Regionality trends within the UK production sector - A report for Ofcom by Oliver & Ohlbaum Associates Ltd

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Regionality trends within the UK
      production sector
  A report for Ofcom by Oliver & Ohlbaum
                Associates Ltd

              September 2018
Executive Summary
This report studies recent production sector trends in the nations and regions through an analysis of PSB
commissioning, both in terms of producer location and productions qualifying as ‘made outside London’

 UK production sector in the nations and regions
 • Network PSB commissions account for the majority of production spending in the nations and regions, although
   their ‘made outside London’ (MoL) originations spending has fallen very slightly over recent years
 • Northern England is the most active region, with roughly £550m of originations spend in 2017. Southern England
   and Scotland are also key areas; though all are significantly smaller than the production industry in London

 PSB commissioning outside London
 • Total PSB MoL originations volume has fallen slightly but the proportion of MoL hours made by external producers
   has increased from 38% in 2014 to 47% in 2017
 • Over 60% of these external originations are produced by companies whose main office is in London, though many
   also have a secondary office in the nations and regions
 • Sports MoL programming, which has typically covered sporting events outside the location of production, has
   diminished but still accounts for over one-quarter of PSB MoL originations in terms of volume
 • BBC and ITV in-house MoL originations are predominantly focused in Northern England while Channel 4’s MoL
   commissions, mostly factual and entertainment programming, are spread more evenly across the different areas

 Impact of previous broadcaster policies
 • The BBC relocation to Salford and changes to Channel 4’s nations quota have had a significant impact on overall
   spending, but have had a more subdued effect on the independent sector and audience perceptions

                                                                                                                      2
Contents

 1. Introduction

 2. UK production sector overview

 3. Regional analysis

 4. Impact of previous broadcaster policies

 5. Conclusion
Introduction
With regionality becoming an increasingly important topic in the TV industry, this report aims to provide some
context to the discussions though an analysis of recent trends in the production sector

 • The regionality of the TV production and broadcasting sectors has become a key policy area, with multiple
   significant initiatives, ranging from the BBC’s relocation to Salford to Ofcom quota changes and Channel 4’s recent
   ‘4 All the UK’ strategy announcement, recently aiming to improve the state of the industry outside of London

 • Following on from our work on ‘Trends in TV Production’ in 2015, this report provides an analysis of recent trends
   in the production sector, with a particular focus on regionality, to provide some context for the consultation on
   regional TV production and future discussions in this area

 • Our regional analysis is largely informed by an analysis of the PSB’s original output covering the following topics:

      ‒ The location of production companies – who are the PSBs commissioning programmes from?

      ‒ The location of individual productions – where are PSB programmes being made?

      ‒ The impact of recent broadcaster policies relating to regionality, namely the BBC’s move to Salford and
        growth in Channel 4’s out-of-England quotas

                                                                                                                          4
Glossary

 • External producers: production companies not wholly owned by a broadcaster; for the purposes of this study of
   PSB output, this essentially covers all producers expect for the in-house production arms of the BBC, ITV and
   Channel 5

 • Location of producer: the location of the main office of a production company. If a company has multiple offices,
   we have used their main contact address as this is likely to be their main point of business and employment. If a
   directly sourced address cannot be found for a producer, we have instead used their registered office address

 • Broadcaster reported location: the regional location where an individual strand was reportedly produced
   according to Ofcom’s ‘Made outside London’ (MoL) criteria – the three criteria are based on the location of
   substantive production company bases, where the production budget is spent and where off-screen talent is hired
   from*. Please note that this may be different than the actual physical location of a particular production. Our
   source for broadcaster reported location is Ofcom’s ‘Made Outside London programme titles register’ which
   provides a regional location for all MoL PSB originations in a given year

 • Production groups: companies which own multiple separate production companies; these are often large, global
   companies with interests across production, distribution and broadcasting. For one slide later on in this report, we
   have used the location of the head office of the group (defined as their international headquarters) for group-
   owned producers rather than the location of the individual producer

                                                                                                                             5
* See Ofcom’s ‘Regional production and regional programme definitions’ for more detail on MoL criteria and classifications
Contents

 1. Introduction

 2. UK production sector overview

 3. Regional analysis

 4. Impact of previous broadcaster policies

 5. Conclusion
The UK TV industry generated over £13.6bn in 2017 from a variety of sources
Over half of UK TV revenues were reinvested into content in 2017, though a significant proportion of this was spent
on sports rights
UK TV industry’s flow of funds, 2017
£m

14,000       13,650

              900 Other           Cable / DSAT
                            1,910 gross margins
12,000             Public      Other
             2,500 funding 600 fees 11,140

                                                     1,630 Profit
10,000

             3,880 NAR            Multi-             1,960 SGA & T       Acquisitions
 8,000                          channels 5,900                   7,540    / Repeats      Film
                                                                             570        rights
                                                                                         530
 6,000
                                                                                                 Sports
                                                                                                  rights 3,380
 4,000                       Commercial
                                  PSBs 2,740                                                                                          3,070
             6,370 Pay TV                                                                    Sports              News
                                                                                         production 260           420
                                                                                                                                      1,560 External
 2,000
                          Publicly funded 2,500
                                 channels                                                                                 2,390
                                                                                                                                      1,500 In-house
     0
         Total revenues               Broadcasting           Content spend                                                 Other
                                        revenues                                                                        origination
                                                                                                                          spend

Note:   “In-house” programming is commissioned from and produced by internal, broadcaster-owned production companies. “External” programming is produced
        by external, usually independent, production companies. Totals may not equal the sum of components due to rounding                                 7
Source: Ofcom, Broadcasters, Oliver & Ohlbaum analysis
PSB spend on new originations has remained relatively constant
Though there has been a small increase since the downturn in 2009, spend on originations across the PSB channels
has been consistent – this is matched by volume of originations which has also been very steady
PSB network spend on first-run UK originations by channel, 2008 - 2017
£m
3,000                                                                                                   • Pressures on the licence fee have
                                                                                                          meant that BBC’s spend on
                                                                            2,599                         originations has remained flat.
         2,509                            2,536             2,521   2,500
                         2,463    2,449                                             2,459
2,500
                 2,342                     213
                                                  2,413                     166                           ITV’s spend has also stayed broadly
         196                                                213     193     129     137 BBC Portfolio
                          208     210                                                                     flat as it seeks to improve margins
         96                                100        224   101     112             133 Channel 5
                  185      62      95                 88                                                  amidst shrinking viewership
                   69                                                       441
2,000    387              320              385              377     403
                                  372                                               440 Channel 4
                  341                                 382
                                                                                                        • Channel 4 and Channel 5 spend has
                                                                                                          increased slightly recently, possibly
1,500
         769
                          749              756              774             749                           buoyed by a healthy ad market
                  696             733                               782             728     ITV
                                                      750                                                 (pre-referendum) and attempts to
                                                                                                          gain share
1,000                     307                                               303
                                           286
         308      312             322                 272
                                                            286     291             292     BBC2        • The PSB channels generally account
                                                                                                          for at least two-thirds of total
 500                                                                                                      investment in UK production, with
                          816              797              770             810
         752      738             719                 696           720             730 BBC1              the remaining third coming from
                                                                                                          multichannels, international
     0                                                                                                    broadcasters and SVOD services
         2008    2009    2010     2011    2012    2013      2014    2015    2016    2017
Note: Prices expressed in nominal terms                                                                                                       8
Source: Ofcom PSB Report, Oliver & Ohlbaum analysis
However, original spending from multichannels has been rising rapidly
In contrast to the PSBs, the UK content spend of multichannel broadcasters has grown substantially in recent years;
this has benefitted both the independent sector and producers owned by these broadcaster groups

Total spend on UK content by COBA members – 2009 - 2013                                     • COBA members, which include almost all of
£m                                                                                            the major multichannel groups, have been
800                                                                                           rapidly increasing their spend on UK content,
                                                       725                                    especially on first-run, original shows
                                                        4     Re-versioning
700                              651        665
                                  8          3         124    Secondary rights              • This has been driven by the proliferation of
600                                         122                                               digital multichannels and the growing share of
                                 122
                                                                                              viewing that they attract
          487        475
500
           5          5                                                                     • Spend has continued to grow quickly in recent
          94         103                                                                      years too; spend on all network TV
400
                                                                                              multichannel content* has grown from £757m
300
                                                                                              in 2014 to £1,176m in 2017 while independent
                                                       597    First-run
                                 522        540                                               producers have reported that their revenue
200
                                                                                              from multichannel commissions has roughly
          387        367                                                                      doubled since 2010
100
                                                                                            • Similarly, the content spend of commercial PSB
                                                                                              portfolio channels has grown from £269m to
     0
         2009        2010       2011       2012        2013
                                                                                              £344m over the same period
Note:   *excluding sports channels; this may also not be directly comparable to the chart above as the COBA census only covers COBA members, which
        broadcast the majority of, but not all, multichannels in the UK                                                                              9
Source: COBA 2014 Census, Ofcom CMR, Pact Census, Oliver & Ohlbaum analysis
There is unlikely to be sustained downward pressure on commercial content spend
TV ad spending dropped in 2017, which could put pressure on content budgets of the commercial FTA broadcasters,
however, there is evidence that current pressure is cyclical, rather than indicative of broader structural change

UK TV advertising spending, spots and sponsorship, 2001 - 2019
 £m

 6,000                                                                        Slowdown in TV ad spending – creating
                           The TV ad market is                                 uncertainty in the UK content market                  Forecast
                        susceptible to cyclicality
                        – which can put pressure
 5,000
                          on content spending

 4,000

 3,000
                                                                                   Recent pressure is likely to be cyclical rather
                                                                                  than indicative of structural change (for now).
                                                                                   Major TV advertising sectors such as motors,
 2,000
                                                                                    retail, and food have been under pressure –
                                                                                   and some are now showing signs of recovery
 1,000

      0
           2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018* 2019

Note: *2018 is based on actuals for Q1 and forecasts for the remaining quarters                                                                 10
Source: AA/WARC, Oliver & Ohlbaum analysis
PSBs are shifting spend slightly towards non-scripted programming
The major broadcasters are spending more on factual and entertainment programmes as these genres are often
able to drive live viewing at a more efficient cost than drama

PSB spend on first-run UK originations by genre, 2006 - 2017
£m; prices in nominal terms

600                                                                                                  • Spending on new factual programmes
                                                                            Factual*                   has grown much faster than other
                                                                                                       genres over the past decade. Spending
500                                                                                                    on entertainment and soaps is also
                                                                                                       growing steadily
                                                                            Entertainment
400                                                                                                  • Factual and Entertainment are expected
                                                                                                       to continue to thrive on TV in the future
                                                                            News & current affairs     as they can drive live viewing and are a
300                                                                         Drama
                                                                                                       key differentiator from global on-
                                                                            Soaps                      demand services.
200
                                                                                                     • In contrast, TV broadcasters will find it
                                                                                                       hard to compete with the drama
100
                                                                                                       investment of these services; though
                                                                            Comedy
                                                                                                       PSB drama spend has been relatively
                                                                                                       constant since a large drop pre-2011
  0
      2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Note: *includes Specialist Factual, General Factual and Factual Entertainment                                                                      11
Source: Ofcom PSB report, Broadcasters, Oliver & Ohlbaum analysis
Spend on UK scripted has been supplemented by international commissions
The UK’s high-end TV tax relief has attracted a growing amount of overseas investment into UK drama, helping to
bolster stagnant PSB spend. The sector broadly expects UK tax reliefs to continue for the foreseeable future

UK spend on high-end TV programmes produced in the UK                                               • UK high-end TV tax relief, up to 25% of
£m                                                                                                    UK spend on productions costing over
1,000                                                                938                              £1m per broadcast hour, has attracted
                                         882           861                                            increasing investment from overseas
  900

  800                                                                                               • Global SVOD services are some of the
                                                                                                      key commissioners, and their spend is
  700                      658
                                         455                                                          rising as their scope and need for original
  600                                                                      Co-productions &           content continues to grows
                                                       537           684
                                                                           inward investment
  500
             434
                           318                                                                      • Most of these high-end productions are
  400
                                                                                                      premium scripted drama shows

  300        261                                                                                    • Though UK producers will be involved in
                                                                                                      some of the high-end inward investment
  200                                    427
                           340                         324
                                                                                                      projects, this spend will often be
  100
                                                                     254   Domestic UK                associated with or controlled by
             173
                                                                                                      international companies producing parts
     0                                                                                                of their show in the UK
             2013         2014          2015          2016          2017
Note:   ‘Domestic UK’ – an indigenous UK production made by a UK production company and produced wholly or partly in the UK; ‘Inward investment’ – a
        production which is substantially financed and controlled from outside the UK. Total spend on HETV includes programmes commissioned, produced or
        co-produced by UK broadcasters, but also covers internationally-controlled productions (e.g. Game of Thrones, Outlander, Krypton)                  12
Source: BFI, Oliver & Ohlbaum analysis
Rising external producer revenues have been driven by international sources
The external production sector has grown over the last decade, primarily driven by international spending. Revenues
have also been strengthened by Terms of Trade which allow for retention and exploitation of rights, esp. abroad
UK production company TV revenues (excluding those wholly owned by PSBs), by type and source
£ million
3,000

                                                                                                                     2,631
                                                                                              2,530      2,504               Other TV income
2,500                                                                 2,376       2,343                               218    Secondary rights
                                                          2,299                               211         213
                                                                       152         167                                                               International
                                                           174
                                              2,005                                                                   549    Primary commissions
            1,940      1,945       1,937                               301                    430         468
2,000                                                                              289
                                               136         324
            78          101         128
            161                                                                                                              Other TV income
                                                                       166
                        248         217        364                                 208        258                     228    Secondary rights
                                                           184                                            232
            106
1,500                   117                                            381         236
            158                     139                    240                                222                     259    Primary commissions
                        162                    173                                                        275                (multichannels)
                                    130
                                               163
1,000
                                                                                                                                                     United Kingdom

            1,350                                         1,299       1,286       1,350       1,328                  1,294 Primary commissions
                       1,233       1,226                                                                 1,229
  500                                         1,084                                                                        (PSB networks)

    0
            2008       2009        2010        2011       2012        2013        2014        2015        2016       2017
Note:   ‘Primary commissions’ revenue is generated by the sale of primary rights of a new production to the associated commissioner. International commissions
        usually come from major overseas broadcasters or global SVOD services. International ‘Secondary rights’ are largely derived from international sales of
        finished programmes and international format sales. ‘Other income’ includes pre-production and revenues not attributable to other categories.                13
Source: Pact UK Television Production Census 2017, Oliver & Ohlbaum analysis
The BBC’s and ITV’s production and distribution arms are also performing well
BBC’s and ITV’s distribution arms have been growing recently, likely due to the emergence and growth of SVOD
services. The UK production sector, covering both in-house and external, generates about £5bn of revenue per year

BBC TV production and rights revenue                                 ITV Studios revenue                                       • Both the BBC’s and ITV’s
£m                                                                   £m                                                          TV production businesses
1,800                                                                                                                            are growing; though ITV’s
                                                                                             1,582                               growth has been boosted
1,600                                                                                                                            significantly by acquisitions
                                                                                                     Global Entertainment
                                                                                 1,395        187
                                            + BBC Studios                                            (Distribution arm)             We estimate that acquisitions
1,400                                         external†
                       1,272                                          1,237                                                         accounted for over £200m of
                                                                                  179
1,200      1,147                  1,164                                                                                            growth between 2015 and 2017
                                                                       157                        ITV America &
                        422                                                                   703 Studios RoW
1,000
            384                    423
                                          BBC Worldwide                                           (Int’l production)           • Distribution revenue has
                                          content sales*                          590
                                                                       533
                                                                                                                                 risen in both cases, likely
  800
                                                                                                                                 due to the growing spend
  600                                                                                                                            and competition among
                                                                                                                                 SVOD services
  400                   850               In-house BBC                                               Studios UK
            763                    741
                                          commission spend
                                                                       547
                                                                                  626         692
                                                                                                     (UK production)           • Combined with the
  200                                                                                                                            external sector, UK
                                                                                                                                 producers generate about
     0                                                                                                                           £5bn of revenue per year
            2015       2016        2017                               2015       2016        2017
Note:   * ‘BBC Worldwide content sales’ are stated for financial years 2015/16, 2016/17, 2017/18 finishing at the end of March
        † BBC Studios also competes for external commissions though this activity was relatively limited in 2017, its first year as a commercial entity             14
Source: BBC Worldwide Annual Report, ITV Annual Report, Ofcom PSB Annual Report, Oliver & Ohlbaum analysis
Production activity in the nations and regions is primarily driven by the PSBs
The production sector in Northern England (which includes major BBC and ITV in-house production units) is the most
active nations and regions area, though it is still smaller than London where roughly £2 billion is spent per year
Estimated UK TV originations spend by region, 2017
£m                                                                                                • The majority of spend outside London comes
600
                                                                                                    from the PSBs. Inward investment from
                            543
                                    Other UK broadcasters
                                                                                                    overseas may add to regional spending as
                             16
500
                             26     Commercial PSB portfolio                                        well, but this spend is likely to be more
                            64                                                                      London-centric than PSB expenditure
                                    Channel 5
400                         59      Channel 4                                                     • Nations and regions productions are usually
                                                                                                    made out of a production office outside
                                                                                                    London, though this can either be the head
300                                         289                                                     office of the company or a secondary office
                            191     ITV      20
                                             9                                                      of a producer otherwise based in London
                                                                           223
                                             58
                                                                           20
200                                                                        10             175
                                                                           15
                                             65
                                                                           54
                                                                                           63      Regional channel*
100                                          44                            26
            74              183     BBC                        65                          29      PSB – Non-network
            42                               87                29          91
                                                                                           67      PSB – Network
  0         19                                                 24
        Midlands &       Northern         Southern       Northern       Scotland         Wales
           East          England           England        Ireland
Note:   *includes BBC Alba and S4C. PSB non-network programming is nations’ and regions’ programming that is shown only in specific areas of the UK – the
        majority of non-network programming in the English regions is local news and current affairs content, accounting for over 98% of spend              15
Source: Ofcom Media Nations Report, Pact UK Television Production Census 2017, Oliver & Ohlbaum analysis
PSB spending outside of London has dropped after a long period of growth
Made-outside-London (MoL) PSB spending has been falling since 2014, having grown consistently before that, partly
driven by a drop in the amount of sports output being made outside London. Northern England, boosted by the BBC
Salford move, and Scotland have seen the most growth while spend in Southern England fell significantly in 2016
PSB spend on first-run, network originations by region of production
% of qualifying spend
100%       2%       1%          2%                                                                                                Other
           3%       3%          3%        2%        3%        3%                                                                  Northern Ireland
                                          4%        5%                  4%         3%        3%        4%        3%        3%     Wales
                                                              5%        4%                   5%        4%
 90%       9%      10%         10%                                                 6%                            6%        6%     Scotland
                                         11%
                                                   13%                  12%                                      8%
                                                              15%                           13%       14%                  10%    Southern England
 80%                                                                              14%
           18%       17%       17%       15%
 70%                                               15%
                                                              17%       20%                                      22%       20%    Northern England
           6%         6%        7%                                                          23%       20%
                                          7%        3%                            20%
 60%                                                          3%        3%                                       2%        1%     Midlands & East
                                                                                   2%                  1%
                                                                                             2%
 50%

 40%

 30%       63%       63%       61%       61%       61%
                                                              57%       55%                           54%        57%       57%    London
                                                                                  52%       52%
 20%

 10%

  0%
          2006       2007      2008      2009      2010      2011      2012       2013      2014      2015      2016      2017
Note:   Qualifying spend excludes national news and sports rights (we estimate that total PSB qualifying spend has been relatively consistent at just under £2
        billion, in nominal prices, over the past decade). Regions allocated based on Ofcom criteria                                                             16
Source: Ofcom PSB Annual Compliance Report, Ofcom PSB Annual Report, Oliver & Ohlbaum analysis
BBC and Channel 4 MoL spend has grown, in contrast to the other PSBs
Increases to BBC and Channel 4 MoL spend has been driven by growing quotas and office relocations – this trend is
likely to continue with Channel 4 increasing their regional presence and the BBC responding to new Ofcom quotas.
Channel 5’s MoL spend has gradually declined; their extra investment in originations has mostly stayed within London
Spend on network originations (exc. News) by region and broadcaster; 2008 vs 2017
% of qualifying spend                                                                                  Multi Nation/Region
100%                      4%                    2%           1%                   1%           1%                    3%           1%      Nations
             8%                                                                                9%                                13%      English regions
 90%
                         18%
                                                                                 30%
 80%                                                        37%                                                     31%
            27%
                                               48%                                             34%
 70%
                         29%
 60%

 50%
                                                                                                                                 86%      London
 40%
            65%                                                                  68%                                66%
 30%                                                        62%
                                                                                               55%
                         49%                   50%
 20%

 10%

  0%
            2008         2017                  2008         2017                 2008         2017                  2008         2017
                   BBC                                ITV                           Channel 4                         Channel 5
Note: ‘Multi Nation/Region’ are productions deemed to have been made out-of-London but did not meet Ofcom’s criteria in any one nation/region               17
Source: Ofcom PSB Annual Compliance Report, Oliver & Ohlbaum analysis
Similarly, BBC and Channel 4 also have the highest shares of out-of-London hours
The share of hours being made outside London is larger than share of spend on the BBC and Channel 4 suggesting that
their out-of-London strands are predominantly lower value, higher volume productions - this seems to be a recent
trend for the BBC. In contrast, ITV and Channel 5 shares of spend and hours are much closer
Hours of network originations (exc. News) by region and broadcaster; 2008 vs 2017
% of qualifying hours                                                                                  Multi Nation/Region
100%                      1%                    1%           0%                   3%           2%                  1%             1%      Nations
             5%
                                                                                               12%                               10%      English regions
 90%                                                                                                                17%
                         23%
 80%        28%
                                                            43%                  38%
                                               50%
 70%
                                                                                               43%
 60%
                         37%
 50%
                                                                                                                                 89%      London
 40%                                                                                                                83%
            67%
 30%                                                        57%                  59%
                                               50%
 20%                     40%                                                                   43%

 10%

  0%
            2008         2017                  2008         2017                 2008         2017                  2008         2017
                   BBC                                ITV                           Channel 4                         Channel 5
Note: ‘Multi Nation/Region’ are productions deemed to have been made out-of-London but did not meet Ofcom’s criteria in any one nation/region               18
Source: Ofcom PSB Annual Compliance Report, Oliver & Ohlbaum analysis
The production sector is dominated by companies primarily based in London
Producers with their primary base in London account for almost 90% of independent sector turnover. The total
revenues of nations and regions producers are broadly growing, from £241m in 2015 to £269m in 2017, but a
diminishing share is coming from indigenous out-of-London companies
Independent TV production sector revenues by location of producer
% of market revenue
100%                                                                            Other                    • Nearly 90% of independent sector
              4%             4%                                                 Wales      Scotland
                                                                                           West            revenues are generated by
 90%                         4%
                                           4%             4%             4%     North-West South-East      producers who are primarily based
              4%
 80%
                                                                                                           in London

 70%                                                                                          • The Broadcast Indie Survey reported regional
                                                                                                revenues, from indies based outside London, of
 60%
                                                                                                £269m for 2017; though only 27% of this (and
 50%                                                                                            thus only 3% of total sector revenues) came
             85%            86%            89%            88%           89%     London          from standalone, qualifying indies
 40%
                                                                                              • This is a symptom of consolidation in the
 30%                                                                                            sector, both in terms of large production groups
 20%                                                                                            and broadcaster ownership (50% of regional
                                                                                                companies in the latest Broadcast Indie Survey
 10%                                                                                            are non-qualifying indies, up from 0% in 2014)
  0%
             2013           2014          2015           2016           2017
Note: Analysis only covers the companies that completed the Broadcast Indie Survey in that year                                               19
Source: Broadcast Indie Survey, Oliver & Ohlbaum analysis
Contents

 1. Introduction

 2. UK production sector overview

 3. Regional analysis

 4. Impact of previous broadcaster policies

 5. Conclusion
Regional analysis by location of producer
This first section of our regional analysis is based on the location of the main office of each producer; though this is
not comparable to PSB licence requirements, it provides good insight into the regionality of the production industry

 • In order to analyse the regionality of PSB output, we have coded our Producer Programme database (which covers
   BBC1, BBC2, ITV1, Channel 4 and Channel 5) against a list of main office locations for each producer and Ofcom’s
   ‘Made Outside London programme titles register’. This first section of our regional analysis is based on the former

 • In this section, regions are based on ITV regions and the main location base of the production company at an
   individual company level (with one exception later on where we use the location of the production group’s head
   office instead for those companies in a large production group). Production companies in our database are based
   on the credited producer for each programme, we have coded the location of distinct production units (e.g. RDF
   West, rather than RDF) separately when they have been credited

 • This analysis of production base location does not necessarily reflect location of actual production so it is not
   comparable with Ofcom’s PSB licence requirements. We also only focus on external producers (i.e. excluding all
   output produced by the BBC’s, ITV’s and Channel 5’s production arms) as the main base of large in-house
   producers with offices across the country can be difficult to define

 • However, analysis of producer location offers useful insight into the composition of the production industry and
   the PSB’s activity with regionally-based producers – something which is difficult to glean from Ofcom’s compliance
   reporting which includes regional productions from London-based producers

                                                                                                                           21
External producers deliver over a half of original PSB output
The volume of first-run, original hours on the five main PSB channels has remained relatively consistent. External
producers, our focus for ‘location of producer’ analysis, have delivered a relatively consistent number of hours

Volume of PSB network originations by type of producer – 2008 - 2017
Number of first-run hours

                                                            13,819
14,000   13,353                                       13,356 101 13,133
                      12,958 12,827 13,042 13,195                                                    • The levels of in-house and
           14
                                      18     22 12,828 40           96                Channel 5
               12,180 12       14                 43                                  in-house         external production on the five
12,000   2,339   15                                          3,082
                      2,856 2,840 2,610 2,909 2,808
                                                      2,958
                                                                   3,018
                                                                                                       main PSB channels has been
                                                                                      ITV Studios
                2,355                                                                                  consistent over the past decade
10,000                                                                                                 though ITV Studios output has
         3,934                                                                                         grown, driven by acquisitions
                                          3,519 3,442            3,932 3,966 3,604
 8,000            3,586 3,943 3,481                     3,882                         BBC in-house
                                                                                                     • The following section of our
                                                                                                       analysis, on the location of
 6,000                                                                                                 producers, focuses on external
                                                                                                       production as the main base of
 4,000                                                                                                 a large in-house producer with
         7,066                      6,895 6,821                                       External
                  6,224 6,146 6,492             6,094 6,425 6,670 6,414               producers        offices across the country can
 2,000                                                                                                 be difficult to define

     0
         2008     2009      2010   2011   2012   2013   2014     2015   2016   2017

Note: Excludes News and Other programming, as defined by Ofcom                                                                           22
Source: Attentional, BARB, Oliver & Ohlbaum analysis
Regionality of external PSB originations by location of producer
The majority of external PSB originations are produced by London-based producers. The level of regional activity has
increased slightly over recent years; the North-West, South-East, West and Scotland are the most prominent regions

External PSB network originations by location of producer – 2008, 2013 - 2017
% of first-run hours
               7,066 (53%)       6,821 (52%)        6,094 (48%)       6,425 (48%)        6,670 (48%)        6,414 (49%) Total hours (% of all originations)
100%                              4%                 3%                                   4%
                                                                       4%                                    4%     Other
                9%                4%                 4%                2%                 4%                 4%     Scotland       ‘Other’ includes Anglia,
                                  3%                 3%                3%                 3%                 2%
 90%            2%                3%                 2%                3%                 3%                        West           Central Midlands, Isle of
                                  2%                 3%                4%                                    3%     South-East
                5%                                                                        4%                 3%     North-West     Man, North-East, Northern
 80%            2%                                                                                                                 Ireland, Wales, West
                                                                                                                                   Country, Yorkshire and
 70%                                                                                                                               producers of unknown
                                                                                                                                   location
 60%
                                                                                                                                                 Regions Nations
 50%
                                                                                                                                        2008       17%     2%
                                  85%                85%               84%                84%                83%     London
 40%           81%
                                                                                                                                        2013       11%     4%
 30%                                                                                                                                    2014       10%     5%

 20%                                                                                                                                    2015       12%     4%

 10%                                                                                                                                    2016       12%     4%

                                                                                                                                        2017       12%     5%
  0%
               2008               2013              2014               2015               2016              2017
Note:   Excludes BBC portfolio channels and programmes made by in-house producers. All News and Other programming are also excluded
        Based on main location of credited producer, this is not directly comparable to the substantive base criteria in Ofcom’s compliance reporting              23
Source: Attentional, BARB, Oliver & Ohlbaum analysis
Regionality of external PSB originations by location of producer – BBC1 & BBC2
The BBC’s share of originations coming from regional producers has increased steadily in recent years, though there
was a slight reversion in 2017 partly due to the loss of a few daytime strands previously made in Scotland; despite
this, there has also been an overall shift from South-East to Scotland-based producers
External PSB network originations by location of producer – BBC – 2008, 2013 - 2017
% of first-run hours
               2,100 (34%)       2,401 (39%)        1,698 (29%)       1,983 (33%)        1,892 (31%)        2,027 (35%) Total hours (% of all originations)
100%                              3%                 3%                4%                                           Other
                7%                                                                        5%                 4%
                                  4%                 6%                4%                                           Scotland                    Regions Nations
                                                                       3%                  8%                6%
 90%            4%                4%                                                                         2%     West
                                                     3%                4%                                    2%     South-East        2008         11%      2%
                                                                                           2%
 80%                                                                                                                   North-West
                                                                                                                                      2013         7%       6%

 70%                                                                                                                                      2014          7%    8%

 60%                                                                                                                                      2015          10%   6%

                                                                                                                                          2016          7%    10%
 50%
               88%                87%                                                                        86%     London               2017          6%    8%
                                                     85%               84%                83%
 40%

 30%

 20%

 10%

  0%
               2008               2013              2014               2015               2016              2017
Note:   Excludes BBC portfolio channels and programmes made by in-house producers. All News and Other programming are also excluded
        Based on main location of credited producer, this is not directly comparable to the substantive base criteria in Ofcom’s compliance reporting               24
Source: Attentional, BARB, Oliver & Ohlbaum analysis
Regionality of external PSB originations by location of producer – ITV
ITV has a slightly higher share of external originations coming from regional producers compared to the BBC; in ITV’s
case most of this comes from the West, largely due to Dickinson’s Real Deal, and also the South-East in 2017,
boosted by James Martin-fronted programmes such as Saturday Morning with James Martin
External PSB network originations by location of producer – ITV – 2008, 2013 - 2017
% of first-run hours
               1,002 (34%)        990 (30%)          966 (30%)         880 (27%)          850 (26%)          840 (26%) Total hours (% of all originations)
100%                                                                                      3%                 3%    Other
                5%                 6%                5%                 5%                                   3%    Scotland                    Regions Nations
 90%            5%                                                                                                 West
                4%                                                                        13%                8%
                                  13%                15%               10%                                                           2008         13%      5%
                4%                                                                                           7%    South-East
 80%                                                                    3%                 3%
                                   2%                                                                                                2013         21%      1%
                                                     3%                                                               North-West
 70%                                                                                                                                      2014          23%   2%

 60%                                                                                                                                      2015          19%   3%

                                                                                                                                          2016          19%   1%
 50%
                                                                                                                                          2017          17%   4%
 40%           82%                78%                                  79%                80%                79%     London
                                                     75%
 30%

 20%

 10%

  0%
               2008               2013              2014               2015               2016              2017
Note:   Excludes programmes made by in-house producers. All News and Other programming are also excluded
        Based on main location of credited producer, this is not directly comparable to the substantive base criteria in Ofcom’s compliance reporting              25
Source: Attentional, BARB, Oliver & Ohlbaum analysis
Regionality of external PSB originations by location of producer – Channel 4
An increasing share of Channel 4 originations are coming from regional producers; Channel 4 now has the largest
share of out-of-London originations among the PSBs. Almost all of the North-West output is associated with
Hollyoaks while most other important regionally-sourced strands are property/lifestyle factual shows
External PSB network originations by location of producer – Channel 4 – 2008, 2013 - 2017
% of first-run hours
               2,184 (92%)       2,260 (87%)        2,168 (87%)       2,214 (84%)        2,441 (87%)        2,111 (85%) Total hours (% of all originations)
100%                              3%                 2%                4%                 4%                 7%      Other
                                  3%                 4%                3%                 3%                                                       Regions Nations
               13%                1%                 1%                1%
 90%                                                 6%                                   2%                 5%      Scotland West
                                  6%                                   10%                                                                2008          24%   3%
                2%                                                                        8%                 4%      South-East
 80%            7%
                                                                                                             8%      North-West           2013          11%   4%
                5%
 70%                                                                                                                                      2014          9%    5%

 60%                                                                                                                                      2015          14%   4%

                                                                                                                                          2016          15%   4%
 50%
                                  85%                86%                                                                                  2017          19%   6%
 40%                                                                   81%                81%
               73%                                                                                           75%     London
 30%

 20%

 10%

  0%
               2008               2013              2014               2015               2016              2017
Note:   Excludes programmes made by in-house producers. All News and Other programming are also excluded
        Based on main location of credited producer, this is not directly comparable to the substantive base criteria in Ofcom’s compliance reporting              26
Source: Attentional, BARB, Oliver & Ohlbaum analysis
Regionality of external PSB originations by location of producer – Channel 5
Channel 5 has the largest share of originations coming from London-based producers, the share had levelled off in
recent years but jumped up again in 2017. Regional production has decreased significantly since 2008 as ‘Trisha’,
previously produced in Anglia, is no longer being commissioned
External PSB network originations by location of producer – Channel 5 – 2008, 2013 - 2017
% of first-run hours
               1,781 (97%)       1,171 (97%)        1,262 (94%)       1,348 (95%)        1,487 (93%)        1,436 (91%) Total hours (% of all originations)
100%              [inc. Anglia    2%                 2%                3%                 3%                 3%     Other
                10% = 7%]         5%                 3%                4%                 5%                           Scotland                 Regions Nations
                                                                                                                       West
 90%                               5%                                                                                  South-East
                5%                                                                                                     North-West     2008         17%      1%
 80%                                                                                                                                      2013          8%   6%

 70%                                                                                                                                      2014          6%   2%

 60%                                                                                                                                      2015          9%   1%

                                                                                                                                          2016          9%   0%
 50%
                                                     92%               90%                90%                94%     London
                                  86%                                                                                                     2017          6%   0%
 40%           82%

 30%

 20%

 10%

  0%
               2008               2013              2014               2015               2016              2017
Note:   Excludes programmes made by in-house producers. All News and Other programming are also excluded
        Based on main location of credited producer, this is not directly comparable to the substantive base criteria in Ofcom’s compliance reporting             27
Source: Attentional, BARB, Oliver & Ohlbaum analysis
Regionality of external PSB originations by location of producer and genre
A high level of Entertainment and Comedy originations were made by London-based producers in 2016, likely partly
because these genres require studio facilities. Factual genres tend to have the highest shares of regional production

External PSB network originations by location of producer and genre – 2017
% of first-run hours
             28           90         113         138         291        1,126       1,246        2,093        164         272          822    Total hours
           (48%)         (58%)      (83%)       (17%)       (60%)       (50%)        (67%)       (53%)       (27%)        (53%)       (37%) (% of all originations)
100%                                 1%                                   4%                                                                  Out-of-London
                                                             12%                      9%                                              11%
 90%                     19%                    19%                                              23%
            24%
 80%                                                                                                                      36%

 70%

 60%

 50%                                 99%                                                                     100%
                                                                         96%                                                                  London
                                                             88%                     91%                                              89%
 40%                     81%                    81%                                              77%
            76%
 30%                                                                                                                      64%

 20%

 10%

  0%
           Arts &      Children's   Comedy     Current Drama (exc. Enter- Factual Ent. General               Soaps      Specialist    Sport
          Classical                            Affairs   Soaps)    tainment            Factual                           Factual
           Music
Note:   Excludes BBC portfolio channels and programmes made by in-house producers
        100% of soaps were made by producers based out-of-London as Hollyoaks, made by Lime Pictures, was the only externally-produced soap                   28
Source: Attentional, BARB, Oliver & Ohlbaum analysis
Number of active external producers in 2016 across the five main channels
The number of producers making programmes for the PSBs has grown recently after hitting a low point in 2014; this
growth has come relatively equally from both in and out of London

Number of active production companies by region – 2008, 2013 - 2017
                           2008          2013           2014           2015           2016           2017         *        In this table, an active
                                                                                                                           producer is one which has
 Anglia                      7              2              1              3              4             2          ▼        produced any first-run,
 Central Midlands            6              2              2              3              4             2          ▼        original content broadcast on
 Isle of Man                 1              0              0              0              0             0          ▼        the five main PSB channels in
                                                                                                                           that calendar year
 London                     223            211           177            174            195            208         —
 North East                  6              1              3              2              2             2          ▼        The internal production arms
 North West                  9              7             12              8              8             8          —        of BBC, ITV and Channel 5
                                                                                                                           have been excluded from this
 Northern Ireland            5              2              6              7              7             6          —
                                                                                                                           analysis
 Scotland                    8             12             12              9             16             20         ▲
 South East                 32             26             25             26             21             23         ▼
 Wales                       7             12             11             10             10             13         ▲
 West                       19             19             13             16             14             14         ▼
 West Country                3              3              2              1              3             3          —
 Yorkshire                   7              6              3              4              5             6          —
 Unknown                    22             15             15             20             15             21         —
 Total                      355            318           282            283            304            328         —

Note:   *Arrow shown if change between 2008 and 2017 was greater than 20%. Large production groups are only counted once in each region in which they
        are active. Excludes BBC portfolio channels and programmes made by in-house producers. All News and Other programming are also excluded.        29
Source: Attentional, BARB, Oliver & Ohlbaum analysis
Regionality of external PSB originations from new producers
In 2017, PSB originations from new producers came from a range of regions, however these shares are highly variable
and often reliant on only a few strands due to the low number of new producers. For example, almost all of ITV’s
original output from new producers came from James Martin-fronted shows produced by Blue Marlin in 2017
PSB network originations from new producers by location of producer – 2017
% of first-run hours
                 173                   64                    83                    34                   354      Total hours
100%                                                                               3%
                 4%                    5%                    7%                    3%                    5%      Other                 We have classified ‘new
                                       3%                                                 Yorkshire
                 6%                                                                                      3%      Wales                 producers’ as those who
 90%                                                         9%                    8%                    5%      Scotland
                 6%                                                                                      3%      West                  produced an original
                                                             6%                    5%                                                  show on any of the five
 80%
                                                             3%                                         17%      South-East            main channels for the
 70%                                                                                                                                   first time in 2017
                                                                                                                 North-West
 60%                                                                                                                                   Some of these numbers
                                                                                                                                       have changed a lot since
 50%                                   86%                                                                                             2014, when it was last
                                                                                                                                       measured in ‘Trends in
 40%             82%                                                              81%                                                  TV Production’, due to
                                                            74%                                                                        the low number of
                                                                                                        67%      London                original hours being
 30%
                                                                                                                                       commissioned from new
 20%                                                                                                                                   external producers

 10%
                                       7%
  0%
                 BBC                   ITV                   C4                    C5                 All PSBs
Note:   Excludes BBC portfolio channels and programmes made by in-house producers. All News and Other programming are also excluded
        ‘Other’ includes Anglia, Central Midlands, Isle of Man, North-East, West Country, Northern Ireland and companies of unknown location                  30
Source: Attentional, BARB, Oliver & Ohlbaum analysis
Regionality of external PSB originations from new producers over time
ITV and Channel 5 broadcast fewer original hours from new producers than the BBC and Channel 4, as such their
out-of-London share and regional breakdown is highly variable year-on-year
PSB network originations from new producers by location of producer – 2014 - 2017
% of first-run hours                                                                                    Scotland    Wales         North-West
            58     73     178      173      50      23         67    64      54      59      176      83      47     41        80   34 Total hours
100%                                                                                                                                3% Other
                                   4%                          5%    5%                      4%       7%     6%                     3% Yorkshire
                          12%      6%              12%                      10%     14%
 90%              16%                                                                        8%               8%                    8% West
                                                                                                      9%                      11%
         29%                  4%   6%               4%
                                           32%                                                                       31%            5% South-East
 80%              4%          7%                                                                      6%
                                                                                    13%
                  10%         4%
 70%                                               24%
                              6%                                                                             30%
                  7%
 60%                                                                                                                 13%
         30%
 50%                                                                 86%
                                                               95%                                           14%
                                           41%
                                   82%                                                       86%                              84%
 40%                                                                        79%                                                       81%      London
                                                                                    72%              74%
                  62%     65%
 30%                                               59%
                                                                                                                     53%
 20%                                                                                                         40%
         34%
 10%                                       23%
                                                                     7%
  0%
         2014    2015     2016     2017   2014     2015    2016      2017   2014    2015    2016    2017     2014    2015    2016     2017
                        BBC                              ITV                         Channel 4                         Channel 5
Note:   Excludes BBC portfolio channels and programmes made by in-house producers. All News and Other programming are also excluded
        ‘Other’ includes Anglia, Central Midlands, Isle of Man, North-East, West Country, Northern Ireland and companies of unknown location            31
Source: Attentional, BARB, Ofcom, Oliver & Ohlbaum analysis
Regionality of external PSB originations from new producers over time
In total across the five main PSB channels, there has been an increased number of original hours coming from new
producers in the past few years. A consistent portion of these hours has come from new producers primarily based
outside London with the South-East being a particularly active region
PSB network originations from new producers by location of producer – 2008, 2013 - 2017
% of first-run hours
                423              214                209               196               501               354     Total hours
100%
                                  7%                                                    7%                5%      Other
               12%                                                                                        3%      Wales
 90%                              2%               20%               18%                2%
                                                                                        3%                5%      Scotland
                                  8%                                                    1%                3%                 Yorkshire
                5%                                                                      5%                        West
 80%                                                                  1%                2%
                                  9%                4%                4%                                  17%      South-East
                                                                      6%
 70%                              6%               10%
                                  2%                                  7%                                           North-West
 60%
                                                   17%
 50%
                                                    4%
 40%           79%                                                                      80%
                                 65%                                                                      67%      London
 30%                                                                 63%

 20%                                               44%

 10%

  0%
               2008              2013              2014              2015              2016              2017
Note:   Excludes BBC portfolio channels and programmes made by in-house producers. All News and Other programming are also excluded
        ‘Other’ includes Anglia, Central Midlands, Isle of Man, North-East, West Country, Northern Ireland and companies of unknown location   32
Source: Attentional, BARB, Oliver & Ohlbaum analysis
Regionality of external PSB originations – New & returning series
An ever increasing share of new series have been coming from regional producers. In contrast, a smaller proportion
of returning series are made by regional producers – those that are typically come from the main production regions
outside of London (North-West, South-East and Scotland), driven by high-volume, established strands
External PSB network originations by location of producer and new/returning – 2015 - 2017
% of first-run hours
                       New series                                                 Returning series
            1,626          1,782          1,699                           4,799         4,887          4,716 Total hours
100%                                              Other
              6%            5%             6%                              2%             4%            2% Yorkshire
                            3%             2%                              2%             2%            3% Scotland
              2%                                                           3%             2%
 90%          3%            4%             7%
              3%            3%                                             5%             5%             4%    North-West
              3%                           4%     West
 80%          3%            4%                    South-East
                            1%             6%
                                           1%
 70%

 60%

 50%
                                                                          85%            85%            86%    London
 40%         80%            79%
                                          75%
 30%

 20%

 10%

  0%
             2015          2016           2017                            2015           2016           2017
Note: Excludes BBC portfolio channels and programmes made by in-house producers. All News and Other programming are also excluded   33
Source: Attentional, BARB, Ofcom, Oliver & Ohlbaum analysis
Regionality of external PSB originations (location of head office for groups)
When accounting for the location of the head offices of large production groups (rather than the location of
subsidiaries), the share of PSB network originations being made by London-based or global companies goes up to
nearly 90% though this has seemingly started to decrease despite consolidation in the sector
External PSB network originations by location of producer / group head office – 2008, 2013 - 2017
% of first-run hours
               7,066          6,821             6,094            6,425            6,670            6,414    Total hours        Here we have reclassified
100%                           3%                2%               2%               3%               4%      Other              the location of producers
                8%             5%                4%               4%               5%                                          which are part of a
                                                 3%               2%                                5%      Wales
 90%                           3%                                                  3%               3%      Scotland           production group to the
                13%                                                                                            West            location of the group’s
                                                                                                               South-East
 80%                                                                                                           North-West      head office

 70%                                                                                                                           Some large production
                                                                  47%              41%              35%     International      groups are based
                               45%              48%
 60%          30%                                                                                                              internationally (e.g.
                                                                                                                               EndemolShine, Warner,
 50%                                                                                                                           Banijay, etc.) while the
                                                                                                                               rest are in London. The
 40%                                                                                                                           sole notable exception is
                                                                                                                               Tinopolis in Wales
 30%
                                                                                                    49%     London                     Regions Nations
              44%              42%                                42%              45%
 20%                                            40%                                                                            2008     12%     14%
                                                                                                                               2013      5%      8%
 10%                                                                                                                           2014      5%      8%
                                                                                                                               2015      5%      6%
  0%                                                                                                                           2016      5%      9%
              2008             2013             2014             2015             2016              2017                       2017      7%      9%
Note: Excludes BBC portfolio channels and programmes made by in-house producers. All News and Other programming are also excluded                          34
Source: Attentional, BARB, Oliver & Ohlbaum analysis
Regional analysis by location of production, as reported by broadcasters
Our analysis of the location of individual strands is informed by Ofcom’s ‘Made Outside London programme titles
register’. This is broadly comparable with Ofcom’s compliance reporting

 • The second section of our regional analysis is based on the location of production as defined in Ofcom’s ‘Made
   Outside London programme titles’ register. In order to do this, we identified and matched programmes from this
   register, which the broadcasters reported as being ‘made outside London’ (meeting at least two out of the three
   MoL criteria: substantive base, production budget and off-screen talent), against our database

 • This allows a full analysis of the regionality of all PSB originations, both in-house and external, according to the
   actual locations of production

 • This method is broadly comparable with the reported regionality of output hours in Ofcom’s PSB compliance
   report; however, our numbers may not match up completely due to these differences:
       ‒ Our work does not cover the BBC portfolio channels; these channels will have a smaller impact on overall
         trends though due to their lower volume and spend on original output
       ‒ We are unable to match sub-components of shows (e.g. One Show Inserts) from the register to our database;
         however, instances of separate programme sub-components in the register are rare
       ‒ We have decided to exclude ‘Other’ programming to make our analysis more reflective of PSB commissioning.
         High-volume ‘Other’ programmes can often skew volume trends but are usually placed at the fringes of the
         schedule and have limited audience impact; for example, ITV Nightscreen, which was broadcast for about 560
         hours on ITV1 in 2017, greatly boosts ITV’s output from the Midlands & East
 • As per the previous section, our work only reflects volume of original hours and not spend
Note: ‘Other’ programming only covers channel information/previews during overnight downtime, e.g. ‘ITV Nightscreen’ and ‘This Is BBC Two’, and late night   35
      gaming or teleshopping segments, e.g. ‘Super Casino’, ‘Jackpot247’ and ‘The Zone: QVC’
Regionality of PSB originations by reported location
Approximately 40% of first-run originations on the five main PSB channels, covering both in-house and external
productions, are made outside of London according to regional production definitions; this has generally been slowly
decreasing since 2014. Northern England, Southern England and Scotland are the main regional production hubs
Volume of first-run PSB network originations by reported location – 2014 - 2017
% of first-run hours                                                       Total hours
               12,828          13,356            13,819            13,133   Other (multi-region)
100%             1%                                2%                     Wales
                                 2%                                  2%                            These numbers may not match those
                 7%              6%                7%                8%   Scotland
 90%                                                                                               reported by the broadcasters in the Ofcom
                                                                          Northern Ireland
                                                   8%                                              PSB compliance report for multiple
                11%             10%                                 10%   Southern England         reasons:
 80%

                                                  20%                                              ‒ This graph does not cover BBC portfolio
 70%           21%              20%                                 18%      Northern England
                                                                                                     channels
 60%                                               2%                   2%   Midlands & East
               2%                1%                                                                ‒ ‘Other’ programming (e.g. ITV
                                                                                                     Nightscreen, made in Midlands & East)
 50%                                                                                                 has been excluded

 40%                                                                                               ‒ Methodological differences and
                                                                                                     broadcast data constraints. For example,
 30%           57%              58%               60%               59%      London                  it is not possible for us to identify and
                                                                                                     match components of a show (e.g. One
 20%                                                                                                 Show inserts) to different regions.

 10%

  0%
              2014              2015              2016              2017
Note: Excludes News and Other programming, and BBC portfolio channels                                                                            36
Source: Attentional, BARB, Ofcom, Oliver & Ohlbaum analysis
Regionality of PSB originations by reported location – Broadcasters
Around 50% of BBC and Channel 4 original hours are produced outside of London, in contrast ITV and Channel 5 only
reach about 30% and 10% respectively with very little coming from the nations; these numbers have been consistent
since 2014. Our distributions may not match Ofcom’s compliance reporting due to methodological differences
Volume of first-run PSB network originations by reported location and broadcaster – 2014 - 2017
% of first-run hours

                     BBC (BBC1 & BBC2)                                 ITV                            Channel 4                            Channel 5
                 2014      2015     2016     2017      2014     2015      2016     2017     2014      2015     2016     2017      2014     2015     2016   2017

London            46%      50%       51%      50%      71%       68%         72%   73%       47%      48%      47%       46%      90%      90%       91%   87%
Midlands &
East              2%        2%       1%        2%       0%       0%          0%     0%       2%        1%       7%       3%        3%       3%       1%    2%
Northern
England           27%      21%       19%      20%      17%       22%         23%   21%       24%      27%      26%       18%       1%       2%       3%    4%
Southern
England           7%        9%       8%        9%      12%       10%         5%     6%       19%      14%      12%       20%       6%       5%       4%    6%
Northern
Ireland           2%        1%       1%        1%       0%       0%          0%     0%       0%        0%       0%       0%        0%       1%       0%    0%

Scotland          13%      11%       14%      14%       0%       0%          0%     0%       6%        6%       5%       8%        1%       0%       0%    1%

Wales             3%        4%       4%        4%       0%       0%          0%     0%       1%        2%       2%       2%        0%       0%       1%    1%

Other             1%        1%       1%        1%       0%       0%          0%     0%       0%        1%       0%       1%        0%       0%       0%    0%

Note:   Excludes News and Other programming, and BBC portfolio channels. Due to these exclusions and other methodological differences (explained on
        the previous slide), these percentages may not match the distribution of hours of qualifying productions reported in the Ofcom Compliance Report         37
Source: Attentional, BARB, Ofcom, Oliver & Ohlbaum analysis
Volume of MoL originations by broadcaster and type of producer
Total first-run MoL hours across the five main channels dropped slightly in 2017. Both the BBC’s and ITV’s MoL output
is dominated by in-house production, especially ITV whose in-house MoL output is boosted by soaps (e.g. Coronation
Street, Emmerdale) and key daytime strands (e.g. The Jeremy Kyle Show, Judge Rinder)
Volume of first-run PSB MoL originations by type of producer – 2014 - 2017
Number of first-run hours
3,500                                                                                                                  6,000
                                                                                                                               5,497 5,583 5,538
        3,137                                                                                                                                      5,341
                3,058
                        2,985
3,000   181     130             2,914
                        224                                                                                            5,000   1,124 1,258 1,207
                                150                                                                                                                1,127   ITV Studios
2,500
                                                                                                                       4,000

2,000                                                                                                                                      1,899 1,703     BBC in-house
        2,263
                2,011           1,703                                                                                          2,263 2,011
                        1,899                                                                                          3,000
                                                                              1,487
1,500                                                             1,309 1,363       1,334
                                                                               197
                                              1,020                184 241           217                               2,000
1,000                                   920           916   885

                                                                                                                                           2,432 2,511     External
                                              886                              1,290                                   1,000   2,110 2,315
 500            917
                                1,060 753             776   742 1,125 1,122            1,117
                        862
        693                                                                                          142   150   208
                                                                                               131
                                        167   134     140   143                                125   142   140   190
    0                                                                                                                     0
         '14     '15     '16     '17    '14    '15    '16   '17    '14   '15    '16     '17    '14   '15   '16   '17            '14   '15   '16     '17
                   BBC                           ITV                     Channel 4                   Channel 5                         Total

Note: Excludes News and Other programming, and BBC portfolio channels                                                                                                 38
Source: Attentional, BARB, Ofcom, Oliver & Ohlbaum analysis
Regionality of PSB originations by reported location – In-house & External
Roughly 50% of BBC original hours are made outside London across both in-house and external producers, whereas
ITV’s external originations are more likely to be made in London compared to their internal output
Volume of first-run PSB network originations by reported location and in-house/external – 2017
% of first-run hours
             BBC (BBC1 & BBC2)                                           ITV
100%
              3,600             2,222                          2,394             851      Total hours        • A very similar level of BBC
                                         Other                  2%
               5%                2%      Wales                                                                 originations are made outside
               3%                                                               16%       Southern England
 90%                                                                                                           London across in-house and
               7%
                                                                28%              1%       Northern England     external producers; whereas for
 80%                            31%      Scotland
                                                                                                               ITV the share is higher in-house
 70%           28%
                                         Northern Ireland                                                    • Regional breakdown is very
 60%                            12%                                                                            different, this is partly driven by
                                                                                                               long running strands:
 50%                             6%
                                         Midlands & East                                                       ‒ Scotland is prevalent among
 40%                                                                            83%       London
                                                                                                                 external BBC shows due to
                                                                69%                                              sports (Snooker) and daytime
 30%
               53%                                                                                               strands (Antiques Road Trip,
                                46%                                                                              Eggheads)
 20%
                                                                                                               ‒ Northern England within ITV
 10%
                                                                                                                 in-house is primarily boosted
  0%                                                                                                             by soaps (Coronation Street,
            In-house          External                        In-house         External                          Emmerdale)
Note: Excludes News and Other programming                                                                                                        39
Source: Attentional, BARB, Ofcom, Oliver & Ohlbaum analysis
Volume of MoL programming by genre
A large amount of MoL PSB programming is sports content (especially in comparison to total PSB originations), a
sizeable proportion of this is live coverage of events not taking place in the production location reported by the
broadcasters. However, sports’ share has dropped recently in favour of general factual programming
Volume of first-run PSB MoL originations by genre – 2014 - 2017                                 All first-run PSB network originations
% of first-run hours
               5,497          5,583            5,538            5,341 Total hours                12,828    13,356    13,819    13,133
100%                                                                  Other genres

 90%                                                                                                                             17%
                                                                                                  22%       18%       20%
                                                                 27%    Sport
 80%                           35%              33%
              40%                                                                                            3%                  4%
                                                                                                   3%                  4%
 70%                                                                    Specialist Factual
                                                                 5%
                               4%               4%
 60%                                                                                              22%       28%                  30%
                                                                                                                      28%
               4%
                                                                 24%    General Factual
 50%                           19%              20%
              15%
 40%                                                                                              16%       14%       13%        14%
              11%              10%              10%              11%    Factual Entertainment
 30%
              14%              15%              15%              15%    Entertainment             18%       18%       17%        17%
 20%

               9%              10%              10%              10%    Soaps                      5%        5%        5%        5%
 10%                                                                                               4%        4%        4%        4%
               4%              4%               4%               4%     Drama                      7%        6%        6%        6%
  0%           3%              2%               2%               2%     Current Affairs
              2014            2015             2016             2017                              2014      2015      2016      2017
Note: Excludes News and Other programming, and BBC portfolio channels                                                                    40
Source: Attentional, BARB, Ofcom, Oliver & Ohlbaum analysis
Volume of MoL programming by genre – BBC & ITV
Sports programmes account for a very large proportion of BBC MoL hours, though this has been reducing over recent
years, while ITV has MoL content across a range of genres, mainly soaps, factual and entertainment (MoL content in
the latter two genres are mostly daytime strands)
Volume of first-run PSB MoL originations by genre – 2014 - 2017
% of first-run hours
                       BBC (BBC1 & BBC2)                                               ITV1
            3,137        3,058         2,985         2,914              920    1,020          916    885    Total hours
100%                                                                                                        Sport
             3%           4%            3%            4% Other genres                         3%     3%
                                                                                              2%            Specialist Factual
 90%                                                                           20%
                                                                        25%
 80%                                                                                          27%    34%    General Factual
                                                     39%
                          45%           45%
 70%        51%
                                                                               23%
 60%                                                                    26%                   14%    8%     Factual Entertainment
                                                      6%
 50%                                    5%                                      9%
                           5%
                                                                                              17%    18%    Entertainment
             5%                                      18%                15%
 40%                      14%           14%                                    16%
            10%
 30%                                                                    2%
             9%           11%           11%          12%
 20%                                                                                          28%    29%    Soaps
             9%                         10%                             27%    25%
                           8%                        10%
 10%         3%            3%           3%            3%
             6%            5%           5%            5%                                       6%    5%     Drama
             4%            3%           3%            3%                 2%     4%                          Current Affairs
  0%                                                                     2%     1%             2%    2%
            2014          2015         2016          2017               2014   2015           2016   2017
Note: Excludes News and Other programming                                                                                           41
Source: Attentional, BARB, Ofcom, Oliver & Ohlbaum analysis
Volume of MoL programming by genre – Channel 4 & Channel 5
Daytime factual and entertainment programmes (e.g. Countdown, A Place in the Sun) represent a significant
proportion of Channel 4 MoL output, though Hollyoaks and peak time factual strands (e.g. Location, Location,
Location) also contribute a notable amount. Almost all Channel 5 MoL originations are factual programmes
Volume of first-run PSB MoL originations by genre – 2014 - 2017
% of first-run hours
                             Channel 4                                                Channel 5
            1,309        1,363         1,487         1,334                   131    142      150    208    Total hours
100%                                                          Other genres
                                                                             5%     6%
                                                                                             12%
 90%                                                 19%                     13%    11%             19%    Sport
            26%           25%                                                                 4%
                                        30%
 80%                                                                         2%
                                                      3%
             2%            1%
 70%                                    2%                                                          28%    Specialist Factual
            14%           21%                        29%                     33%
 60%
                                        23%                                         52%
             8%                                                                              60%
 50%                       5%
                                                      9%
 40%                                    6%                                                          28%    General Factual
                          30%
 30%        39%
                                        24%          25%
                                                                             46%
 20%                                                                                26%
                                                                                             21%    23%    Factual Entertainment
 10%                      15%
             9%                         13%          12% Soaps
                                                                                    4%
  0%         1%            2%                         1% Drama                                4%    3%     Entertainment
            2014          2015         2016          2017                    2014   2015     2016   2017
Note: Excludes News and Other programming                                                                                          42
Source: Attentional, BARB, Ofcom, Oliver & Ohlbaum analysis
Volume of MoL programming by genre – In-house & external producers
Decreasing levels of sports MoL content has driven the fall in the total volume of MoL programming being made by in-
house producers, the absolute volumes of other genres from in-house producers have either been steady (e.g. drama,
soaps) or have grown slightly (e.g. entertainment, factual)
Volume of first-run PSB MoL originations by type of producer and genre – 2014 - 2017
% of first-run hours
                         In-house                                                 External
          3,387        3,268    3,106      2,830                        2,110   2,315   2,432   2,511   Total hours
100%       2%           2%       2%         3%                           2%      2%      3%      2%     Other genres

 90%
                                                                        24%                     23%     Sport
                                                                                27%
 80%                             35%       31%                                          30%
                       40%
           50%                                                           3%                      4%     Specialist Factual
 70%                                                                             2%
                                            6%                                           3%
 60%                             5%                                     18%
                        4%                                                      23%             30%     General Factual
                                           18%                                          22%
 50%                             18%
            4%         16%                                              20%
 40%                                        7%                                  14%
           13%                   8%
                        7%                                                              14%     16%     Factual Entertainment
 30%        5%
                                 17%       18%
                       15%                                              19%     15%
 20%       12%                                                                          12%
                                                                                                12%     Entertainment
                       11%       11%       12%                           6%      9%      8%
 10%       10%                                                                                   7%     Soaps
                                            3%                           5%      5%      5%      4%     Drama
            3%          3%       3%                                      3%
  0%        2%          2%       2%         2%                                   3%      3%      2%     Current Affairs
           2014        2015     2016       2017                         2014    2015    2016    2017
Note: Excludes News and Other programming, and BBC portfolio channels                                                           43
Source: Attentional, BARB, Ofcom, Oliver & Ohlbaum analysis
Volume of MoL programming by genre – New & returning programmes
Sports programmes make up a large part of returning MoL strands. General factual programming accounts for a large
part of new MoL strands; however, the genre has a similarly large share of hours among all original hours

Volume of first-run PSB MoL originations by new/returning and genre – 2014 - 2017
% of first-run hours
                        New series                                              Returning series
           608         697       862        951                         4,889    4,886    4,676    4,390   Total hours
100%                                                                     2%       2%       2%       2%     Other genres
           5%                    4%         4%
                       8%
                                 8%        11%
 90%       10%
                       9%
                                 11%                                                               31%     Sport
 80%       12%                             10%                                   38%      38%
                       14%                                              44%
 70%
                                                                                                    4%     Specialist Factual
 60%       25%                   39%                                              2%       3%
                                           41%                           2%                        20%     General Factual
 50%                                                                             15%      16%
                       42%                                              13%
 40%
                                                                                 11%      10%      12%     Factual Entertainment
           24%                                                           9%
 30%                             15%        7%
                       4%                                                        16%      15%      14%     Entertainment
                                                                        15%
 20%        8%         8%
                                 16%       19%
 10%        8%                                                          10%      12%      12%      12%     Soaps
                       14%
            7%                   7%         6%                           3%       3%       3%       3%     Drama
  0%                             1%         1%                           2%       3%       3%       3%     Current Affairs
           2014        2015     2016       2017                         2014     2015     2016     2017
Note: Excludes News and Other programming, and BBC portfolio channels                                                              44
Source: Attentional, BARB, Ofcom, Oliver & Ohlbaum analysis
Regionality of PSB originations by reported location – Genre comparison
A significant portion of both soaps and sport are made in Northern England, the latter largely due to BBC Sport’s
move to Salford. Other genres have a much higher share of hours not made outside of London

Volume of first-run PSB network originations by reported location and genre – 2017
% of first-run hours
           57          155         135      791         487        2,259        1,867        3,953         64        609       517        2,220 Total hours
100%                                        2%                                                                                                    Wales
           4%           7%         6%       5%          8% Other                  5%                                           4%
                                   3%                               12%                       5%                               2% N.I. 14%        Scotland
90%                                2%                                             6%
                                            6%          11%          3%           2%
                                   8%                                                         13%        29%
80%       30%                                           3%
                                                        2%                       13%                                                      10%     Southern England
                                                        3%          20%           3%          9%
70%                                                                               3%                                           42%
                                                        13%
           2%                                                                                                        70%
60%        2%
                                                                                                                                          39%     Northern England
50%
                       93%
40%                                80%      85%                                                          57%
                                                                                 68%          68%                                          1%     Midlands & East
30%       61%                                           61%         65%

                                                                                                                     14%       46%
20%
                                                                                                                                          35%     London
10%                                                                                                                  16%
                                                                                                         12%
 0%
          Arts &     Children's   Comedy   Current   Drama (exc.     Enter-   Factual Ent.   General   Religious &   Soaps   Specialist   Sport
         Classical                         Affairs     Soaps)      tainment                  Factual     Ethics               Factual
          Music

Note: Excludes News and Other programming, and BBC portfolio channels                                                                                         45
Source: Attentional, BARB, Ofcom, Oliver & Ohlbaum analysis
Regionality of PSB originations by reported location – Genre comparison
The regional breakdown within each genre has been broadly consistent over recent years. One notable exception is
comedy which has seen a substantial rise in the share of hours being made outside of London though given the low
volume of comedy, this only represents a few additional MoL series per year
Volume of first-run PSB network originations by reported location and genre – 2014 - 2017
% of first-run hours
                                                                                                                      Other
100%                        2% 6%                                   3%                           3% 2% 5%                               Wales
              4%            4%                       7% 5% 4% 4% 6% 5% 3%                        5% 5%     8%  6%  8%           1%
                                                                                                                       10% 9% 10% 12% Scotland
                                                        3% 9% 5% 3%    6%
90%                                                              2% 3% 3%                        3%    12%     10%                       N.I.
                                                              8% 8% 4% 2%                        3% 6%     12%     11%      8%      3% Southern England
       33%           34%                                                                                       3% 3% 13%        11%
80%                        30%                                                                         6%
              32%                                                                                          3% 3%
                                                                                                       4% 3% 3% 3%          16%     20% Northern England
70%                                                                                                    4%              10%
        2%                                                                                                     13% 13%          17%
        4%          2%                                                                                 12% 17%                          Midlands & East
60%           3% 9% 2%
              4% 1%
50%                                       99%
                                  94% 98%     93% 92%
                                                                 87%                       85%
40%                                                                    80% 80% 83% 84% 84%
                                                                                                                                         66% 67%             65% London
30%    61%            61%                                                                                                    61% 61%                   59%
              55% 57%                                                                                            56% 56%
20%

10%

 0%
        '14    '15   '16    '17   '14   '15   '16    '17   '14   '15   '16   '17   '14     '15    '16      '17   '14   '15   '16   '17   '14     '15   '16     '17
         Arts & Classical Music         Children's                Comedy                 Current Affairs          Drama (exc. Soaps)           Entertainment

Note: Excludes News and Other programming, and BBC portfolio channels                                                                                                     46
Source: Attentional, BARB, Ofcom, Oliver & Ohlbaum analysis
Regionality of PSB originations by reported location – Genre comparison
Again, most genres have been relatively consistent. Sports programming has experienced a sharp decline in the
proportion of MoL activity in recent years while the composition of religious & ethics programming has fluctuated
wildly due to the small volume being produced in this genre
Volume of first-run PSB network originations by reported location and genre – 2014 - 2017
% of first-run hours
                                                                                                                           N.I.  Other
100%                                                                                                              3% 3% 2% 1%                 Wales
       6% 4% 5% 5% 5% 3% 4% 5%                                                                                    6% 3% 3% 4%
                                                                                                                        2% 2% 9%
90%        6% 5% 6%                                                                                               2% 3%           11% 13% 14% Scotland
                       11% 13% 11%         23%
                                   13% 32%     29% 29%
       15%                                                                             10% 9% 2%
80%        13% 12% 13%                                                                             10% Southern England
                       11% 8% 10%                                      28% 31% 33%
       2% 3% 5%                    9%
                   3%                                                              42%
70%            3% 3%                                   64%
                                       2%                  70% 71% 70%
                                       4%      18%                     2%                      43%
60%                                                                        2%  2%
                                           42%                         4%
                                                                                                   39% Northern England
50%                                                                                3%  56% 56%

40%                                                                                57%
       72% 70% 69% 68% 71% 72% 72% 68% 53%                                                                                                             5%
                                                                                                                                                             1% Midlands & East
30%
                                                                             53%          17%                     56% 56% 58%
                                                                                                15% 13% 14%                         46%
20%
                                                                       36%                                                                             35% 35% London
10%                                                                                       19%                                              22% 21%
                                                                                   12%          15% 16% 16%
                                                                 8%
 0%
        '14    '15   '16     '17   '14     '15    '16      '17   '14   '15   '16    '17   '14   '15   '16   '17   '14   '15   '16    '17   '14   '15   '16   '17
              Factual Ent.               General Factual           Religious & Ethics            Soaps              Specialist Factual             Sport

Note: Excludes News and Other programming, and BBC portfolio channels                                                                                                      47
Source: Attentional, BARB, Ofcom, Oliver & Ohlbaum analysis
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