Bazalgette on ‘watershed year’ for TV - and new twist in Studio Tax saga
ScreenPower: where TV and Film meet politics and power
Happy New Year - and welcome to ScreenPower: a free newsletter from the intersection of the UK’s screen industries, with Westminster and Whitehall.
In the last edition of 2023, I set a (rather tricky) quiz to spot the names of six Christmas films hidden in the newsletter. The festive films were Love Actually, The Nightmare Before Christmas, Scrooge, The Holiday, Die Hard (yes it is), and Spirited (me neither). Nobody got all six, but Special Recognition awards go to Sir John Whittingdale and Jonathan Banks, with the most correct answers. 🏆
This New Year edition of ScreenPower brings you four must-read 2024 predictions from senior screen industry figures, including TV industry legend Sir Peter Bazalgette who tells me it could be a “watershed year” for public service media. There’s also a must-see drama recommendation from ITV’s Vivek Sharma.
First though, a new development in the Studio Tax saga…
Exclusive: No impact assessment carried out for Studio Tax hikes
Regular readers will know I’ve highlighted the ‘Studio Tax’ a number of times now - this is the decision by an agency of HMRC (the Valuation Office Agency) to massively hike business rates on UK film and TV studios - seemingly unaware of the government’s competing objective to attract overseas investment into the sector.
Today, ScreenPower can exclusively reveal that no impact assessment was carried out by the VOA or HMRC before imposing the increases - despite this being a key part of one of the Chancellor’s five priority growth sectors.
This was revealed through a series of Freedom of Information requests submitted by ScreenPower - asking whether any assessment had been made into the potential impact on the industry, on local creative economies, or on investor confidence.
Warner Bros. Discovery have cited a **five-fold increase** in business rates at their Leavesden Studios site in Hertfordshire - while Pinewood Studios have warned that the hikes “will likely reduce the level of new development” in the sector.
The revelation illustrates how one part of government can act out of step with another. And these are parts of government that are - in theory - closely connected: the VOA reports to HMRC, which reports to an HM Treasury Minister (HMRC and HM Treasury also occupy the same building in Whitehall).
The VOA told me they can only take into account the rental values at the designated valuation date - and that ‘the law prevents’ them from considering anything else.
I asked HMRC the same question (through FOI) - and they pointed me back to the VOA: “the Valuations Office Agency are responsible for rateable values”. So the whole thing is frustratingly circular.
Talks are continuing between the VOA and affected parties - and those talks are expected to conclude early this year. This isn’t over.
I’m grateful to the VOA for providing additional info and pointers in their FOI response - which I will pursue and report back on.
What’s in store in 2024?
The writers and actors strikes dominated last year, sending shock waves across the Atlantic and throughout the industry. So what - he says cautiously - might 2024 bring?
I asked four senior industry figures (and ScreenPower readers) for their take on what the coming months could hold across some key areas: public service broadcasting, independent production, streaming, and the impact of AI.
1. Sir Peter Bazalgette on a ‘watershed year’ for public service media
Bazalgette (or Baz) is a huge figure in British television - and the creative industries more broadly - responsible for bringing some of the biggest shows of the last 30 years to our screens. Most recently he was Chair of ITV, and is now Co-Chair of the Creative Industries Council. His prediction is in solid ScreenPower territory…
“The Media Bill - now progressing through Parliament - is the most significant piece of legislation for broadcasters since the Communications Act 2003. The latter secured prominence for the BBC, ITV, Channel 4 and Five on Sky and Virgin. The new Bill updates that principle to enshrine prominence on the multiple aggregator platforms of the streaming age.
When I chaired ITV we were getting distribution for ITVx. We wanted it to be seen as widely as possible, wherever viewers are. This required separate negotiations with more than 30 platforms, from Apple, to Amazon, to LG & Samsung to Xbox. If we value the old domestic channels, as deliverers of a public good for our democracy, our culture and our creative economy, the proper application of this new law in 2024 is crucial. Not just prominence , but also fair value for the programmes and access to the relevant viewer data too.
2024 may be seen in future as a watershed year in which we preserved and nourished our public service media…making programmes for us, about us and by us.”
This is a really interesting point around fair value and viewer data. It’s vital Parliament get the Media Bill right - especially if it’s going to be another 20 years until the next one!
2. Caroline Norbury on a sector grappling with AI
Caroline is the Chief Executive of Creative UK - a membership organisation that spans the whole of the creative industries, while also investing in creative businesses. Caroline is one of the most important voices in the UK’s creative sector.
“William Goldman’s famous quote “Nobody knows anything” is a truism that remains instructive and one that I consistently remind myself of when asked to make predictions.
Notwithstanding that – it seems likely that there will be some consolidation and/or shrinkage of big US entertainment businesses; the war between media owners and big tech over Large Language Models will intensify; much debate and discussion about AI ingestion, alignment and regulation approaches the UK could, should, might, adopt will be had, with little resolution.
In brighter news, there will be a glut of brilliant scripts courtesy of previously striking writers; Bridgerton will return; Channel 4 News will continue to be excellent and surely Claudia Winkleman will be asked to host the BAFTAs?”
Food for thought. It’s still really unclear what AI will mean for the screen sector - and more importantly for the people working in it.
3. Ben Keen on streaming and a return to ‘tried and tested’ models
Ben is a media analyst and expert on the TV and film industries, with decades of experience in the sector. He has fascinating insights into how the streamer model is evolving. Here he’s written about the ‘Netflix accelerator effect’ - with a table below that illustrates it neatly.
“The ‘walled gardens’ of content set up by the major Hollywood Studio streamers are now being dismantled at an accelerating rate such that they may now be more accurately described as ‘hedged gardens’. In perhaps an implicit concession that Netflix has already won the so-called ‘streaming wars’, even the mighty Disney has begun to pivot away from its previous strategy of keeping all its own content for Disney+ and Hulu and has begun selling prized catalogue shows to Netflix again, including This Is Us, How I Met Your Mother, and Prison Break. In the past, Disney boss Bob Iger described this as akin to “selling nuclear weapons technology” to a powerful rival. The Disney licensing agreement with Netflix follows on the heels of recent Netflix deals to acquire content from NBCUniversal and Warner Bros Discovery.
In what I call the ’Netflix accelerator’ effect, older shows from erstwhile rivals seem to get a new lease of life when released on Netflix and often perform better than they did on their original outlet. A now famous case-in-point is the NBCUniversal show Suits. Originally launched on the USA Network back in 2011 and subsequently on NBCUniversal’s Peacock streamer, the series was a surprise hit on Netflix last year with season 1 alone generating over 129m hours of viewing to make it the 67th most watched show globally in 1H 2023 according to the data recently revealed by Netflix.
Last summer, Warner Bros Discovery’s HBO started licensing older shows to Netflix, including Insecure, Six Feet Under, Ballers, and Band of Brothers. Fascinating data from streaming audience research firm Digital-i, demonstrates that the ‘Netflix accelerator’ effect again kicked in such that all four shows achieved greater reach on Netflix than they had on HBO Max. It will be intriguing to see whether this phenomenon will also reignite viewer interest in the older Disney shows heading to the rival streamer in 2024.
This year will surely see the continued crumbling of the streamer walled gardens and a resurgence of the ‘tried-and-tested’ legacy business model of licensing content to multiple buyers around the world and exploiting ever-more sophisticated release ‘windowing’ to maximise revenues.”
4. John McVay on independent production
John is Chief Executive of PACT - the UK’s leading Trade Association for Film, TV, Animation, Children’s and Digital production companies. He’s one of the biggest figures at the intersection of the UK’s screen industries with politics.
“My prediction is that the UK Govt will finally recognise that the domestic independent film sector is the incubator for all the talent the drives US production and investment in the UK and will increase its support for this economically and culturally important part of the UK creative industries.
If not then its continuing decline will not only affect domestic employment but also make the UK a less attractive country for much needed investment.”
That’s an optimistic prediction - but ScreenPower is 100% behind it! I previously wrote about the need for supporting independent production here.
My prediction:
Judging by the emails I keep getting about subscription price hikes (Amazon is the latest), this year we’ll all either be paying more for streaming platforms or watching more adverts - or both! And it looks like we’ll be enjoying fewer new shows.
So perhaps this will spark a revival in the fortunes of the commercial PSBs - ITV, C4, C5 - as people rediscover free to view quality British content ? I said I was optimistic.
Worth a read
📈 TV ad slump prompts more fear among staff: The Guardian’s Mark Sweney paints a grim picture for broadcasters, as the worst decline in ad revenue in 15 years brings “an unexpectedly severe drought…forcing cuts to the production and development of new shows.” Happy New Year.
🖋️ ‘New BBC chair faces daunting in-tray’: The FT’s Daniel Thomas tackles the to do list facing Samir Shah.
💥 ‘How PSBs are fighting back against the streamers’: Fascinating long read from Kate Bulkley in Broadcast, with a warning for legacy broadcasters: “the likes of Netflix and Amazon have capped out on growth among the younger viewers who were early adopters - so the new target for the SVoDs will be in the 34-plus age group – the core demographic for most broadcasters, apart from C4".
📺 ‘The Return of Comfort TV’: Carol Midgley in The Times stands up for dependable PSB shows like Call The Midwife and Grantchester: “Some may call that ‘unchallenging’ TV but, really, so what? With war raging around the world, the daily news is ‘challenging’... Is it any wonder many people want a mental check-out, a tranquillising mini-break from reality’s coalface?”
📽️ Box Office predictions for 2024: It’s going to be a leaner year for the Box Office - but there’s still some big films to get excited about. Here’s Variety on what to expect at the cinema in 2024 - including Dune 2, Deadpool 3, and Wicked.
What to watch tonight
This week’s recommendation is from Vivek Sharma, Associate Editor of ITV’s This Morning.
Sharma has been making hit daytime shows for over 20 years - for ITV, Channel 4 and Channel 5. Clearly a big believer in live linear TV and the power of the PSB! 💪
Sharma’s recommendation is for ITV’s Mr Bates vs The Post Office starring Toby Jones - the drama about the extraordinary and horrifying Post Office/Horizon IT/Fujitsu scandal.
“If you don’t yet know the story, this show is a must watch”, Vivek tells me, “I’ve been totally gripped”.
But be warned: “it’s not only deeply moving - it will make your blood boil with anger. It really demonstrates how great TV can move you and make you feel strongly about something. It’s also a reminder of the power of PSB content to have a genuine impact - with the Met Police now investigating the Post Office, and 50 more potential victims coming forward”.
Now that’s Screen Power!
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