Each year, the MacTaggart Lecture at the Edinburgh International Television Festival is designed to act as an explosive catalyst for discussion and debate. This year’s model was no exception.
During his lecture yesterday (August 21), Channel 4 chief executive David Abraham took aim at what he calls “the Gold Rush of British television,” or, in his words, the “spate of deals that will reshape our industry and alter where decisions get made and by whom.”
Citing the recent deals that have seen U.S. media companies such as Viacom and Discovery acquire broadcaster Channel 5 and superindie All3Media respectively, as well as casting an eye towards the potential merger of Shine and Endemol under Fox, Abraham charged: “Our free-to-air channels have become the must-have accessories, the tiny dogs of 2014, amongst U.S. media companies eager to stay ahead of each other by internationalizing their revenues, priming their distribution pipes and shielding their tax exposure.”
He added: “Our independent sector, built up and nurtured over decades, is being snapped up almost wholesale and acquired by global networks and sold by private equity investors at a faster rate than tickets to a public flogging of [UK Top Gear personality] Jeremy Clarkson. Several owners have admitted to me privately that even they, as they sell, cannot fully understand the thinking behind how their companies are valued.”
With the current rash of consolidation and M&A activity at a seemingly feverish level, Abraham proposed that “the term ‘superindie’ has, in effect, become redundant. There are now just indies and studios.
“The truth is that UK production has turned in 20 years from an ugly duckling into a very valuable goose indeed – one that, as a result of hard work and talent, has laid some very valuable golden eggs.”
With commercial success apparently at a peak level for the UK production sector, Abraham cautioned against allowing financial gain to trump creativity. “Scale demands an increased focus on cost-cutting and margins,” he said. “Reformatting ideas is more efficient than the messy business of finding new ones. Fear of risk overtakes an appetite for it.”
Abraham also used his lecture to put forward the notion that the UK’s Terms of Trade between producers and broadcasters need to be re-examined – an idea that has also been floated by the BBC’s director of television, Danny Cohen.
“…The old settlement on Terms of Trade reflected the markets of the time: an absence of competition; strong broadcasters, weak indies; fledgling cable and satellite companies,” he said. “Today, if Danny Cohen thinks the BBC is dwarfed by the major studios; can you imagine how the world looks from my office?
“Smaller companies need a special level of support and protection when participating in a market characterized by big players, many of whom are connected to broadcasters,” he added.
Elsewhere in his speech, he highlighted Channel 4′s Growth Fund, designed to facilitate growth and expansion capabilities for UK indie producers, and which named its first four recipients on Thursday. Abraham also cited a greater need for diversity in the UK media sector, stating: “When we get things right, the results are spectacular.”
The Edinburgh International Television Festival closes tomorrow, August 23.