Memorandum submitted by Radio Telefis
Éireann (RTE)
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 9,000 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
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