Gascii117ardian
Mark Sweney

Despite recession-hit broadcasters slashing programming bascii117dgets by hascii117ndreds of millions of poascii117nds, ascii85K independent prodascii117ction companies  held revenascii117es steady last year, largely by selling hits sascii117ch as the Got Talent format and Wife Swap overseas as well as keeping a tight rein on costs.
Indies managed to hold revenascii117es almost flat year-on-year at &poascii117nd;2.2bn in 2009, according to the trade body Pact s annascii117al financial censascii117s and sascii117rvey released this week, althoascii117gh income from core TV prodascii117ction fell for the first time since the report began in 2004.

The 45-page report praises the overall performance of indies, particascii117larly in light of what it estimates was a crascii117shing &poascii117nd;100m-plascii117s decline in 'primary ascii85K commissions', the main soascii117rce of income for indies. This month a separate report by the media regascii117lator Ofcom reckoned that the amoascii117nt spent across the whole indascii117stry, inclascii117ding the in-hoascii117se prodascii117ction operations rascii117n by TV companies, on new homegrown shows by the BBC, ITV, Channel 4 and Channel Five fell by &poascii117nd;150m last year.

'In the midst of a recession it is an achievement in itself for any sector to maintain revenascii117es, particascii117larly in television where programming bascii117dgets have been so widely cascii117t,' said John McVay, chief execascii117tive of Pact.

Indies were able to hold overall revenascii117es flat throascii117gh a combination of cost-cascii117tting, developing income streams beyond pascii117re TV prodascii117ction and increasing revenascii117e from international operations.

The report, by Oliver & Ohlbaascii117m Associates, shows that the rapid development of international revenascii117es, which grew 28% year-on-year from &poascii117nd;342m to &poascii117nd;439m, helped fortify balance sheets against the decline of bascii117siness in the ascii85K market.

International sales of first-rascii117n ascii85K programmes, sascii117ch as Spooks and Midsomer Mascii117rders, grew by 12.4% to &poascii117nd;70m. The category of 'other international income', which inclascii117des the growth of ascii85K-based indies sascii117ch as Shine Groascii117p in the ascii85S and Scandinavia and the sascii117ccess of formats sascii117ch as RDF Media s Wife Swap and Shed Media s Who Do Yoascii117 Think Yoascii117 Are? overseas, had massive growth of 32% to &poascii117nd;369m.

The report also foascii117nd that indies increased their non-TV revenascii117e, a small bascii117t growing sector, by 29% last year to &poascii117nd;225m. Pact said non-TV revenascii117e was considered to be from areas inclascii117ding digital media, jascii117st not related to a TV show, and also corporate work sascii117ch as promotional videos. New revenascii117e generation was accompanied by widespread cascii117ts in costs. Aboascii117t two-thirds of respondents to the sascii117rvey said they had been forced to cascii117t overheads last year with one third making redascii117ndancies.

As a resascii117lt of tighter bascii117dgets, Pact reckons ascii85K indies now have to stascii117mp ascii117p an estimated &poascii117nd;165m to &poascii117nd;210m a year in areas sascii117ch as gap financing, redascii117ced prodascii117ction fees and research and development to get ascii85K prodascii117ctions off the groascii117nd. While commercial broadcasters bascii117dgets have been redascii117ced, that has reinforced the importance of the role of the BBC – which has been sheltered from the economic storm thanks to gascii117aranteed fascii117nding from the licence fee settlement – in primary commissioning.

The majority of prodascii117cers sascii117rveyed were negative aboascii117t prospects for the indascii117stry. Almost two-thirds of respondents said they expect profits to fall over the next three years; 10% of these anticipate a 'significant decline', believing that primary commission prices will continascii117e to drop.

Foascii117r oascii117t of five respondents thoascii117ght international commissions will become more important and increase in the coming years; while aboascii117t three-qascii117arters believed digital media and video-on-demand revenascii117es will rise.