These findings are contained in independent report, by Mark Oliver
of Oliver & Ohlbaum Associates. The report titled UK Television
Content in the Digital Age was released yesterday. It concludes
that the $75 per head spend in the UK, compares to $65 in the USA,
$52 per head in Germany, $43 in France and $26 in Australia.
The current high investment enables the UK's TV industry to play
a prominent role in reflecting and reinforcing UK culture and national
identity, says the report, commissioned and published by the BBC.
Despite the significant economies of scale enjoyed by the USA in
television production and global exports, three quarters of UK television
content is currently home grown. This compares to only 20 per cent
in the film industry where the USA dominates 80 per cent of movie
consumption in the UK.
But investment in domestic TV production could drop by 60p per
pound for every £1 reduction in the BBC's public funding,
hitting high cost drama, documentaries and scripted comedy in particular.
Reallocating public funds to other commercial broadcasters is also
highly likely to result in a fall in the total amount invested in
UK content production, says the report.
The UK's strength in homegrown television content investment stands
at £3 billion per year. This is underpinned by the BBC's investment
which accounts for 40 per cent of this total, says the report. ITV
also plays a central role maintaining original production at 20
per cent above the level legally required. ITV, Channels Four and
Five combined account for £1.3 billion of programme spend
a year – 43 per cent of all domestic content spend, while pay TV
in the UK recycles only 3 per cent of revenues into new UK productions.
However, the report warns of pressures on the UK's unique broadcasting
model of market intervention and regulation which ensures diversity,
range and investment and encourages creative competition across
Audience fragmentation, increased competition for commercial revenues
and possible future pressure on advertising premiums, will threaten
investment in original, diverse content by the UK's main commercial
broadcasters. Channels Four and Five may increasingly attempt to
compete directly with ITV for mass-market audiences. At the same
time ITV may be forced to reduce its originations to the legal minimum,
says the report.
New legislation and ownership rules could also mean a single dominant
owner of commercial TV networks will place more emphasis on diversity
between its networks than on original content investment. "In
these circumstances, the nature and structure of public funding
will have a pivotal role in underpinning both total content funding
and preventing dilution by the commercial networks," says the
"The presence of a well-financed, publicly-funded broadcaster
– the BBC – has helped ensure that each commercial TV channel needs
to invest significant amounts in new content to protect its audience
share. Far from crowding out investment in domestic programming
by commercial TV, the BBC may well encourage such investment."
"This also increases barriers to entry in the commercial network
TV market which prevents revenue fragmentation and further pressure
on programme budgets" the report adds.