HOST/PRESENTER REPLACED

10

20

30

40

50

60

70

80

90

100

NAME 1

C4

NAME 2

C4

NAME 3

C4

NAME 4

BBC

NAME 5

BBC

NAME 6

BBC

NAME 7

FIVE

NAME 8

C4

NAME 9

ITV

NAME 10

FIVE

%

LIKELY TO WATCH MORE

ABOUT THE SAME

LIKELY TO WATCH LESS

SOURCE: O&O VALUE SURVEY, 2,500 RESPONDENTS, JAN/FEB 2008

FIGURE E.7. – DEMOGRAPHIC APPEAL OF NAMED TALENT – value survey – entertainment sub-genres

GROUP A: DEMOGRAPHIC POSITIONING(SATURDAY NIGHT ENTERTAINMENT, CHAT SHOWS, QUIZ SHOWS AND PANEL GAMES)

0.8

0.9

0.9

1.0

1.0

1.1

1.1

1.2

0.80.90.91.01.01.11.11.21.2

APPEAL TO RESPONDENTS <35

APPEAL TO ABC1 RESPONDENTS

PANEL GAMES

BBCITVC4FIVE

SOURCE: O&O VALUE SURVEY AND ANALYSIS

QUIZ SHOW

CHAT SHOW

SATURDAY NIGHT

FIGURE E.8. – COST PER VIEWER HOUR VERSUS TALENTS COSTS PER HOUR INDEX – BBC1 entertainment

BBC 1 ENTERTAINMENT PROGRAMMES: TOTAL PROGRAMME COST PER VIEWER HOUR AND TALENT COST PER OUTPUT HOUR, 2006/07

20

40

60

80

100

5 10 15 20 25 30

PROGRAMME COST PER VIEWER HOUR (PENCE)

TALENT COST PER OUTPUT HOUR INDEX

SITCOM

OTHER COMEDY

ENTERTAINMENT

CHAT SHOW

PANEL/QUIZ

FEE INCREASES JUSTIFIED?

FIGURE E.9. – BBC TV STRANDS – index of talent cost hour and total cost per viewer hour

BBC TV STRANDS: INDEX TO GENRE AVERAGE OF TALENT COST PER VIEWER HOUR AND TALENT COST PER OUTPUT HOUR, 2006/07 (sample of 156 strands / 8 major TV programme genres)

100

200

300

400

500

600

100 200 300 400 500 600 700 800 900 1000

INDEX TO GENRE AVERAGE OF TALENT COST PER VIEWER HOUR

IND

EX T

O G

ENRE

AV

ERA

GE

OF

TALE

NT

CO

ST P

ER O

UTPU

T H

OUR

39 STRANDS

20 STRANDS

19 STRANDS

78 STRANDS

GENRE AVERAGE = 100

on screen and on air talent an assessment of the...

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