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Blighty TV eyes global market

Indies set to gain most of their business from int'l pacts

LONDON — Christmas has come early for British television’s increasingly confident and well-resourced band of independent producers.

Some U.K. indies are so upbeat it is being suggested that, with new laws enabling producers to retain secondary rights to their shows, and the strong international appetite for British reality and entertainment formats, Blighty’s independents could build successful internationally focused businesses.

That might sound far-fetched. But 18 months ago few industryites could have forecast that an outfit like All3Media would emerge, poised to become an important program supplier in Europe, the U.S. and the Antipodes — or that the British Broadcasting Corp. would raise the ceiling for outside production from 25% to 40%, or higher, of its output.

The move is important for British production companies, which, unlike their U.S. counterparts, do not have access to a lucrative syndication market.

“I think what you are seeing in the U.K. for the first time is the arrival of the independent production group as a business in itself,” opines Steve Morrison, CEO of All3Media.

Two years ago Morrison, a Granada veteran of more than 20 years including an ill-starred spell as chief executive, was written off in some quarters following the closure of ITV Digital, the cash gobbling pay TV venture ran by Granada and Carlton.

But since the purchase of Chrysalis TV for $76.5 million in August 2003, Morrison has been quick to seize advantage of the new environment giving outside producers an edge over broadcasters that previously were able to force indies to pay a high price for commissioning their shows.

New rules written into last year’s Communications Act enabling all British independents to retain secondary rights have encouraged investors to look again at the sector.

“For the first time we’re being treated like grown-ups and it feels nice,” David Franks, CEO of RDF Media, the producer of “Wife Swap,” noted recently.

Morrison has no doubt, at least in public, that British independents are set to derive much of their business from international deals.

“If Endemol can do it from a small market like Holland,” he says. “I don’t see why with the wealth of creative talent we’ve got here the British can’t.”

The upshot of this new vote of confidence, sparked by Prime Minister Tony Blair’s crusade to foster creative entrepreneurs after British broadcasters largely failed to expand beyond Blighty, has been a wave of consolidations and mergers.

True, not all of them have worked out. Hat Trick, the makers of “Whose Line Is It Anyway,” failed to tie the knot to Shed Productions, one of Blighty’s more successful indie drama producers.

But Hat Trick did successfully offload a 45% stake in the company to private equity group Kleinwort Capital.

Meanwhile All3Media, following the acquisition of Lion TV and Company Pictures, has come from nowhere to become the U.K.’s biggest independent, judged on the basis of its revenues.

“This year our revenue will be more than £140 million,” says Morrison, “and we’re still at the buy and build strategy.”

This is hardly big bucks in the global scheme of things. Yet the size of its business puts All3Media ahead of the U.K.’s other super-indies such as Endemol U.K., owned by Spanish telco Telefonica.

However, All3Media, backed by investment group Bridgepoint, is a freestanding company. Unlike other British independent TV combos, it controls a group of companies that are run on a devolved, federal basis.

An assault on the potentially hugely valuable German market is anticipated via IDTV Germany, likely to be run by Yurgen Brinkmann, ex-topper at Endemol Germany.

“We don’t want to do what Pearson did and rush round the world buying up lots of different companies,” Morrison maintains.

“We adopt a very hands off approach and allow each individual company to run itself. It’s the most effective way of running a creative business.”

David Liddiment, All3Media’s creative director, is optimistic. He said recently: “U.S. network TV, dominated by home-grown drama and sitcom, is looking to the U.K. not just for the ideas, but also the production skills to realize those ideas.”

Peter Bazalgette, chairman of Endemol U.K. is bullish too. “We are outward looking in an era where the English language is still the lingua franca of the entertainment world and when America has recognized that in non-scripted programs Europe is the pace setter.

“I think we can be global in outlook if not in weight. In two to three years you’ll see one or two British independents with revenues of £3 million to $500 million provided the deals are done.”

Andrew Zein, managing director of Tiger Aspect and present chair of producers’ lobby group PACT, predicts that as U.K. indies bolster their financial clout an increasing number will set up shop in the U.S.

“You’ve got to be able to manage it on the ground while not losing the things that U.S. channels find so attractive. That is the next step.”

Blair, for one, hopes he is right.

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