How much do networks pay for local drama?

The average cost of making an hour of Australian drama is $760,000, up 7% on 2018
according to the Screen Australia Drama Report*

The minimum license fee a network must contribute is $440,000 per hour.
Increasingly for producers, it is also the maximum a network will pay, meaning other
investments such as overseas sales, or co-productions, are required to meet budgets.
Recently at the Screen Forever conference a number of TV and Drama execs were
asked when will they contribute more?

Here’s what they said….

Brian Walsh, Foxtel Executive Director of Television:

Quite honestly we’ve never walked away from a project that we wanted to do because
of the money. We’ve always found the money if it’s the right idea. I acknowledge
that’s the minimum spend, and for a lot of colleagues in the industry, that’s the kind
of ceiling spend. But for us if the idea is right, if it’s going to sell subscriptions, if it’s
going to retain an audience we’ll find the money. It’s never been a barrier to Foxtel.
We like to pride ourselves on creating and commissioning shows that are different,
that are better, that are special, that will grow our Pay TV universe.
There are various ways to achieve that. You either dig deeper into your budgets or get
partners on board who also believe in the idea, that will carry your story, in some
places, to a global audience.
We picked up A Place to Call Home, which had two seasons on the Seven Network
and we recognise that show would be great for our audiences because a lot of our customers have been with us for quite a long time, and are in the older segments.
They’re not necessarily well served by commercial Free to Air.
That cost us well over a million dollars an episode and we believed in the show, we
believed it would resonate with our customers and we didn’t walk away from
spending that kind of money.

Nick Forward, Stan Chief Content Officer:

I think if you’re just talking about the Australian territory you’re limiting the
conversation. The opportunity’s got to be (in) the rest of the world, bringing on
partners who buy into the idea as much as you do and pursue a similar vision.
Every decision you make in commissioning is a balance between creative,
commercial, timing and what else you have coming up. So there’s a whole world of
things that go into that.

Sally Riley, ABC Head of Drama:

$440,000 per episode is kind of the starting point. That’s what we would expect
someone to bring in a finance plan to us, and generally there’s a gap. We have put
equity in, in the past. But we have a Charter to support Australian stories and want to
make stories that will resonate around the world. So we are looking for the best
ideas, the best creative teams. Riot was a show we thought was culturally significant
and we needed to subsidise the show to get it over the line, because we thought it was
very important to do.
So it’s a case by case basis. If it’s a story that we are absolutely committed to, an
amazing show, we’ll think about it. But ultimately, we’re trying to stretch our dollars
further so we can make more content.

Marshall Heald, SBS Director of TV & Online:

We’re making shows where the total cost per episode historically, is probably around
$1.5 million. We probably put in about a third into each show and cap it out at a total
investment of about $3 million, whether it’s 4, 6 or 8 episodes. Australian Drama is
very well regarded internationally. There’s very strong interest from distributors
from international networks trying to do co-productions. If you’ve got the right kind
of idea, and you have an entrepreneurial approach to it, you can break the traditional
glass ceiling.
*The Australian screen industry provided 44% of the finance to this year’s Australian
TV and online drama titles – $219 million to 73 titles. 44% is the lowest proportion of
total finance since 2000/01, while also being the second highest year in terms of
titles produced (73). The increase in titles is largely driven by the inclusion, since
2016/17, of online drama. The largest proportion of finance (and the largest from any
sector) came from the commercial free-to-air networks. The largest contribution
from a single broadcaster came from the ABC, which, as a first release broadcaster
provided finance to 28 titles, including seven ABC iview originals. Subscription
television financed three titles for first release broadcast. SBS/NITV financed four
titles – one for SBS on Demand. Stan financed four titles. Distributors and
production companies provided the rest of the industry finance.

November 26th, 2019 By David Knox, TVTonight

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