SUPER INDIES PRODUCTION 100
SURVEY
Plimsoll: Tiny World
Element: Conversations With Friends
and of House Productions to BBC Studios. Manwaring points out that
linear channels have generally remained consistent in their levels of commissioning in recent years. But a whole new layer of demand has been created, not just from Netflix, but also from streamers such as Apple, Amazon, Paramount+ and Disney+.
At the time of its sale, for example, House Productions had a commissioned slate of seven scripted shows across Netflix, Disney+, ITV and the BBC.
A bigger client pool of streamers
and traditional broadcasters has led to greater opportunities for indies to grow. Indies will need to obtain deficit funding for commissions from
PSB broadcasters like the BBC, and once the deficit is recouped, will generate a long tail of IP income over several years thanks to IP ownership in projects. Most trade buyers are looking for producers with content they can distribute. Or they will earn premiums for streaming productions for the buyout of rights paid on delivery of the show, which has the advantage of enabling the producer to grow much more quickly. “As a result, a producer that retains rights by producing for the linear channels and also benefits from fast, high margin growth with the streaming platforms is quite compelling, and makes them attractive to potential buyers,” says Manwaring.
There is still growth in the UK market. Some of the buyers may be more discerning about how to structure deals, but I don’t think that is going to reduce the level of deals.
Putting the brakes on The streamers, of course, have had a challenging year. The spectre of a recession has prompted investors to re-examine the streaming TV business model and to question the billions that platforms are pumping into content in their race to win subscribers. The questions only got louder
when Netflix announced that it had lost 200,000 subscribers in the first quarter and one million in the second quarter.
Amid a broader stock market slump, Netflix’s share price is down a particularly acute 60% this year – making it one of the biggest fallers on Wall Street. It is not the only one.
Autumn 2022 P20
televisual.com
Disney’s share price has slumped 30% year to date, while Warner Bros. Discovery has dropped nearly 50% since its market debut as a merged company in April. Analysts fear that rising inflation and interest rates will make cost-conscious consumers rein in spending on discretionary items like streaming service subscriptions. The streamers have hinted at plans to be more cautious about expenditure. Netflix has laid off 450 staff and updated its corporate culture principles to urge employees to “spend our members’ money wisely.”
Meanwhile, Warner Bros
Discovery boss David Zaslav has talked up the need to be ‘smart’ and ‘careful’ in how it spends money on content.
The upside However, even though Netflix (which has a reported annual spend of $1billion on UK content) may ease up slightly on expenditure, others will more than fill any gaps left. Earlier this year, Amazon said that it had spent £1 billion on UK content in the past five years – and is stepping up spend thanks to major series such as The Lord of the Rings series.
Looking ahead, Manwaring is confident there will be similar levels of M&A activity in the TV production sector – despite concerns about recession, the cost of living crisis
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