Will the Sun Set on the Terms of Trade?

Last week’s The Royal Television Society’s conference (28.9.10) had a number of themes. One is getting more insistent. The UK commercial broadcasters do not like the Terms of Trade for independent producers and want to make more content in-house, thus controlling its exploitation.

Public interest set the Terms in the first place. (OK, effective lobbying should get some credit, too.) A public policy perspective can often yield perceptions and insights that do not come up when you look, as most of us do, to the immediate interests of your firm or industry. That is why, back in the 90’s, broadcasters vigorously opposed them.

For those who are unfamiliar with the Terms, Ofcom eventually introduced them in 2002 because, in Britain, the public service broadcasters, collectively, dominated the commissioning of new content. Producers and others also accused them of “warehousing” content, -- that is, starving satellite and cable channels of available content. The result? Producers got ownership of the secondary rights to the content they made for broadcasters (where previously they had ceded rights) and could license it to domestic and overseas players. This made some producers extremely rich and helped to build some very large companies – like Shine, All3Media, and Tinopolis.

The Courage to Compete, PACT, 1997

 Our company, Attentional (then called DGA) strongly supported this initiative and helped to make the terms happen. With support from producers’ trade body, PACT, and a hugely talented steering group, we wrote The Courage to Compete, a key document in the campaign, published by PACT in 1997. The document promised – and the reforms delivered – a boost to exports from the UK creative industries, a much more dynamic production sector, and a new global media profile for the UK.

However, things move on.

Now many of those producers have created very large companies, some larger than the broadcasters subject to the Terms.

Moreover, some might argue that the Terms have, in their way, frozen the very situation they were intended to free up. First, they made the traditional public broadcasters the preferred destination for larger producers. Second, they drove a wave of energy and innovation among independents, helping the traditional channels to get access to the best content available and keep their dominant shares.

Now some of the larger independent companies are being bought out by even bigger firms – such as Hollywood studios – controlled from overseas.

If over time these Terms are “sunsetted”, as similar rules were in the US many years ago, it should not happen quickly. There will be many arguments, many questions to think about. What, for instance, of the smaller producers, whose gains from the Terms have been modest? Would it mean revisiting the quotas for independent production? What are the appropriate rules for a new era? What new models will emerge for the production of expensive content? Should broadcast policy now aim to encourage a new level of diversification in the commissioning of content? Or is that best achieved by simple deregulation?



Complacent? Or Not?

Children greet Mister Maker in Indonesia

A few weeks ago, at a conference we were sponsoring, called Programming the Future, I heard Thomas Schreiber, a senior executive with ARD Television in Germany, make an almost-passionate plea: could the UK please take the Eurovision Song Contest seriously? To him -- as to many Europeans -- it is simply the biggest global music event. Could we please persuade Robbie Williams or Jamie Cullen not to fear ridicule for being part of a “naff” event, but to have a go at winning it?

At the same conference David Weiland of BBC Worldwide told us how surprised the Mister Maker team were, on arriving in Indonesia, to find thousands of children waiting for them. Mister Maker appears on the Asian CBeebies feed. In a mall in South Jakarta, an estimated 8,000 CBeebies viewers turned up to watch the on-stage demo. The 4-storey shopping mall was filled with preschoolers and their parents. Traffic queued to get to the mall for hours before the event.

In Britain we seem to be curiously complacent about our media presence outside the UK.

Is that unfair, with MIP coming up shortly and the Brits, as ever, probably the largest contingent? The UK has indeed been very good at originating and exporting formats, with Paul Smith back in the 90’s setting the trend with Who Wants to be a Millionaire. That surge of activity was driven partly by the revolution caused by the Terms of Trade rules that gave indies a huge incentive to exploit their new-found rights. (ITV was already operating a similar regime at that time as a result of intervention by Competition Authorities).

But could we do more? Formats are worth less than “tape sales”. The most valuable content of all is, of course, drama. There is plenty of English language drama playing around the world, dubbed or subtitled – the trouble it’s nearly all American.

Why is this? What are the key drivers to US success? First, the series are well made, on budgets that exceed those of the UK and other European markets. Second, they do not pose a “cognitive challenge”. Audiences are used to the settings, the venues; the conventions are all familiar.

But there are some deeper issues which make the issue of US dominance a much for contingent, relative affair. For example, the US has had, as the superpower and protector of the free world, the status that goes with that role. It has been a country – and a culture – that people wanted to know about. But times change: much of the rest world now finds the social-democratic model epitomised by the countries of the European Union more attractive.

So, to return to some essentials: the English language is not the problem. The issue is: the content has to work…in Germany, Lithuania, wherever. What matters is energy, relevance, story telling and “fit” with current scheduling patterns.

That should not be hard; we live in a European context, we hear European voices on our streets every day, much crime – to take one staple of storytelling – has a European dimension. To meet the challenge we will have to work with other European partners. But do we need it enough? Perhaps the production of short-run drama in the UK is just too comfortable an option for us to give up?

What Do Kids Need?

In my paper on the future funding of the BBC (see http://www.attentional.com/), I argued that the Government needs to be more specific about Public Service Content. Most of what the BBC broadcasts is not public service content, unless you define it very broadly. But a broad definition means that we end up subsidising a large amount of entertainment, which people would be happy to pay for.

A working definition of core public service content might be: “content that most reasonable people would like to see available to everyone”. Most surveys suggest that News falls into that category. That does not mean all news should be publicly funded:  merely that Government should ensure that accurate news is widely available.

I argued that Government should set up clearer criteria for public service content and develop expertise in “public value”. Broadcasting is about communications. There are many ways of communicating and broadcasting may not be the best carrier for all of messages. Expertise in choosing the best way to deliver a message would be one part of the package.

Beyond news, children’s programming is another item that must be on the agenda. In fact, it’s a good example around which to rehearse what tools Government might need.

For a start, Government needs to know as much as possible about the role of TV in teaching children about the world, helping their development, “socialising” them. I do not know how much work has been done on this and I am going to start looking into it. My guess is: not enough. What kids need really is the issue here.

The Government must also know popular opinion, whether people – and particularly parents – are happy with what they are getting, whether they see gaps in the supply, etc.

If there were gaps, and even if the perceived gaps did not concern pure public service content, Government might seek evidence of “market failure” and address it.

This would help Government to get involved in the kinds of issues that now concern makers and broadcasters of children’s content in the UK. The first and most important is how much original content – and what kinds of content – should be made specifically for children in the UK? A second question is: how should broadcasters act to give children maximum access to this content?

A lot of children’s content is co-produced. This is because the BBC – and others – do not “fully fund” most children content but send producers off to find parts of their budgets from other countries. Should broadcasters in receipt of public funds be told to pay more?

And because children’s content may reach most children at times of the day when most adults would also be watching, the BBC and other broadcasters have an incentive to move children’s content away from such popular slots. A policy based on a clear view of childrens' needs would help Government to take a line on this issue too.

(When I use the term “Government”, I am speaking about the regulatory structure that government puts in place. If it delegates to another body, a government needs to be sure that the delegated body knows government policy and is equipped to enforce it).

In Praise of the Ordinary

Over the last two weeks I have been going through comments in various media about my paper on the funding of the BBC.

Some of it was depressing. Some of it was supportive. But there was little on the core objective of the project: how we do grow our media industry and our media exports? How do we take full advantage of the new “trade routes” offered by the broadband Internet?

The UK’s success with formats should be recognised and is something to be proud of. But drama is what earns the money overseas. It is also what gives our country “profile”.

So here is a tribute to two series that have achieved that and which play all over the world: Midsomer Murders and Wild at Heart. Some people find them "ordinary". But both series know exactly what they are doing, and who they are aiming at.

Unlike so much of our fiction, they also offer the numbers of episodes that international markets want. There are more than 80 Midsomer Murders.

Both have found venues that people are interested in and which provide a stage for the 10 or 12 main characters that series seem to need. A British village is familiar territory from numerous detective novels. A game reserve was a braver notion for a new drama but it has provided a setting that people all over the world can understand – with plenty of scope for conflict, and issues that are very topical.

A detective story relies on a basic fact about human condition. We want to cooperate but don’t quite know how much to trust people – and there are some people, a minority, who are amoral and very good at concealing it. We want to see then caught and punished.

Apart form the traditional family and romantic issues, Wild At Heart can give us animal attacks, tropical storms and the rest of it. We love to see people facing up to such challenges when the performances are well executed.

Both series avoid a social agenda. People back from work on an average day can easily get depressed over problems they know they can do little about.

PUBLICATION: Report for the Adam Smith Institute on the Funding of the BBC

As I said in my second last post, I took time out to write the report that was published this week. It is out there now, and can be found at http://www.adamsmith.org/publications/. It has had quite extensive publicity. I will resume the Powerhouse blog when I have digested it all.
Here is a link to BBC News.
http://www.bbc.co.uk/news/entertainment-arts-10815162

And here is the Guardian poll:  http://www.guardian.co.uk/commentisfree/poll/2010/aug/02/bbc-tv-licence-fee-adam-smith-institute.