Writers' strike helps lift earnings

Revenue in the U.K.’s thriving independent TV production sector grew by 9.4% last year to £2.14 billion ($4.15 billion).

The figures, taken from the annual census based on responses from 153 companies, show that increased commissions by British broadcasters, principally ITV, BBC and the proliferation of satellite, cable and digital channels, generated most of the growth, with spending up $302.6 million since 2006.

International commissions contributed $601 million, of which the U.S. accounted for 84%, due largely to the success of factual entertainment formats.

John McVay, CEO of producers group Pact, which conducted the census with KPMG and the Bank of Ireland, said: “I think we will see still more growth from the U.S. in the future, especially following the writers strike.

“The big change is that U.K. indies are now making shows for U.S. networks. They clearly have an appetite for British programs.”

The writers strike, he added, “provided a good opportunity. It allowed U.K. indies to exploit their high reputation for factual material and take advantage of the possibility there will be less U.S. drama available in the coming months.”

He added that it was “a win win” for U.K. shingles. They also stand to gain at home as local webs are likely to invest more in domestic production because of a shortage of U.S. scripted shows and the high cost of acquisitions.

Average operating profits at British indies increased from 6% in 2005 to 9.3% in 2007, according to the census.

The key players in the sector are All3Media, IMG, Fremantle, Hit Entertainment and Endemol, each with sales north of $194 million.

Together they generated 43% of the sector’s revenue, but the growing consolidation of U.K. indies has led to what McVay described as “a hammocking effect” as midsized outfits found it increasingly difficult to compete against the “super-indies” at one end and small combos at the other.

McVay predicted continued long-term growth despite the prospect of a slowdown due to the global credit crunch.

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