Budgets are down, deals with buyers are harder and terms of trade are less fair: all in all, things aren’t looking rosy for unscripted producers headed into 2017, according to a recent report from Variety and independent association of producers PactUS.
It’s not all bad news. Released this week, the report found that 71% of producers considered 2016 to be a more successful year than the previous one, while 51% were confident in their own own business over a year ago (by comparison, only 9% were more confident in business in general).
However, 57% said network programming budgets have decreased in the past year, while only 6% said budgets had gone up. Predictably, profit margins are also on the decline, with nearly 67% of respondent saying their margins granted by the networks have decreased in the past year. Deals with buyers are even harder to make, with 76% saying it’s been more difficult to get their content on air. For those managing to strike up some deals, 63% of respondents said terms are becoming less fair and equitable.
A&E came out on top as the best network to do a deal with, named by industry respondents because it is “creatively empowering,” “collaborative,” and “getting creative with the business model.” ABC came in second, followed by FYI and Lifetime. On the flip-side, Amazon and Spike were ranked as the most difficult to work with.
A&E also topped the list as the “most respected” network (followed by ABC, HGTV and Netflix), while Bunim/Murry ranked the top as the most respected production company (followed by IPC, Left/Right and Zero Point Zero).
Some of the biggest threats posed to the business remains the decline in linear TV viewership and networks bringing production in house. A lack of risk-taking on the part of buyers, too much competition, and media consolidation also came up as industry-wide issues.
But where there are issues, there are also opportunities: non-traditional broadcast, such as SVOD and OTT platforms were brought up by many as the best places for growth into 2017 (as was VR), while premium storytelling and evolving platforms was also raised.
As for formats: producers were exploring talent-drive, social experiments, “loud” as well as internationally proven hits. (More than 72% of respondents said formats proven outside the U.S. were either very important or at least “helpful” when exploring new series.)
Pictured: Pact US , president David Lyle.