Memorandum submitted by Radio Telefis Éireann

 

 

1. RTE is Ireland's largest public service broadcaster, a non-profit making organization owned by the Irish people. RTE is Ireland's cross-media leader, providing comprehensive and cost effective free-to-air television, radio and on line services, which are of the highest quality and are impartial in accordance with RTE's statutory obligations. RTE operates two complementary television channels, RTE One and RTE Two.

 

2. The Broadcast and Acquisitions department operates within the Television IBD (independent business division) of RTE. Among its responsibilities are the acquiring of international programming, the selling of RTE's programmes abroad and the commercial exploitation of RTE's programmes on DVD. The Director of Broadcast and Acquisitions is Mr. Dermot Horan, who sits on the board of RTE Television.

 

 

The International Sales Market

 

3. The International Programme Sales market is dominated by the American 'Majors' as they are described. These six companies (Warner Bros, Twentieth Century Fox, Disney, CBS Paramount, NBC Universal and Sony) produce most of the world's biggest grossing feature films, and most of the US networks' major drama and comedy series.

 

4. As such they have a huge influence in the way that programmes are sold and bought. Their leverage of having both feature films and series to sell, as well as extensive feature film and series libraries, means that they now control approximately 70% of the world's programme sales revenues.

 

5. Just to give you an example, Disney in a given year may be selling movies of the calibre of Pirates of the Caribbean and The Chronicles of Narnia: the Lion, The Witch and the Wardrobe, as well as series such as Desperate Housewives, Lost and Grey's Anatomy. At a recent Disney presentation the company boasted that Lost had been sold in over 150 territories.

 

6. These programmes and feature films are sold at particular television markets such as Mip TV and Mipcom in Cannes, and the LA Screenings in Los Angeles. However, the US majors also have field offices in all the major territories, such as London, Paris, Madrid, Hong Kong, Sydney and the like, with local sales people with local broadcasting knowledge to exploit their large catalogues.

 

7. The LA Screenings, where the US Majors show off their new drama and comedy series is attended by over 1600 buyers, all of whom choose to fly all the way to Los Angeles at their company's expense, in order to purchase US series.

 

8. Mip TV and Mipcom have over 9000 attendees each, and the US majors erect vast lavish stands in which to conduct their business meetings.

 

 

The UK Perspective

 

9. It is in this environment that British programming must compete in order to make international sales.

 

10. The question may be asked as to why British programming, or indeed any other programming needs to sell outside its own market. The answer is that broadcasters cannot afford to pay for series which they commission in their entirety, particularly those of high production value such as drama and natural history. The deficit funding must be made up through both programmes sales and DVD sales.

 

11. The absence of a significant programme sales business to a broadcaster means inevitably less commissioned drama, natural history, comedy, documentaries and children's programmes, all of which to succeed must have expensive production values.

 

12. Equally that programme sales business can only succeed if it has a through-put of regular high quality product. To compete with the US majors a distributor must have a high volume of high quality content, both new programming and a significant library. The distributor must attend all the key sales markets.

 

13. There are many distributors which specialise in specific genres, and there are countless smaller distributors. To compete at the highest level, the distributor must carry programming across the key television genres - drama, comedy, documentary and children's. This gives the distributor the leverage to cut significant deals. For example if a distributor has a weak documentary slate of programmes in a given year, but a strong drama and children's slate, the strong latter two categories will probably see an overall deal through.

 

 

 

 

BBC Worldwide

 

14. BBC Worldwide is the only British distributor which can compete with the US majors. It doesn't have the feature film slates which they have, but has a really rich variety of programming across all genres. The US majors sell feature films, drama and comedy, and a little reality. BBC Worldwide sells drama, comedy, natural history, documentaries, and children's programming including pre-school.

 

15. It has an ongoing roll-out of programming across all of these genres. This has allowed it to do 'output' or 'volume' deals with other major broadcasters. These output deals generally last three to five years, and involve a broadcaster agreeing to buy a certain volume of programming in given genres for a given price. These deals allow BBC Worldwide to fund the deficits in the BBC broadcast programmes, with a great degree of certainty. It also allows the broadcaster to commission ambitious projects, such as Planet Earth, secure in the knowledge that the programme has been pre-sold in many territories.

 

16. The significance of BBC Worldwide can be seen in the success of its own screenings market, BBC Showcase. Every February over 550 buyers from around the world fly into the UK and head to Brighton, where the BBC screens all of its new programming in all genres. The fact that these buyers fly in and book hotels at their own expense demonstrates the pulling power that BBC programming has.

 

17. If BBC Worldwide were a smaller player, with less programming to sell, this market would not take place, and the significant sales that are generated there would disappear.

 

18. Latterly not just completed programming has been sold by BBC Worldwide. Popular UK series such as Strictly Come Dancing and The Office have become hits in the US as Dancing with the Stars and The American Office. Again the BBC name and brand opened doors in the fiercely competitive US market, and allowed these shows to happen.

 

19. Smaller broadcasters, particularly public broadcasters, around the world rely on programming from the BBC to fill their schedules. Indigenous programming is expensive, and buying is always cheaper. Combining good locally produced programming with the best from the international market place can produce a potent programme schedule.

 

20. If most of the UK programming was split across a large number of smaller distributors, the effect would be two-fold. The programme buyers from around the world would have more leverage, would buy less volume and pay less for UK programming. Also the beneficiaries would be the US majors who offer a one stop shop for volume acquisitions.

 

21. The consequence for the British Television viewer would be less British programmes on the UK channels, and certainly less high production series such as film drama and natural history.

 

September 2008