48 The year 2008 didn’t just see the worst financial crisis of the past 80 years — it also saw the beginning of an entirely unprecedented and ongoing technological revolution. These historic events continue to affect the balance of acquisitions versus local production in Europe. As a consequence of the 2008 crash, belts are still being tightened across Europe, and this is impacting production budgets. The E.U.’s Audiovisual Observatory recently reported that the total budget for public service broadcasters in the E.U. fell to 32.6 billion euro (U.S.$43 billion) in 2012 from 33.4 billion euro (U.S.$44.5 billion) in 2009. In 2013 turnover for the E.U.’s 19 largest television groups rose just one percent. Despite this, Ross Biggam, director general of ACT (Association of Commercial Broadcasters) said he has not, “seen any figures suggesting there has been a migration of money from production budgets to acquisition budgets.” In fact, he noted, “As a general rule in Europe local drama has always fared better than imported drama. This has always been markedly the case in the U.K., Germany and Italy, and, to a lesser extent, Spain. The one major market that has been an exception to this has always been France, but now, even there, locally produced drama is catching up in the ratings.” Benoit Danard, director of Studies and Statistics and CNC (National Centre for Cinema and the Moving Image), reported, “for the first six months of 2014 four of the top five dramas on French television were French productions.” Even more interesting is Danard’s assertion that, “this is a very recent phenomenon — it is not more than a year old at the most.” Danard revealed that, “this is because there has been a notable improvement in the standard of French drama,” something he ascribed to a number of factors including, “a greater focus on the script, more risk taking, and, of course, a greater spend on local drama.” Sandra Petkovic, director of BBC Worldwide France Sales, concurred that there has been an improvement overall, pointing to the influence of crime drama series The Tunnel and Broadchurch in this regard, although she doesn’t, “see much change in the balance between local production and acquisitions at the moment.” There has, however, been a notable increase in the levels of co-production. According to Danard, “Although the channels were required to increase their spending on drama, given the economic situation, there has been no increase in available budgets.” This dichotomy has, said Danard, “been resolved by a much greater incidence of coproductions with foreign partners.” Jamie Lynn, EVP of Distribution, EMEA, FremantleMedia International sees many of the changes occurring in French drama reflected more broadly inEurope. For Lynn, “It isn’t somuch that theactual balance between local production and acquisition has changed, as thenatureof that balance has changed.” Lynn added, “If you look at the major European FTAs they all now have a family of niche channels, usually aimed at a demographic rather than a niche interest, and it is to these channels that acquisitions naturally gravitate, while major domestic productions tend to play out on the main channels. Although there are exceptions, we have recently sold the sitcom Cuckoo to ARD, who have scheduled it in a prime access slot bowing in October. For an edgy British comedy this is extraordinary. Just how extraordinary is illustrated by the fact that, while we have produced many shows for ARD via UFA, this is only the third time they have made a straight pick-up from us in the last 10–15 years.” As his final illustration of the way in which the nature of the balance between acquisitions and local production is changing, Lynn pointed to Sky Italia for which Fremantle produces a local version of The X-Factor, while also selling them the U.K. version as a straight pick-up. Speaking of Italy, in an article on page 22 of this issue, it is noted that, in the case of pubcaster RAI, its budget for local production of $300 million per year is 33 percent higher than that for acquisitions ($190 million), but it provides only 15 percent of drama production that RAI channels broadcast yearly. In the U.K., PACT (the trade body for independent producers) reported in July that, “U.K. primary commissioning of indie programming grew by 8.4 percent year-on-year to hit £1.67 billion (U.S.$2.8 billion). Of this spend, 77 percent was attributable to the four PSB services (BBC, ITV, Channel 4 and Channel 5) and their spin-off channels, and there was also a dramatic increase in the primary original production spend among multichannel operators — up a whopping 59 percent year-on-year to £381 (U.S.$648 million) in 2013 from £240 million (U.S.$408 million) in 2012. It is clear that the old rules that once dictated the division of budgets between acquisition and local production are rapidly disappearing. By Bob Jenkins The Impact of Europe’s Shrinking Budgets October 2014 Local Production Vs. Acquisitions Jamie Lynn, EVP of Distribution, EMEA, FremantleMedia International Ross Biggam, director general of ACT (Association of Commercial Broadcasters) Sandra Petkovic, director of BBC Worldwide France Sales
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