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Television Production in Transition Independence Scale Sustainability and The Digital Challenge Palgrave Global Media Policy and Business 1St Ed 2021 Edition Gillian Doyle Full Chapter PDF
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PALGRAVE GLOBAL MEDIA POLICY
AND BUSINESS
Television
Production in
Transition
Independence, Scale, Sustainability
and the Digital Challenge
Series Editors
Petros Iosifidis, Department of Sociology, City University,
London, UK
Jeanette Steemers, Culture, Media & Creative Industries,
King’s College London, London, UK
Gerald Sussman, Urban Studies & Planning, Portland State
University, Portland, OR, USA
Terry Flew, Creative Industries Faculty, Queensland
University of Technology, Brisbane, QLD, Australia
The Palgrave Global Media Policy and Business Series has published to
date (2017) 15 volumes since its launch in 2012. Concentrating on the
social, cultural, political, political-economic, institutional, and technolog-
ical changes arising from the globalisation of media and communications
industries, the series considers the impact of these changes on matters of
business practice, regulation and policy, and social outcomes. The policy
side encompasses the challenge of conceiving policy-making as a reitera-
tive process that recurrently addresses such key challenges as inclusiveness,
participation, industrial-labour relations, universal access and freedom
in an increasingly globalized and transnationalized world. The business
side encompasses a political economy approach that looks at the power
of transnational corporations in specific contexts—and the controversies
associated with these global conglomerates. The business side considers
as well the emergence of small and medium media enterprises.
Focusing on issues of media convergence, industry concentration, and
new communications practices, the series analyses the tensions between
systems based on national decision-making and publicly-oriented partici-
patory structures and a more global perspective demarcated by commer-
cialization, privatization and monopolization.
Based on a multi-disciplinary approach, the series tackles three key
questions:
• To what extent do new media developments require changes in
regulatory philosophy and objectives?
• To what extent do new technologies and changing media consump-
tion require changes in business practices and models?
• And to what extent do privatisation, globalisation, and commerciali-
sation alter the creative freedom, cultural and political diversity, and public
accountability of media enterprises?
Television Production
in Transition
Independence, Scale, Sustainability and the Digital
Challenge
Gillian Doyle Richard Paterson
CCPR CCPR
University of Glasgow University of Glasgow
Glasgow, UK Glasgow, UK
Kenny Barr
CCPR
University of Glasgow
Glasgow, UK
© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer
Nature Switzerland AG 2021
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The use of general descriptive names, registered names, trademarks, service marks, etc.
in this publication does not imply, even in the absence of a specific statement, that such
names are exempt from the relevant protective laws and regulations and therefore free for
general use.
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tion in this book are believed to be true and accurate at the date of publication. Neither
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respect to the material contained herein or for any errors or omissions that may have been
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Switzerland AG
The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland
Preface
v
vi PREFACE
directly cite our sources, they have nonetheless very valuably informed
our study.
We thank Research Associate Dr. Michael O’ Neill who partici-
pated throughout the research project. In particular, we are grateful for
Michael’s work in coding, categorisation and measurement of program-
ming outputs for our sample group of companies—his care and efficiency
was invaluable in completion of the content database.
We are very grateful to interviewees, including the following, who
kindly consented to participate in our research: Sir Peter Bazalgette at
ITV, Zai Bennett at Sky Television, Ross Biggam at Discovery, Roberto
Suarez Candel of the European Broadcasting Union, Nick Catliff at Lion
Television, Susan Cooke at Media Wizards, Ed Coulthard at Blast! Films,
Simon Cox at Endemol Shine International, Andrew Critchley at Red
Productions, Tim Davie at BBC Studios, Thomas Dey at About Corpo-
rate Finance, Bruce Dixon at Pulse Films, Sachin Dosani at Wonderhood
Studios, Matt Elek at Vice, David Frank at Dial Square, Jane Featherstone
at Sister Pictures, Wayne Garvie at Sony Pictures Television International,
Charlie Goldberg at Left Bank Pictures, Anna Herold at GD CNECT of
the European Commission, Tim Hincks at Expectation Entertainment;
Jacquie Hughes at Ofcom, Alastair Jones at DCMS, Elena Lai of CEPI,
Rose Lubega at DCMS, Kevin Lygo at ITV Studios, Debbie Manners at
The Ingenious Group, Richard McKerrow at Love Productions, Stewart
McKinnon at Headline Pictures, John McVay of PACT, Jane Millichip
at Sky Vision, Jimmy Mulville at Hat Trick Productions, Mark Oliver at
Oliver & Ohlbaum Associates, James Penny at Mammoth Screen, Jon
Thoday at Avalon, Jane Turton at All3Media, Siobhan Walsh at Ofcom,
Jes Wilkins at Firecracker, Beth Willis at The Forge; John Willis at Tinop-
olis, Doug Wood at Endemol Shine, Sue Vertue at Hartswood Films and
Andrew Zein at Warner Brothers International Television.
We thank Andrea Esser, Professor of Media & Globalisationat
Roehampton University, John McVay at PACT (the trade association
for UK independent producers), Philip Schlesinger, Professor in Cultural
Policy at the University of Glasgow, Dr. Simon Harden at Univer-
sity College London, Raymond Boyle, Professor of Communications at
Glasgow and David Booth at media consultancy DBB12, who, over the
course of the project, provided invaluable guidance and advice. Thanks
also to commissioning editors Lucy Batrouney (Palgrave Global Media
viii PREFACE
Policy and Business Series) and Mala Sanghera-Warren and to the rest of
the team at Palgrave Macmillan for superb support.
1 Introduction 1
What Is Television Production? 2
Typology of Production Companies 5
Independent Producers or Indies 6
Vertically Integrated 7
Conglomerates and Super-Indies 7
Why Does Television Production Matter? 7
Television Production in Transition—Aims and Methods 10
Layout of the Book 16
References 18
2 International Trends 21
Early Formation, Growth and Internationalisation 22
Key Territories 26
Us 26
Europe 30
Rest of the World 34
Digitisation and Convergence 39
References 44
3 From Minnows to Sharks 53
Early History 53
Annan Report and Channel 4 56
Peacock, the 1990 Act and Increased Competition 59
ix
x CONTENTS
Bibliography 225
Index 249
List of Figures
xiii
List of Tables
xv
CHAPTER 1
Introduction
While creativity is thriving in the UK, many businesses struggle to make the
step from executing successful projects to becoming fully-fledged, sustain-
able creative businesses… Despite its reputation for world-class content,
the UK has very few creative businesses of an international scale (and not
enough work has been done to understand why).
Often, companies that achieve early success are acquired by a large interna-
tional player, rather than building sustainable businesses in the UK. While
we want the UK to continue to be an attractive country for inward invest-
ment, it is vital that those companies that want to grow organically have
the means to do so.
(Create UK, Creative Industries Strategy 2014: 6)
1 We gratefully acknowledge the support of the Economic & Social Research Council
(Reference ES/N015258/1).
1 INTRODUCTION 3
…we all thought twenty years ago that television would be dead by now
and of course it’s not. Because television as we know it still exists. It’s still
alive and well but it’s sitting on different platforms.
(Manners, Interview, London, November 2018)
1 INTRODUCTION 5
Stand-alone Indie
No cross ownership from broadcasters
Part-Vertically Integrated
Up to 25% broadcaster owned
Ownership Vertically Integrated UK
Configuration +25% UK broadcaster owned
Vertically Integrated Non-UK
+25% non-UK broadcaster owned
Conglomerate UK
Horizontally integrated UK cluster/‘Super-Indie’
Conglomerate Non-UK
Horizontally integrated non-UK cluster/‘Super-Indie’
Vertically Integrated
By contrast, vertically integrated production companies are those that are
cross-owned by broadcasters or vice versa. Supplying television content
is in some ways an uncertain business and the desire for more control
over the market environment acts as a powerful incentive to become
vertically integrated by diversifying into additional upstream or down-
stream phases in the value chain or vertical supply chain. Involvement in
both production of content, which brings ownership of valuable IPRs,
plus broadcasting, which allows exploitation of content rights, yields
obvious advantages in terms of strategic complementarity. So in many
countries such as the UK the television production industry is composed
of both the in-house production divisions of vertically integrated broad-
casters (such as the BBC and ITV plc) and an ‘independent’ production
sector which is populated by stand-alone programme-makers that are not
cross-owned by domestic broadcasters, or vice versa.
[w]hilst the economic aspects and the job creating potential of the sector as
outlined above are clearly major elements to be taken into account … it is
the social and cultural role of the audiovisual media that forms the point
of departure for policy making… [AV media] ‘play a central role in the
functioning of modern democratic societies’ … [and]… in the development
and transmission of social values’ …[and]… ‘help to determine not only
what we see of the world but also how we see it.’ (COM 1999)
Television Production
in Transition---Aims and Methods
The aim of this book is to build an understanding of the implications
of recent ‘seismic’ shifts in ownership in a sector where custodianship is
recognised to be of importance both for economic and cultural reasons.
Findings are based on research carried out as part of a major project
entitled Television in Transition: Independence, Scale and Sustainability
conducted by a team based at the Centre for Cultural Policy Research
(CCPR) at the University of Glasgow over a three and a half year period
from 2017 until 2020. Funded by the UK Economic & Social Research
Council (ESRC), the project set out to examine how and why the struc-
ture of ownership of the UK television production sector has shifted over
recent years and what this means for the economic sustainability of the
sector, for audiences and for content.
Using key case studies, the scope of our investigation covered the
role of changing digital distribution technologies in encouraging consol-
idation and strategies of horizontal, vertical and transnational expansion
in the television production industry; the relationship between, on one
hand, size and corporate configuration and, on the other, the ability of
production companies to maximise the value of their IPRs and to achieve
sustained economic success; the conditions that govern creative decision-
making and content in the production industry and how these are affected
by differing corporate configurations; and implications for public policy
and regulation. Our research questions covered three themes: How do
1 INTRODUCTION 11
the fact that evaluating performance in the context of media and cultural
sectors requires attention to be paid to non-economic indicators too such
as audiences, awards and critical reception for outputs.
Another key aspect of the project was to examine how changes in
ownership affect content. In order to investigate the relationship between
corporate ownership and content, we conducted an analysis of program-
ming outputs for several different types of television production compa-
nies based on their organisational configurations (i.e. whether a true
independent, owned by a conglomerate—UK-based or non-domestic, or
partially or fully vertically integrated) and based on genre (i.e. whether
drama or factual entertainment producers), in each case studying the sort
of content produced over an eleven year period from 2007–2017. This
involved detailed tracking and analysis of all programmes made at each
case study company over the study period in order to gauge continuity or
change in the volume and nature of its outputs and in how it’s content
fared for example on terms of distribution reach, ratings, awards and
critical acclaim.
Findings from the analysis of content were combined with evidence
from interviews carried out with senior executives at production compa-
nies and with their parent companies and with corporate financiers
specialising in takeovers in the television industry. Interviewees at selected
production companies included Chief Executive Officers (CEOs) with
responsibility for the overall strategy, Chief Creative Officers (CCOs) with
frontline responsibility for developing and producing content, and also
directors of legal and business affairs.
Case study companies were selected based on the need to investigate
our research questions across a range of differing types of production
companies in terms of scale, output and ownership configurations—see
Table 1.2. All were founded in the UK as independent production compa-
nies and the sample group includes producers of different genres of
output. Although mainly London-based, many have activities that extend
across a range of international territories. Many of the production compa-
nies within the sample were taken over during the study period. Thus,
this particular selection of companies and the spread of individuals that
we conducted interviews with enabled us to carry out extensive evidence-
gathering on our core questions about how changes in ownership have
affected business performance and content in the production sector.
14
a After the project study period ended a takeover of Kudos’ parent company, Endemol Shine, by French entertainment conglomerate Banijay Group
was completed in July 2020.
1
INTRODUCTION
15
16 G. DOYLE ET AL.
from interviews with leading executives across the selected case studies to
examine the business advantages conferred on production companies that
are taken over and to how ownership and changes in ownership config-
uration correlate with business performance in the television production
industry in the twenty-first century.
In Chapter 5 the focus shifts from the experience of production compa-
nies (sellers) to the perspective of investors (buyers). We assess the crucial
role played by advisors and specialist financial intermediaries in matching
buyers and sellers and in facilitating merger and acquisition (M&A) trans-
actions. We also delve more deeply into the main business and economic
motives that have driven M&A strategies and the attributes regarded by
buyers as lending greatest appeal to production companies as investments.
Thus, Chapter 5 sets out the important ways that the empirical findings
of this study extend knowledge and theory about propensities towards
consolidation and concentration in a digitally convergent and increas-
ingly supra-territorial landscape of media provision. In Chapter 5 we also
consider why it is that producers struggle to scale up and remain ‘inde-
pendent’ and whether there is now effectively a Minimum Efficient Size
for television companies.
In Chapters 6 and 7 our attention shifts to the question of how
changes in corporate configuration affect creative decision-making and
content. Drawing on both content analysis and interview findings,
Chapter 6 presents and analyses the findings of our investigation into how
differing sorts of corporate configurations effect the quality and nature
of content outputs in the television production industry. Drawing on the
insights provided in Chapter 6 about how ownership configuration affects
content, in Chapter 7 we reflect more widely on the socio-cultural signifi-
cance of recent transformations affecting the television industry, including
the growing significance of transnational distribution. We focus on the
role of market demand or commissioning as a powerful force shaping
production of television content. The growing influence of globalised and
multinational content service providers is examined and we ask whether
concerns about potential marginalisation of indigenous cultures remain
valid in an increasingly globalised environment for television content. We
consider the effects of the rise of SVoD services both as a force for disjunc-
tion in eroding production financing models that have supported the
success of the UK production sector and also as an agent of continuity
in advancing processes of transnationalisation of television.
18 G. DOYLE ET AL.
References
Abraham, D (2014), ‘After the Gold Rush’, James MacTaggart Lecture, Edin-
burgh International TV Festival, Channel 4 Press Release, London: 21
August.
Agnew, H (2017), Mediawan Turns Up Volume TV Investment, Financial
Times, 31 January, at p. 16.
Barker, A (2020), Banijay Boss Stands by e2bn Best on Europe’s Biggest Indie
TV Producer, FT.com, July 3 2020, Accessed at: https://www.ft.com/con
tent/63078376-3d78-4542-9a4d-315da07c0f21.
Barker, C (1999), Television, Globalisation and Cultural Identities, Milton
Keynes: Open University Press.
Bennett, J, and Strange, N (Eds) (2014) Media Independence: Working with
Freedom or Working for Free? London: Routledge.
Campelli, M (2015), US-Owned Indies Increase Share of UK Revenue, Broad-
cast, 27 March at p. 6.
CEC (2018), Audiovisual Media Services Directive, 2018/1808/EC, Brussels:
European Commission.
Chalaby, J (2010), The Rise of Britain’s Super-Indies: Policy-Making in the Age
of the Global Media Market, International Communication Gazette, 72(8):
675–693.
Chalaby, J and Esser, A (2017) The TV Format Trade and the World Media
System: Change and Continuity, International Journal of Television, 8(1), 3–
7.
COM (1999) Communication From the Commission to the Council, the European
Parliament, the Economic and Social Committee and the Committee of the
Regions. Principles and Guidelines for the Community’s Audiovisual Policy in
the Digital Age, Brussels, 14 December 1999.
1 INTRODUCTION 19
International Trends
In this chapter and the next, we lay out the background for the findings
of changing ownership of the production sector which are presented and
analysed in later chapters of this book. In Chapter 3, a detailed analysis
of the historical development of the UK television production sector is
set out, highlighting the importance of a series of public policy interven-
tions in determining the character and circumstances of the contemporary
British programme-making landscape. First however, in this chapter we
sketch out key trends and issues affecting the historic and contemporary
development of television production as an international industry.
The focus here is on wider international industrial, technological
and economic contexts that have shaped the contemporary production
environment and associated patterns of international trade in television
content. In the first section, we outline the historic development of
production—often as an adjunct to broadcasting—and analyse key forces
that, over time, have encouraged gradually increasing levels of interna-
tionalisation of television. In later sections of the chapter, we examine how
television production has developed in a number of international territo-
ries including the US, Europe, South America and Far East. Finally, we
consider the effects of more recent technological and market shifts that
have dramatically advanced processes of globalisation of television in the
twenty-first century.
and deliver film and television software all over the world’ (HoC 1993,
cited in Negrine 1998). More channels and greater resources to support
strategies of segmentation of audience demand combined with the spread
of transfrontier delivery platforms and the growth of thematic services
aimed at transnational audience groups (e.g. CNN, MTV, Discovery, etc.)
encouraged greater awareness, including among broadcast policy-makers,
of the growing opportunities surrounding the production and of the
potential value of having a well-developed indigenous television produc-
tion sector. Calls for more local production were fuelled by growth in the
number of commercial broadcasters and concerns about their reliance on
US-made content (Franquet et al. 2020). So, from the 1980s onwards,
technological advances that expanded avenues for delivery of television
not only ushered in more demand for content but also, in the UK and
many other countries, encouraged changes in approach towards policy
and regulation that resulted in more emphasis being placed on promoting
representational diversity and on improving the competitive position of
indigenous television production vis-a-vis international rivals.
As television systems have become increasingly internationalised over
time, this has favoured the development of programme-making as a sector
of economic activity that stands separately from broadcasting. Interna-
tionalisation has been spurred on by the launch of international channels
and pay-TV services (Chalaby 2003). Another route via which tele-
vision has expanded across frontiers is through co-productions where
programmes are funded by partners in differing territories (Hoskins et al.
1998; Hilmes 2014). Internationalisation has also been propelled by
growing cross-border trade in finished programmes and formats—broad-
casters and other service providers acquiring rights to programmes or
purchasing the right to use existing tried-and-tested formats from overseas
television companies, in some (though certainly not all) cases from neigh-
bouring countries or countries that share a common language (Doyle,
2014; Steemers 2014).
Fuelled by the rise of internet-based globalised streaming content
services who have been major buyers of both original and archive content,
the value of international trade in television content has grown consis-
tently in recent years (EAO 2020: 60; Steemers, 2016; USITC 2018;
WTO 2010). All available data about international trade in film and tele-
vision confirms that audiovisual is an area dominated by English language
products and particularly by exports from programme suppliers based in
one country: the US (Doyle 2014). A number of factors account for the
24 G. DOYLE ET AL.
frontiers may well involve some minor outlays on marketing and distri-
bution e.g. costs of attendance at international content markets such as
MIPCOM, and on dubbing or sub-titling where additional markets have
their own distinctive languages. But replication costs tend to be low so
the wider the audience, the more profitable the content will become.
Therefore economies of scale are a prevalent feature of the business and
there are great natural incentives for the makers and suppliers of tele-
vision content to extend the consumption of their output as widely as
possible, including across national territories (Doyle 2014, 2016). In
short, the economics of production strongly favour extended international
consumption of output, to whatever extent this may be feasible.
Uncertainty about likely demand for an as-yet unproduced item of
content is another economic feature of the television production industry.
As an ‘experience’ good, the extent to which any given television show
might satisfy consumers is a subjective and unknowable matter (Caves
2000). At the same time, the high costs and uncertainties involved in
audiovisual production encourage and indeed necessitate the use of strate-
gies aimed at risk reduction such as repetition and imitation of storylines
or formats that have already worked successfully with audiences (Hoskins
et al. 1997). Another approach towards risk reduction is to adopt a corpo-
rate shape that is conducive to financial success. A vertically integrated
structure, for example, reduces risk by ensuring access to both content
and audiences. Or risk can be reduced by scaling up to a size that is suffi-
ciently large to deploy a portfolio strategy where a number of different
sorts of output are produced simultaneously (Doyle 2013). Production
of television, as with film, is a hit-based business and so companies that
have the scale to mitigate risk by operating product portfolio strategies
will enjoy a competitive edge (Achtenhagen 2012).
The point here is that economic forces based on traits that are funda-
mental to the television industry play a significant part in encouraging
processes of international expansion, consolidation and globalisation. The
presence of economies of scale in any industry acts as a powerful incen-
tivising force that drives tendencies towards corporate expansion and
consolidation of ownership and television production is no exception. The
exact nature of advantages, benefits and economies of scale that accrue
to enlarged, diversified and consolidated television production entities is
examined in depth and detail in Chapters 4 and 5.
26 G. DOYLE ET AL.
Key Territories
Us
The US always has been and remains the dominant player in the global
television production sphere, both in terms of commercial value and
cultural influence. As was the case in many other territories, the first
US television networks—ABC, CBS and NBC—initially grew from the
radio sector. Michele Hilmes describes how ‘the schizophrenic nature of
US broadcasting split between First Amendment, free-market ideals and
protective social goals, would carry over into television’ (Hilmes 2003:
30). Nonetheless, a license fee system of public funding support for tele-
vision was not considered and so, from the outset, the US television
industry was orientated towards commercial sources of revenue in the
form of sponsorship and advertising.
2 INTERNATIONAL TRENDS 27
audience tastes and over time this may well pose an increasing challenge to
historic patterns of diffusion typified by largely one-way flows emanating
from the US outwards.
Europe
The television production and broadcasting landscape is hugely varied
across the continent of Europe. Each national system has evolved
according to differing cultural, political and commercial imperatives,
but there are also important shared characteristics. In many cases, the
context in which television production has emerged has been similar to
the UK where the established pattern has involved a mixed economy
of PSB plus commercial broadcast networks. All of the other largest
nations of Western Europe—France, Germany, Italy and Spain—mirror
this broad pattern. European neighbours have cooperated with one
another, for example on policy matters and in terms of development
of co-productions. But the national television industries of Europe also
compete with one other to sell content into and across international terri-
tories. However, despite occasional successes such as Spiral (France) and
Inspector Montalbano (Italy), the larger nations of Western Europe other
than the UK have achieved only limited success as exporters of television
content.
Most Western European countries, particularly France (Miller 1993),
share concerns about the implications for their respective cultural
economies of imbalances in trade in audiovisual (film and television)
content and about the possible effects on languages and cultures of exces-
sive audiovisual imports. While Britain has at times been regarded as
an ‘awkward partner’ in discussions about collective European measures
to protect culture, political support for action to protect and boost
the position of domestic programme-makers has more generally across
Europe remained robust (Collins 1994). Shared concerns about the need
to counter the effects of globalisation and of the dominance of US
audiovisual suppliers have paved the way for protective policy interven-
tions at national and collective European levels, such as quotas requiring
broadcasters to screen a minimum proportion of locally made content
and subsidies for local production sectors. Support for local produc-
tion is seen partly as a necessary counter-measure to the potentially
adverse effects of cultural imperialism and partly as a means of protecting
national producers who otherwise would struggle to compete in the
2 INTERNATIONAL TRENDS 31