Exports drive U.K. TV growth

Reality formats score big

By STEVE CLARKE

Brit reality formats such as 'Wife Swap' have done big biz in the U.S., fueling revenue growth in Blighty's indie TV sector.

LONDON — Blighty's booming indie sector is being driven by strong growth from international sales, principally to the U.S., where reality formats such as "Wife Swap" have scored.

Overall, the sector generated revenue of £1.88 billion ($3.76 billion) in 2006, up 9.8% on the previous year. While U.K. growth accounted for only a 4.4% increase in TV revenue, international sales surged by 57.3% to $670 million from $426 million in 2005. The international marketplace accounts for 19.8% of all TV revenues generated by U.K. indies, of which 60.5% ($404 million) comes from sales to the U.S.

These were some of the key findings from a census undertaken by producers lobby group Pact, Bank of Ireland Corporate Banking and KPMG (U.K.).

One indication of how well the rapidly consolidating sector is doing: Some 45% of the companies surveyed said they had received a takeover approach last year.

With consolidation set to continue -- 33% of companies reporting revenues of $10 million-$21 million stated their intention to merge, acquire or be acquired -- 80% of those in the sector consider their situation to be stable. Average revenues per company increased by 17.4% last year as profits grew by an average of 8.4%.

U.K. terrestrial commissions still account for the lion's share of revenue, but multichannel commissions are growing. Last year, these accounted for 9.4% of revenues vs. 4.2% in 2005.