distributors_survey_2010

Distributors 2010

THE ANNUAL SURVEY OF THE UK’S TOP DISTRIBUTORS

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Distributors 2010 Contents

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Some reassuring results Welcome to Broadcast’s sixth annual survey of the UK distribution sector, which this year includes 30 of the UK’s leading rights management groups.

Given the economic climate and concerns about the lack of UK commissioned programming in 2009-10, the results are reassuring – with two-thirds of our companies growing revenues and quite a few still posting decent profits. For the most part, this robust performance is because distributors have Andy broadened both their content base and their geoFry graphical scope. As a result, 90% are confident about the coming year, despite all the talk of a double-dip recession.

At the same time, however, there are rebellious murmurings about production deficits – with one company complaining that broadcasters “treat us like banks”. Expect more of this talk if channels attempt to roll back the terms of trade with indies.

Other issues that come up in our survey are the return of mergers and acquisitions, the weakness of digital rights revenues and the need to diversify out of completed programme sales. This last point presents us with methodology problems every year, since we need to filter out programme sales from revenues derived through format licensing and production, co-production, and product licensing and merchandising. This is not easy because of the disparate ways in which companies present their accounts – and the understandable desire at some companies to talk up performance.

Overall, though, the survey paints a valuable and positive picture of the UK-based distribution business – which is now the most important outside the US studio system. And that’s something in which all those involved should take great pride. ➤ Andy Fry, supplement editor A note on methodology To be included in the survey: Companies need to be key players in the UK distribution market, selling their own or third-party product. They must be UK-based or with a sales team based in the UK. Companies must state distribution financial turnover in their responses.

Participants are ranked based on distribution turnover for the year to April 2010 or their latest financial year.

Our thanks to all the companies that took part this year. If you’d like to be included next year, please email robin.parker@emap.com

Contents 16

4-11 O verview Despite a drop in commissions, the majority of respondents to this year’s survey managed to increase revenues 13-14 Trends As companies strive to take control of established IP and diversify into new areas, mergers and acquisitions are back on the agenda 16-18 Peer Poll All3Media International is the clear winner in this year’s poll, with rivals praising its strong content and skilful marketing

With thanks to Compact Media Group for sponsoring the supplement. For more information visit www.compactcollections.com

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Broadcast Editor Lisa Campbell Supplement Editor, Writer and Researcher Andy Fry Features Editor Robin Parker Production Editor Dominic Needham Group Art Director, Media Peter Gingell Sub Editor Sangeeta Chauhan Senior Commercial Director, Media Alison Pitchford Group Advertising Manager Rebecca Jones Senior Account Manager Fiona Evans Account Manager Sonya Jacobs www.broadcastnow.co.uk

24 September 2010 | Broadcast | 3

Distributors 2010 Overview

Distributors

show resilience

Despite having fewer commissions all round, the majority of industry players stood firm in the face of last year’s economic gloom. Andy Fry reports on how they have come out fighting

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onsidering the economic climate in which they are operating, the companies that took part in Broadcast’s Distributors Survey 2010 haven’t done too badly.

Last year, our respondents warned that a slowdown in commissioning would result in a lack of domestic content for international exploitation.

But there’s no evidence here of this commissioning hiatus causing carnage.

At the top of the table, the big three players – BBC Worldwide, Fremantle Media Enterprises (FME) and ITV Studios Global Entertainment – have all reported increased revenues, generating more than £525m between them. And keep in mind this is just

most profitable Company

BBC Worldwide PowerCorp International All3Media International RDF Rights Fireworks International

Profit

£64.2m *£8.4m £4.0m £3.9m £3.3m

Note Table only includes companies that revealed profits *Resubmission of last year’s figures. PowerCorp has since gone into administration

Top Gear: BBCW 4 | Broadcast | 24 September 2010

‘Big turnover is not the only way to judge the financial health of a sales company’

programme sales – the figure says nothing about revenues from licensing and producing formats.

IMG Media has disappeared from the chart, though this is due less to the recession than to a return to its roots as a sports marketing agency after selling Darlow Smithson and Tiger Aspect.

With a few exceptions, the rest of the table shows reassuring resilience.

Indeed, the recession has not prevented the upward trajectory of the mid- to large-sized companies that make up the next group in our table. Endemol Worldwide Distribution (EWD), Shine International, RDF Rights, All3Media International, Cine­flix International, Outright Distribution and Zodiak Entertainment all reported doubledigit year-on-year increases. Zodiak led the way with 84% growth.

EWD is starting to deliver the scale of distribution revenues that its parent company might expect, although it’s still a long way behind the three big hitters at the top of the table. Also worthy of note is Cine­flix, which has jumped 40% to £24.1m with a fairly small catalogue of 1,500 hours.

Hole In The Wall: FME

£525m Combined revenue generated for programme sales by BBC Worldwide, Fremantle Media Ents and ITV Global

Further down the table, a few companies have elected not to take part this year. But there are some truly impressive results. Passion and Optomen have recorded advances of 30%-plus. Given the state of the market, the achievement of Passion founder Sally Miles has to be acknowledged. She has created a 2,000-hour, £6.9m business in two years, and turned a £700,000 profit.

Profitability is one column that some companies shy away from tackling. But it’s pleasing to note just how many of the smaller outfits have returned a positive number. Margins at Parthenon, Hat Trick and Mentorn are a reminder that big turnover is not the only way to judge the financial health of a sales company. ➤

Hell’s Kitchen US: ITV Studios GE www.broadcastnow.co.uk

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THE UK’S TOP DISTRIBUTORS Company

Distribution turnover to April 2010

Distribution turnover to April 2009

% change

Pre-tax profit to April 2010

Value of international prog sales to April 2010

£240.8m

£231.2m

4%

£64.2m

£181m

Value of domestic prog sales to April 2010

Top-selling programmes include

Hours of programming in catalogue

% of catalogue from third-party producers

£59.8m Top Gear, Life, Planet Earth

50,000

27%

1

BBC Worldwide

2

Fremantle Media Ents

£153.0m1

£152.0m

1%

n/a

£89.0m

£64.0m Merlin, American Idol

20,000

75%

3

ITV Studios GE

£132.3m1

£131.0m

1%

n/a

£90.3m

£42.0m

35,000

45%

4

Hit Entertainment

£62.4m2

£62.4m

0%

n/a

£53.4m

£9.0m Thomas, Bob The Buider

950

25%

5

Endemol WD

£55.0m1

£44.0m

25%

n/a

£37.0m

£18m Extreme Makeover, Wipeout, Rush

24,000

30%

6

Shine International

£36.5m1

£34.0m

7%

n/a

£35m

£1.5m Biggest Loser, The Listener, MasterChef

3,250

60%

7

RDF Rights

£34.0m4

£30.0m

13%

£3.85m

£30.4m

£3.6m So You Think You Can Dance, Wife Swap

6,000

75%

8

PowerCorp Int’l

£32.2m5

£32.2m

0%

£8.4m

£30.2m

£2.0m

Ice, XIII: The Series, Day Of The Triffids

3,370

20%

9

All3Media Int’l

£26.0m

£21.5m

21%

£4m

£23.5m

£2.5m

Midsomer Murders, Skins

3,000

20%

10

Cineflix International

£24.1m

£17.2m

40%

n/a

£21.1m

£3.0m Nazi Hunters, Conviction Kitchen

1,500

30%

11

Digital Rights Group

£22.4m3

£22.6m

-1%

n/a

£19.0m

£3.4m

8,000

100%

12

Fireworks International

£15.3m

£15.4m

-1%

£3.3m

£13.8m

£1.5m Emmy Awards, Heartland, The Border

3,200

40%

13

Target Entertainment

£11.1m

£13.3m

-16%

n/a

£9.1m

£2.0m

10 Years Younger, Taggart, Next!

5,850

99%

14

Outright Distribution

£11.0m1

£7.2m

53%

£2.0m

£9.0m

£2.0m

Supernanny, WDYTYA?, It's Me Or The Dog

2,150

36%

15

Zodiak Entertainment

£10.1m1

£5.5m

84%

n/a

£10.0m

1,500

10%

16

Parthenon Ent

£10.0m

£9.3m

8%

£2.0m

£7.5m

1,200

65%

17

Beyond Distribution

£9.0m

£9.0m

0%

£1.25m

£8.5m

£500,000 Mythbusters, Deadly Women

4,000

60%

18

DCD Rights

£8.3m

£8.2m

1%

n/a

£7.8m

£500,000 Bridezillas 8, Land Girls

2,500

30%

19

Electric Sky

£7.9m

£8.2m

-4%

n/a

£5.1m

£2.8m Place In The Sun, Fattest Man

1,600

100%

20

Passion Distribution

£6.9m7

£5.2m

33%

£700,000

£5.5m

£1.4m Fashion Strip, Tori And Dean

2,000

100%

21

Optomen Television

£6.65m

£5.1m

30%

n/a

£5.35m

£1.3m Kitchen Nightmares, Gordon's Great Escape

1,150

5%

22

TVF International

£5.1m

£4.5m

13%

n/a

£4.6m

2,650

96%

23

Cake Entertainment

£4.5m

£2.7m

66%

£300,000

£3.5m

375

100%

24

3DD Entertainment

£4.0m

£4.1m

-3%

£78,000

£3.7m

£300,000 Album Chart Show, In The House

1,488

50%

25

Hat Trick International

£3.2m8

£2.4m

33%

£441,000

£2.4m

£760,000

250

5%

26

Indigo Film & TV

£2.4m1

£3.3m

-28%

£250,000

£1.8m

£600,000 Spike, David Blaine: What Is Magic?

2,500

80%

27

Pilot Film & Television

£2.2m

n/a

n/a

£100,000

£1.8m

£400,000 Globe Trekker, Planet Food, Bazaar

420

0%

28

Mentorn International

£1.3m6

£1.6m

-19%

£482,000

£1.3m

2,600

15%

29

DLT Entertainment

£1.25m

£1.4m

-11%

£200,000

£300,000

£950,000 My Family, As Time Goes By

940

70%

30

Leopard International

£1.2m1

£1.0m

20%

n/a

£950,000

£250,000 An Englishman In NY, Cash In The Attic

1,100

1%

Hell's Kitchen, The Prisoner

Doc Martin, The Inbetweeners

£100,000 Millennium, Stars On Stage, Hot Pursuit £2.5m

Jakers!, Mystery File, Fight Science

£500,000 E2 Design, How Do They Do It? £1.0m Total Drama Island, Stoked, Angelo Rules

James May's Toy Stories, Outnumbered

£0 Madeleine Was Here, Paradise Hotel

Notes All figures are for year ended 31 March 2010 unless otherwise stated. n/a refers to an entry where figures were not provided. Where figures were supplied in foreign currency, these figures have been exchanged into sterling at the rate applicable at the company year end.

1. Turnover for Fremantle Media Enterprises, Endemol Worldwide Distribution, ITV Global, Shine International, Outright Distribution, 4. Part of Zodiak Entertainment since July 2010 5. Resubmission of last year’s figures. PowerCorp has since gone into administration Zodiak Entertainment, Indigo Film and TV and Leopard International is to 31 December 2009 2. Due to a change in it’s financial 6. Turnover for Mentorn International is to 30 September 2009 7. Passion Distribution year-end is now 31 July 2010 8. Turnover for year, Hit Entertainment has resubmitted the figures it used last year 3. Digital Rights Group year-end is now June 2010 Hat Trick International is to 31 May 2010

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24 September 2010 | Broadcast | 5

Distributors 2010 Overview

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ARE YOU MORE CONFIDENT THAN LAST YEAR? No 10%

Yes 90%

So how do we explain the sector’s solidity? Some cite hard work, while others point out that acquisitions go up as commissions go down. But as EWD chief executive Cathy Payne observes: “Buyers rely more on suppliers of trusted brands during downturns.

We’ve done well with Extreme Makeover: Home Edition, whereas a couple of our newer titles haven’t sold as well as they might have in a buoyant market.”

Cineflix boss Paul Heaney describes how terrestrial broadcasters are behaving more like cable channels in the way they build their schedules

53%

The change in revenue for Outright, which rose from £7.2m in 2009 to £11m in 2010 around high-volume tent-pole shows.

He also talks up the growing demand for content from the latest wave of digital terrestrial TV channels.

Even more important than this flight to trusted brands is the fact that the UK distribution market is no longer simply about the export of homegrown shows.

While domestic content is still an important part of the mix – particularly when exchange rates work in its favour – the UK has become the main trading station for English-language content not managed by Hollywood studios. In many ways, it has become the rights management business’s equivalent of the FA Premier League.

FME COO Dan Allen confirms the growing orthodoxy that “companies [like FME], that are geographically spread in their acquisition/development focus are best placed to weather the storm”. Not just because they are protected from the UK commissioning 6 | Broadcast | 24 September 2010

Extreme Makeover: Endemol WD

drought – the shows they acquire from abroad come in the volume that buyers crave, whereas UK titles usually don’t.

This internationalisation of the UK’s business is evident in the presence of EWD, Cineflix, Fireworks International and Beyond Distribution, all of which carry vast slates of Australian or Canadian content.

Consider EWD’s UK sales column.

Of £18m in revenues, less than £3m comes from licensing UK shows to the secondary market. The rest is foreign content sold to domestic broadcasters.

Equally significantly, DCD Rights chief exec Nicky Davies Williams cites Bridezillas, a September production for WE Network in the US, as her topselling show. With UK players viewing international acquisition as the logical way to grow their business, this is a trend that is likely to continue. DRG chief exec Jeremy Fox says: “Our next move will not be for a UK company; it will be for a company from another English-speaking market.”

‘Buyers are committing increased budgets to tent-pole series and we need to supply those’ Cathy Payne, EWD

BiGGest iNCrease iN reVeNUes Company

Zodiak Entertainment Cake Entertainment Outright Distribution Cineflix International Passion Distribution Hat Trick International Optomen Television Endemol WD

% change

84% 66% 53% 40% 33% 33% 30% 25%

Revenue 2010

Revenue 2009

£10.1m £4.5m £11.1m £24.1m £6.9m £3.2m £6.7m £55.0m

£5.5m £2.7m £7.2m £17.2m £5.2m £2.4m £5.1m £44m

top iNVestors iN DeVelopmeNt Company

Total annual spend

Fremantle Media Ents Digital Rights Group BBC Worldwide ITV Studios GE RDF Rights Outright Distribution Zodiak Entertainment Passion Distribution

£3m+ £3m £2m £2m £1m £1m £1m £900,000-£1m

EWD’s Payne says her company is about to sign up “three or four” big US series. “Buyers are committing increased budget to tent-pole series and we need to supply those if we are to operate at the scale end of the distribution business.”

Meanwhile, the UK production sector’s critical contribution to the global format trade is having two main effects.

First, UK producers that sell formatbased shows to the US often get to keep the completed show rights for international exploitation, says Outright Distribution chief exec Chris Bonney.

“It’s useful to have different versions of shows such as Supernanny and Who Do You Think You Are? – particularly if we have the US version, which usually has strong appeal to international buyers,” he explains. Similarly, FME, ITV Studios GE and All3Media have done great business with American Idol, Hell’s Kitchen US and Undercover Boss.

Second, the UK’s success in unscripted formats is beginning to translate into the scripted arena. ➤ www.broadcastnow.co.uk

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MOST NON-UK CONTENT IN CATALOGUE Company

% of catalogue content

Fireworks International Beyond Distribution Zodiak Entertainment Endemol WD 3DD Entertainment

98% 90% 90% 75% 75%

Hours of catalogue content

3,136 3,600 1,350 15,000 1,116

MOST UK CONTENT IN CATALOGUE Company

% of catalogue content

Hat Trick International Leopard International Pilot Film & Television BBC Worldwide Optomen Television

100% 100% 100% 99% 96%

ARE YOU STILL CONCERNED ABOUT THE CREDIT CRUNCH?

No 24%

Yes 76%

Hours of catalogue content

250 1,100 420 45,000 1,104

‘For many, the impact of the credit crunch is exacerbated by the fact they feel broadcasters are underpaying for content’

While conscious of the need to protect revenues from the sale of completed UK dramas, DRG’s Fox says the reinvention of UK shows such as Doc Martin, Shameless and The Office is further cementing the UK’s relationship with export markets.

Shine International president Chris Grant says his group is now targeting scripted formats.

Looking ahead, most of our companies predict a tough year. One distributor says it is “hard to get buyers to take a risk”. Another predicts a stormy year because of “the shortage of content created in 2009, which creates more competition for rights”.

Shameless (US): All3Media

Of concern to smaller companies is “distributor buyouts of independent producers” – since this again limits their options in the content market.

A common complaint is “limited access to bank finance” – which explains why almost all still see the credit crunch as a problem. High-end drama co-pro specialists have been hardest hit. First Alchemy and RHI Entertainment faced a financial squeeze, now it’s the turn of PowerCorp. The company was placed into administration as this supplement went to press, but is high up our list as it recently changed its financial yearend and is still quoting figures for year-end 31 March 2009, just as the wave of negative economic news was engulfing the industry.

For many, the impact of the credit crunch is exacerbated by a feeling that broadcasters are underpaying for commissioned content. Parthenon chief executive Carl Hall says he expects this

situation to persist for some time. “I don’t see any evidence that broadcaster budgets have recovered – and my worry would be if they have got used to getting content for less money and relying on us to deficit.”

100%

The proportion of DRG’s 8,000 hours of catalogue obtained from third parties Parthenon’s own healthy financial profile is down to the company’s diversified business base, says Hall.

“We have production, distribution and a strong archive, and long-term output deals have taken the edge off the impact of the downturn.”

Others have identified this as a key point in their survivor’s manual. ➤

MOST RELIANT ON THIRD-PARTY PRODUCER CONTENT Company

Digital Rights Group Electric Sky Passion Distribution Cake Entertainment Target Entertainment TVF International Indigo Film & TV www.broadcastnow.co.uk

% of catalogue content

Hours of catalogue content

100% 100% 100% 100% 99% 96% 80%

8,000 1,600 2,000 375 5,790 2,544 2,000

Who Do You Think You Are?: Outright 24 September 2010 | Broadcast | 9

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CHANGES IN STAFF LEVELS (YEAR ON YEAR)

Same staff 24%

More staff 48%

Less staff 28%

Electric Sky chief executive David Pounds talks of “building more strategic relationships with buyers”.

Matthew Frank, who was chief executive of RDF Rights for the period in question, observes that “strategic relationships and output deals give us better visibility on earnings”.

Notwithstanding concerns about the funding gap, there is a recognition that the ability to deficit finance is critical. Our surveyed companies say they will deficit anything from 10-70% of a show’s budget, depending on genre and sales projection. The most frequently quoted figure is 15-30%, though plenty will go to 50%.

There’s also a willingness to spend on development. For small companies, development budgets are in the £30,000-100,000 range – but eight

10-70% Range within which companies will deficit-finance a show, depending on genre and projected sales

spend £1m or more. All of the top players claim to have sustained spend.

Most companies cite the US, UK, Scandinavia and Australia as their top markets – but France and Germany are increasingly prominent. Not surprisingly, many see Latin America, Middle East, Asia-Pacific and Eastern Europe as key emerging markets – with Latin America showing the biggest advance year on year. Drilling down further, it’s interesting that China, Poland, Russia, Brazil, Turkey and South-East Asia all rate numerous mentions. By contrast, sellers say Spain and Greece are tough.

Earlier this year, BBC Worldwide launched China Showcase in Beijing.

Speaking while in China, BBCW www.broadcastnow.co.uk

Doc Martin: Digital Rights Group

managing director, global TV sales, Steve Macallister said the country was rapidly emerging as a key market.

“There’s quite a lot of regulation still but there is also a real desire to do more co-production along the lines of Wild China. We’ve also broken through with a local production of Dancing With The Stars and a Chinese-language version of Top Gear.”

Around half of the respondents say they are looking to extend the number of genres in which they operate, though the deficits involved in drama make this an area that many prefer to avoid.

Most distributors have retained a fairly steady balance between inhouse and third-party content – though RDF’s merger with Zodiak crunches together two very different models. One exception is the DCD catalogue, where third-party content is now 30%, up from 20% last year – perhaps reflecting a desire to diversify.

Going in the other direction is Shine, whose reliance on third-party

Nazi Hunters: Cineflix

‘Most cite the US, UK, Scandinavia and Australia as their top markets – but France and Germany are increasingly prominent’

shows has dropped from 75% to 60%.

This may indicate a growing maturity in terms of in-house IP such as MasterChef and The Biggest Loser.

But Shine’s Grant is trying not to be too prescriptive. “There’s always an ambition to have wholly owned brands come through your internal operation. But the balance of the catalogue is defined by where the great ideas are coming from. At Shine, we are focused on identifying shows from third-party producers with potential to become global brands.”

If, at this point, you’re still looking for evidence of trouble in the domestic market, the best indicator could be the drop in UK sales revenue at some larger companies.

This might mean thematic channels are commissioning more. But more likely is that budgets have been channelled into fewer shows, which get repeated, and terrestrials are doing deals that secure more runs on their in-house spin-off channels.

Outnumbered: Hat Trick International 24 September 2010 | Broadcast | 11

Distributors 2010 Trends

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M&A returns with a bang Zodiak’s purchase of RDF, All3Media’s takeover of Optomen and Warner Bros’ interest in Shed all signal a desire to take control of established IP or diversify into new areas, says Andy Fry

£40m Estimated value of Zodiak Entertainment’s distribution business following takeover of RDF

Wallander: Zodiak success story

M

ergers and acquisitions in the distribution sector have been back in a big way in recent months. Most of these don’t show up on our table because they have happened since the companies in question closed their books on the 2009-10 financial year. But next year’s chart could look very different once the integration process is complete.

Based on this year’s figures, Zodiak Entertainment’s acquisition of RDF Media will establish a distribution business worth more than £40m with a combined library of 7,500 hours.

All3Media’s £40m acquisition of Optomen Television should take its distribution revenues above £30m on this year’s numbers, assuming it elects to absorb Optomen’s sales arm, though Optomen International is going to be kept as a separate entity for now.

Then there is Warner Bros’ planned acquisition of Shed Media, a highprofile move that has implications for Shed’s distribution arm, Outright. No less significant is the news that film distributor Metrodome has finally acquired Target.

Deals like these are driven by the desire to take control of established IP or extend content-creation capabilities www.broadcastnow.co.uk

‘Everything has been set up to take on much more content capacity’ Paul Heaney, head of Cineflix International

into new genres or markets. But the knock-on effect in the distribution space is two-fold: it creates a tier of mid-to-large companies that have to keep growing to stay competitive, and it forces others to make strategic decisions about what they want to be.

For the latter group, there’s a clear choice between getting big, and thereby gaining market clout and securing economies of scale, or being boutique. Choosing the latter, they can talk up their flexibility and the quality of their client servicing without taking on excessive operational overheads.

Targeting growth Among those going for growth is Cineflix International, which has seen revenues hit £24.1m after a stellar two years. Cineflix boss Paul Heaney says everything about the vertically integrated group has been set up for growth. “The North American production operation is expanding, our programme acquisitions team is getting bigger and we have a head of formats. Everything has been set up to take on much more content capacity.”

Another in growth mode is DRG’s Jeremy Fox, who says he is looking at further acquisitions outside the UK.

DRG is the only one of the mid-tolarge players to be completely reliant on third-party producers as opposed to content from within the group.

Given the way the market is moving, does he see that as sustainable? “I think it’s a great position – because producers don’t have to worry that their shows will be given less prominence than the in-house slate.”

Companies that represent both inhouse and third-party content have always disputed the claim that they give preferential treatment to in-house titles, and that’s more true now than ever, says Outright Distribution chief exec Chris Bonney. “When times are tight, you really have to justify to your board why you want to invest in adding third-party content to the portfolio.”

Outright is at a crossroads. The question now is whether Warner will shut it down and absorb its activities into its own global distribution operation or leave things as they are.

Bonney says he’s not in a position to comment, but one senior distribution exec believes Warner will probably maintain the status quo. “The kind of content they sell would get lost in the Warner catalogue. You might see integration in backroom systems, but keeping Outright as a standalone operation would probably work its content harder. It’s not uncommon for the US studios to manage specialist or distinct content outside the main portfolio.”

For companies with turnover of less than £10m, there’s an obvious temp­ tation to stay boutique and avoid piling on unsustainable overheads.

Electric Sky, for example, sits contentedly in the £8m turnover range, where, as CEO David Pounds says, “we can ride the knocks better than larger companies, which have to retrench during downturns”. ➤ 24 September 2010 | Broadcast | 13

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turnover From new media Company

% of turnover from non-TV platforms

Fireworks International DCD Rights BBC Worldwide Digital Rights Group Beyond Distribution TVF International 3DD Entertainment DLT Entertainment

10.0% 10.0% 6.5% 5.0% 5.0% 5.0% 5.0% 5.0%

For Pounds, sustainability has involved innovating around its core expertise: factual programming.

“Factual is such a broad area that it hasn’t really restricted us in any way.

We’re going to move more into 3D programming from Mipcom. We see this as a natural extension as market demand expands.”

For some, being boutique means having the best of both worlds. Take Hat Trick, which generates revenues both from its own inter­national arm and via a relationship with BBC Worldwide. On the one hand, this provides market intelligence that can feed into the production business; on the other, it delivers distri­bution muscle.

Digital media remains a talking point, with companies in our survey divided on the merits of the new media market. The more bullish, such as Fireworks, claim to be generating as much as 10% of their revenue from non-standard platforms.

Both 3DD and DCD are pretty positive about non-standard platforms, as is Electric Sky’s Pounds, who cites “new revenue streams that reflect the growth and success of a title as opposed to fixed-price deals”.

BBC Worldwide sales chief Steve Macallister says his company is generating 6.5% of its revenues from digital.

At BBC Showcase in China, he secured a ground-breaking content supply agreement with one of the country’s leading internet portals, sohu.com, which covers Charles Dickens TV drama, factual series and children’s shows such as Teletubbies and Fimbles.

Value in £

£1.6m £830,000 £15.6m £1.1m £450,000 £250,000 £200,000 £60,000

‘We can ride the knocks better than larger companies, which have to retrench during downturns’ David Pounds, CEO, Electric Sky

For Macallister, the Sohu deal is a great example of how digital opens up opportunities for exploiting BBCW’s 50,000-hour archive. But this optimism is counterbalanced by companies that say they are generating little money from new media.

RDF Rights CEO Matthew Frank says: “New media platforms continue to deliver poor income streams despite a lot of hype. On the positive side, they continue to be great brand builders.”

Passion’s Sally Miles adds that new media is “a very relevant area to be building strategy and relationships around, as well as brand awareness”.

Negative assessments come from companies that see new media as a threat to existing revenue streams.

“DVD revenues are rapidly declining, while new revenue streams are still not strong enough to fill the gap,” says one company. Others cite the threat to their activities in the UK secondary market, as commissioning broadcasters try to hold on to more non-standard rights.

Rights issues FME distribution COO Dan Allen has long been concerned about the threat of piracy in the digital space. To this he adds another concern: “complexity in rights definitions and administration”. This is echoed by EWD’s Cathy Payne, who says new media means “more transactions and obligations for minor revenues”.

Macallister uses developments in digital to raise his concern that the UK is lagging behind the US when it comes to narrowing the time-lag between domestic and international TX. “The US studios have recognised that collapsing the international time window reduces the risk of piracy.

Logistically, the UK market is not able to do that yet, which makes us vulnerable to IP theft and less competitive than our US counterparts.”

6.5%

Proportion of BBC Worldwide revenues currently generated by its digital activities

Half of our survey respondents say they are looking to extend the number of genres in which they operate, though the deficits involved in drama make this an area that most avoid.

At FME, this diversification is regarded as a top priority. Allen talks of “expanding the genre base beyond mainstream TV entertainment into children’s and family, US drama, and also moving into non-TV areas such as gaming, brand licensing, character art and sport”.

Shine’s Chris Grant also wants to be working with IP that is “more than just a TV show”.

“We’re looking for brands that can generate ancillary revenues off-screen as well. I think we nailed it with Master­ Chef and The Biggest Loser,” he says.

To achieve this, however, IP owners need to be working with enlightened broadcasters, says EWD’s Payne. “It is becoming increasingly difficult for companies that invest in the development of their own IP to do deals with broadcasters that require producers to assign their shows fully to the network.

“It’s frustrating that, even when producers retain a revenue share from exploitation of the programme, the broadcasters are not effective with their distribution and/or exclude their international channels from the pot of revenue to be shared. This is resulting in some producers deciding not to take projects to such broadcasters, as it is not economically viable to do so.”

Key emerging markets Business area

Eastern Europe/Russia LatAm/Brazil/Mexico Asia-Pacific/China Middle East India Africa Other

% of votes

29.0% 23.5% 23.5% 11.0% 8.0% 2.0% 2.0%

14 | Broadcast | 24 September 2010

Outnumbered: Hat Trick production

Got To Dance: Shine hit www.broadcastnow.co.uk

Distributors 2010 Peer Poll

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All3Media rises to the top The indie distributor that markets Skins and Undercover Boss was the clear winner in this year’s poll, with rivals highlighting the quality of its content and marketing efforts. Andy Fry reports 1. All3Media International 16 points From sixth position last year to top in 2010, All3Media International’s 20% rise in revenues doesn’t seem to have come at a cost to its reputation.

Not only did the Louise Pedersenled outfit accumulate more poll points than its rivals, it was also cited positively by the greatest number of its industry peers. One of these summed up the company by saying it is “enjoying the results of an internal supply of high-quality content and the effective use of marketing”.

All3Media’s biggest-selling franchises this year were Midsomer Murders and Skins – just like last year.

Studio Lambert’s Undercover Boss came in at number three in terms of sales – a welcome diversification in terms of genre and a US-derived revenue boost that may provide a clue to the way the company will grow its slate.

It has also managed to post significant growth without denting profitability. This year’s £4m is a healthy number that follows on from last year’s £3m.

Undercover Boss (US): strong franchise

2. RDF Rights 12 points After topping our poll last year, RDF Rights’ peers have shifted their votes elsewhere. Still, there’s generally warm regard for CEO Matthew Frank and his cohorts, who are viewed as the classic service-oriented, client-hugging rights outfit.

It will be interesting to see if that is still true once RDF and Zodiak complete their business integration. While RDF’s 6,000-hour catalogue is 75% indie content, Zodiak’s 1,500-hour catalogue is just 10% – suggesting a company that wants to create and control IP in-house.

Frank, whose top titles at present are So You Think You Can Dance and Wife Swap, has always had to balance the needs of RDF’s in-house production arm with third-party clients – but never across so many disparate territories. It will be fascinating to see what the combined business looks like in next year’s survey. ➤ 16 | Broadcast | 24 October 2010

So You Think You Can Dance: top RDF title

Sherlock: export appeal

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Distributors 2010 Peer Poll

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=3. BBC Worldwide 11 points While some companies resent BBC Worldwide’s domestic market muscle, its place in our peer poll shows continued respect for its role in establishing the appeal of UK programming in the export market. Keep in mind also that it sells some shows that commercial rivals wouldn’t deem profitable.

This year, titles such as Top Gear, Sherlock and Life head BBCW’s diverse portfolio, which is now sold extensively in markets such as Latin America, Eastern Europe and Asia.

BBCW’s figures also suggest it is starting to make headway in generating revenues via digital platforms.

About 27% of BBCW’s content is from indies, but there has been no attempt to bring in foreign rights, an area that has fuelled much of its rivals’ growth. It is also one of the few that can offer an extensive deficit while still spending money on development.

areas such as home entertainment, licensing and live shows. As COO Dan Allen observes: “FME has created a global business model that lots of others are now trying to emulate.”

At Mipcom this year, FME expects to start providing some examples of how its move into areas like kids’ programming and drama is playing out.

If it gets that right, then the chasing pack may find taking on FME for revenues is a long and arduous process.

Border Security: selling well

=3. Cineflix International 11 points Cineflix International’s march up the charts has been checked this year by the rise of All3Media International.

The company does, however, have its fans – with one rival calling it “the growing company of the moment”.

Cineflix is one of a handful of North American-owned companies from outside the studio system that are attempting to scale up fast both in terms of production and distribution.

It has launched a drama division, so down the line Cineflix International will diversify out of factual. And it has just appointed a Latin America and Iberia specialist to help it grow in Spanish-speaking regions.

Cineflix’s top titles appear to have benefited from a lack of risk-taking among buyers. High-volume trusted titles like Nazi Hunters and Border Security are selling well.

Take Me Out: FME dating game

18 | Broadcast | 24 September 2010

With revenues up 53%, it’s been a great year for Shed-backed Outright Distribution, which has built a robust business around titles like Supernanny and Who Do You Think You Are?. While not cited in our main chart, managing director Chris Bonney says there are also strong new titles coming through distribution, such as World’s Strictest Parents. “Now it has been produced in the US and Australia, we have three different English-language versions to distribute around the world.”

Like his rivals, Bonney wants to broaden his slate, with shiny-floor shows a priority. And he has looked beyond the English-speaking market for third-party content.

=6. Shine International 8 points

Supernanny: Outright hit

=3. Fremantle Media Enterprises 11 points After two years at number two, RTLowned rights management company FME has slipped to joint third this year – though the consistency of its showing is probably the most important measure of the company’s prowess.

FME is currently in the midst of a huge diversification programme and its admirers point to the company’s successful cross-platform exploitation, with TV revenues backed by activity in

=6. Outright Distribution 8 points

MasterChef (US): recommissioned

The growth of Shine is admired by many, both for its production and distribution capabilities. While the big headline in the past year has been the company’s success rolling out versions of MasterChef, which has just been picked up for a second series in the US, there’s more to Shine than a single show. Other international hits include The Biggest Loser and The Listener.

The company’s catalogue is still quite small, but with lots of in-house production expertise it shouldn’t be long before Shine scales up its volume.

It is very international, with 70% of its content non-UK in origin. Most companies cite the UK as a top-three market but Shine is making more money in France. That said, Shine’s Chris Grant stresses that UK content is still a great asset: “It hasn’t diminished in importance. It’s just that other markets are growing.”

Note on methodology: Respondents were asked to rank their top three rivals. We allocated three points to the company they most admired, two to their second choice and one to their third. www.broadcastnow.co.uk

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