Time to call ‘turn over’ for greater TV turnover

Last night, on the eve of the TV industry’s annual migration to Edinburgh from London (where notwithstanding the BBC’s efforts to shift production into the nations and regions, most of it remains domiciled) a vision of televisual growth and opportunity was unveiled by Tern TV’s David Strachan in the august surroundings of the National Library of Scotland.  “Growing the Television Broadcast and Production Sector in Scotland” is the much anticipated report of the working group set up in the wake of the Scottish Broadcasting Commission, which published its closely argued and impassioned final report (‘Platform for Success’) back in September 2008 to be followed by Scottish Enterprise’s rather more prosaic contribution “Building the ‘Platform for Success’” in March 2009.

In a nutshell the report argues that television in Scotland is looking at a three-year window of opportunity to achieve 60% growth in commissions and employment.  That would see turnover grow from £215m to £346m and employment from just under 3,000 to the full –time equivalent of over four and half thousand jobs.  However as the report notes:

“This will only happen with collective and coordinated action across broadcasters, independent production companies and the public sector”.

While the major driver of this anticipated growth is the BBC’s commitment to increase network production in Scotland to account for 9% of its spend, an increase of £50m a year by 2016, the report also expects higher levels of commissioning by Channel 4 and, in the longer term, other broadcasters to be part of the mix.

But there are significant barriers to achieving this step change and, as in the film sector, a key one is the question of scale and diversity of companies.  Skills gaps are another barrier, the Catch 22 of growing network production in genres that Scottish companies have historically not been adept at is that you can only become adept at developing and producing entertainment or drama if you have had commissions that allow you to grow that expertise!  Lacking a domestic market of sufficient scale to give companies both the business base and the range of genre expertise that can migrate to network, the danger is that increased demand from network commissioners will be met by local branches of London companies importing talent and skills ‘known’ to network commissioners.  This is nothing new – it’s been the central issue facing indies and broadcasters in Scotland since 1982 and the creation of Channel 4.

The solution to this market failure?  Coordinated action (which includes significant public investment) to address the questions of scale, sustainability and skills that can get Scotland’s producers – indie and in-house BBC/STV –  into the premier league across the full breadth of programme genres. 

Who will deliver this?  The report suggests Creative Scotland should take the lead, building on the model of the Creative Industries Partnership Reference Group, but calls more broadly on the ‘public sector’ to provide up to £10m a year (though some of that might come from the BBC and Channel 4) through various mechanisms ranging from Seed Equity Finance of £50k to new start-up companies through to Production Incentive Finance of up to £500k a shot to support ‘productions of scale’.  The report suggests that the latter investment could itself lever an additional £12m a year securing or creating around 240 jobs a year.

How will it be paid for?  According to insiders one of the reasons the report has taken so long to hit the streets has been Scottish Enterprise’s seeming reluctance to sign up to hard figures on the necessary pump-priming investment – presumably for fear that the larger portion of it might have to come from its budget with no guarantee of the Government chipping in, particularly in the current climate.

So it boils down to whether the potential return of an extra £130m to the Scottish economy, 1700 jobs a year and a step change in Scottish broadcasting and production with significant wider cultural and economic benefits (e.g. to the ‘creative supply chain’ of writers, directors, designers, actors, facilities and technology companies etc.)  is worth the risk of around £10m a year in investment – around a third of the cost of the proposed new Forth Bridge or what the Government currently spends on supporting air services to the further reaches of the country. 

Assuming around half of the necessary investment – say £5m – were to come from Scottish enterprise that would be just over 2% of its annual investment budget.  On its own figures the current Gross Value Added (GVA) of the sector is £153m a year.  Taking the mid-point between its worst case and best case scenarios gives an additional £76m a year GVA, even if the return were only £50m that would still be a ten-fold return on investment.  In opportunity-cost terms that seems like a pretty competitive proposition and arguably at a considerably lower risk than in many (most?) other sectors.

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