the evolution of the tv content production sector - ofcom · pdf filethe evolution of the tv...
TRANSCRIPT
The evolution of the TV content production sector
A discussion document
Prepared for Ofcom by Oliver & Ohlbaum Associates Ltd
September 2014
Introduction
Data on the UK external and UK independent production sector
The data on the UK indie production sector includes data for non-qualifying independents, i.e. previously independent productions groups
who are now owned by broadcasters (such as Shed, Shine and Carnival). This is to maintain consistency between data sources over time
and the available breakdown of data from public sources.
The indie data does not include external production by traditional broadcaster production units for other broadcasters (such as ITV
Studios, BBC Production)
The report uses the following definitions and distinctions for external content production:
External production
Output produced both by indies and by a broadcaster related production house for another broadcaster (NBCU, Sony, Discovery, ITV etc)
Non-qualifying independent
Previously independent super indie production groups now part of a broadcaster related group (Shed and Shine)
Future non-qualifying independent
Recently purchased super indie production groups that will now be part of a broadcaster related group (All3Media, Endemol)
Programmes made within 2 years of being commissioned retain independent status if an independent production company loses its
qualifying status after commissioning has taken place
The TV content production sector CONFIDENTIAL
2
Definitions and caveats
3
The evolution of the UK TV content production sector
Appendix
- Main trends in originated output
- The UK external sector
- Terms of Trade
Contents
1,147 1191 1347
1508 1395 1,356
1,247
1,539 1,668
103 107
118
107
115 154
165
185
147
36
28
63 70 87
119
152 156
215
351
310
279 369
495 652
670
755
16
32
43
38 32
26 25
41
40
46
16
21
22 17
27 18
2
14
1,527
1,732
1,867
2,016 1,999
2,145 2,227
2,588
2,779
0
500
1,000
1,500
2,000
2,500
3,000
2004(2005
Census)
2006(2007
Census)
2007(2007/2008
Census)
2008(2010 Census
- restated)
2009(2010 Census
- restated)
2010(2011
Census)
2011(2012
Census)
2012(2013
Census)
2013(2014
Census)
£ million
The UK indie sector showed strong growth up until 2008. The recession put pressure on UK commissioning budgets with
indies relying on international revenues. UK commissioning bounce back in 2012 boosted total sector income
The evolution of the UK TV content production sector
Independent producer TV-related revenues*
The independent sector has experienced a significant increase in revenues
*Definitions: ‘Other international income’ - revenue from companies overseas operations and any primary commissions received from non-UK broadcasters; ‘Int’l sales of UK
finished programmes’ - sales of first run UK programming sold as finished product abroad; ‘UK rights income’ – UK secondary sales, publishing, formats, DVD sales etc.
Source: Oliver & Ohlbaum analysis, Pact census
OTHER INT’L
INCOME*
PRIMARY UK
COMMISSIONS 5.5%
CAGR
2004 - 07 2008 - 13
39.0%
-
OTHER UK
PRE-PRODUCTION
UK RIGHTS INCOME*
(23.0%)
13.0%
2.0%
1.1%
20.0%
(9.0%)
22.0%
The TV content production sector CONFIDENTIAL
4
INT’L SALES OF UK
FINISHED PROGRAMMES*
6.9% 6.6%
4.7% 6.7%
REVISED METHODOLOGY
100 108 121
139 148
181 191
230
277
340
425
464
523 570
593
0
100
200
300
400
500
600
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Index (1998 = 100)
Source: BTDA / TRP / UKTI / PACT, Oliver & Ohlbaum analysis
CONFIDENTIAL
1998-2003 CAGR 12.6%
2004-2008 CAGR 22.2%
2008-2012 CAGR 9%
The evolution of the UK TV content production sector
Terms of Trade
Introduced
TV exports have seen significant growth
Following the introduction of Terms of Trade there was an initial significant boost to TV exports followed by healthy growth
in more recent years.
The TV content production sector
5
The evolution of the UK TV content production sector
5% 5% 5% 4% 4% 4%
6% 6% 7% 9% 9% 9%
12% 15% 17%
20% 22% 22%
21% 21%
19% 16% 15% 15%
55% 53% 52% 50% 50% 50%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2008 2009 2010 2011 2012 2013
Per cent
There has been some consolidation of mid-tier indies
Some consolidation of smaller
companies into mid tier
Small amount of consolidation at top
end of the sector
The TV content production sector
6
There was some consolidation into mid-tier indies up until 2010/11. The distribution of companies has remained stable in
more recent years
CONFIDENTIAL
Source: Broadcast Magazine, Oliver & Ohlbaum analysis
Distribution of number of indie companies by turnover brackets – 2008-2013
#Indies* 141 122 137 152 140 152
£70m+
£25-70m
£10-25m
£5-10m
£1-5m
*In addition to the companies above, we estimate there are circa 500 small prodcos with a turnover of less than £1m
There has been a much higher concentration into non-qualifying ownership than vice versa. Prior to 2008 most
consolidation did not affect indie status as this was indies buying other indies, creating the so called “super indies”
The evolution of the UK TV content production sector
The TV content production sector
7
CONFIDENTIAL
The sector has attracted external investment, now consolidated in trade buyers
Source: Oliver & Ohlbaum analysis
NON-
QUALIFYING
QUALIFYING BBCWW
Left Bank Pictures*, Hardy &
Sons, Cliffhanger Productions,
Clerkenwell Films, Baby Cow, Big
Talk**, Sprout Pictures
ITV
12 Yard
DISCOVERY/LG
All3Media
RTL
Fremantle
TIME WARNER
Shed
21 CF
Shine
2006 2014 2007 2008 2009 2010 2011 2012 2013
ITV
So Television, Big Talk**,
The Garden Productions
DISCOVERY
Betty TV
SONY
Victory Television, Left Bank Pictures*
All3Media
Cactus TV
21 CF/Apollo
Endemol
NBCU
Carnival Films
NBCU
Monkey Kingdom, Working Title,
Lucky Giant, Chocolate Media
*BBCWW retains a smaller minority share in Left Bank Pictures after it was sold to Sony
**BBCWW sold stake in Big Talk 2013 when purchased by ITV
SKY
Love Productions Programmes made within 2 years of
being commissioned retain indie status
if an indie prodco loses its qualifying
status
The evolution of the UK TV content production sector
0
0.5
1
1.5
2
2.5
3
3.5
Total indie revenue £bn
Number of indie companies
£10-
25m
Revenue is concentrated among the biggest indies
The TV content production sector
8
The top 6 indie production companies represent almost 45% of total revenues
CONFIDENTIAL
Source: Broadcast Magazine, Oliver & Ohlbaum analysis
Indie revenues by turnover band – share of revenue and number of companies - 2013
<£1m
£1-5m
£70m+
£25-70m
£5-10m
The evolution of the UK TV content production sector
46% 44% 40%
46% 47%
37%
32% 33%
23%
36% 29%
40%
13% 11%
29%
10%
16% 14%
5% 7% 2%
4% 3% 6%
3% 4% 6% 3%
6% 4% 0% 0% 0% 0% 0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2008 2009 2010 2011 2012 2013
Percent
Increased share of UK commission spend, smaller indies are claiming more share
The TV content production sector
9
The largest indies’ share of UK commission spend has declined over the last year, i.e. the so called “super indies” with
more than £70m in turnover. The indies in the £25-70m turnover bracket have gained the most from this shift in spend
CONFIDENTIAL
£70m+
£25-70m
£10-25m
£5-10m
£1-5m
Less than £1m
Note: *Primary commissions expenditure data excludes all expenditure on news and sports programmes and rights but includes expenditure on
all regional and nations and regions programmes
Source: Ofcom Communications Reports, BARB, Company reports, O&O / Pact Census, Oliver & Ohlbaum analysis
Share of spend on UK externally produced primary commissions turnover band of producer, 2008 to 2013
9%
51%
7%
3% 1% 5%
5% 0%
14%
3% 1% 1%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Indies (including currently qualifying indies and current and future non-qualifying indies) generate approximately £300m in
content rights from UK commissions.
The evolution of the UK TV content production sector
The TV content production sector
10
CONFIDENTIAL
Indie revenues from UK content rights by category - 2013
Indies have been able to generate secondary revenues on rights retained
£303m
UK SECONDARY TV SALES
PUBLISHING
FORMATS
MOBILE
OTHER MERCHANDISING REPEAT USE OF PROGRAMMING
DVD & VIDEO SALES
DISTRIBUTION ADVANCE
INTERNATIONAL FINISHED
PROGRAMME SALE
NEW MEDIA
OTHER*
Source: Pact census, Oliver & Ohlbaum analysis
* ‘Other’ includes advertising, PRTS, and other activities such as music publishing, live events, gambling, product integrat ion, ancillary & digital rights and cable relay
1st TX
6 12 18 24 36 Months
DTO (from TX+7; May be TX+1 in some cases)
DVD release (tends to be seasonally driven)
Primary licence commercial holdback
(typically 2 years, can be longer)
SVoD release
UK secondary release
Illustrative revenue windows for UK content rights
The evolution of the UK TV content production sector
7.0%
8.4%
9.3%
8.0% 8.5%
13.0%
6.7%
5.0% 5.3%
0%
2%
4%
6%
8%
10%
12%
14%
2004
2006
2007
2008
2009
2010
2011
2012
2013
Percent
The TV content production sector CONFIDENTIAL
11
Indie sector profitability has seen some recovery, but remains challenging
Sector average net margins improved only slightly in 2013
Source: Pact census, Oliver & Ohlbaum analysis
Net margins, 2004 to 2013
12
The evolution of the UK TV content production sector
Appendix
- Main trends in originated output
- The UK external sector
- Terms of Trade
Contents
2,157 2,255 2,239 2,323
2,188
187 200 196
173
153
387 367
522 540
597
94 103
122 122
124 2,825
2,925
3,079 3,157
3,062
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2009 2010 2011 2012 2013
£m
There has only been modest growth in spending on UK content since 2009. This growth has been on the back of
increased multichannel spend on UK content rather than PSB spend, although PSBs remain the main spenders
Trends in originated output
The TV content production sector
13
CONFIDENTIAL
Spend (incl news and sport*) on UK content by main PSB networks and multichannels – 2009-2013
Growth in spend on UK content has been modest in recent years
Source: Ofcom broadcaster returns, COBA, O&O analysis
PSB FIRST RUN
COMMISSIONS
PSB SECONDARY
RIGHTS
MC SECONDARY
RIGHTS
MC FIRST RUN
COMMISSIONS
0.4%
(5.0)%
11.4%
7.2%
2.0%
CAGR 2009-13
* Sport excludes rights for multichannels, inlcudes rights for PSBs
1,202 1,151 1,304
1,209 1,265 1,127
1,111
1,006
951 1,030
1,058
1,062
196
187
200 196 173
153
289
238
244 185
160
163
2,798
2,581
2,700 2,620 2,656
2,504
0
500
1,000
1,500
2,000
2,500
3,000
2008 2009 2010 2011 2012 2013
£m
PSBs have been cutting back on programme spending across the board
Trends in originated output
The TV content production sector
14
CONFIDENTIAL
Content spend by main PSB networks (incl news and sport)– 2008-2013
PSB spend on content has been cut back
Source: Ofcom broadcaster returns
FIRST RUN IN-HOUSE
COMMISSIONS
FIRST RUN EXTERNAL
COMMISSIONS
ACQUISITIONS
REPEATS
(1.3)%
(0.9)%
(4.9)%
(10.8)%
(2.2)%
CAGR 2008-13
2246 2355 2355 2321 2546
2702 2207 1997 1943 2091
3674 3232 3868
3169 3541
2142
1942 2353
2289
2094
1505
1657 860
1185 1228
12,269
11,393 11,432 10,906
11,500
0
2000
4000
6000
8000
10000
12000
2006 2008 2010 2012 2013
Hours
First run output hours have also declined although with some recovery over the last year. Genre focus has changed in
favour of factual entertainment and factual. The cost per hour has been largely static apart from a dip in 2010
Trends in originated output
The TV content production sector
15
CONFIDENTIAL
First run origination hours (excl news and sport), 2006-2013
Total originated first run output has decreased
Source: BARB, Ofcom, Oliver & Ohlbaum analysis
BBC1
ITV1
BBC2
Channel 4
Channel 5
4,401 3,826
3,226 3,483 3,545
1,404 2,298 2,551
2,576 2,719
1,317 1,391 1,713 1,466
1,632
2,048 1,288 1,198 1,370 1,586
1,262 1,174 1,086 1,064
1,191
920 589
384 118
87
915
827 1,274 829
741
12,269
11,393 11,432 10,906
11,500
0
2000
4000
6000
8000
10000
12000
2006 2008 2010 2012 2013
Hours All day – by channel All day – by genre
Factual
Entertainment
Children’s
Drama
Current Affairs*
Fact Entertainment
Other
* The Increase in Current Affairs output in non-peak 2013 is mainly down to programmes such as Cowboy Trap, The Sheriffs are Coming and Don’t Get Done Get Dom on the BBC
Cost per
hour £K 147 129 145 141
921 954 998 945 994
901 954 914 1091 999
799 784 877 915 929
726 736 951
943 912 378 394
476 465 502
3,726 3,822
4,215 4,360 4,336
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
2006 2008 2010 2012 2013
Hours
There has been an increase in first run originated peak time output. The genre focus has shifted in favour of Factual
programmes. Cost per hour is showing signs of recovery
Trends in originated output
The TV content production sector
16
CONFIDENTIAL
First run origination hours (excl news and sport), 2006-2013
Peak time originated first run output has grown
Source: BARB, Oliver & Ohlbaum analysis
BBC1
ITV1
BBC2
Channel 4
Channel 5
1,165 793 891 1,042 1,152
1,071
1,009 895 893
980
701
746 848 1,028
912
355 857
949
987 900 263 318
533
304 321
171 98
99 106 71
3,726 3,822
4,215 4,360 4,336
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
2006 2008 2010 2012 2013
Hours Peak time – by channel Peak time – by genre
Factual
Entertainment
Drama
Current Affairs
Fact Entertainment
Other
Cost per
hour £K 318 265 276 288
The volume of new commissions has declined at an annual rate of 8.3% since 2006 with a slight recovery in 2013.
Returning commissions have continued to grow over the period
Trends in originated output
The TV content production sector
17
CONFIDENTIAL
UK: New versus returning commissions (excl news and sport), first run output hours on main PSB networks
The share of new versus returning commissions has declined
Source: BARB (Attentional), Oliver & Ohlbaum analysis
4244
2823 2922 2155 2308
8024
8570 8510
8750 9192
12,269
11,393 11,432 10,905
11,500
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2006 2008 2010 2012 2013
Hours
NEW
RETURNING
(8.3)%
2.0%
CAGR 2006-13
(0.9)%
18
The evolution of the UK TV content production sector
Appendix
- Main trends in originated output
- The UK external sector
- Terms of Trade
Contents
1,132
828 1,012 920 879
94 536
541 888
798
492
580
575
514 711
68
86
345
347 400
735 324
253
329
376
98
137
130
195
222
1
2
25
59
44
2,620
2,492
2,882
3,251
3,430
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2006 2008 2010 2012 2013
Hours
Following a drop between 2006 and 2009, the major independent producer groups have recovered their volume of first run
origination output on the main UK networks
The UK external sector
The TV content production sector
19
CONFIDENTIAL
UK: First run output hours on main PSB networks by independent producer group*
The major independent producers have recovered their output hours on PSBs
Source: BARB (Attentional), Oliver & Ohlbaum analysis
ENDEMOL
SHINE
ALL3MEDIA
FREMANTLE
ZODIAK
SHED
NBCU
• Endemol and Fremantle have both seen a
decline in programming output on the main UK
networks since 2006
• All3Media made good recovery in 2013. It lost
significant hours in 2012 with the sell back of
Cactus TV to its founders
• Shed, Shine, Zodiak and NBCUniversal have all
improved their position, albeit coming from a
lower base
• Shine’s big increase in hours from 2010 to 2011
was due to the commissioning of chat/current
affairs shows Live with Gabby, The Vanessa
Show and The Wright Stuff Extra, although it
experienced a drop in 2013
*Measured according to prodcos that were part of the groups in each respective year
External hours on the BBC have increased slightly, while there has been a decrease in external hours on ITV. Channel 4
and Channel 5 have remained largely unchanged in recent years
The UK external sector
The TV content production sector
20
CONFIDENTIAL
External commissioning share of all hours - 2006 to 2013
There has been some movement in the use of external commissions by networks
Source: BARB (Attentional), Oliver & Ohlbaum analysis
23% 25% 23%
26% 28%
42%
33% 35%
33% 30%
100% 100% 100% 100% 100%
82%
97% 99% 99% 99%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2006 2008 2010 2012 2013
Share of hours
ITV
BBC
Channel 4
Channel 5
The trend remains when looking at qualifying hours, excluding news and sport
The UK external sector
The TV content production sector
21
CONFIDENTIAL
External commissioning share of hours (excl news and sport) - 2006 to 2013
The use of external commissions by networks – excl news and sport
Source: BARB (Attentional), Oliver & Ohlbaum analysis
34%
39% 39%
46% 48%
54%
43%
47%
42% 42%
100% 100% 100% 100% 100%
92% 94%
98% 99% 99%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2006 2008 2010 2012 2013
Share of hours
ITV
BBC
Channel 4
Channel 5
The major independents have seen their share of new commissions fall significantly since 2006 (with the exception of
NBCUniversal). Shed and All3Media have remained more stable
The UK external sector
The TV content production sector
22
CONFIDENTIAL
UK: New commissions, first run output hours on main PSB networks by independent producer group
The share of new commissions by the major independent producers has fallen
Source: BARB (Attentional), Oliver & Ohlbaum analysis
151 132 190
124 178
112 125 54
106 82
202
90
284
41 81
62
49
58
89
81
169
114
154
90 62
173
114
35
48 26
1
14
27
24 17
870
640
802
522 528
0
100
200
300
400
500
600
700
800
900
1,000
2006 2008 2010 2012 2013
Hours
ENDEMOL
SHINE
ALL3MEDIA
FREMANTLE
ZODIAK
SHED
NBCU
2.4%
(4.3)%
(12.2)%
3.9%
(13.3)%
(23.7)%
CAGR 2006-13
61.9%
• Fremantle, Zodiak and Endemol have seen the biggest drop in new commissions from the main networks. All other major indie groups have performed better
than the market average growth.
• All3Media has recovered somewhat in 2013 and continues to be the biggest single supplier of new indie output. The market share of the next four groups has
evened out in the last few years.
The UK external sector
12%
26% 29% 30% 31%
41%
37% 28%
34% 29%
25% 12%
12%
15% 17%
7% 6%
7%
7% 8%
2% 3%
3%
3% 5%
7%
5%
3%
1% 1%
6% 11%
18%
10% 10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2006 2008 2010 2012 2013
Hours
Genre specialisms of independent producers – a move out of entertainment
The TV content production sector
23
There has been a move out of entertainment and into factual entertainment specialism among indie producers. Factual
has regained some ground in recent years
CONFIDENTIAL
Source: BARB, Oliver & Ohlbaum analysis
Factual Entertainment
Factual
Entertainment
Drama
Current Affairs
All day – by genre
Hours 6,065 6,009 6,025 6,211 6,056
Children’s
Other
The increase in “other” in 2010 is largely down to an increase of Nightscreen programming and “The Zone – Netplay / QVC” on ITV
Since 2006, Endemol has seen it return to predominantly having entertainment shows commissioned (mostly Big
Brother), whilst Fremantle has diversified away from entertainment towards factual entertainment
The UK external sector
The TV content production sector
24
CONFIDENTIAL
Major independent producers: Genre mix*, 2006 versus 2013: Endemol and Fremantle
Genre specialisms of major independent producer groups (i)
Note: Genre mix on 5 main PSB networks only
Source: BARB (Attentional), Oliver & Ohlbaum analysis
26%
51%
84%
74%
38%
20%
7%
13%
3%
26% 12%
2% 2%
29%
7% 4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Share of hours
Children’s
Drama
Entertainment
Factual
ENDEMOL FREMANTLE
2006 2013 2006 2013
Factual Entertainment
Current Affairs
Other
Drama
Entertainment
Factual Factual Entertainment
Other
All3Media and Zodiak have both had more hobby and leisure output commissioned, moving away from entertainment,
factual and drama, and in All3Media’s case sport
The UK external sector
The TV content production sector
25
CONFIDENTIAL
Major independent producers: Genre mix*, 2006 versus 2013: All3Media and Zodiak
Genre specialisms of major independent producer groups (ii)
Note: Genre mix on 5 main PSB networks only
Source: BARB (Attentional), Oliver & Ohlbaum analysis
17% 11%
6%
36%
13%
13%
49%
10% 23%
53%
23%
48%
24%
22%
5%
1%
1%
1%
4%
1%
3%
1%
20%
13%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Share of hours
ALL3MEDIA ZODIAK
2006 2013 2006 2013
Drama
Entertainment
Factual
Factual Entertainment
Current Affairs
Other
Children’s
Drama
Entertainment
Factual
Factual Entertainment
Current Affairs
Other Children’s
Shed is still mainly focussed on factual programming, whilst Shine has seen most commissions coming from its
entertainment strands. Both have seen a drop in drama output
The UK external sector
The TV content production sector
26
CONFIDENTIAL
Major independent producers: Genre mix*, 2006 versus 2013: Shed and Shine
Genre specialisms of major independent producer groups (iii)
Note: Genre mix on 5 main PSB networks only
Source: BARB (Attentional), Oliver & Ohlbaum analysis
0%
14%
61% 60%
53%
45%
7% 6%
17%
18%
18%
30% 23%
19%
9%
3%
1% 3% 3% 4% 5%
1%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Share of hours
SHED SHINE
2006 2013 2006 2013
Drama
Entertainment
Factual
Factual Entertainment
Current Affairs Other
Children’s
Drama
Entertainment
Factual
Factual Entertainment
Other
The UK external sector
The TV content production sector CONFIDENTIAL
27
All3Media – Key deals over time
Over the longer term, qualifying status has only been affected by broadcaster / studio deals in recent years. Prior to this
was the creation of the “super-indies” (indies buying other indies) which did not affect indie status
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Bentley Productions
North One
Cactus TV
Company Pictures
Lion Television
Lime Pictures
Maverick
Objective Productions
Zoo Productions
Studio Lambert
One Potato Two Potato
Optomen
John Stanley Productions
Little dot studios
Apollo 20
Cactus TV
Management buy out of Chrysalis TV Purchased by Discovery / LG
2014
The UK external sector
The TV content production sector CONFIDENTIAL
28
Fremantle – Key deals over time
The sale of Channel 5 has marked the only significant event of a non-qualifying production group becoming a qualifying
indie
2011 2012 2013 2014
Thames
Talkback
Boundless
Retort
Newman Street
C5 sold
2002 2003 2004 2005 2006 2007 2008 2009 2010
The UK external sector
The TV content production sector CONFIDENTIAL
29
Endemol – Key deals over time
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Initial
Zeppotron
Cheetah
DSP
Remarkable Television
Tiger Aspect
Tigress
Artists Studio
Purchased by 21 CF / Apollo
2014
The UK external sector
The TV content production sector CONFIDENTIAL
30
Shine – Key deals over time
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Shine TV
Shine North
Kudos
Princess Productions
Dragonfly
Brown Eyed Boy
Channel Flip
Bossa Studios
Organic creation Purchased by 21CF
2014
The UK external sector
The TV content production sector CONFIDENTIAL
31
Warner Bros. Television Productions UK (formerly Shed) – Key deals over time
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Shed Productions
Watershed
Yalli Productions
Shed Media Scotland
Ricochet
Wall to Wall
Twenty Twenty Television
Studio Lambert
Renegade
Organic creation Purchased by Time Warner
2014
The UK external sector
The TV content production sector CONFIDENTIAL
32
Zodiak – Key deals over time
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
IWC Media
Touchpaper Television
The Foundation
Bullseye Productions
Lucky Day Productions
Red House
RDF Television
The Comedy Unit
Presentable Productions
Bwark Productions
2014
33
The evolution of the UK TV content production sector
Appendix
- Main trends in originated output
- The UK external sector
- Terms of Trade
Contents
2001
Pop Idol premieres
on UK television
1999
Millionaire
premiers in the
US on ABC
1993
Independent quotas
become a statutory
requirement for
PSB channels
1986
Peacock
Committee
recommends 40%
independent quota
1982
Channel 4 launch
stimulates growth
of independent
sector
Terms of Trade Timeline of key events in the run up to Terms of Trade
CONFIDENTIAL The TV content production sector
2000s 1990s 1980s
1990
Broadcasting Act
introduces 25%
independent
quota
1997
Launch of Channel
5 as new PSB
broadcaster
1996
Broadcasting Act
introduces 10%
independent
quota on DTT
channels
2004
Negotiated
‘Terms of Trade’
come in to force
2003
Communications
Act mandates
broadcaster Codes
of Practice
1998
Channel 4 agrees
out of London
quota of 30%
2002
ITC PSR
recommends
negotiated terms
of trade to
counter-balance
inequality in
bargaining power
1998
Millionaire
premiers in the
UK produced by
Celador
2003
Chrysalis TV
(All3Media)
MBI backed by
Bridgepoint
(Euro 72m)
2006
Following Ofcom
TPSR, Heads of Terms
agreed between
broadcasters and Pact
for new media rights
34
Prior to ToT the indie sector was highly fragmented and was highly dependent on the main PSB network groups. There
was little scope to negotiate on production fees or take strong positions in rights against which to build up an asset base
89% 90% 85%
82% 85%
8% 6%
10% 10%
7%
3% 4% 5% 8% 8%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2006 2008 2010 2012 2013
Primary UK commissions continue to constitute the main source of revenue covered by Terms of Trade, although
international sales are now as important as UK secondary rights income
Terms of Trade
The TV content production sector
35
CONFIDENTIAL
Indie revenues by window covered by Terms of Trade – 2006-2013
Revenue covered by Terms of Trade by window
PRIMARY UK
COMMISSIONS
UK RIGHTS INCOME*
INT’L SALES OF UK
FINISHED PROGRAMMES*
£1,334m £1,678m £1,597m £1,876m £1,971m
*
Source: Pact census, Oliver & Ohlbaum analysis
Terms of Trade
The TV content production sector CONFIDENTIAL
36
Windows and platforms collapsing
1st TX in
originating
country
UK
commissions
US Imports
6 12 18 24 36 Months
DTO (from TX+7; May be TX+1 in some cases)
DVD release (tends to be seasonally driven)
Primary licence commercial holdback (typically 2 years, can be longer)
SVoD release (moving earlier)
UK secondary release (UKTV)
1st Pay window (moving to 12 months exclusive)
DTO (from 1st run series end)
DVD release (tends to be seasonally driven)
SVoD release (moving earlier)
FTA or 2nd pay TV window Sky use threat of side-loading
from DVR to secure more VoD
rights, otherwise can use this
to limit SVoD window value