Format fortunes

By Ed Waller 21-08-2017

The UK’s route to market leadership in international TV formats is well documented, driven by its long tradition of factual entertainment, its well-funded and risk-friendly broadcasters – particularly pubcasters – and the creation of a community of rights-endowed global indies with exports front of mind.

Its subsequent loss of market share is perhaps less explored and probably won’t be a talking point at this month’s Edinburgh International TV Festival, but the numbers are quite stark. In 2003, the golden age of hit formats like Who Wants to be a Millionaire?, Survivor, Weakest Link and Wife Swap, the UK accounted for 45% of the global formats business, according to the now-defunct BTDA.

By 2006, format protection outfit Frapa said the UK’s figure was closer to 32%. More recent data from programming analyst The WIT says UK formats were responsible for 25% of all format adaptations in 2016, marginally down from 26% in 2015.

Data from FremantleMedia also suggests a similar loss of market share, with the UK accounting for 44% of unscripted formats travelling abroad in 2005, falling to 26% last year. Furthermore, recent figures released by Pact and TRP Research show revenues from UK format exports tumbled by 17% between the 2014/15 and 2015/16 financial years, falling from £56m (US$69.3m) to £46m.

The Australian version of the UK-originated Survivor format

The decline is partly due to structural changes in the global market, and partly down to what has happened in the UK and those new IP-exporting markets with which the UK has begun to compete, such as Israel, South Korea and Turkey.

As format distributors have found, give a man a fish and he eats for a day; teach a man to fish and he eats for a lifetime. After a few years of producing formats under licence and listening to all those flying producers, companies in IP-importing territories learned how to create their own formats.

Neither can the impact of the spate of mergers and acquisitions in the UK’s production sector be ignored, as that tends to put a brake on development as the focus shifts inwards to exit strategies, earn-outs, HR issues and exploiting the newly acquired library of existing formats.

Throw in the so-called ‘creative crisis’ in unscripted of a few years ago and the global upswing in drama and it’s no surprise that demand for UK formats has declined.

But the M&A frenzy has perhaps planted the seeds of a rebirth. The growth of the production giants has done two things. Firstly, it created a new generation of indie start-ups, usually founded by creative people leaving those behemoths with some great ideas in their back pockets that smaller companies can take risks on without the beancounters going on about ROI.

Secondly, the sheer size of some programme suppliers these days has not only stifled creativity, according to some, but also made some TV commissioners reluctant to order from them, preferring smaller, hungrier prodcos that are prepared to go that extra mile and keep the money on the screen.

According to Pact data, UK indies turning over less than £5m have increased their share of external production spend from 3% in 2011 to 9% in 2015. Those with turnovers under £25m have jumped from 17% to 43% over the same period, at the expense of mid-sized (£25m to £70m) and big producers (£70m-plus). The latter group saw its share of external production commissioning fall from 46% in 2011 to 29% in 2014, during the M&A peak, but this bounced back to 37% in 2015 as the focus returned to making shows rather than millionaires.

Channel 4 and the multi-channel crowd are particularly keen on commissioning small prodcos and these networks are coincidentally also the ones commissioning more new IP while ITV and Channel 5 – the networks favouring the production giants turning over more than £70m – are the ones more focused on safely renewing existing formats (based on 2015 stats, at least).

As well as creating a few production behemoths, a byproduct of the UK’s recent M&A frenzy is the creation of a new wave of smaller indies with fresh ideas supported by risk-taking local broadcasters. What more does a rebirth of UK formats on the international market require?