CAPITULO 4. GESTION DE LA CALIDAD BAJO EL ENFOQUE
4.1.8 PLAN DE GESTION DE CALIDAD
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“That means if we make a show for the BBC, like Antiques Road Trip, we have 85% basically of the rights of that show, 85% of the IP,” Alan said . “So if we sell it to another channel in the UK – Discovery, or Gold or Blighty, any one of the channels – we keep 85% of that revenue, after all costs . If we sell it either as a finished programme or as a format internationally we get 85% of the revenue from that . We also have a similar deal with ITV and we should have it with Channel 4 but because we are not a qualifying indie we negotiate on a deal- by-deal basis so it tends to be more like 50:50 . And like all companies when we do something for Sky it is done as a straight 50:50 deal .”
STV Productions’ status also impacts on the quota of commissions it can compete for from the BBC and Channel 4 . Thus there are disadvantages to not being a qualified indie, but there are advantages to being part of a large broadcasting company . In addition, STV Productions is able to keep all IP rights for such projects and can then exploit it in secondary markets with 100% of the profits feeding back into the company .
Developing and licensing IP
In addition to producing commissioned content for the UK and increasingly, for international distribution, STV Productions’ business model focuses on partnerships for developing existing IP, and licensing agreements with international rights holders . A relationship with US production company Kinetic Content enables both companies to license original formats from the other and to develop new formats, such as the Perez Hilton Super Fan series which played on ITV2 . These shows were based on the Perez Hilton blogs, Alan explained: “Basically he did a whole series of celebrity love-ins with Lady GaGa and Katy Perry, and that was in Aberdeen, one of the most bizarre Saturday nights in my life .”
Potentially lucrative, the licensing and developing of existing IP models involves less risk than new commissioned work, since the IP has been tried and tested in the market .
“People are more and more risk-averse, so if you can see something has been a huge success… .You know, we have just brought back Catchphrase – much loved, actually belongs to a guy called Marti Pasetta . He is 80 years old but sharp as a tack, lives in Palm Springs . He produced the Oscars for years, he produced the Grammies – a really interesting man . We took [his] idea of
Catchphrase – the basic idea is that an image comes up and you have to guess the Catchphrase . That is his idea, unquestionably . No one else was doing it, it is very original .
“The rights to it, to exploit it worldwide, were bought by a company called DRG, who are distributors . We took the UK rights, and we have a share in the UK exploitation, apps and so on, but we don’t have any share if the rejuvenation of Catchphrase takes off internationally . Well, it is good for us in that it creates a halo effect but we have no financial income from that .”
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Although STV Productions attempted to gain the show’s copyright for other territories, it was unsuccessful . However with solely UK rights, Alan is pleased with the low-risk/high-reward potential in the deal: “If it runs for 10 years and we make 800 episodes, wow . It gets us in the internationally focused entertainment field, so the next time somebody is looking for a partner maybe in the UK they will come to us .”This realistic approach to licensing and revenue is a hallmark of the company’s exploitation strategy . As Alan suggests, while it is, of course, ideal for
producers to own all the IP in their content, when it comes to negotiating shares in rights it is important to consider the revenue that even just a portion of the IP potentially will provide:
“You have got to be pragmatic about it . Sometimes to have something like
Catchphrase, an ITV peak-time entertainment show, you cannot go, I am only going to do that if I own [all] the rights to it . Well good luck with that . You are better having a percentage of something than 100% of nothing .”
STV Productions also has found success with partnering other companies to further develop formats which do not initially attract commissions .
“We did a show called First Dance, which is basically a format we have always loved . We could not get a UK-wide commission and we really believed in it . We worked with [Kinetic and] Group M, who are part of WPP, the massive advertising company, and we created a pilot of First Dance, an hour long pilot . We took a couple from Edinburgh and a couple from Aberdeen, totally unbeknown to one another, and Group M secretly backed us with absolutely world class choreographers – Lady GaGa’s choreographer and Katy Perry’s choreographer – to teach the couples the most amazing first dance ever at their weddings, which if judged as the best they would win £10,000 . So we are then using effectively our broadcast window as almost an advertising tool for that format but it means that we can go to the international marketplace and say, ‘It attracted 20% audience share, it won the 16-34 year-olds, here is the Twitter feed, here is the Facebook .’”
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Rights, returnability and reputation
When Alan is negotiating licenses and partnerships, impact on company reputation is a key consideration, along with the rights share and something called ‘returnability’, or the likelihood that a programme or series will create demand for further episodes . Indeed, the rule of thumb at STV is that a property will not be considered if at least two of these ‘Three Rs’ (rights, reputation and returnability) are not significant parts of the proposal . A healthy IP portfolio, Alan believes, contains properties with a mixture of the Rs, in order to balance the inherent risk experienced by all creative industries and achieve a sustainable business model .
“I do a little chart called the Three R’s and for us it is: rights, returnability and reputation . What I say about a show is that it has to have two of these three . Now you hit the jackpot if it is all three of those: With Antiques Road Trip, we own 85% of the rights, it is on Season 7 and Season 8 currently being filmed, so it is returnable, and it is brilliant for our reputation as it is now on BBC 1 as a well-known feature show .
“We do a show called Fake Reaction for ITV 2 . Originally it was a round in a Japanese game show – you know these Japanese game shows – a small part of it was created by a guy called Mr . Eto, who I met, with his two very glamorous Japanese assistants . Then Kinetic, our cousin company in America, bought the US and UK rights to it . They could not get it away in America, but we liked it and piloted it for the BBC . It did not go on the BBC though, it was picked up by ITV 2, and we made a series and, touch wood, it will come back” or ‘return’ for further series, Alan explained .
STV Productions owns only a part of the IP in Fake Reaction, but its potential for revenue is strong, he believes:
“So it is a Japanese format, bought by an American company, exploited by a British company and it is currently being sold by a German distributor called Red Arrow . We share the fees, and if the British version kicks off the American version then we get a share of the fees and internationally we have got a little bit there, because we have created an English language version for it which is great for the foreign market .
“Something like Fake Reaction – great for our reputation, very returnable if it works, but we don’t own the rights . Catchphrase – the same . Fire in the Night
– not at all returnable . We own the rights – it is the big drama documentary about [the North Sea oil platform disaster] Piper Alpha – but it is brilliant for our reputation .
“Now the only thing that is awful is if you have got a programme format, it is not really returnable, you don’t own the rights and it is going to be on a minor digital channel . You go, well actually, — … . For First Dance, from a format point we are still negotiating and it went out six months ago .”
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I think if you don’t enjoy competition this is not really the job for you. I like to compete and I like to win and that is what we intend to do… I think clearly we work to the Three R’s, we get an international focus and we try to hold on to as much IP as we can.”
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Thus a rule of thumb is perhaps not as easy to replicate in real life, or it takes longer than expected to apply . Nor does Alan’s formula fully eliminate all risks from the company’s IP portfolio, but he sees risk-taking, as well as passion, as imperative for any business .“You cannot say ‘I want to be a business person, a business man or a business woman’, and then not take risks . What was it – ‘Capitalism without bankruptcy, is like Christianity without hell’ – do you know what I mean? It does not work – unless there is that disincentive then there is no incentive .
“I think if you don’t enjoy competition this is not really the job for you, you know? I like to compete and I like to win and that is what we intend to do and as I say it’s the Three ‘R’s focus . … I think clearly we work to the Three R’s, we get an international focus and we try to hold on to as much IP as we can .”