Statement on proposed financial requirements for cross border broadcasters

April 2018

Imposing further financial obligations on cross-border linear broadcasters under Article 13.2:

A statement from the Commercial Broadcasters Association on the negative impact of further obligations under 13.2 on cross-border broadcasters on the following areas:

  • the cross-border circulation of European works;
  • localization;
  • investment in European works;
  • and competition with non-linear players.

 

 

Introducing further statutory requirements on cross-border linear broadcasters under Article 13.2 would:

  • Damage broadcasters’ investment in European content: business models are not “elastic” – broadcasters would be forced to mitigate additional obligations by reducing their own investment in content.

 

  • Reduce cross-border distribution of European works: Cross-border broadcasters are uniquely placed to circulate European works across borders. It is at the core of the business model when they invest in content. Imposing further statutory obligations will force them to reduce their investment in European works, and so reduce the opportunities that content to cross borders.

 

  • Reduce localization: Cross-border broadcasters might also be forced to respond by stopping “targeting” a country (removing local content, advertising and language), and reverting to a generic European service as was common 20 years ago. This would mean less localization.

 

  • Increase uneven playing field with non-linear: Contrary to some suggestions, it is clear that introducing additional obligations for broadcasters would compound the already uneven playing field for linear and non linear. Linear broadcasters are already subject to higher content quotas and stricter rules on content, scheduling and advertising. Non linear services do not invest in European content on a comparable level.

 

Overview

Cross-border broadcasters – i.e. channels licensed in one country and available in another under the freedom of reception rule – are already significant investors in national film and television production in many countries, irrespective of where they are licensed. In other countries where they are less established, they are often growing their investment. This is entirely logical, given the market incentives to offer local content to local audiences, regardless of where a channel is licensed.

This market-led investment is happening without imposing levies on linear channels. Indeed, international channels bring unique advantages that would be lost by transferring investment to national funds. When they invest in content, cross-border broadcasters do so on the basis they will be able to generate a return on that investment by distributing that content in multiple markets. This greatly enhances the cross-border circulation of European works. It is difficult to see how national funds could replicate this.

It is also notable that, supported in part by this investment, certain countries are developing as specialist clusters for particular genres of content, such as animation in Ireland and factual content in Poland. This clustering effect can create a virtuous circle in the single market: as more channels invest, the skills base and infrastructure improves, encouraging more investment in turn. This can result in sustained investment from the private sector.

 

 

CASE STUDY 1: IRELAND – a thriving animation sector supported by cross-border broadcasters

Cross-border broadcasters invest substantial levels in the Irish animation sector, supporting a thriving production ecology, providing a platform for Irish producers to reach global markets and for European content to cross borders.

One notable example is Doc McStuffins, commissioned by Disney from Brown Bag Films in Dublin. With Disney’s backing, the show has become one of the most successful animation properties in the world. It has been broadcast across Europe and the rest of the world, in the process winning prestigious awards and plaudits for its diverse characters. Originally premiered by Disney in 2012, Brown Bag is now in production on season five of the show.

Alongside Doc McStuffins, Disney has in recent years invested in a number of other animation productions from Brown Bag, including Hugglemonsters, Sadie Sparks and Vampirina. Other shows supported by Disney include Randy Cunningham (from Boulder), Vikingskool (Cartoon Saloon), Space Chickens (Gingerbread Animation) and Footbal Shorts (by Dublin-based Bec Hill and Gareth Lyons).

Nickelodeon is also a major investor in animation in the Republic. It recently committed to Nella The Princess Knight, a large scale animation also from Brown Bag. The series launched last year and has been re-commissioned for a second season.

Nickelodeon also recently partnered with Dublin’s Jam Media on a global deal for pre-school animation Becca’s Bunch. John Rice, CEO of JAM Media, talked about the impact of Nickelodeon broadcasting the show around the world:

“Nickelodeon is the perfect partner for Becca’s Bunch and it’s exciting that they have made such a commitment to the show, rolling it out worldwide following its US debut next year.”

In terms of investing in Irish jobs and wider infrastructure, Sky opened a Dublin headquarters in 2013, employing 1,000 people and committing to invest Euros 1 billion over five years. Sky also supports the local production sector through its investment in various live-action genres, including comedy Moone Boy and drama Moonfleet, both of which shot in Ireland with local production partners.

 

CASE STUDY 2: POLAND – an emerging centre for factual content, with hundreds of hours commissioned each year by cross-border broadcasters

Cross-border broadcasters are significant investors in original Polish content, notably factual and factual entertainment shows. Cross-border channels now commission hundreds of hours of Polish content every year, and many are increasing their commitment.

One of the biggest players in the factual genre, Discovery alone invests in more than 300 hours of Polish content each year. Amongst its biggest successes is Kamil Stoch: Untold Story, shown on Eurosport.

Discovery has also invested in many Polish shows over multiple seasons, bringing sustained investment to help grow Poland as a centre for factual programming. It has now commissioned five seasons of Scrappers, along with two seasons for each of Polish Truckers, Bieszczady Frontier, and Operation: Flight. Other Polish shows for Discovery Channel include Business on Wheels, Polish Miners, and Gold Miners.

Meanwhile, Discovery’s TLC channel has commissioned a raft of shows since launching a few years ago, opening up a new source of investment for Polish producers. TLC’s Polish shows include Cleaners, What Have I Got (Poland), Something Borrowed, Something New, Kitchen Tricks, Poland’s Ride, Kasia’s Driving Wardrobe and Full Swing Change.

Another cross-border broadcaster that is increasing its commitment to Poland is A+E Networks, which has commissioned more than 100 episodes of local shows over recent years. This includes 64 episodes of crime shows for its Crime and Investigation channel, including Polish Private Crimes (16 episodes), The 997 Files (16 episodes), and The Whole Truth About The Crime (12 episodes). Other investments include Condemned: Confessions from Behind Bars, There is a Ghost in My House and Killer Women.

A+E’s History Channel is also active in Poland, having commissioned 23 episodes to date. This includes Pick And Bid (17 episodes) and Raiders of the Lost Truth (six episodes). Other commissions include Thrift Queens and Interiors to Fix: Celebrity Houses for Lifetime Channels.

A+E also produces substantial amounts of short-form digital content in Poland (50 shows in recent years), some of which broadcasts on its channels. The company also invests in local CSR activities, including a campaign around International Down’s Syndrome Day which went viral in Poland, with over 10 million unique internet users.

 

CASE STUDY 3: CROATIA AND BALKANS – backing regional talent

In February this year, HBO Europe greenlit its first original series from the region, a major drama to be directed by Oscar-winning filmmaker Danis Tanović (No Man’s Land). The investment is the first result of HBO’s First Draft initiative, a scheme launched at last year’s Sarajevo Film Festival whereby HBO committed to produce one large scale drama series a year from the “Adria” region (Croatia, Serbia, Bosnia and Herzegovina, Slovenia, Macedonia and Montenegro).

The six-part series will be set in Zagreb and produced by Zagreb’s Drugi Plan. Bosnia and Herzegovina-born director Danis Tanović will make his television debut on the production.

“For a long time I’ve been getting offers to make series which I think, at the moment, are more interesting and inventive than the movies, but none of them intrigued me so far,” Tanović said, highlighting the script from Zagreb-based Marjan Alčevski. “Marjan Alčevski’s script is amazingly written, and I’m really happy that HBO has recognized its quality and given me the opportunity to collaborate on it.”

HBO is also in active development on another drama production, The Island, from Serbia. Ivan Knežević, who originated the idea, welcomed the audience-driven nature of HBO’s approach. “I’m happy there is finally a company in the region which evaluates our work from a purely market perspective,” he said. “They know what kind of original content they want to create and they simply pick quality scripts that fit them.”

Another recent production of note from the Balkans that was supported by international broadcasters was Sky Atlantic’s The Last Panthers. Shot partly in the Serbian language and set partly in Serbia, the large-scale drama was broadcast widely across the Europe. It showcased regional talent led by co-star Goran Bogdan and shot partly in Serbia.