Kate Bulkley, Media Analyst.

Will exports hit the buffers?

By Kate Bulkley

Royal Television Society


Sky’s newest channel is a niche offering – but its operator admits to Kate Bulkley that it will prosper only as part of a growing portfolio of channels

After a bumper year for sales of British programmes and formats, Kate Bulkley finds distributors worried that the momentum cannot be maintained, particularly for drama

British television is known throughout the world for its high levels of professionalism and creativity. So the recent announcement that UK TV exports increased by 22% last year was no great shock.

A rack of compelling, new and saleable programmes across many genres, plus the increasing opportunities in licensing, DVDs, co-productions and formats, have assisted in a sales surge that had exports reach $921m in 2003, according to the British Television Distributors’ Association.

Bob the Builder, The Weakest Link, Living with Michael Jackson, The Office, Prime Suspect, Bad Girls, Walking with Dinosaurs and a host of other shows are now truly global hits.

But with success comes doubt and there are several in the TV sales business who believe that sustaining such high growth will be very difficult. “I would not expect the export growth at this level to be sustainable,” says Nadine Nohr, managing director of Granada International, the sales entity resulting from the merger of Carlton and Granada into ITV Plc earlier this year.

“I don’t know if 22% is sustainable because it’s a pretty big number,” adds Mike Phillips, managing director of international television and film for BBC Worldwide. “But certainly the Brits are still pretty hot around the world and this is still seen as the place you come for the big, high-end CGI pieces and dramatisation, and for a lot of the more interesting formats like makeovers and reality.

“But our biggest problem is in the fiction area. In the past two years the two biggest buyers, PBS and A&E, have had smaller appetites. Generally, schedules are filling up with local production and Hollywood still owns pop culture globally. All this makes it much more difficult to sell British fiction.”

The challenge to the industry is to solve the potential problems and maximise revenues from what is, hopefully, an ongoing creative conveyor belt full of blockbusters.

Certainly the trend toward consolidation in the UK TV industry is helping to create players that can compete on the world stage with size and authority.

The next step: UK Sales Plc?

BBC Worldwide is already a major player, with TV export sales of $441m in 2003, representing nearly half of all UK TV export sales. The merger of the international sales units of Carlton and Granada into Granada International has created a second large player. But even these two big exporters of UK TV are minnows compared with the big US TV and Hollywood studio conglomerates.

ITV CEO Charles Allen – as part of ITV’s recent submission to the Government about BBC charter review – recently suggested that the sales arms of ITV and BBC Worldwide work together on the world stage.

“I think consolidation makes sense, whether it’s with the BBC or someone else,” reckons Nohr. “The merger of Granada with Carlton has shown that you can drive turnover and maintain your cost base in a very effective way.

“So although I can’t comment on the BBC specifically, I think the potential for further collaboration between various companies is quite strong.”

Meanwhile, the programme supply review – initiated by the ITC – that has resulted in independent producers being able to hold onto more rights has jump-started a range of mergers and is attracting new investors to the independent sector.

In several cases – such as the creation of All3Media from Chrysalis – these funds are being used to set up stronger combined production and distribution companies.

“The potential for profit coming closer to the creators means they will target the projects that go beyond the RTS Awards, wonderful as they are, and make shows that work in their primary market, but also have the potential for foreign sales,” suggests Rupert Dilnott-Cooper, formerly a senior executive at Carlton International and a director of the BTDA.

TV is more than just programmes

BBC Worldwide had an impressive 2003, with sales up 22%, matching the UK’s overall TV export growth. This was down to some stellar performers like Walking with Dinosaurs, Tweenies and The Weakest Link.

But the BBC also has another important asset: it is the only non-American media company that is a serious player in the global international channels business. Increasingly, these outlets are becoming an important distribution outlet for TV exports – and not only for the BBC.

In May, Granada International (GI) announced it had licensed over 90 hours of drama to US digital TV service BBC America, including classics from the ITV archive such as The Saint and The Prisoner.

What is clear from the BTDA figures is that although the export of completed programmes such as Prime Suspect remains the biggest single contributor to overall sales (worth $371m last year) the real growth areas are licensing, co-production and DVD sales.

As for finished material, one area that both GI and the BBC are targeting is the big event programme designed to stand out from the crowd. Shows like Living with Michael Jackson, Ancient Greek Olympics and Walking with Dinosaurs all have the advantage of being easy to promote in global network schedules.

“Around the world broadcasters are doing more and more domestic production so on the whole there is less primetime available for acquisitions,” says Phillips. “But everybody looks for the event pieces and in factual the Brits are top of the tree.

“This is partly because the Americans have never really been in this business and because the biggest single player in this area in the US is Discovery which has a big co-production deal with the BBC and a love affair with British producers. ”

Unpredictable formats

Sales of formats like TV Corporation’s Paradise Hotel, and, of course, Fremantle’s Pop Idol and Celador’s Who Wants To Be a Millionaire? have become increasingly important, showing the biggest growth of any genre, up some 62% from 2002. But as Phillips stresses, the Brits cannot afford to take success in the formats business for granted.

“The biggest question mark I think is formats,” he says. “Formats are hit driven and whether we can continue the kind of success we’ve had with The Weakest Link is unclear.”

Pre-school programming is a key component of TV exports, given the big money that can be generated from licensing and DVD on the back of shows like Tweenies and Bob the Builder.

It is not only DVD that is helping to drive sales. Nohr mentions new high-definition channels – a booming market in the US and Japan – and video-on-demand services. They are all hungry for material, which explains why GI is digitising Carlton’s movie libraries.

US dependency

To keep up with the changes in the TV landscape and boost GI’s sales beyond the current £139m, Nohr established a new team earlier this year, briefed to assess the various distribution technologies to identify programmes that could be acquired to add to the com-pany’s current 30,000-hour catalogue.

“We haven’t come out of the global recession yet so I think maintaining our current position as a company is one of our targets,” she says.

Dilnott-Cooper agrees with this assessment. “There is a buzz in the industry with the success of formats and the growth of foreign channels and the success of DVDs and licensing.

“My only note of caution is with the volatile dollar and the fact that the growth of UK exports is substantially coming out of the US. It is difficult to forecast growth continuing at the rate is has from that one market.”

But just as the format Survivor was not a big hit in the UK but did very well in the US, British producers are learning the importance of adapting production to appeal to non-British audiences. That kind of creativity is what the business is all about.


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