The tables have turned in the UK television sector. Small TV companies and new start-up entrants are growing their share of commissions from the major broadcasters, whilst the industry’s big players have seen revenues slow or even decline. This is creating interesting – and so far overlooked – opportunities for investors.
Whilst the so-called ‘super-indies’ such as All3Media, Shine and Fremantle still rule the marketplace, last year, according to industry figures smaller indies took a larger share than ever of the £3bn total revenue figures. Why this shift, and why now?
One view is that market consolidation has begun to stifle creativity in the super-indies and renewed broadcaster interest in smaller, start-up producers. After five years of continuous mergers and acquisitions, 45 per cent of the UK TV production market is now owned by just five companies. Analysts estimate that truly independent production companies now only account for 38 per cent of the market in the UK.
However, broadcasters are always searching for the new, the bold and the distinctive to help them chase ratings in an industry where the experimentation rate is very high; last year over 1500 new shows were trialled on UK television. To find new hit shows, broadcasters are increasingly turning to smaller, sub £5m companies – as a result, according to the Producer’s Alliance of Cinema and Television (PACT) these companies’ share of the market last year rose by 7 per cent to a total of 11 per cent of UK commissioning.
This is driving a new wave of ambitious entrants into the market. Barriers to entry are very low; however, small businesses looking to scale their operations still face a financing gap. TV founders spend most of their time courting channel commissioners and often know little of the world of investment or how to access it. Equally investors are wary of a sector they do not know or understand. But for those who are willing to look there are some interesting opportunities.
Helping investors and indies to realise these opportunities is what motivated me to set up the TV accelerator Indielab. A partnership with the Mayor of London through the London Enterprise Panel and Creative Skillset, Indielab launched this month and aims to attract the best and the brightest sub £5m revenue producers into a 3-month growth programme. Master classes in business strategy, changing global TV trends and investor readiness culminate in the opportunity to pitch for up to £2m of investment per company from Angel Investors.
At the same time we have established an investor club, providing a series of market intelligence events for angel investors who are interested in finding out more about the opportunities in TV and the creative sector and in meeting our Indielab companies. UK TV is an immensely vibrant sector. Our balance in trade for TV export is higher than any other nation, and we are set to go on for bigger and better if investors can get behind our talent.