2nd July 2009 Production 0 Comment

Reduced funding by broadcasters and a fall in licensing revenue are taking their toll on kids TV production. What’s needed to keep innovation and quality coming? David Wood reports

Children’s television in the UK is something of a paradox. Never has there been such a big choice of programmes for our kids, but rarely has the UK children’s production industry been in such dire straits.

Pact estimates that only 1% of UK children’s programmes currently premiering on a UK kids channel are actually produced here. Part of the reason is that the world of children’s production has changed beyond all recognition over the past 10 years. Once a genre bankrolled by broadcasters, the reality today is that 100%-funded children’s series are the exception rather than the rule, while broadcaster licence fees have shrunk to a fraction of their original value.

Crucially, the genre is less commercially relevant to commercial channels, following the ban on TV ads for foods high in fat, salt and sugar. ITV, which used to spend £25m per year on kids programmes, now spends a fraction of that amount.

Five director of children’s programmes Nick Wilson admits his own £6m kids budget has been cut because of the downturn. “Over the past few years, the nice, comfortable world where BBC and ITV would fully fund kids animation and drama is disappearing fast,” he says.

Alison Homewood, Hit Entertainment’s executive vice-president for worldwide TV distribution, notes that in addition to smaller licence fees, there are fewer commissions as broadcasters weather the downturn by scheduling more repeats. “We have noticed that broadcasters are using their inventory more. A lot of preschool is licensed on an unlimited transmissions basis and in leaner times, they run it as many times as they want.”

There are two basic types of kids producer: the specialists, which make UK shows that are highly relevant to UK children, with little export potential and that rely heavily on high levels of funding from UK broadcasters; and the international co-producers, which stitch together packages of international finance to bankroll kids production. Of these, it’s the specialists that have been hit hardest.

Lack of ideas

CBeebies controller Michael Carrington says: “It’s terrifying - they are having a really tough time. What I see are fewer ideas coming into CBeebies over the past 12 months.

“It’s companies such as Hit Entertainment, RDF and Classic Media that are sending in the ideas. I don’t hear from the smaller cottage indies. I think they are hanging on by the skin of their teeth at the moment and not spending money on development.”

The specialists are facing more competition, adds CBBC controller Anne Gilchrist. “Indies with reputations in other sectors have hired experienced children’s producers and come up with really inventive ideas - companies such as Kudos (MI High), Lion TV (Horrible Histories), So TV (Sorry I’ve Got No Head) and RDF/ Foundation (Escape from Scorpion Island) - so it’s extremely competitive.”

Wish Films’ Will Brenton, who founded Tell-Tale Productions - producer of BBC live-action hit The Tweenies - insists that in the current market, successful kids producers need strong ideas and creativity combined with the ability to build global relationships, as well as experienced staff who can navigate the vagaries of international coproduction treaties.

But things are tough even for the producers adept at negotiating complicated co-production deals and international finance. Brenton says: “Falling broadcast licence fees and distribution fees have made financing more difficult. There’s increasing evidence that the model has hit breaking point, because too little money is being put in.”

Financing deals

UK broadcasters now routinely provide as little as 10%-20%, reveals Brenton. “If broadcasters put in less, the gap is bigger, which has to be filled by more pre-sales or merchandising rights. A more crowded market means distributors are wary - because there’s a bigger financial risk for them.

“Broadcasters need to put in more - around double or 30%-40% - so that projects are turned around within a realistic timescale. These days, shows can take between three and four years to get financed, which is too long.”

Another problem is that producers that have relied on licensing and merchandising rights to make up for budget shortfalls have found margins at that end of the business getting tighter, as Aardman Animations head of broadcast Miles Bullough explains. “The DVD business, for example, is much tougher. Particularly now that it’s driven by grocers such as Tesco and Asda, which have pushed prices down. DVDs used to be £10-£20, but now they can be as cheap as £5.”

All these financial concerns have pushed many producers to head for the comparative sanctuary of the international co-production market in territories such as Canada, where they can find up to 70% of the budget for a series through a combination of tax credits and TV subsidies. The downside is that they may not be able to negotiate a co-production deal that enables them to keep their rights intact.

“It’s the kind of set-up many kids producers would love to see replicated in the UK,” says Aardman’s Bullough.

“Matching Canadian funding models would be really interesting,” adds Wish Films’ Brenton. “With the right tax breaks, you can get 30% of the budget, then add a broadcaster licence fee and strong distributor partner and you are very near being fully financed, with your rights intact - a much healthier position to be in.”

London-based animation producer Oli Hyatt from Blue-Zoo declares that the lack of production incentives in the UK has been particularly disastrous for the UK animation industry. “Nearly every European country has tax breaks, but we receive no assistance. What has really scuppered us is that Wales and Ireland now get regional funding and tax breaks. Work that we would have got in England has gone to Ireland and Wales, where it’s subsidised.”

Alarming statistics from Screen Digest point to the fact that over a five-year period, animation production has fallen from 84% of UK shows produced in England to just 28%, although Hit Entertainment’s Homewood stresses that much of the writing and pre-production is still done in the UK.

Hyatt insists that the UK, and England in particular, is losing its grip on an animation industry estimated to be worth an annual £7bn globally. “These overseas companies are learning from us, getting better at writing and storyboarding. Soon we won’t be outsourcing IP to other countries because we won’t have any.”

If there is one glimmer of light in a somewhat gloomy picture for UK kids production it’s the announcement in the recent Digital Britain report that Channel 4 will have kids programming hardwired into its broadcasting remit for the first time - good news after the disappointment of the broadcaster shelving its £10m programming initiative for older children last year.

Novel Entertainment founder and Pact policy group member Mike Watts insists it’s a big step forward in a kids content market dominated by the BBC’s combined £125m budget for CBBC and CBeebies. “Now it will be a licence obligation, which means C4 can’t back out of its commitments.”

Watts wants to see C4 quickly confirm a programming budget well in excess of the £10m fund, a proper kids programming policy and a children’s commissioning editor.

“It’s encouraging because it provides a public service alternative to the BBC, which is what the market has really been lacking,” says Watts. “We have seen £30m removed from spending on kids programming in the UK and budget freezes at BBC - which is bad enough - but it’s the absence of plurality with broadcasters providing a variety of content for kids of all ages that is the real problem.”

Brenton agrees, pointing out that the dominance of international financing models in kids production dictates the type of programme that can get made. “It crushes the more innovative creative approaches to programming, which require different financial structures. There’s a big black hole in programmes for kids between 12 and 16 - they just watch programmes marketed at older age groups.”

Teen drama is an obvious area where C4 could provide some healthy competition for the BBC. “The fact that ITV no longer commissions children’s drama is a massive loss,” says Novel’s Watts. “Between them, ITV and the BBC used to generate 18 drama commissions a year; now there are only eight commissions. That’s devastating for children’s drama producers.

“We also want to see good-quality factual kids shows. One thing C4 did was make really good factual shows such as Wise Up. We want C4 to bring that quality and innovation back.”

Kids commissioning