How bright is the future for Swedish TV-producers? Och den ljusnande framtid är vår?
Mar 31, 2015
How bright is the future for Swedish TV-producers?
Och den ljusnande framtid är vår?
Agenda for today’s seminar
• 14.00-15.00 Presentation of the study• Short break (wine/beer/coffee available)• 15.15-16.00 Discussion in groups (audience
participates) about key issues for the future of the Swedish TV- production industry
The study of the Swedish TV-production industry
• Strategies and business models• Industry structure• Legal and regulatory framework
– With European comparisons
Background
• The Swedish TV-production industry coming of age: maturing and professionalizing
• Technical, economic and regulatory changes make for a turbulent environment for Swedish TV-producers
Turbulent and exciting times ahead!
• Technological development allows for new distribution platforms as well as new business models and revenue streams
• Regulatory changes• Globalization of the TV production
industry: formats and foreign ownership
Rolf A. Lundin
Handling Strategies and Projects in TV Production Companies
Why projects?
Open interviews with relevant actors more than three years ago
• Lots of references to creativity
• Three types of projects:
1. Production projects2. Format projects3. Strategy projects
Ad 1) Production: Coordination, freelancers, well prepared!
• Impressively efficient. • TV producers do not have much to learn but
have a lot to teach others!
Ad 2) Format: From first idea and marketing through bible work• The bible phase is orderly. • The phases prior to the bible phase are less
clear. • One problem is how ideas are generated and
kept • No correspondence to “shelving” in traditional
product development.
• Action was unclear.
• The interviewees did not seem to know how to handle the question!
• Why is that so – ”Is he a spy?” Ad hoc? System?
• No clear projects related to strategy, not even to learn.
• The TV producer association for common problems (IPR, relations to SVT, etc.) providing a forum for “industrial wisdom”.
Ad 3) Strategy: The problems were described in similar terms.
Discussions with actors in TV production in November 2011:
• Less talk about creativity• No change when it comes to production projects• Less stress on development of formats • Strategy a lot more developed for the company (less
about the association) • A system for strategic development. Similarities with
traditional, ripe industries. • More discussions about new market opportunities in
parallel to the traditional ones. Translation of trends to development and action.
• Conclusions about projects in the companies: Still very efficient in exploitation and the competence for exploration has definitely grown.
• But the Swedish TV production market is all too small. Successful innovation demands a big market. Swedish film seems to be riding on a wave of new attention. Can this wave be utilized?
The Regulatory Framework
Pernilla Rendahl
The regulatory framework
• Initial ideas – The link between intellectual property rights and
VAT distorts competition?– The regulatory framework cannot coop with the
transformation without causing more competitive distortions?
– More regulation v. less regulation?
The regulatory framework
The regulatory framework
• Particular Swedish concerns- Need to be strong within the EU and other
international organisations- X-border problems cannot be solved with
unilateral measures- VAT creates distortions
- link between copyright and VAT- Deductibility of input VAT
The regulatory framework
• Intellectual property and licencing– Key issues that need to be prioritized by regulators– One-stop shopping (?)
• VAT – EU Commission: too many distortions– One-stop shop 2015
• Freedom to provide and receive services?• One framework, but issues are discussed
separately
The regulatory framework
• More and larger groups of companies
• New business models?
• Shift of powers?
The regulatory framework
• More or less regulation?
• Sweden difficult to compare due to its size and structure
• Unilateral measures are not enough• Regional and international coordination is
needed
The regulatory future
• How can business affect the legislators?
• Should business affect the legislators?
• Utopia – one single market?
Independent TV production in Europesome preliminary findings
Lucia Naldi
• Turbulent times– Changes in technology– Regulations
• Change/extension of business models?
2 possible business model extensions
– Tapping into advertising funding as a replacement for declining broadcaster funding
– Integrate the distribution: starting in-house distribution
In fall 2010, MMTC scholars and a team of researchers from the University of Zurich have jointly designed and carry out a European-wide survey
A pan-european study (1)
The survey was directed at independent TV producers in the following EU countries: Sweden, Norway, Denmark, Holland, Germany, Switzerland, the UK, Ireland, Spain and Croatia
Identified using the registers of members of the national industry association
E-mail questionnaire
Targeted responded: the company’s CEO
A pan-European study (2)
A pan-European study (3)
14%
30%
12%
10%
16%
8%
2%
2%
5%
1%
CHDEUKIEESCRDKNOSENL
431 responses (155 complete) out of 1467 emails. Response rate 29% (11%).
Perceptions of the dynamisms in the TV production industry?
- Technology-Competition
-Consumer behavior-Regulatory framework-Product maturity rate-Marketing practices
Moderately high dynamism
United Kingdom
Ireland
Spain
Norway
Sweden
Switzerla
nd
Germany
Croatia All
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
3.48 3.34 3.37 3.22 3.11 3.09 3.032.65
3.16
Developments within:
- Advertiser funding programming- Online distribution
Advertiser funded programming (+)
• It is getting more widespread among firms• Although with limitations• No major differences between European
countries
Share of production companies using ADF
2007 2009 20110%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Share of productions containing ADF
2007 2009 20110%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Advertiser funded programming (-)
• Advertiser funding is not clearly beneficial for producers—broadcasters can secure part of the advertising revenue
• Differences between European countries
United Kingdom
Norway
Switzerla
nd
SwedenSpain
Germany
Croatia
Ireland
1
2
3
4
5
6
7
BroadcasterProducer
Distribution of advertising revenue
• Only firms with first hand experience with AR• Differences across genres: fiction can retain higher share of
advertising
1-all revenue remains with broadcaster; 7= all revenue remain with producer
Online Distribution (+)
• Over the next three years, growth will come from non-traditional distribution channels
• Differences between countries
Distribution platforms(expected development)
TV
Cinema
Mobile
On-line
-3 -2 -1 0 1 2 3
-3 strong decrease; 3= strong increase
Distribution platforms across countries(expected development)
• Germany and Switzerland expect a major decline of TV market (-60%)
• Spain and Croatia some growth potential in the TV market
• Swedish producers have lower expectations on the opportunities in mobile and online compared to their European colleagues.
Online distribution (-)
• European producers expect themselves to have a less powerful position in the on-line space as compared to the traditional market
• Ranking the actors according to their expected revenue1. internet platforms2. telecommunication operators3. broadcasters/publishers4. Advertisers5. Producers
Possibility to retain broadcast and online rights
1-no rights at all retained; 7= all rights retained
Switzerla
nd
Netherlands
Norway
United Kingdom
DenmarkSpain
Germany
Sweden
Ireland
Croatia
Total1
2
3
4
5
6
7
brodcast rights retained online rights retained
New competences needed?
• 88% believe they need new competences in their organization to growth in adverting funding and online distribution
What new competences?
Adjusted training programs
Building cooperation with advertising
agencies
Necessity of marketing division
More expected skills per person
0%
10%
20%
30%
40%
50%
60%
70%
80%
Future?
• ADF is likely to establish• Growth of online and mobile distribution
• How can European producers retain ADF funding?
• How can they secure their position in the online space?
• Consolidation of the industry? Larger production companies
• Backwards integration- broadcasters acquiring production companies and reintegrating production to better serve the advertisers, i.e. their actual customers
Possible scenarios
The structure of the Swedish TV-marketSVT and production companies
Maria Norbäck
SVT’s co-productions
• More investment (and thus risk) is being demanded of the production companies
• In some genres production companies are responsible for finding additional financers
SVT’s co-productions
• SVT needs to professionalize and improve their commissioning practices
• There needs to be a discussion around the division of rights between SVT and production companies
Structure of the Swedish TV market
• SVT and the other distributors enjoy oligopoly-like position (buyers’ market)
• In other European countries the broadcasters’ power is less strong
• The issue of the division of rights is crucial for Swedish production companies’ future
The UK legislation a role model?
• The UK Communication Act of 2003 states that broadcasters must negotiate secondary rights, and that these not automatically end up with the broadcasters (which is something that many Swedish broadcasters today have written into their contracts).
• BBC has very clear policies regarding their commissioning practices (price per hour of programming, waiting times etc.)
Diskussionsfrågor
• Det främsta strategiska problemet nu?• Framtida affärsmodeller?
• Utopia – one single market?
• Vad har ni för förväntningar/förhoppningar på SVT i framtiden?