CONTENT REPORT 2019 Multichannel investment in UK ... - COBA … · COBA members’ total...

Multichannel investment in UK television programming

CONTENTREPORT 2019

03Executive Summary

04Content investment

10Independent Commissioning

14 International influence

CONTENTS

Written by

03COBA Content Report Multichannel investment in UK television programming

INVESTMENT IN UK CONTENT

l Annual UK content investment made by COBA members crossed the £1 billion mark for the first time in 2017, hitting £1.1 billion

l This marks a 57 per cent uplift since 2013 and 75 per cent since 2011

l In 2017, UK content accounted for half of all content spend by COBA members

l COBA members’ spend on UK originated content has grown faster than that of the main PSB channels since 2011

INDEPENDENT COMMISSIONING

l Spending with UK external producers has more than doubled since 2011, reaching £447m in 2017

INTERNATIONAL INFLUENCE

l COBA members with international channel groups raised just over a third of their content investment from their own overseas channels

l COBA members exported over 21,000 hours of UK content across their international channels, up 79 per cent on 2011

Executive SummaryThe multichannel broadcasting sector, which was surveyed for COBA’s 2019 Content Report, comprises hundreds of digital, cable and satellite channels. They are available on free-to-air and pay-TV platforms, as well as increasingly via on-demand services. Their investment in the production of UK television programming covers a wide variety of genres, including news, arts, entertainment, sport, drama, factual, comedy, music and children’s and animation. This investment is directly linked to their commercial revenues, particularly advertising and subscription fees.

KEY FACTSInvestment in UK production:

£1.1 billion paIncrease in overall spending since 2011:

75%Spend on commissions from external producers:

£447m paIncrease in commissioning from independents since 2011:

100%Hours of UK content broadcast globally:

21,000 pa

04

Content Investment

Total UK content investment surpassed £1 billion in 2017, up over 57 per cent since 2013 and 75 per cent since 2011 (excluding sports rights)

FIGURE 1

Total investment in UK content made by COBA members reaches £1.1 billion in 2017

2011 2012 2013 2014 2015 2016 2017

1500

1000

500

0

Source: COBA members, Oliver & Ohlbaum analysis

651 665725

855

933962

1141

CAGR CAGR 2011-17 2013-17

TOTAL 9.8% 12%

COBA

mem

bers

’ tot

al in

vest

men

t in

UK co

nten

t, 20

11-2

017

£Milli

ons

COBA members invested more than £1.1 billion in UK television production last year, a record amount and the first time multichannel spending on the creation of homegrown content has crossed the £1 billion mark

COBA Content Report Multichannel investment in UK television programming

05

Investment in content is directly linked to commercial revenues, notably advertising (relatively flat overall) and subscription fees (still growing)

FIGURE 2

Advertising revenues relatively flat while subscription grows

2011 2012 2013 2014 2015 2016 2017

110

100

90

80

Note: Index (2011=100) Source: Ofcom, Oliver & Ohlbaum analysis

n SUBSCRIPTIONSn TOTALn ADVERTISINGn LICENCE FEE

UK TV

sect

or re

venu

e gro

wth

by so

urce

, 201

1 – 2

017

Inde

x


Since 2011, COBA members’ investment in UK originations has continued to grow faster than the main five PSBs

FIGURE 3

Growth in multichannel spending outpaces all other broadcasters

2011 2012 2013 2014 2015 2016 2017

190

180

170

160

150

140

130

120

110

100

90

80

Note: Index (2011 = 100)Source: Ofcom, Oliver & Ohlbaum analysis

UK or

igin

ation

s spe

nd b

y so

urce

, 201

1 – 2

017

Inde

x

n COBA MEMBERSn CHANNEL 5n CHANNEL 4n ITVn BBC

06

1500

1000

500

0

Growth in total UK content investment was supported in particular by a significant uplift in spend on new UK programming (“first-run originations”), which outpaced total growth at an annual rate of 12.8 per cent since 2013

FIGURE 4

Investment in new “first-run” production drives overall growth

2011 2012 2013 2014 2015 2016 2017


6518 3

4

25

20 29

29

665725

855

933962

1141

CAGR CAGR 2011-17 2013-17

Total 9.8% 12%Reversioning 25.5% 64.5%UK Secondary 3.2% 4.3%UK first-run originations 10.8% 12.8%

522

122 122124

119

128 140

147

541597

710785 792

965

COBA

mem

bers

’ tot

al in

vest

men

t in

UK co

nten

t by

sour

ce, 2

011-2

017

£Milli

ons

Total sector growth was bolstered by multichannel groups’ continued investment in the UK independent production sector, with spend more than doubling between 2011 and 2017

FIGURE 5

Spend on independent commissioning doubles

2011 2012 2013 2014 2015 2016 2017

1500

1000

500

0


COBA

mem

bers

’ tot

al in

vest

men

t in

UK co

nten

t by

type

, 201

1-201

7£M

illion

s

6518

12

9 1114

5

4

25

10

24 18

10

20 29

9

1955

11

29

5

3665

725

1141

CAGR CAGR 2011-17 2013-17

Total 9.8% 12%Reversioning 25.5% 64.5%UK Secondary 3.2% 4.3%Co-production -1.7% 21.3%Independent producers 13.9% 16.3%External non-indie 35.1% 40.6%In-house 8% 8.8% 855

933 962

326

175

122 122124

119

128 140

147

187208

247295 291

381

338 370430

463 473 518


07

Annual sector spend on UK content increased by £416 million between 2013 and 2017, with spend on UK independent productions representing the largest change at £173 million

FIGURE 6

COBA members’ annual investment in UK content increased by £416m since 2013

2013 In-house External non-indie

Indie Co-production UK Secondary

Reversioning 2017

1500

1000

500

0


Cha

nge i

n UK

cont

ent i

nves

tmen

t by

type

and

sour

ce, 2

013

– 201

7 £

Millio

ns

725

14841

173 6 23 25 1141


UK content spend accounts for roughly half of all content spend by COBA members (i.e. including all spending on overseas content)

FIGURE 7

COBA members’ content investment 2011-2017

2011 2012 2013 2014 2015 2016 2017

2500

2000

1500

1000

Note:Excludes spending on sports rightsSource: COBA members, Oliver & Ohlbaum analysis

13231219

1323

1804

19282037

2267

COBA

mem

bers

’ tot

al co

nten

t inv

estm

ent,

2011

-201

7£M

illion

s

n UKn Non-UK

49%

51%

55%

45%

55%

45%

47%

53%

48%

52%

47%

53%

50%

50%

The production wanted to confound expectations about the setting on a council estate

08 COBA Content Report Multichannel investment in UK television programming

CASE STUDY

Save Me (Sky Atlantic): Backing British talent

09

Save Me is very much the vision of acclaimed actor Lennie James, who wrote the gripping British drama and stars in it. Commissioned by Sky Atlantic, it follows a father’s obsessive search for a kidnapped daughter that he barely knows. Talking to Broadcast magazine, director Nick Murphy explained how the production wanted to confound expectations about the setting on a council estate, creating an often riotous trip through working class South London against the darkest of dramatic backdrops. “Why have a background extra walking discreetly by when we could have a man in pyjamas with his shopping, a woman in a burka stealing a sneaky vape underneath her veil, a bruiser on a hover-board, or some elderly Sikhs playing rugby with a plastic bottle?”

Produced by independent UK producer World Productions, the first series became the most rapidly watched box-set release in Sky’s history, with 700,000 watching the entire series in the first week alone. On average, more than 1.7 million watched each episode.

The ending’s unpredictability might have also confounded expectations, but it left the door open for Sky to commission a second season, which it has now confirmed. Shooting will start once again on location in London in 2019. Announcing the second season, James said: “I am so chuffed that we get to keep telling the story of Save Me. Thank you to Sky Atlantic and a huge thank you to everyone who watched our little show and enjoyed it. More to come as soon as I can sit down to write it!”


10

The multichannel sector continues to increase investment in the UK production sector with nearly £450 million spent on externally originated content in 2017 (independent producers, non-qualifying independents, co-productions)

FIGURE 8

Commissioning from external producers hits £447m a year

2014 2015 2016 2017

500

400

300

200

100

0


COBA

mem

bers

’ tot

al in

vest

men

t in

exte

rnal

ly or

igin

ated

UK

cont

ent,

20

14 –

2017

/ £Mi

llions

280

322 319

447


Independent ProductionThe multichannel sector now invests nearly £450m a year on commissions from independent and other external UK producers, with a particular emphasis on programming from small and medium production companies

Independent and other external producers represent nearly half of total spending on new production, while small and medium producers account for just over half of spending on external commissions

Commissions from small/medium and large producers have grown strongly. While the strongest growth was in commissions from larger companies, small/medium producers still account for just over half of spending on qualifying independent producers

FIGURE 9

External commissions represent nearly half of first-run spending

FIGURE 10

Commissioning from all sizes of producer has increased

11

2014 2015 2016 2017

450

400

350

300

250

200

150

100

0

Note: Large indies are classified as independent production companies with an annual turnover of £70m+Source: COBA members, Oliver & Ohlbaum analysis

COBA

mem

bers

’ tot

al in

vest

men

t in

exte

rnal

ly-o

rigin

ated

co

nten

t, 20

14-2

017 /

£Mi

llions

280

322 319

447

158

93

168201

n Small and medium indiesn Large indiesn External non-indien Co-Production

Small and Medium Indies

53%

Large Indies‡ 47%

In-House 54%

External* 46%

UK First-Run Originations

85%

UK Secondary 13%

2017 UK Content 2017 Originations 2017 Indies by type

100

75

50

25

0

*External includes all spend with independent production companies, non-independent production companies and co-productions ‡Large indies are classified as independent production companies with an annual turnover of £70m+ Figures may exceed 100% due to rounding Source: COBA members, Oliver & Ohlbaum analysis

COBA

mem

bers

’ inve

stm

ent i

n UK

cont

ent b

y so

urce

, 201

7%

Reversioning 3%

89201

123

180


10

10 9

11

24

18

55

CASE STUDY

Helicopter ER (UKTV): Supporting independent producers

12

UKTV’s hit show Helicopter ER is a key, longterm series for Leeds-based independent producer Air Television. The show, which documents the life-saving work of the Yorkshire Air Ambulance teams, is now in its third season. That sustained investment has helped Air grow to be one of the biggest producers in Yorkshire.

“We wanted to set up a production company that was based in the North,” says Air’s Ian Cundall.


13

“One that not only reflected life in the North but was solidly based here. That has been directly built on the funding that we have received from UKTV.”

Air now makes a range of shows for UKTV’s portfolio of channels, all based around its speciality of factual entertainment. These include 999 Rescue Squad, which follows the work of a specialist ambulance team.

As it has grown, it has opened a new production office in York University’s Hub building and acquired post-production facilities that are used to edit episodes of new UKTV series and other upcoming projects. In turn, other companies in the region have benefited.

Air is also the only production company with a full-time team of Technical Aircrew qualified to fly on UK air ambulances.

The shows have strong “public service” credentials, documenting the work of the UK emergency services. “It’s a fantastic opportunity to highlight how our highly trained paramedics work alongside their colleagues in Yorkshire Ambulance Service and the other emergency services in some of the most precarious and life-threatening situations,” says Mike Shanahan, Head of Special Operations at Yorkshire Ambulance Service.


We wanted to set up a production company that…not only reflected life in the North but was solidly based here.

Prop

ortio

n of

cont

ent s

pend

by

sour

ce, m

ade b

y CO

BA m

embe

rs w

ith in

ter-

natio

nal c

hann

el gr

oups

, 201

4-20

17 / %

100

75

50

25

0


14

Multichannel broadcasters often raise additional investment for their UK commissions by leveraging against projected sales from overseas channels within their own portfolios. In 2017, just over one third of all UK multichannel spend came from these international channels

FIGURE 11

Overseas investment in UK content

2014 2015 2016 2017

UK 57%

Non-UK 43%

UK 69%

Non-UK 31%

UK 67%

Non-UK 33%

UK 65%

Non-UK 35%


International InfluenceCOBA members gave a global platform to UK talent by broadcasting more than 21,000 hours of homegrown content across their international channels in 2017. They also raised a third of their total investment in UK production from overseas markets via their international channels

15

2014 2015 2016 2017

30000

20000

10000

0


12003

17408

2091721461

Hour

s of U

K ch

anne

l pro

gram

min

g sh

ared

inte

rnat

ional

ly, 2

014 –

201

7In 2017, COBA members broadcast more than 21,000 hours of UK content across their portfolio of international channels, up 79 per cent since 2011

Europe was the biggest international market for UK programming, but growth was shared across most territories

FIGURE 12

Hours of UK programming shared across international channels

FIGURE 13

Proportion of UK programming shared across non-UK channels in 2017

Note: Figures may exceed 100% due to roundingSource: COBA members, Oliver & Ohlbaum analysis

Europe Africa (sub-Sahara)

MENA LatAM Asia North America

50

40

30

20

10

0

42%

18% 18%

8% 8%6%

Prop

ortio

n of

UK

chan

nel p

rogr

amm

ing

shar

ed in

tern

ation

ally

, 201

7%


CASE STUDY

101 Dalmatian Street (Disney): Giving British talent a global platform

16

101 Dalmatian Street is the biggest UK series ever commissioned by Disney’s European operation

101 Dalmatian Street is the biggest and most ambitious UK-produced series ever commissioned by Disney Channel’s European operation (Disney Channel EMEA). The animation series re-imagines Dodie Smith’s novel and Walt Disney’s classic film, 101 Dalmatians, for the 21st Century, setting a new story against a backdrop of modern-day London.

The large-scale production features 43 cast members covering 106 speaking roles, and includes a raft of UK talent such as Paloma Faith, Miriam Margoyles, Ben Bailey Smith, Tameka Empson, and Bethan Wright, as well as US talent such as Josh Brener and Michaela Dietz. Oscar® and BAFTA winning Passion Animation

Studios, headquartered in London and employing an international crew of more than 50 artists, is the lead producer, while the series was developed by Disney’s UK-based original animation team.

In total, the series will include more than 50 episodes, shorts and specials. A special, introducing the characters and setting, aired in the UK and across Europe, the Middle East and Africa in December, with the series itself launching in the UK from spring 2019. From there, the show will roll out on Disney Channels globally throughout the year. Disney Channels Worldwide is a global portfolio of 120 entertainment channels or feeds, available in 164 countries, in 34 languages.


This report (“Report”) has been produced by Oliver & Ohlbaum Associates Limited (“O&O”) for the Commercial Broadcasters Association (“COBA”) in connection with their Census 2018 (“the Project”). The Report is confidential to and for the sole benefit of COBA.

The information contained in the Report has been obtained from COBA members and third-party sources that are clearly referenced in the appropriate sections of the Report.

While the information provided herein is believed to be accurate, O&O makes no representation or warranty, express or implied, as to the accuracy or completeness of such information. The information contained herein was prepared expressly for use herein and is based on certain assumptions and information available at the time this report was prepared.

Neither the whole nor any part of this Report may be distributed, reproduced, disclosed to, used or relied upon by any other person or used for any other purpose without the prior written consent of O&O. All copyright and other proprietary rights in the Report remain the property of O&O. COBA has the right to reproduce the Report and to publish the Report.

Disclaimer

18 COBA Content Report Multichannel investment in UK television programming

The Commercial Broadcasters Association (COBA) is the UK industry body for multichannel broadcasters in the digital, cable and satellite television sector. COBA members operate a wide variety of channels, including news, factual, children’s, music, arts, entertainment, sports and comedy. Their content is available on free-to-air and pay-TV platforms, as well as on-demand.

Oliver & Ohlbaum Associates Limited (O&O) is one of the leading independent strategy advisors to the European media industry, where they have unrivalled knowledge and expertise.

Established in 1995 and based in London, O&O has been an advisor to over 200 different clients on many of the major developments in the European television, radio, print, online and sports markets in the last twenty years. Their clients are the leading players in the media industry in Europe and globally, together with regulatory bodies, lawyers, banks and other potential investors in media businesses. Typical assignments cover the major policy and regulatory issues, high-level corporate strategy, commercial exploitation and M&A advice. They are recognised across the media sector for their in-depth expertise and the quality of their analysis.

www.coba.org.uk www.oando.co.uk

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