Is British TV under threat of US takeover?

Downton-Abbey-a-British-i-014

Les séries britanniques comme Downton Abbey et Skins sont très populaires mais récemment les sociétés qui produisent ces séries ont été rachetées par des géants américains. Ce phénomène inquiète certains Britanniques et des appels à plus de protectionnisme dans le secteur ont été lancés.

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Today seven of the UK’s ten biggest independent TV production companies are foreign-owned, mainly by US media giants, such as NBC Universal, Warner Bros, Sony and Rupert Murdoch’s 21st Century Fox. Moreover amongst the only three big UK-owned companies left, one of them Tinopolis, just put up a “for sale” sign. The last company purchased during this gold rush of British television was  All3Media, the maker of Skins.  Gordon Ramsay’s Kitchen Nightmares was sold about nine times its earnings (£550m) to two US cable giants Liberty Global and Discovery Communications.

Why is the market so red-hot for British content companies?

Two main reasons can explain this increasing interest of foreign companies for UK production companies.

First of all, the digital revolution changed the balance of power between the consumer and the TV companies. Before the viewers could only watch their shows on TV and had to adapt to the programmes chosen by the networks. The old model changed, viewers now have the control in this on-demand environment and they decide when, what and how they want to watch their shows. Therefore owning the content that the consumer wants to watch has become strategic. Media giants now have to woo viewers with high-class programming in order to be more competitive. This new model is strengthened by the arrival of new digital players such as Netflix that will spend a fortune on copyrights and represent a significant new source of revenue for content owners.

The UK is the biggest net exporter of TV formats in the world and the country has a strong regulatory framework to protect production companies which therefore own a lot of intellectual property and this is what allows them to be profitable with their shows. This flourishing sector has a big impact on Britain’s economy as the independent production companies have generated £3 billion in revenue and almost a third from sales abroad. The whole British TV industry made £12 billion in revenue.

Is it healthy for the sector?

The debate started at the Guardian Edinburgh International festival in August when Channel 4 chief executive David Abraham raised concerns about American companies investing in British production houses. He urged politicians and regulators to strengthen the protections around the public part of the British TV industry, meaning public service broadcasters such as the BBC and Channel 4 that, according to him, are the only bulwark against a broadcasting system dominated by the US. If purely left to the market, he fears that creativity in this sector will be sacrificed for profit.

But others disagree. Culture Secretary Sajid Javid describes US takeover of producers behind programmes such as Downton Abbey as a “massive vote of confidence” in the work of Britain’s talented TV creators and industry in general. Others criticised Abraham’s declarations more virulently, saying that those declarations endangered the well-being of the system. The Commercial Broadcasters Association (COBA), which represents US broadcasters operating in the UK including Fox, Discovery and NBC Universal, Coba showed that their activity in the country benefits the country, it creates employment: it doubled the number of its UK employees in the last ten years and increased investment in British TV production by 50% in the last five years. Those investments drive growth in this sector and a wider range of economic players is healthy competition that favours innovation, creative competition by increasing the choice for audiences.

Olivia LI

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