US TV Production: Market Insight Report 2017

£1,245£2,490

Published: August 2017
Pages: 50
Format: PDF

 

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Description

About this report

This report focuses on the television production industry in the US. We quantify the size of the market as well as historical growth rates and the factors which drive these figures. This includes analysis of television industry revenue and the factors which influence it, such as advertising spending, TV licence trends and pay-TV revenues – setting out historical trends and forecasts.

We also review and evaluate the impact of key industry trends such as development of new platforms such as IPTV and OTT, market consolidation and the growth of the super-indies, development of content distribution models, deficit funding and exploitation of new revenue sources such as digital rights.

The price includes a follow-up conference call with the Apex Insight team to discuss findings and go through any questions you may have on areas such as report methodology, definitions, inputs to our forecast model and alternative scenarios.

Why is it important?

The TV production industry has been forced to evolve as the television and entertainment industries have changed. New TV viewing platforms, such as IPTV and OTT, have emerged alongside other forms of entertainment using tablets, smartphones and other fast-growing platforms.

TV production has responded by becoming more international and more creative in exploring ways to derive revenue from its content – while maintaining creativity in producing new hit shows.

The industry is currently going through a wave of consolidation, both within production and between production companies and broader media groups. Recent deals, such as the mergers between Banijay and Zodiak, Endemol and Shine and ITV and Talpa, have seen the leaders strive to match each others’ reach and capabilities, and large global media groups gain an increasing presence in the industry.

The report aims to analyse these and other trends to produce estimates of current market sizes, forecasts of likely growth and a view of how the key trends might play out.

We quantify the size of the US TV Production market as well as historical growth rates and the factors which drive these figures. This includes analysis of television industry revenue and the factors driving it such as advertising spending and pay-TV revenues – setting out historical trends and forecasts.

We also review and evaluate the impact of key industry trends such as development of new platforms such as IPTV and OTT, the impact of cord-cutting, market consolidation and the growth of the super-indies, development of content distribution models, deficit funding and exploitation of new revenue sources such as digital rights.

Our forecast for industry growth by segment is based on this analysis of historical trends and our understanding of growth drivers.

Who is the report useful for?

TV production companies
Broadcasters and television networks
Other media groups
Investors in these sectors
Banks, analysts, consultants and other advisors
Market regulators and policymakers

What are the sources and methodology?

This report is based on

– Interviews with senior-level contacts in the TV and TV production indsutries
– In-depth analysis of the macroeconomic and legislative environments and relevant industry drivers
– Analysis of information on the leading TV production groups
– Our own experience of advising both companies and investors in the TV and TV production industries and the wider media sector.

Information from these sources has been synthesised and presented clearly and concisely with extensive use of charts and tables to illuminate points and support conclusions.

We have developed our own model of the market to evaluate the impact of trends and changes and underpin our market forecasts.

Summary

Market context

The US TV production market is over €12bn in size.

Viewing levels in the US are significantly higher than in Europe. Viewing levels of over-50s have continued to increase. However, the development of new forms of entertainment such as games and other interactive content on smartphones, tablets and other platforms, mean that younger generations are now watching less TV than in the past.

Given the importance of cable, cord-cutting is a significant threat, but primarily to the cable operators rather than to production companies, for whom new OTT players such as Netflix are potential customers.

For many years, the US market saw a sustained growth in the popularity of non-scripted / reality show formats, in particular on cable channels but also via free-to air networks. More recently, the market has swung back towards scripted programming. This trend was heralded by the success of major scripted series such as Game of Thrones (HBO) and House of Cards (Netflix) and has continued with other blockbusters and smaller scripted series.

Exploitation of the potential from international sales of finished content, licensing of formats, digital rights and success-based payments is important to the commercial success of a format, although it is increasingly difficult for independent producers to retain rights in the US market.

Competitive landscape

All of the eight leading international production groups are present in the US market with several, such as ITV Studios and Tinopolis having made significant acquisitions to strengthen their US presence.

The networks have traditionally carried out most of their scripted production in-house. Close relationships with the Hollywood studios give them access to production facilities, hence the super-indie groups focus primarily on non-scripted content. Some of the networks / studios are now starting to build non-scripted capabilities.

Some of the key non-scripted shows of recent years, such as Fremantle’s X-Factor and American Idol, have reached maturity. Acquisition of Talpa gave ITV Studios possession of the most recent big non-scripted hit show in the US market, The Voice, which it produces for NBC.

Outlook

The market has a pronounced 2- and 4-year cyclical pattern driven by major sporting events (Olympics, Word Cup) and elections. Advertising revenue peaks in those years allowing production budgets to increase. This means that, while 2016 was a strong year for TV industry revenues and hence for the US TV production market, given the presidential election and Rio Olympics, we expect much slower growth in 2017, when there are none of these major events.

Overall expectations are for US GDP, TV industry revenue and TV advertising revenue to continue to grow at healthy rates to support ongoing market growth. However, the threats from OTT and other models are likely to take some of the shine off TV industry finances and hence also from production spending.

Introduction    2

About this report

Executive summary

About Apex Insight

Contents

List of charts and tables

Market size and growth  7

Definition

TV market background

Market size

TV industry revenue and funding

US TV market characteristics   10

Genres and shows

Channels

Networks

Pay-TV

Key market trends  22

Market seasonality and cyclicality

Programme genre trends

Customer segments

Traditional and new sources of revenue

New programme funding models (deficit financing)

Impact of trends on the formats

Competitive landscape   29

Competition can be split into four main, but overlapping, categories

Geographical presence

Value drivers for TV production companies

Summary of leading global super-indies

Market consolidation, creation of super-indies and acquisition by major media groups

Review of the leading independent TV production companies in the US

All3Media America

Banijay Studios North America / BMP

BBC Worldwide North America

Endemol Shine North America

FremantleMedia North America

ITV Studios America

Maker Studios

Mark Burnett (MGM)

Pilgrim Productions / Lionsgate Television

Red Arrow US

Sony Pictures Television

Tinopolis US

Warner Bros Television Group (WBTVG)

Forecasts   41

Market forecasts

Key market data

Risks to the forecast

List of figures

    1. 1. Average daily viewing figures / minutes per person

2. TV Production market size and growth / €m

3. GDP, Advertising and TV Production revenue / annual % changes

4.TV industry funding structure / €bn

5.TV industry funding structure – US vs 9 leading country average/ %

6.Pay-TV quarterly subscriber growth, 2006-15 / % quarterly change

7.Geographical coverage of leading super-indies

8.Summary of leading global super-indies

9.US GDP, TV Industry revenue, TV advertising and TV production forecast annual % changes

10.TV Production forecast market size and growth / €m

11.Key market data

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