TLG talks to Dawn-McCarthy Simpson about the future of distribution in the UK
As the Director of International Development at pact, Dawn McCarthy-Simpson is at the heart of the UK’s relationship with the global production industry.
With an increasing amount of foreign productions shooting in the UK, we spoke to Dawn to understand what the future holds for all UK production professionals in an increasingly globalised world.
What is the current state of the independent sector in the UK?
Not a lot has changed over the last few years – there are those who are struggling and those who are doing very well. It still surprises me however when I see that one company has been bought by another. I noticed recently that TCB, one of our newest distribution companies, has also just been bought. That cycle is still ongoing and unlike 20 years ago when companies would set up with the intention of being creative, I think that companies set up now with the view that at some point they want to be acquired or they have bigger ambitions down the road as a multifaceted company.
Nowadays, people approach the indie sector more as a business instead of a creative hub. Domestic money is really flat and that’s never going to change so there’s a massive urgency for people to start moving their focus outside of the UK, which is where things become difficult. The bigger distribution companies have eyes and ears on the ground and they can see where the market’s moving. Smaller companies on the other hand can run around like headless chickens as they try to figure out which territory they should be breaking into. That’s why we’re helping them to build a bespoke export strategy.
People are at the stage where they’ve realised that they can’t survive on a domestic market alone. Plus, the deficit is getting wider so funding and financing are quite difficult, which is why big global deals are growing in popularity. These deals with the likes of Netflix and Amazon, they stop you from selling into territories but you get a decent pay-packet and then you can move on to your next project. It’s quite scary for distributors but for content producers it’s definitely a plus.
If I were in a distribution role now, I would investigate the potential for becoming more of a financing house as a means of combating the lack of financing by investing in programmes and securing those distribution rights early. I can see that shift taking place. Distributors will become a lot more involved and I’ve seen this already where they’re getting into more first-look deals, sometimes on a single idea but particularly in scripted.
How has the industry reacted to Brexit and what advice have you given on the topic?
My analysis of the ‘B’ word is that, while there was initially sheer panic because we were heading into the unknown, it’s now clear after so many discussions that there’s actually not that much to say. We can raise our concerns but we just have to get on with it and it could open up a new trade deal that benefits us. Once we’re outside the EU we’ll have a bit more flexibility with regards to film incentives which could make us even more competitive for attracting international buyers. One of the bigger things that concerns us is the digital single market because we have GBP340 million worth of exports and when we’re out of the EU, we won’t have a seat at the table to negotiate the future of it.
We’re tapped into conversations about what trade deals could look like, the problem is that we’re competing with every single industry in the UK. The good thing is that the creative industry is one of the five industrial strategies as laid out by the Government, so we are one of the priorities. This is why we took part in the independent creative industries report, created by Peter Bazalgette, analysing the current state of the independent sector and how the Government can steer its growth.
Is there an international model for distribution that could be looked to as a source of inspiration?
Well this is the thing about financing – you have to look outside of the UK to make it work. When we talk to our members and they say that they’ve got 60% of their budget already but they need another 40%, ideally people like to look for that remainder in their own market. Normally a producer would go to a distributor and ask if there can be any presales/advances. Outside of that however, they think – can we shoot this somewhere else and find incentives? They consider location first as a means of bringing the cost down and then they think about potentially co-producing or involving a broadcaster to fill that gap. In the case of British television, it’s beginning to emulate the feature film model more frequently.
TV originally was commissioned and you’d get a small margin, job done and then move on to your next one. Then the terms of trade came in, alongside a deficit in finance and those gaps have gradually widened, so now production companies are having to be more creative with their budgets. Banks are not really confident in intellectual property (IP) so it’s been difficult to get financial help from them but with that said, I have had three separate banks get in contact with me to organise meetings at MIPTV. I imagine however that they’re not interested in factual but scripted. It might be that because of the big deals taking place with Netflix and Amazon, they’ve realised that it’s not that big of a risk.
Looking to the future, Matthew and David Frank (of Zodiak Media) have recently unveiled TRX which is a digital, automated platform for securing distribution. It’s a tool for distribution companies to use that’s not too dissimilar to the bidding system employed by eBay. Anyone in the world can log on, view content, see the terms that are available as well as the price, and then they are given the chance to make an offer. The production company then receives a notification that someone has made an offer and other potential buyers can also see that an offer has been made, giving them a week to decide if they want to put their own offer on the table. It’s very efficient and it’s only been around for a year. It began as a start-up but now they have all of Sky Vision’s catalogue alongside BBC Worldwide and Endemol Shine – everything’s there. It gets around the global issue by shortening the process of selling into territories and allowing the production companies to access more money than with a single global deal. With that said, this could have an effect on events such as MIPTV as it’s essentially a digitised version of the event, but we’ll see.
If international productions keep coming over at an increasing rate, do you think that the domestic market will get phased out?
I believe that there’s more to it than that. If you have an American studio coming into the UK to shoot a long-running series here, that helps the supply chain to build their skill base. What it means is that we’re just becoming more experienced. If you’re working on a big Hollywood studio production in the UK, then you’re going to learn some invaluable skills which can be passed on during work on domestic projects. On the flipside however, I’ve known instances where a domestic production has gone to Wales to shoot and no-one’s available, all the freelancers are booked up.
There are different schemes in place to try and help the situation but with productions coming in that are involving local crew, British companies need to start thinking about introducing new people so that they’re left with a larger and more experienced crew once the production leaves. This is why I’ve created a module that will fit inside media degrees to help students understand how the business works today. We announced it a couple of months ago and it addresses the commercial aspect of production, the importance of IP and structuring your finances for production. It’ll talk about exports, co-production strategies, all these things that aren’t currently being taught but are essential. If you don’t understand these elements then you won’t be able to move forward. For me, the training needs to start at a young age. For people who take media courses now, it’s too much about the arts. We want to show people that production is a business so they’re well prepared for a career in the industry.
Dawn, thank you for your time.
This article was first featured in the FOCUS Magazine, distributed at the 2017 FOCUS event in London.
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