Television programmes have been switching channels for years – from Men Behaving Badly to Big Brother, University Challenge to The Voice. Yet none have met with quite such an outcry as the poaching of The Great British Bake Off from the BBC.
After all, it’s not every day that the UK’s favourite TV show switches channels. GBBO’s maker, Love Productions, has been pilloried in parts of the press, especially since it did the Channel 4 deal without securing the show’s current presenters, Sue Perkins and Mel Giedroyc, or judges Mary Berry and Paul Hollywood. The company turned down an offer of £15m a year from the corporation – and higher bids from ITV and Netflix – to take the hit baking show to Channel 4 for around £25m a year.
However, beyond the brouhaha about whether Love Productions was right to take a hit that had been nurtured by the BBC to a rival, does the headline-grabbing move also signal a shift in the balance of power between broadcasters and producers?
New terms of trade introduced more than a decade ago, which allowed producers to hold on to more of the intellectual property rights to their programmes and gain a greater share of revenues from overseas sales and merchandising, helped tilt the balance away from broadcasters. This has also been a factor in the UK production sector’s growth, with revenues up from £2.2bn annually seven years ago to £3bn.
The other key change in the sector has been consolidation of ownership, with many of the more successful UK independent producers bought by bigger companies or merging to create so-called “super-indies” – providing access to international distribution networks, more investment to develop ideas, and, in theory, more muscle in dealings with broadcasters. Love Productions, founded by husband and wife Richard McKerrow and Anna Beattie in 2004, is now 70% owned by Sky.
Media analyst Claire Enders explains: “The overall long progression over the last 25 years, through a number of phases, into a flourishing production sector has created extraordinarily viable businesses that can actually get an extraordinary change of deal for a programme; an extra £10m a year is an awful lot more.
“The power has moved to the super-indies and they are in a position to call the shots and extract deals that would be unimaginable five years ago, let alone 10. That’s also because the BBC’s commissioning structure was fundamentally changed, and is continuing to change, in favour of independents.”
Enders thinks Love “made a completely commercial decision, which was totally the right decision”, as did the BBC in not topping C4’s offer, as its enemies would have had “a field day”.
The BBC wants to be more than just an incubator of shows for other broadcasters and plans to create more of its own intellectual property. It has set up a new, soon-to-be-commercial production arm, BBC Studios, which was created in large part to stem the brain drain of producers to the independent sector.
However, in exchange for allowing BBC Studios to make shows for rival broadcasters, the government says even more of the corporation’s shows now have to be put out to tender. On Wednesday, around 300 independent producers will meet at the BBC in London to find out how many more of the corporation’s commissions they will be able to bid for.
Rights are key. While C4 will get Bake Off after a year’s contractual break, the BBC will continue to make money from it, as it has the international format rights – apart from in North America – to the show for the next 12 years.
Sales of shows to foreign countries have helped producers build scale too. Enders says the UK is responsible for 50% of international TV format sales, while the producers’ trade body, Pact, says exports have grown from £524m to £1.1bn in a decade. DVD sales, streaming and merchandising can be lucrative too. The BBC1 historical hit Poldark, made by ITV-owned Mammoth, has a range of products including a calendar, mugs and cushions. Bake Off has its own merchandising including bakeware, which the BBC makes no money from.
Viewer loyalty is also key. Richard Madeley and Judy Finnigan are one of the few presenting teams to successfully swap channels – from ITV to Channel 4 in 2001, via a new daytime show made by independent producer Cactus TV. Amanda Ross, Cactus’s co-founder, says ITV tried to lure Madeley and Finnigan back with more money, but they stayed with Channel 4.
“I think ‘good for Love Productions’, but I wouldn’t have done the same. We put the price up a little bit but we didn’t jump ship,” she says. “We decided Channel 4 took the punt on us initially – and I think that’s the same for Bake Off – so we decided to stay on Channel 4.”
Ross, whose company makes the BBC culinary series Saturday Kitchen, warns that Bake Off’s move will actually “be chronic for independents and anybody who’s a rights owner, because ultimately an idea is worth nothing until it’s been broadcast”.
She adds: “The broadcasters have the complete power. Having the idea is the easy bit: getting it on is the hard bit. Now I think the broadcasters will tie down even more firmly at the point of commission because they realise you can only sell a format internationally if you’ve got a primary broadcaster, so the primary broadcaster is going to go after you harder for your rights.”
Andrew Zein, a senior executive at Warner Bros International who was involved in the negotiations over setting up the new terms of trade for producers, warns against reading too much into the Bake Off move.
“This kind of thing only happens once around every 10 years. It shouldn’t be seen as opening the floodgates,” he says. “There are protections in there so broadcasters can’t hold production companies to ransom by lowballing them on subsequent commissions.”
Pact’s chief executive John McVay, who helped advise Love on its Bake Off deal, also cautions against seeing the deal as a turning point in relations between producers and broadcasters. “The Department for Culture, Media and Sport have supported the independent production sector in the teeth of opposition from broadcasters.”
He points out that broadcasters often ask producers to lower the fees they charge for making a show, even when it has become a hit.
He adds: “Love are core believers in public service broadcasting and were trying to balance the impact on viewers by going to Channel 4. But they are a business.”
Enders points out that while producers are more powerful than ever and a company such as Love can call the shots when it has a show as popular and commercially successful as Bake Off, broadcasters still have a fixed production-fee tariff for what they will pay for a show, based on its time slot and genre.
This is particularly the case with the BBC, with its income reduced by latest licence-fee deal with the government. Commercial broadcasters, which also generate revenue from advertising and sponsorship, may be more flexible.
“The BBC will still be trying to get the same tariff when [a show is] a success six years on. Its income is fixed and going down,” says Enders. “In contrast, Channel 4 can say of Bake Off: ‘This is one of our major hits: we’re going to put a lot behind it and do a lot with advertisers’.”
How much does prime-time TV cost?
The fact that The Great British Bake Off is now valued at £25m a year has surprised observers: not many shows of its type can command such a big figure (although the deal includes spin-off series). The X Factor and Britain’s Got Talent, two of ITV’s biggest hits, are thought to be worth around £40m a year together.
Most broadcasters negotiate fees for programme commissions based on a tariff of what they will pay per hour for a particular genre - factual, drama, entertainment - and what time of day a show is broadcast. Scripted drama and comedy generally has the highest tariffs, followed by entertainment, while peak evening slots with the biggest audiences are worth more. The top Channel 4 tariff for an hour of peak-time entertainment is understood to be £500,000.
Negotiations will also involve intellectual property, with the deal covering core rights – allowing the broadcaster an exclusive window for first transmission and a number repeats on its channels and video-on-demand catch-up services. The producer usually retains secondary rights, including those for overseas sales and merchandising.
Love may have been able to secure a premium above Channel 4’s standard tariff as GBBO is already an established hit - the UK’s most popular show, no less. C4 will have struck a deal after assessing how much advertising and sponsorship revenue the show could generate.
