Broadcasters risk being forced to abandon “niche” British TV shows such as Mr Bates vs The Post Office as budgets are squeezed in a production downturn, ITV has warned.
In evidence to MPs, the broadcaster said that rising costs and shrinking commissioning budgets were making it harder to produce “distinctively British content”.
It cited the example of Mr Bates vs The Post Office, a dramatisation of the Horizon IT scandal that became the channel’s biggest new drama in more than a decade when it was released in January.
Despite this success, ITV made a loss of around £1m on the show as it struggled to drum up interest from international buyers increasingly seeking global programming.
The channel sold Mr Bates to just 12 foreign territories. That compares to other series that the broadcaster regularly sells to as many as 150 countries.
In its submission to the Culture, Media and Sport committee, ITV said: “Rising costs and stagnating commissioning budgets mean the margins for very distinctively British content are narrowing. Moreover, international customers increasingly want content that travels well globally and are, therefore, less interested in British and in particular niche British content.
“We commissioned Mr Bates in the knowledge that it would be challenging to make a profit but we felt the responsibility to tell the postmasters story was important.
“Unfortunately, rising costs, lower commissioning budgets and international markets/clients experiencing the same economic/sector specific challenges as UK broadcasters mean it is becoming even harder for ITV to take risks like Mr Bates.”
The UK’s long-thriving production industry is coming under increasing financial pressure as surging inflation pushes up the cost of making TV shows, and an advertising slump forces broadcasters to cut their content spend.
This has been exacerbated by protracted Hollywood strikes, which brought production to a standstill last year. ITV has warned that the walkouts will delay around £80m in revenues from 2024 to 2025.
Secondary sales – where British producers sell their shows to international customers – play a crucial role in funding.
British TV dramas from Downton Abbey to Happy Valley sell well around the globe, while ITV also generates foreign revenues from game shows and reality formats such as The Chase and Love Island.
But waning demand from overseas buyers could mean producers can no longer afford to make UK-focused programmes and will have to rely on broader shows with wider appeal.
ITV said an increasing number of shows commissioned by UK broadcasters were “not financeable” and therefore never made.
The broadcaster called on MPs to consider new subsidies “to ensure there is a continued and strong pipeline of distinctively British content being made which drives awareness of truly British stories, characters and locations around the world alongside driving revenue back into this sector”.
This should include expanding tax relief to cover early development of projects, it said, along with support for smaller-budget productions and targeted relief for production in the nations and regions.
An ITV spokesman said: “It’s no secret that the cost and risk of making very UK specific dramas which may have limited international appeal is becoming more challenging as costs increase and it becomes essential to assemble financing for drama from many different partners to get projects off the ground.
“ITV has an outstanding record in making these sorts of UK focused dramas and we will continue to do that but it is harder and harder to make the economics work in a way that is less true of dramas with obvious global appeal.”
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