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.

7 Comments:

  1. The problem is that production crews have got to a ridiculous and unnecessary size. Everybody has to have first, second and third assistant..Walk past a location shoot and look at the number of people standing around doing nothing.

    • TV works like the army… you hurry up and wait.
      So many people’s jobs on location involve setting something up, and then waiting until it needs to be tweaked, or moved on to the next setup. That could be lighting, makeup, extras… anything…
      Typically those people “standing around doing nothing” cost hugely less to employ that the ‘talent’ and the ones who look like they’re always doing something. The machinery of TV works to ensure that the ones who cost the most spend as much of their time as possible “doing” and as little time as possible waiting around for things to be ready for them.

      I’ve been a production manager in a bunch of different genres of TV. If I’m on location and things are going well, anyone walking past would think I’m doing “nothing”. Because they haven’t seen the previous weeks and months of 12hr days that result in the day on location. Once…

  2. Can I perhaps ask a stupid, but maybe obvious question? Why does it cost so much? As in how does the $440k per hour come about? I get it takes a week of full days filming to to get an episode done but I still see a huge bridge to get to such a high cost

    • Think about all the wages for a start. Cast and crew, plus writers, producers, directors, location scouts, makeup, etc. Then the cost of constructing sets, filming permits, technical equipment (cameras, lighting, effects), wardrobe/costuming, music licensing, catering, transportation between sets and accommodation. I can see all that soaring well past half a million for your average show.

    • Have a watch of the first 5 mins of this episode of Charlie Brooker’s Screenwipe.
      youtu.be/MszYiKczYls?t=50
      It’s a bit dated now, so adjust for inflation – but you’ll get the idea.

      For drama, keep in mind that $440k per hour is the licence fee… not the total cost. The total cost for a half decent drama is highly likely to be $1m per hour as a minimum.

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