Special report: Where do hit formats come from?

In the third of four special reports, international consultancy K7 Media considers how changing technology has shifted the balance of power in format origination.

It’s no secret that the last five years have seen some of the greatest disruption in the business of television since the advent of satellite and cable. New platforms proliferate, old broadcast models fight to remain relevant, and in the ensuing upheaval, assumptions about who makes the most popular television and who buys it have been thrown into doubt.

That’s why international consultancy K7 Media is tracking global entertainment trends via annual report Tracking the Giants, which digs deep into sales data and statistical analysis to illuminate the past, present and future of the format market. A large part of this endeavour involves detailed discussion with distributors, which brings us to the subject of our penultimate special report: format origination.

Which countries are the power players when it comes to creating formats, and how has that changed over time? Which countries are gaining confidence in global sales, and which countries are beginning to exercise more buying power?

Looking back over the last decade of data, we see that Germany and the Netherlands share the top spot when it comes to purchasing titles from our Top 100 Formats list. The UK, Belgium, US, Spain and France follow in terms of spending power. It’s also interesting to note the special relationships between countries when it comes to sales, which can often defy expectations.

For example, Germany’s prolific purchasing makes it the number one destination for shows from the UK, US and New Zealand, as well as the Netherlands. Meanwhile, Israel is more likely to buy formats from Spain, while the US is the source of most Japanese acquisitions but is followed by Indonesia in second place.

This is corroborated by our long-term study of sales trends. Up to the 1990s, international format sales were dominated by the US, which had 62% of the market. This was the peak of network and cable television’s reign, and the commercially-driven US broadcast ecosystem was well-positioned to take full advantage, particularly in the quiz show genre with evergreen hits such as Family Feud and The Price is Right (Fremantle) and CBS mainstay The Wheel of Fortune. Together with the UK (23% share) and Japan (15% share), this trio of territories accounted for virtually all sales of top TV formats.

During the 1990s, and the dramatic rise in reality television, the balance begins to shift. The UK takes the top spot during this period – and has held on to it ever since – while smaller territories, such as the Netherlands, began to punch above their weight, scoring global success with shows such as Big Brother (ESG), and Long Lost Family (Lineup Industries).

The US is nudged into third place by the Netherlands but pulls back in the 2000s, regaining the second spot on the sales chart. That blip was not to last, however, and as media has fragmented at a staggering pace in the 2010s the US has slipped further down the list, supplanted by a newly emboldened Israeli production sector and a resurgent Japan.

Indeed, it is Israel that has arguably performed the best in the last 10 years, coming from nowhere to be the world’s second most prolific producer of TV formats. Even so, the market share tells a more nuanced story. The UK may still dominate, but with just 30% of the market now. Israel, the Netherlands and the US all account for between 13% and 16%, shares which would scarcely have charted 20 years ago. Japan, the fifth most popular source of television formats, has just 5% of the market.

This, then, is the new reality of format sales and it is no coincidence that it echoes a similar shift in audience share. Rather than several large suppliers, we now have a much broader and more evenly spread landscape of smaller provisioners, and while the occasional breakout, such as The Wall (ESG), may skew the data in the short term, these outliers don’t change the ongoing trend towards a more diverse array of format-creating countries. While this may be a shock to the system of territories that are used to comfortable domination, it suggests an exciting if volatile future where compelling ideas can make an impact regardless of their origin.

David Ciaramella is K7 Media’s communications manager