But is it that easy? Mark Hiley is a television industry expert. Former CEO of Rapido, an experienced analyst and advisor to countless TV production companies, he’s been there, done that and learnt the reality of turning your creative passion into a money-making business. As a result he has now, along with a team of TV consultants, set up HileyTV, providing high-level television industry advice from senior experts. They also cater to newcomers to the television industry with one-to-one coaching and networking events.
So who better to quiz on this subject:
What are the key considerations for someone contemplating setting up on their own?
There are many reasons to consider setting up your own production company, but the primary motivation is, of course, financial. Setting up your own production company gives you the opportunity to multiply your income by taking part in the long-term commercial exploitation of the programmes. But the ultimate goal of every production company owner is to build the annual EBITDA (profits) in the hope that one day it will form the basis of a valuation, allowing you to generate a multiple of those profits as your retirement fund!
What aspect of the business do new small independents struggle with most?
Most indies are set up by successful, creatively-minded production people, but when their companies start doing well they suddenly find themselves playing a boardroom role, typically with very limited corporate experience or training. As such, a very high percentage of indies are making great programmes, but are operating very poorly, from a commercial viewpoint. Despite the commonly held view that the television industry is some sort of ‘walled garden’ and that business methodology from other industries can’t possibly apply, the harsh reality is that an indie is just a manufacturer of ‘products’ (programmes) for paying clients (broadcasters). Despite the apparent glamour and mystique of building a programme library, the company will eventually be valued using the very same methodology applied to companies in every other industry: a simple multiple of EBITDA. As such, making the move from producer to successful indie-boss requires a complete change of thinking.
An example of that is programme-strategy; it’s unlikely that the programmes you like to make, or those created from unfocused “spray and pray” development meetings, are going to be the ones which reflect the best revenue curve for the company. Instead, you might be thinking about which programme types give you the best profit curve, how can you strengthen your relationship with key commissioners, which onscreen/production talent might give you access to the bigger commissioning budgets, how might you secure a big returning series, and what the international sale potential and ancillary rights might be worth over a given period. The list of issues facing indie-bosses are a great many times those of a typical jobbing production exec, but so are the potential opportunities to multiply their financial success.
Does a successful TV executive necessarily make a successful independent producer?
The answer depends on your definition of success. If the purpose of your indie is just to make good programmes, not good profits, then perhaps! As the vast majority of production people are creatively-minded, the solution to launching and building a successful indie is typically to develop your business skills through training, or to get outside help from professional TV-industry advisors.
Of course, if you’re exceptionally lucky, your producing skills might land you a big returning series on day one, which was fully funded from the commission, you retained 100% of the rights which, because the series had huge international potential, was sold to 100 territories by a major distributor and at the end of the first year you’re so cash rich that you decide to retire to the Caribbean. But back on planet earth, things rarely happen that way and even the very best producers will end up struggling with common cash-flow issues without a high degree of business acumen, or professional help.
Which is more important – the ideas or the business acumen?
Sadly perhaps, ideas are increasingly worth little in the television business. Partly thanks to the advance of technology, broadcasters have more and more audience data, allowing them to create ever more detailed briefs about exactly what they want for each slot, as part of their own strategy. The public briefs which broadcasters give about what they want are useless. The indies accessing the bigger commissioning budgets are those who have built solid business relationships with commissioners; understanding their needs and ambitions and shaping proposals in a collaborate way to ‘tick all the boxes’.
The old ‘spray and pray’ programme-development process – locking yourself in a room with a blank sheet of paper and some coffee – creates a low success-rate against the number of pitches which, for an indie, is a dangerous ‘hit and miss’ way to operate. I would argue that it’s an increasingly complex business and there’s a great deal of business acumen required in understanding what broadcasters (your ‘buyers’) want and how to deliver a creative solution that fulfils their needs…as well as those of the typically-ambitious commissioner! Couple this need to interpret your ‘buyer’, with the complexities of navigating the financial profiles of differing programme types to maximise your future profits, the need to be entrepreneurial about onscreen/production talent hires, the need to deliver on time and budget whilst making a profit, to successfully handle distributor negotiations, run the office, and much, much more, I’d have to conclude that business acumen is more important than ideas.
How does consultancy help a struggling independent?
The vast majority of indies are operating at a depressed performance because of a long list of common failings (some of those are listed on the Indies section of our website (www.hileytv.com). For established indies, we help increase profitability across all areas, building shareholder value and eventually securing a lucrative exit for the shareholders. For individuals working in the TV industry, our mentoring options help them develop and realise their ambitions, using the support of senior TV figures, who have been there before. The team at Hiley ranges from people who have built and sold their own indies, to senior commissioners and even former CEOs of major broadcasters; powerful allies to help people get where their going much faster.
What else does HileyTV do?
As well as helping TV professionals with mentoring, and independent TV production companies and broadcasters with profit growth, we also help newcomers to the industry. We’ve devised a low-cost series of options to get newcomers in front of senior TV people, potentially saving them years of frustrating ‘door knocking’ and rejection. The reality is that senior figures manage their time carefully, so we’ve created a series of packages which get newcomers the help they need for small fees, which justify the time of our professionals. Newcomers can see a range of options on the Mentoring section of our website.