Студопедия — Re-commissioned drama series
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Re-commissioned drama series






A new contract which comprises filming the second series of the drama programme has been offered to VYP by the BBC. The first series of this drama was well received by the viewing public, so the second one is considered worth making. What’s more, it should coincide with the rowing championship of the year 2012, starting from the 1st of April 2012 and lasting for 8 weeks from then. Planning and shooting will take 4 months.

 

VYP has been offered revenue of £5m (with 10 % off already). Janet Black has indicated that maximum margin to be made here is 5 % (which is £250,000) whereas the normal margin on drama series is 10 %. The problem is either to have BBC pay more money to VYP or consider the savings likely to be made in this project. First can be attained by giving reasonable arguments that making second series is much more expensive rather than cheaper (or, at least, costs the same) for various reasons. Second is a different issue concerning how much each program may cost and how often the series should be shown.

 

There is another matter which concerns obtaining a required actor, John Strong, and considering the means of releasing him from a pre-existing contract with GGG. His participating in the second series of the drama will make a vital contribution to its future success. Therefore, it’s critical that VYP manage to get Mr. Strong to take part in the programme. Moreover, Les Fisher believes that when it comes to personal service contracts everything is possible.

 

John Strong is contracted for the next 10 months meaning that he will have fulfilled his contract by the 1st of February 2012. This implies that, to say the least, VYP will be able to involve him in shooting the programme for the last two months before it is shown. Besides, VYP could use some other arguments to tackle either BBC or GGG with in order either to release J. Strong from his contact for at least 4 months from now for him to participate in VYP’s programme first and then get on with the contract with GGG or to try fulfilling both projects simultaneously.

4.4 “Banks – friends or foe?”

 

VYP has been commissioned to make a new documentary called “Banks – friend or foe?”, which attempts to explain why financial crisis of 2008 happened. Initially the documentary was budgeted to give a profit of 32000£. However the investigation phase of the programme took longer than anticipated and involved repeated interviews, as the programme director Sarah Runner required further clarification on a large number of inconsistencies in the evidence gathered. As a result, more money has been spent and the forecast margin has been lost. If further interviews are taken and initially estimated costs remain untouched VYP will end up with a loss in the region of 30000£, which is unacceptable, as the aim of VYP is to make successful programmes for profit. When VYP has agreed a contract with a broadcast company for a commissioned programme, or series of programmes, then the actual costs incurred in the making of the programme are the responsibility of VYP. The control of programme-making costs, to ensure that the costs do not exceed the contracted commissioned revenue to VYP, lies entirely with VYP. The commissioned revenue is considered by the broadcast company to be adequate to provide a profit to VYP of around 10% on commissioned revenue. The documentary was to provide a profit around 11% on commissioned revenue, but it risks ending up with a loss of 10,3% on commissioned revenue.

The company intends at least to reach a break-even position. The solution of renegotiation of the fee was ruled out by the managing director Steve Voddil. The programme producer, who was asked to find other solutions, has suggested cutting back expensive computer graphics interface and putting an end to the investigation phase, which means having no further interviews and producing the programme based on the evidence it has to date. However Sarah Runner is strongly against the both steps. She claims that extra expenditure is needed to guarantee the high quality of the documentary. She insists on holding extra interviews and on the full use of CGI.

The question to which we must find an answer is whether to accept the both steps.

The estimated loss is equal to 30,000£, while the programme should have given 32,000£ of profit, which means that 62,000£ is to be spent in total on repeated interviews. As shown in Appendix 1 the share of forecast loss in operating profit from all documentaries in the financial year 2011 counts to 4,45%, in total operating profit – 0,1%. This Appendix also shows that only the costs have changed, the revenue have remained untouched, as the fee cannot be renegotiated. The share of the revenue of the documentary “Banks – friend or foe?” in total documentary revenues amounts to 4,33%, and in total revenues for all genres – 1,06%.

To deal with the matter in question we should pay attention to the role of documentaries in the production of VYP on the whole. Documentaries are one of the pillars of the VYP, especially in the terms of its reputation. VYP has established a reputation for the production of documentaries which allow the general public to make their views known on topical issues.

Broadcast companies have identified that there has been a renewed interest from viewers for documentary programmes in Peak viewing time. The specific requirement from broadcast companies is for documentary programmes to be both informative and entertaining. VYP has gained some new commissions for documentary programmes as it is experienced in this area of TV programme making. The use of computer graphics within documentary programmes, in particular, has appealed to the commissioning TV broadcast companies as well as their viewers.

Over the last year VYP has seen a reduction in the commissioned revenue per hour for programmes of a comparable composition and genre compared to the previous year. For example, the average commissioned revenue per hour for a documentary programme in the year ended 30 September 2011 was £184,100 (as shown in Appendix 2), whereas in the previous year it was £215,000 per hour, a reduction of over 14%.

Moreover the case of the documentary “Banks – friend or foe?” emphasizes the following problems which VYP has to encounter:

1. The quality problem.

2. The cost reduction problem

This problem has its roots in the reduction in commissioned revenue which has made VYP cut costs. Operating profit margins fell to 9.4 % as a direct result of lower commissioning revenues. This has occurred across most programme genres. VYP is aware that it needs to work even harder to secure contracts for new commissioned programmes as well as to secure commissions for returning series of programmes. VYP also recognises the need to make its programmes to tighter programme budgets.

The reduction in commissioning revenues puts VYP under increasing pressure to make cost effective programmes. However, the programme directors argue that not all of the emphasis should be based on cost effectiveness, as VYP needs to maintain its reputation for delivering high quality programmes. Programme directors and production staff are frustrated that the level of cost reduction has led to economies and efficiency savings which have affected the quality of the finished programme.

However, some of the TV broadcast companies have countered this argument, stating that the viewing public will not necessarily notice the difference in programme quality.

From the analysis of the background situation we see that a) documentaries contributes a lot to the reputation and the profitability of VYP, b) the use of CGI can increase significantly the interest of the audience in a documentary, and therefore add to its success, c) the reduction of commissioned revenues urges VYP to cut costs even with damage to the quality, which is believed not to be noticed by viewing public.

To solve the problem we need to take into account all the facts listed above. On the one hand VYP can’t afford making a programme with a loss. This is utterly against its objectives amidst which is making successful programmes profitably. It has always been necessary to pay close attention to cost control and it’s an especially crucial factor now that commissioning revenues have been reduced.

On the other hand there is a question of quality, reputation and competitive edge. Documentaries are one of the VYP’s strong points. VYP is known and praised for making high quality documentaries. We should also consider that the documentary in question is potentially worthy of award. VYP should not miss out on it. For these reasons this particular documentary can affect a lot the reputation of VYP. That’s why VYP is not advised to cut expenses by stopping further interviewing. If such a step is taken the programme can fail to reach its aim – to inform the audience why the financial crisis took place.

Furthermore VYP should take into account the changing requests of the market. Firstly, the market shows interest in high quality documentaries. As we mentioned before there is an increased demand for documentaries to be shown in Peak times. The increase of demand for documentaries also affected the quantity of documentaries commissioned to VYP. As shown in the Appendix 2 there has been an increase by 12,5% in the number of completed documentaries in the year 2011 compared to 2010. Secondly, there is an increased demand for the CGI to be used in documentaries. TV broadcasters and viewers want documentaries not only to be informative but also entertaining. This implies that the use of the CGI in “Banks – friend or foe?” is highly advisable for it will make the documentary meet the needs of viewers more accurately. Moreover CGI techniques are essential for this particular documentary, as they contribute to clarity. Without CGI it will be hard to display to non-financial viewers the reasons why the financial crisis happened. If viewers don’t understand it then the documentary is bound to be a failure.

All facts considered it is not advisable to cut back interviews and CGI. However having a loss is not acceptable either. This means that another way to reach at least a break-even position should be found. The key to the solution lies within revenues. The only way is to increase this figure. As VYP cannot renegotiate the fee other options should be found. This is especially essential as there is a tendency of reduction of commissioning fees. Though making cost effective programmes by strengthening cost control is a good solution, the possibility of increasing revenues by new means should be also considered closely.

 

 







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