Survival of the Fittest

In recent years, U.K. production companies have been obsessed with growth. Increasing output volume, diversifying the production slate, servicing new broadcasters, and controlling multimedia rights have been priorities for both indie producers and the broadcast-owned outfits (Granada, Carlton and United). For...
December 1, 1999

In recent years, U.K. production companies have been obsessed with growth. Increasing output volume, diversifying the production slate, servicing new broadcasters, and controlling multimedia rights have been priorities for both indie producers and the broadcast-owned outfits (Granada, Carlton and United). For the `U.K. majors,’ increasing production is vital to their performance on the stock market.

While much attention is paid to what the majors are doing, in a market awash with independent filmmakers, it is equally important for the little fish to find a way to survive in an expanding pond.

Indies are motivated by growth – viewing it as the only way to survive and prosper in a highly competitive market, one in which production fees don’t guarantee survival. One consequence has been consolidation.

The most significant example of this trend is the £25 million takeover of Mentorn Barraclough Carey (MBC) by Terry Bates’ Television Corporation (TVC). The new operation, which will be the U.K.’s largest indie, combines high-end and popular factual, entertainment, sports, post, outside broadcast and international distribution.

But other indies are expanding quickly too. Obvious examples are Wall to Wall, Lion, RDF and Café. All are broadening their outlook on factual, and have considered expanding into other program genres.

RDF director of programs Stephen Lambert left the BBC to join RDF as a major shareholder last year. His own corporate ambitions sound like the classic blueprint for growth among U.K. indies:

First, expand the business. In the current year, RDF’s turnover has risen from £5 million to an estimated £12 million. This has been achieved by winning commissions from ITV, the BBC, C5 and new departments at C4 (such as youth, daytime and multicultural). ‘You have to look for all possible entry points,’ says Lambert, who adds that RDF has set up a business in Bristol to take advantage of quotas geared towards regionally based (i.e. non-London) production. So far, Sam Organ – who came to RDF from the BBC in May – has won £2 million of work for the Bristol-based offshoot.

Next, get into new genres and control your rights. Currently, RDF is looking for an investor to boost its ambitions in drama and distribution.

RDF Distribution makes a modest business selling in-house series like Wine World and Style World to cable and satellite, but Lambert is keen for the company to own more rights and attract more executive producer talent. As part of this strategy, RDF has taken on ex-C4 International staffer Clare Sivright as commercial director, ‘to spearhead coproduction in the U.S. and exploit commercial properties.’

At present, the company has around 50 staff – far more than the typical indie. Lambert takes the view that if people are part of the fabric of the company they are more inclined to share ideas. ‘Full-time staff are committed to the companies they work for. When people drift in and out, they are less loyal and collaborative. For obvious reasons, they tend to keep their ideas to themselves.’

This philosophy is shared by Lion TV – another BBC breakaway whose directors have had success winning commissions from their old paymasters. According to Lambert, this is partly due to good contacts. But he also stresses that it demonstrates ‘how competitive the BBC has become. Even when you work internally you have to sell yourself. The pressure is ruthless.’

One U.K. indie that has already gone down the diversification road is Richard Sattin’s Principal Media Group, which took on an external investor in 1994. This allowed it to set up factual, drama, IMAX and distribution arms.

Unusually, Principal had its first major successes in the U.S. Series for Discovery/TLC and PBS like Ultrascience, Connections and Choppers on Patrol, established the company’s credentials. Subsequently, the company has made IMAX format films like Wildfire for Discovery.

This high profile outside the domestic market has had two clear advantages, says Sattin. Firstly, it encouraged the company to build a state-of-the-art production HQ in London, which is capable of cost-effectively supporting productions at remote locations. (Producers are wired up to Principal so they can work from their own chosen locations, rather than camping out at head office.) Secondly, ‘it meant we understood the coproduction market before the U.K. broadcasters stopped giving producers fully-funded commissions.’

Sattin takes a flexible approach to distribution. In some cases, Principal positions itself as a funder to retain rights. In others, it will pass on the risk to third party distributors like ITEL, RDF or Southern Star. ‘There is no science about it,’ he says. ‘But we are in the fortunate position that if we don’t want to wait a year to enter production we can make a commercial decision about whether to kick-start it ourselves.’

The downside of international success for Principal has been that it has become tough to win commissions at home. ‘We have done some things for C4, like a film called Bounty Hunter,’ says Sattin. ‘But there is a real resistance by strand editors. They tend to go for tried-and-tested directors and pigeon hole us as a large international coproducer.’

Sattin believes this can lead to ‘tired formulas. Our strength is we have the resources to develop good ideas and back top directors.’

Despite this concern, Principal has won a commission from Lambert to make The Other Hollywood for ITV’s Real Life series. Sattin hopes the film – which charts efforts by British `artistes’ to get into the U.S. porn industry – will demonstrate the company’s ability to make Britdocs to fit local requirements. It is directed by Stephen Walker, who recently made a one-off called Waiting for Harvey, a behind-the-scenes look at the Cannes Film Festival.

Café Productions’ managing director André Singer has been looking long and hard at the structure of his company for some time. He echoes a number of the themes to emerge within other companies. ‘Changes at the broadcasters, company mergers and attempts to link up with powerful allies have all made the U.K. a pretty traumatic market. But we are on a growth curve. Turnover went up from £3.5 million to £5.5 million in 1999.’

Like Wall to Wall, which broke into drama last year, Singer has looked at other genres as a means of growth, but rejected it, noting ‘the learning curve is steep and dangerous.’

Instead, ‘we will concentrate on the four corners of our business: history, science, archaeology/anthropology and features, where we are continuing to expand.’ Current projects in these fields include: a science magazine for Discovery International called Future Tense; The Gene Hunters and Forbidden Rights for National Geographic; Irish Empire (BBC/RTE/SBS Australia); The Old Irish (RTE/WNET); several one-offs with WGBH; and a feature documentary with Werner Herzog called Klaus Kinski: My Best Fiend, which is ‘the sort of film that keeps us sane but is not that profitable.’

Like MBC and Principal, Singer has gone ‘a long way down the road in talking to potential partners. For now, we are strong enough to go it alone. But I feel some investment has to be the route for independents who want clout in the market.’

Singer’s major strategic re-think has come in the field of distribution and rights. Next year, he plans to overhaul Café’s distribution strategy to ensure the company has ‘less of a scatter-gun approach.’

Surprisingly, he has become increasingly skeptical about the value of owning rights. ‘I’m coming to the conclusion that the idea of rights is overrated. After you pay development costs and distributors get their share, the returns are not great. Sometimes, the series is so slow to recoup, it dates and has little commercial value.’ In future, he is tempted to take full funding from broadcasters, ‘stay profitable and then just back top-end series we wholeheartedly believe in.’

Singer shares Sattin’s concern about the difficulty of winning wholly domestic commissions. ‘Foreign companies come to us because they know us for coproductions. But it is not easy for us to get direct commissions out of the U.K. because we tend to be seen as an international company. There are lots of talented people here and not enough slots. From our point of view we are waiting for cable and satellite to grow big enough to compete effectively.’

Another producer who has had more success overseas than domestically is Pilot’s Ian Cross, who is currently into the seventh series of Lonely Planet for Discovery U.S. On the back of that series, Cross has secured commissions from The Travel Channel U.S. for an adventure series called Treks in the Wild World, which is now up to 26 episodes.

Cross has expanded the Lonely Planet brand by making history and food spin-offs. He also hopes to secure a DCI commission for a third travel strand.

Outside travel, however, the going has been tough. Having made a pilot called Short History of the World, Cross has yet to secure funding to go to a series. In the meantime, he is looking to produce a second one-off film and work his way up to a run of six.

Domestically, he hasn’t had a commission since C4 stopped showing Lonely Planet on series four. ‘We get tremendous international support for our shows, but it is frustrating not to get domestic commissions. To be honest, I think the raw commercial environment of markets like the U.S., benefits us. The subsidies inherent in the U.K. system tend to make the landscape here more political.’

In the battle for production funding, some indies have turned to advertisers for funding. One of the most successful outfits in this arena is Sunset & Vine – which has made Gillette World of Sport every week for 14 years and barters the show to more than 120 broadcasters. This year, the company unveiled plans to make Toyota World of Wildlife in partnership with Partridge Films.

In addition to S&V’s international barter productions, it has also appointed Leeds-based producer Nick Lord as its head of factual. Like RDF, the choice of a location outside London allows the company to pick up non-metropolitan commissions. Lord himself has experience on major strands like First Tuesday and Network First, which featured acclaimed film Conspicuous Consumption.

To date, S&V Factual has made a two-part history on lingerie for C5 and a film about an attempt to break the land-speed record on two wheels for BBC1. With a major post-production resource in-house, S&V is also able to amortize costs. S&V is the production arm of The Television Corporation, which recently acquired MBC. Leach says the merger is a complementary fit, but that it is too early to know how the two businesses will be integrated.

What is yet to be resolved in the U.K. indie sector is how many companies can survive the current competitive squeeze. Lambert believes indies will need to be either big or small, ‘with medium sized companies under more pressure.’

C4′s director of programming, Tim Gardam, is keen to ensure that a wide range of companies can win commissions. ‘The top 50 indie companies supply most of our programming, but there have got to be enough opportunities for small companies to break into the market with genuinely different ideas. I like to have about 25% of the program budget which doesn’t go to the big suppliers so we can allow originality into the system – rather than a sameness of experience from companies trying to provide all the main channels.’

Lambert’s view is that ‘C4 should be more generous with rights and encourage financially strong indies which can afford to take risks. I don’t think keeping indies hungry and precarious encourages good ideas.’

About The Author