How the TV industry is financing drama in a choppy market

The Swarm (Source: Beta Film)

As scripted execs hit London TV Screenings this week, Richard Middleton explores the industry’s next moves as it navigates a streamer-induced squeeze on spending in the US and across Europe.

Anyone hoping that the start of 2024 would bring blessed relief from the storm of the last 12 months is likely to have been left disappointed.

While 2023 spiralled into something to forget for swathes of the industry, the current year has not shied away from starting with a bang of its own. Companies of all flavours are in cost-cutting mode – Disney is slashing jobs at Pixar, UK broadcaster Channel 4 is overhauling its structure and Paramount is firmly in the retrenchment game.

You can’t substitute the crazy amount of ‘peak TV’ money but the Alliance can be the new El Dorado for meaningful entertaining projects that are increasingly leaving the streamers

Morad Koufane, head of international drama at France Télévisions

Its CEO, Bob Bakish, confirmed in January that around 800 lay-offs were on the cards, with its teams in the US and those looking towards a more international horizon subsequently affected towards the middle of February.

Blame for the cuts was put on “a soft ad market, a volatile macroeconomic environment and two historic strikes,” Bakish said, factors that can be applied to almost every company as much as Paramount. And alongside the lay-offs has come a re-evaluation of content priorities, with a refocusing on “Hollywood hits” that have the “biggest impact”.

It means Paramount will produce “fewer local, international originals” for its platforms, but there’s a silver lining of sorts. The company also owns networks in Australia (Network Ten), Argentina (Telefe), Chile (Chilevisión) and the UK (Channel 5), all of which will “continue to have a strong pipeline of local content.”

This re-evaluated strategy neatly highlights the fluxing nature of today’s scripted industry and reflects how the swaggering US streamers that were flooding the market with cash just 18 months ago are now scrabbling to recoup whatever they can.

Much-publicised Disney+ original Nautilus, for example, was pulled in August last year by the Mouse House bean counters and flogged off to AMC Networks in the US, while The Spiderwick Chronicles found a new home on Roku. Needs must when you need to slash content costs by around $1.5bn.

And yet, as Wayne Garvie points out, the industry is not all doom, gloom and kaboom. Streamers are still spending tens of billions on content excluding sports rights; public broadcasters have relatively stable coffers into which they can dive; and more importantly the industry is adept at navigating budget squeezes. It’s happened before, after all.

Wayne Garvie

“As producers, we have come through a real ‘boom’ era of ever-expanding budgets which have accompanied the proliferation of new platforms popping up all over the place,” Garvie tells TBI.

“Now the wheel is turning again, but we are still going to be left with a drama market substantially bigger in scale and ambition than anything that existed ten years ago, as well as an audience that is much more sophisticated and global in its tastes,” adds Garvie, who has been behind shows ranging from Sex Education and The Crown to My Life With The Walter Boys in his role as Sony Pictures Televisions’ president of international production.

Indeed Garvie’s company has, probably better than any other of the US majors, navigated the boom to great effect. It famously did not enter the streaming wars and now, with Netflix sitting pretty, is neither burdoned with giant debts nor desperate for consolidation.

“From a production perspective we have to realise that for the next few years, cost will be crucial,” Garvie continues. “Those inflated global budgets are going to be increasingly hard to find, but producers who can make premium drama at a more compelling price are going to find this could be a wonderful new era.”

Why European groups can vie with US counterparts

While US scripted product might have the pulling power of Hollywood behind it, European producers are the ones that are most adept at creating “premium drama at compelling price points”, as Garvie puts it.

Part of that is because of the nature of the European landscape and its make-up. Budgets have never been as big across the continent as they were on the other side of the Atlantic, and in these leaner, meaner times, that’s good news.

One timely example comes in the form of The Kollective, an upcoming thriller that was first unveiled in 2022 and which has The Alliance – the public broadcaster triumvirate made up of France Télévisions, Italy’s Rai and ZDF in Germany – onboard.


Earlier this year it emerged that the show had also attracted A+E Networks as distributor, along with a US-based buyer in the form of Hulu. The 6 x 60-minute drama is now in production, tracking the story of an intrepid group of young citizen journalists as they travel from Budapest to St. Petersburg and London amid a globe-spanning web of government lies and corruption.

The show is from Mediawan-owned Submarine (Undone) and was created by Gomorrah’s Leonardo Fasoli and Maddalena Ravagli, along with the prodco’s Femke Wolting, who was also instrumental in moving the show from script to screen.

“We received the greenlight in 2022 for the writing phase and in 2023, we received the production greenlight,” she tells TBI.

“During the writing phase, we worked on finalising the budget and closing the financing. We partnered with A+E as a distribution partner and eventually attached Hulu in the US. In the Netherlands, Videoland became a partner for the series and we received financial support from Creative Europe.”

The show is being shot in Hungary, Belgium and the Netherlands – meaning tax incentives can be employed – and Wolting’s Submarine (which produced Undone for Amazon and Richard Linklater’s Apollo 10 1/2 for Netflix) is working on the FX for The Kollective.

“There are tax incentives in Belgium and the Netherlands, and by keeping the whole production in-house we can keep the creative vision complete.”

For those looking for a recipe of how to get bigger budget drama off the ground, look no further. It is in many ways a throwback to a decade or so ago, when budgets were pulled together piecemeal and co-productions ruled supreme.

Putting TV co-productions into context

Much has been made of the return of the co-production but in truth it has never been away – such models have been in play throughout the streaming boom to some degree. The difference now is that the model is so necessary, but also that the scope of spending is far greater than a decade ago when the copro was a go-to for producers filling budgets.

Femke Wolting

One key challenge of the co-production model is reaching critical mass, of ensuring you can scrabble together a big enough budget to get the thing moving to secure more investment and then get it into flight, rather than striking lucky with one global streaming deal.

“Getting these more extensive international series off the ground might be more difficult in the current climate,” admits Wolting. But she points to another change in the market compared to a decade ago: the demand for international drama.

“We believe viewers want to see authentic and substantial character-driven stories, and viewers are now more than ever used to watching series from Korea to Europe to Latin America. I don’t think that viewing behaviour will now all of a sudden change.”

And as for the challenge of getting the co-production together, there are now numerous co-commissioning buyers that are looking to get more bang for their Euro. The Alliance has been around shows such as Germinal, Around The World In 80 Days, Leonardo and The Swarm, which Beta Film and ZDF Studios subsequently sold to The CW.

Then there’s the Nordic 12 and the more nascent New8 – ZDF (Germany), NPO (The Netherlands), VRT (Belgium), SVT (Sweden), DR (Denmark), YLE (Finland), RÚV (Iceland) and NRK (Norway) – all now potential options for producers seeking a more significant budget hit.

For Rai, the attractions are clear. “The projects of The Alliance give us the possibility to be part of endeavours that we would never have been capable to tackle alone,” Michele Zatta, Rai Fiction commissioning editor of international co-productions, tells TBI.

“The negative aspect is that they’re usually pretty expensive. And since we have the smallest budget we have to be careful in choosing not too many – and the right ones for our audience.”

There also seems to be a shift in the balance of commissioning power, partly with US streamers’ spending priorities less focused on international fare, but also because the collective might of European pubcasters and soft money adds up.

“It is true that we’re experiencing a pendulum movement,” says Morad Koufane, head of international drama at France Télévisions. “We’ve been receiving a lot of abandoned developments from the streamers that rediscover their purpose and the added value that we can offer to creators and talents.

“For the next two years, I guess our role is to be present for the creators and to be ready to commit to talents that have something to say through the [public service broadcaster] lens. One cannot substitute the crazy amount of ‘peak TV’ money, but the Alliance can be the new Eldorado for meaningful entertaining projects that are increasingly leaving the streamers.”

Morad Koufane

The Kollective, of course, ticks that ‘meaningful entertainment’ box and Frank Seyberth, head of co-production at ZDF’s International Fiction unit, adds that his organisation’s public broadcaster status also reflects stability in a time of uncertainty.

“As a public broadcaster, our editorial line is always shaped by a multitude of factors, such as relevance, social and financial needs, as well as public demand. In this sense we see ourselves as a stable and reliable partner for our producers in an especially fast paced market.

“We are alert to how quick some market players have been changing their behaviour and investments. Even so, we believe strongly in the benefits of a sustainable and trust-based slate development over a longer timeline with reliable partners. This will attract the best talent and result in (commercially) viable projects.”

The evolution of distributors filling drama deficits

Reliable partners also come in the shape of a show’s distributor, a vital part of the machinery and never more so than now. ITV Studios’ Ruth Berry points out that rising costs of deficits in nearly all genres “are creating challenges and unprecedented risk in traditional funding models for TV.”

The key, for Berry, is “to be more open-minded towards new funding models and partnerships to share the risk”.

Patrick Vien, group managing director of international for A+E, tells TBI that The Kollective appealed because it offers cut-through and will “strike well above its weight creatively”, with its sale to Hulu seemingly a fair indicator on that front. The cost of the show has not been revealed, but Vien says it is “definitely healthy”.

This market can reenergise both European FTA and PSB’s and a distribution industry that was being sidelined by global buying models

Wayne Garvie, SPT

Vien is also broadly bullish about the global scripted market, pointing to the billions that continue to be spent despite the pull-back, but admits that “whoever’s deploying capital in scripted is going to be doing so more strategically than ever and they’re going to be more careful with the amount of capital they’re deploying than ever before.”

“We definitely went through a period of time where there were simply no rules,” Vien says. “Now, there’s a very grounded approach, but it’s still an extremely exciting time for scripted – I think we had a period of time where there was way too much and consumers reacted to that, so this correction is justified.”

Certainly, the collective intake of breath that the entire industry has been taking of late seems to be constricting supply, although there seems at present little correlation between production cost inflation and the softening of commissioning budgets.

With macroeconomic inflation also at play, determining when – if at all – production costs will decline is the stuff of crystal ball gazing. But as Wolting highlights, “there are many opportunities for European drama producers as we are able to produce high-quality series for a cost-effective budget that now have the potential to reach a global audience.”

There is also increasing incoming interest from US talent, she adds, with Submarine currently producing Safe Harbor by Mark Williams (co-creator of Ozark). Her prodco financed the show in the Benelux and now hopes to sell it internationally.

And as Vien points out, streamers are “going to maintain a strong – a very strong – position in the marketplace. If we can prove it out [with The Kollective]… we can show that elaborate collaborations can absolutely work.

For Garvie, market conditions are also offering “an opportunity for these various European free-to-air and PSB’s to engage creatively together” to secure scripted shows that would previously have gone to a streamer. “It can reenergise both those buyers and a distribution industry that was being sidelined by global buying models,” he says.

Perhaps calmer waters aren’t that too far off, after all.

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