Bullish producers focus industry attention on brave new world

As if they didn’t have enough to worry about already, the UK’s TV companies and media agencies have been warned by two of the world’s production giants that they might be about to end upon the cutting room floor. Ian Quinn investigates

Television broadcasters have been behaving like one big happy family recently, standing side by side to promote the medium at the inaugural Thinkbox Experience.

But behind the scenes – and behind people's TV screens – a battle is raging about who is the new "big brother" on the block.

For once, the scrap for supremacy does not involve in-fighting between rival broadcasters ITV, Channel 4, Five and Sky.

A new threat is rapidly emerging to them all, ironically from the very source responsible for some of their biggest programmes.

As television's business model comes under threat from a range of potential "enemies"– the PVR, the mobile phone, the home computer – the shows that still bring in the multi-million audiences have taken on more importance than ever.

Programmes such as Big Brother, Who Wants To Be A Millionaire? and Pop Idol have become like gold dust as producers seek new ways to grab the eyeballs of the masses.

In many cases, it is the production companies that hold the precious rights to these shows and it hasn't escaped their notice.

At a conference on the future of broadcasting just over a week ago, the most famous production company boss in the UK, Peter Bazalgette, chairman of Endemol UK, appeared almost to taunt the TV establishment as he let rip on the "vested interests" of broadcasters, advertising agencies and Barb.

Bazalgette is not a man known for being short of an opinion or two. He is about as shy as the average Big Brother contestant.

Yet his declaration that production companies in the future will fight tooth and nail for the advertising and sponsorship money attracted by the major formats they have created, should not be dismissed as hot air.

Bazalgette warns there is going to be "one hell of a battle for who gets the ad money" and, as if the fact that his wife is an intellectual property lawyer was not warning enough, he is not alone.

Tony Cohen, CEO of another production giant, RTL-owned Fremantle Media, whose production company in the UK goes by the name of Talkback Thames and is behind the likes of the Idol series, says: "It's not just a contest between who gets the advertising money – it's going to be a contest for every right we create."

Cohen's use of the word "we" is particularly galling for broadcasters, because the biggest production companies – as opposed to the huge number of smaller outfits who still rely on TV companies for their daily bread – clearly believe they should be at the top of the table with the clients.

Lest anyone thinks producers like Endemol, Fremantle and Celador, producer of Millionaire, are getting ideas above their station, one look at the worldwide TV market shows how massive their brands have become.

Shows such as Big Brother, Idol and Millionaire have become a multi-billion-pound business.

The same names, albeit in slightly different formats, dominate the top 10 ratings in all the leading markets and a proven hit in the UK can be a licence to print money elsewhere.

With multi-territory hits such as I'm a Celebrity…Get Me Out of Here and Hell's Kitchen, Granada International has also been increasingly looking to crack Foreign markets, particularly in the US.

Laura Burrell, head of formats at ITV's production arm, says: "We produce 65% of everything you see on ITV. The amount of content is vast and because ITV owns the rights, it is a big advantage."

Sadly for ITV's profit margins, Coronation Street doesn't go down quite so well in New York or Paris.

For the likes of Channel 4, however, which outsources its programming to independents, there is no such opportunity to exploit a growing globalmarket where individual shows are becoming far bigger than entire channels.

With the prospect of significant relaxation of commercial content in the air, the big production companies are increasingly concentrating on coming up with the next big thing – by which they mean global TV hits.

Of course broadcasters globally, with the UK no exception as the second biggest market of them all, are not exactly going to lie down at the feet of production companies when they still control the distribution of by far the biggest sector in media.

Even Bazalgette admits that producers can't – at the moment at least – afford to see the broadcasting model fail "because we need access." It's hard to see how his company could make the most from shows like Big Brother without the TV platforms.

Fremantle, despite its ownership by RTL, is also far from being able to cut out the middle men – in the form of advertising agencies and broadcasters – and go straight to clients, because it hasn't got the alternative transmission vehicle.

Yet, for broadcasters, perhaps the most chilling part of Cohen's vision of the not too distant future is a slide he shows to industry analysts of Fremantle's broadcast partners, present and future. The present bit shows traditional TV players, such as ITV and C4. The future part sees them replaced by names such as Yahoo! and Real Player.

Dominic Burns, vice-president of sponsorship and advertiser relationships for Fremantle, says: "I'm not going to knock TV for what it can and can't do, but advertisers are having to look at the role it plays in the media mix."

Burns adds that production companies have been "ramping up" their commercial operations because they realise there are opportunities to get clients involved in content earlier in the process.

"This is being led by what advertisers want and if agencies are unable to provide it or broadcasters aren't willing to, then I can see them being bypassed."

Burns stresses there have been cases of producers, broadcasters and agencies getting it right, citing the X-Factor deal, involving his company, ITV and MediaCom, where "all three were at the table."

Mark Cranmer, chief executive Europe Middle East and Africa for Starcom, acknowledges the need for change and the fact that technology will accelerate this process.

"I think vested interests and a reluctance to change is not the right way to describe it. I don't think anyone is in denial about the change that's happening and not just in TV," he says.

"Any period of turmoil causes disruption and we're right in the early stages.

Everyone understands that everything is up for grabs, but I'm positive about it."

Mike Beale, deputy managing director at 12 Yard Productions, whose most famous property is The Weakest Link, says a few in the agency world would be voted off for their lack of enthusiasm for this brave new world.

He says: "As the barriers of advertiser content comes down you could see a producer going to someone like Mars and saying ‘let's make a programme for you'. Or even worse, for the advertising agencies, what happens if someone like Unilever goes into the marketplace and says ‘right, we're going to be in the business of being programme makers now, we're not going to advertise'?".

Broadcasters' biggest strengths
? They hold the keys to the biggest distribution platforms in the world
? They can use their own talent to find new hit shows
? The advertising industry is geared around supporting TV as the biggest medium

Production companies...
? Hold the rights to massive shows capable of dwarfing the revenue of entire channels
? Operate in a climate where the TV business model is coming under threat from all sides
? Are free from the constraints of the Barb TV ratings currency

What to look forward to in the pipeline

Among the formats being planned by production companies is the launch of the first global murder mystery series. The twist in the tale is that it will be released purely on mobile.

Entitled Kill Your Darling, this sort of content could also threaten the livelihoods of a few TV buyers if it takes off as well as some of producer Fremantle's previous TV shows. These include The Bill, Neighbours, Idoland, of course, Gute Zeiten, Schlechte Zeiten (Good Times, Bad Times), which tops the charts in Germany.

The company has seen more than 200,000 clips downloaded via 3G from its show, The X-Factor , with more to come during the next series on ITV.

Endemol sold several million minutes' worth of Big Brother coverage to various mobile companies.

Its group of companies last year had a combined turnover of g 1,033.7m, producing more than 25,000 hours of TV across 400 different series.

Content that boss Peter Bazalgette would like to see imported to the UK include the Dutch series Six Pack, based on the exploits of six people who try to rid the world of crap TV.

Currently he is barred from doing so because of the advertiser-funded content.

The show is backed by Heineken.

Granada International, although more of a four pack in terms of global, has recently sold many series to the key US market, including, Soap Star Superstar , to be screened by NBC under the title I'm a Celebrity but I want to be a Pop Star . And thanks to licensing by Granada, viewers in Romania are enjoying their ninth series of Surprise Surprise.

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