From FAST growth to pre-financing shows and navigating a consolidated market, the 2023 survey reflects the ability of the distribution industry to adapt to change. With more than 40 responses from sales companies around the world, join us as we discover this year’s key trends.

It has been a year of transition for many in the TV industry. On the buyers’ side, it has been tough: US studios have been coming to terms with the realities of streaming; commercial networks have been adapting to a squeezed advertising market; and public broadcasters have been ducking and diving as they try to stretch budgets. For those on the other side of the transaction, consolidation and risk aversion are very real concerns, but growth areas such as FAST and the ever-increasing importance of distributors in financing are seen as offering considerable potential in a business that has always had to adapt quickly.

Formats: Keeping Competitive

Competition formats have been in high demand over the past 12 months and there’s been an uptick in revenue, but economic factors are stalling profit growth

Potentially cost-effective and often with the cache of a familiar name, formats continue to be a popular schedule/category filler.

It’s hard to argue with the results of a show that has been tried and tested on another network before purchase and the bigger companies are sitting on whole flocks of golden geese with some of their major titles.

However, as our Survey results show, rising revenues are not necessarily translating to vastly improved profits when the industry remains in the grip of an economic downturn.

Escalating costs

The rising cost of doing business is illustrated quite clearly in this year’s Survey, with 62% of format distributors reporting that their revenue had increased by as much as 20% over the past 12 months, but overall profit still stayed the same as last year for 81% of them.

Click to expand

Only 19% of companies saw their profits increase upon the 2021/22 financial year and that by around 9% at the most.

Lack of profit understandably means lack of expansion and the percentage of companies expecting staffing levels to change in the next 12 months statitically mirrorring how much money they’ve made – with 81% of companies responding that their workforce numbers will remain the same and 19% planning for a small percentage of new hires.

There is optimism that revenue will continue to climb, with 63% of respondents expecting to this year see up to a 9% rise, whole 23% around expecting to see as much as a 19% increase. However, only 38% of respondents expect market conditions to improve within the next 12 months.

One respondent, Ruth Berry, managing director of global partnerships, at The Voice and Love Island distributor ITV Studios, says that: “Due to inflationary pressure, cost increases and reduced advertiser budgets, production budgets are under pressure impacting format sales as well.”

However, Cathy Payne, CEO of MasterChef and Survivor firm Banijay Rights, sees some light at the end of the tunnel, adding: “We expect to see improved economic conditions along with clarity from those platforms and channels that have been undergoing integration, mergers and/or market correction on their budgets and acquisition and commissioning strategies.”

Market consolidation was seen as the greatest challenge for format distributors over the past 12 months, with falling ad revenues and risk aversion also singled out as major difficulties that have been faced by the sector.

New opportunities

While the majority of the companies surveyed are not expecting to grow their workforces any time soon, there has certainly been catalogue expansion, with every formats firm that took part in the Survey responding that they had more shows on offer than this time last year.

Competition series appear to be the best-selling, with 84% of respondents naming this genre as among their most popular, but dating (66%), factual-entertainment (63%), reality (59%) and scripted formats (56%) are also travelling reasonably well (respondents could pick multiple options as to their most popular genres).

Last year, fact-ent was the clear leader with 86% of respondents to the 2022 Survey naming it as their top-seller, but 12 months onwards and only 63% put it in their top categories.

The UK, US, Australia and Central and Eastern Europe were named as the top importers of formats by our respondents, and the large majority of distribution firms (82%) taking part in the Survey are expecting to see more competition coming out of the US in the next 12 months as the studios make more product available to third-party buyers.

“The studios are clearly more comfortable with licensing product to other platforms and channels – it will not be all exclusive to their own platforms. The economics of the studios rely on exploiting all viable windows for their catalogue,” noted Payne.

The strikes in the US were also seen as both an opportunity and a threat by the distributors, with several companies noting that they were expecting to see a greater demand for non-US content, while others reported that projects had to be put on hold due to attached writers striking – although their comments were made ahead of the WGA and AMPTP reaching a new deal in late September.

Exploring FAST

With FAST still among the hottest of topics in the industry, 62% of respondents revealed that it contributes up to 10% of their overall revenues, with the remainder of those companies that completed the Survey not currently selling via FAST at all.

However, this space – which is mainly attracting finished tape – looks set to grow, and 86% of respondents expect FAST channels to be the buyers that see the biggest growth over the next 12 months, followed by local public broadcasters, with their own streamer, at just 41% (respondents were able to pick more than one answer).

A not-insignifcant 64% of surveyed distributors suggested that the expansion into FAST would likely be powered by sales firms such as themselves moving into the space in the coming 12 months – perhaps sharing some indication of their own interests.

Click to expand

Other respondents said that they expect it to be the major studios and FTA broadcasters that will make the biggest push into FAST in the year ahead.

Looking at other tech breakthroughs, most of the formats businesses surveyed are not using artificial intelligence (AI) in any major ways currently, though some have begun to experiment with it – and other expect to do so soon.

“AI will become very important to lower production budgets so am not using it yet, but am confident I will be in the near future,” said Tanja van der Goes, founder and CEO at All Right Media.

Interest in online distribution platforms has meanwhile almost entirely evaporated, with only 4% of respondents stating that they still use them.

MIPCOM and Content London appear to be the biggest draws for formats firms, with almost all respondents naming these two markets as must-attend.

LA Screenings (82%) and NATPE Budapest (64%) are also popular events among formats distributors, while the relatively nascent Content Americas is also drawing interest, with 38% of respondents adding it to their definite travel plans.

And plenty of travel is still on the cards for most formats distributors, with 86% of those surveyed planning to attend a similar number of physical events in 2024 as they did five years ago.