Huge changes took place in British TV over the summer, and very few people seem to have noticed. American majors embarked on a spending spree that is reshaping both production and broadcasting.

  • Viacom has bought Channel 5 from Richard Desmond’s porn-to-Daily-Express Northern & Shell group for £450 million. Viacom already owns MTV, Nickelodeon, Viva, Comedy Central…
  • Liberty Global has bought a 6.4% share in ITV from BskyB for £481 million
  • Liberty Global had already bought Virgin Media in 2013 for £15 billion
  • Liberty Global and Discovery together bought All3Media in May for £550 million. All3Media own a range of independents including Betty (Undateables) and Raw (Gold Rush)
  • Warner Bros have taken full control of Shed Media (Wall to Wall., Renegade, Ricochet etc), and combined it with its US reality TV company Telepictures, rebranding it Warner Bros Television Productions UK
  • 21st Century Fox, along with Apollo Global Management has engineered the merger of Shine (which it bought from Elizabeth Murdoch three years ago) with Endemol and US group Core Media

Writing about the Endemol/Shine/Core Media merger back in June, I didn’t spot what would happen next, or how far and fast things would develop over the summer. I presented Warner Bros as a friendly investor in Shed. But Warners, a centralised company, clearly felt unhappy with the idea of semi-autonomous production outfits within its fold, and so absorbed them 100%, pushed out Shed’s chief executive and then reorganised the whole of its UK holdings. Nor did I expect, like everyone else, that Liberty Global would suddenly buy its way into UK production.

Shine’s chief exec Alex Mahon explains that there is an “arms race” between US majors to buy UK content producers. He told the RTS London conference that “There are four or five really big companies that have become available, and as one gets bought, they all get bought. There probably won’t be an opportunity to get companies with a turnover of half a billion [pounds] again”.

David Abraham, chief executive of Channel 4, raised the alarm in his MacTaggart lecture at the Edinburgh TV Festival, saying that “While UK production is an undoubted commercial success story, I wonder if it will continue to be a creative one. Scale demands an increased focus on cost cutting and margins. Reformatting ideas is more efficient than the messy business of finding new ones. Fear of risk overtakes an appetite for it.”

Abraham also warned: “Smaller companies need a special level of support and protection when participating in a market characterised by big players, many of whom are connected to broadcasters”. He has also put his money where his mouth is by investing in a number of smaller UK independents, something that Channel 4 has never done before.

In the Observer on 14 September, Will Hutton pinpointed the next possible development: a US-based bid for ITV by John Malone’s Liberty Global group. Hutton know about Malone, “a libertarian conservative businessman who so distrusts government that he owns 2.2 million acres of land as a hedge against government-induced inflation, is preparing a bid for ITV. His libertarianism informs his detestation of taxes and his I-eat-what-I-kill philosophy has made him one of the most ruthless deal-makers in the US.”

Just when you think you’ve seen the end of Murdoch, another one comes along…

It’s important to note that the UK is also buying into the US. The Tinopolis group (owning Mentorn, and sports producer Sunset & Vine) has bought Top Chef producer Magic Elves. ITV has been investing widely in UK production companies including around $800 million for the Leftfield, the producers of Real Housewives of New Jersey as the culmination of a buying spree that has landed them Gurney Productions, High Noon Entertainment, Thinkfactory Media and DiGa Vision.

Increasingly, formats are key to the international content business.

So what are the issues at stake for the TV industry here in the UK?

There seem to be two:

1. Production cultures  

Will production groups like Shine, Wall to Wall etc, all with their own cultures, be able to continue as creative units? Or is this the end of some of the UK’s most productive TV enterprises?

If formats are key to success, then the key to successful formats is a highly focussed, informally organised and flexible production company. That’s why the UK has been so successful in the recent past.

2. Public Service Broadcasting

ITV still has some residual public service obligations, more so than Channel 5. It is also a mass broadcaster and still the only challenger to the BBC in that arena. If John Malone decides to mount a bid… where will that leave the “ecology of British broadcasting”?

And the best time for him to bid is in the coming months: before the next election. Before May 2015 the coalition government, now enfeebled by its dismal role in the Scottish independence referendum, will have decreasing power, or willingness, to step in to thwart the takeover.

Be warned.

And one things is sure: if ITV falls into American ownership – or even is the subject of a serious but unsuccessful bid – there will be discrete celebration at the BBC. They wouldn’t admit to it, of course. But nothing would make the case for new charter with full public service remits underpinned by a proper licence fee than a US controlled ITV.

 

JOHN ELLIS is Professor of Media Arts at Royal Holloway University of London.  He leads the ADAPT project on the history of technologies in TV, funded by a €1.6 million grant from the European Research Council. He is the author of Documentary: Witness and Self-revelation (Routledge 2011), TV FAQ (IB Tauris 2007), Seeing Things (IB Tauris 2000) and Visible Fictions (1984). Between 1982 and 1999 he was an independent producer of TV documentaries through Large Door Productions, working for Channel 4 and BBC. He is chair of the British Universities Film & Video Council and also oversees the Royal Holloway team working on EUscreen.  His publications can be found HERE.