The 'Big Brother Eye'. Image: Rebecca Harley/PA Archive/Press Association Images

Thirty years ago, the world of independent TV production in the UK was widely seen as a cottage industry, made up of hundreds of freelance producers, eager to make programmes and be their own bosses but not so keen on the business side. There was a belief that independent production was ‘not so much a business, more a way of life.’

Programme-makers in the 1970s who felt shackled by the duopoly of the BBC and ITV embraced the idea that ‘a thousand flowers should bloom’. They were galvanised by the prospect of the new Channel 4 and the Thatcher Government’s support for independent producers as a new force in broadcasting.

In a speech setting out his plans for Channel 4 – calculated to stir things up – Home Secretary Willie Whitelaw told broadcasters ‘there must be assured andadequate finance for the purchase and commissioning of programmes for the channel from independent producers.’ Speaking at the Royal Television Society’s 1979 Cambridge Convention, he insisted that independents should supply ‘the largest practicable proportion of programmes on the fourth channel’ and it ‘should not be dominated by the ITV network companies.’

Almost eighteen months later, when Channel 4’s founding chief executive Jeremy Isaacs held an open meeting for would-be programme-makers at the Royal Institution, ‘some 600 independents turned up, spilling out of the hall into the lobby outside the lecture theatre.’ Isaacs himself had not envisaged the independents playing such a major role in the new channel, even though he acknowledged they had had ‘a raw deal’ until then.

Questioned after his 1979 MacTaggart Memorial Lecture at the Edinburgh Television Festival, he suggested that their initial contribution would be modest, perhaps only 10 per cent of the programmes. The Independent Broadcasting Authority thought 15 per cent would be realistic, with the rest coming from the ITV companies and their production offshoots.

Yet when Channel 4 went on the air in November 1982, after its first commissioning round, it emerged that 61 per cent of the commissions had gone to independent producers. Isaacs wrote later:

‘Channel 4 entered into thousands of contracts each year with hundreds of suppliers to make hundreds of individual programmes... Producers have to make a living but, in the case of most of our suppliers, the purpose was not merely to make money; it was to say something that mattered, describe something that might move us or might give pause for thought or just make us laugh.’ 

By the time Isaacs stepped down at the end of 1987, independent producers had made another significant advance, successfully lobbying for the right to make programmes for the other channels. Isaacs wrote: ‘BBC and ITV are required to take 25 per cent of their output from the independents. There is now a guaranteed and expanding market for them. Channel 4 can justly claim to have shown the way to that.’ But, he also observed, ‘independent production is still at the cottage-industry stage. Few companies are viable and secure.’

A global powerhouse – but foreign-owned

Almost three decades later, the cottage industry has turned into a powerhouse of global TV production, with UK companies among the world’s leaders in programme exports and entertainment formats. But most of them are now foreign-owned, after a series of takeovers that bundled up the most successful independent producers into so-called ‘super indies’ and then saw them bought by some of the world’s media giants – NBC Universal, Warner Bros, Sony, Rupert Murdoch’s 21st Century Fox and Discovery.

How did it happen? Sir Peter Bazalgette played a significant part in the changes. His story – from one-man-band to media millionaire and cultural leader– exemplifies the growth and impact of the independent producers over the decades.

Appointed in 2016 to be chairman of ITV, he has had a long and distinguished career in broadcasting and the arts, having served as chairman of the Arts Council and English National Opera, president of the Royal Television Society and senior non-executive director of the Department of Culture Media & Sport. Bazalgette set up his first independent production company in 1987 as a young freelance producer for the BBC. Through creative drive and financial acumen, he helped turn the entertainment producer Endemol into a global giant, best known as the creator of Big Brother and now part of one of the world’s biggest production houses, Endemol Shine.

Bazalgette’s business grew from a canalside studio office in North Kensington, with three full-time employees (including him), ten freelances and a first-year profit of £70,000, to more than 5,000 employees in the Endemol group worldwide, generating turnover of £1 billion and profits of around £220 million when he left in 2007. He began his career as a BBC news trainee, later becoming one of Esther Rantzen’s bright young researchers on That’s Life. His breakthrough came as the producer of Food and Drink, where he devised a popular new format, centring on the ‘Crafty Cook’ Michael Barry and wine buffs Jilly Goolden and Oz Clarke.

‘I set up Bazal Productions in 1987,’ he told me. ‘By 1988 we all knew that the 25 per cent quota was coming to the BBC, ITV and Channel 4. It was a typically Thatcherite move to modernise broadcasting and introduce a competitive content market with more varied sources of programming. Until then the BBC and ITV had maintained a vertical production model, making and broadcasting the programmes, and it was very hard for anyone else to break in.’ 

Bazalgette was in the right place at the right time. ‘If the BBC was going to meet its quota, it needed to outsource some major series,’ he said. ‘I was a freelance producer and I had created a successful programme formula for the BBC. I was also making corporate videos and I had a turnover of a million pounds, so they gave me the commission for Food and Drink.’ Bazalgette was an admirer of the UK advertising business, which led the world in strategy and creativity in the 1980s. He thought broadcasters could learn a thing or two about audiences, research, creativity and how to pitch ideas.

Borrowing those techniques, he created a wave of popular lifestyle programmes for the BBC. Ready Steady Cook, Changing Rooms and Ground Force attracted audiences of over 10 million and had a huge impact on national life, encouraging people to take pleasure in cooking, DIY, interior design and gardening. But it was another change in broadcasting policy that gave him and other independents a chance to spread their wings. The Thatcher Government decided that ITV licences should be awarded by competitive tender, a decision that also opened the way for would-be publisher-licensees, such as Carlton, to commission all their programmes from independent producers.

‘In 1990, it was known that bids would be coming in for the ITV licences – and they needed production expertise’ Bazalgette told me. ‘We sold our company to Broadcast Communications, which was owned by the Guardian. We also became part of the Sunrise consortium (later re-named GMTV) and won a share of the breakfast TV licence.’

A box full of glowing tulips

By 1998, Bazalgette was restless again. ‘We had made some hugely successful programmes and became fed up with being owned by a newspaper that wasn’t doing much in the TV business, so we told the Guardian they should sell us to Endemol’ he said. ‘I had met them at the MIP programme market in Cannes, and saw they were interested in entertainment programmes. On the day the deal went through, a box full of plastic tulips arrived at our offices in Bedford Square and they lit up!’

There was more excitement to come. Endemol made Big Brother, the groundbreaking show which throws ten contestants together in a house for several weeks, cut off from the outside world and the media, and constantly monitored by TV cameras and microphones. The programme was already a success in its native Holland – gaining notoriety after one couple had sex live on TV, albeit discreetly under a duvet. The format spread quickly to Germany, Spain and the USA, where it aroused controversy and complaints.

Inheriting the UK rights, Bazalgette had the task of selling the show here, first to a broadcaster – Channel 4  – and then to the viewers. A few days before the first series began, I interviewed him for Radio 4’s Today programme. As we walked round the Big Brother house, he pointed out the cameras hidden behind one-way mirrors in every room. ‘Even the shower room?’ I asked naively.

On the eve of the first show, Channel 4 executives were nervous, unconvinced it would attract an audience. But the tabloid newspapers loved it and within weeks it was also making headlines in the broadsheets and on TV news. ‘Do you remember the huge fuss over Nasty Nick?’ Bazalgette later recalled to me. ‘That got on to the One O’Clock News - the news! It was crazy.’ When Nick Bateman was evicted, the audience reached 6.9 million – huge for Channel 4 - and the programme website crashed. In the final poll to decide the winner, 7.4 million people voted.

Bazalgette is widely credited with making the changes that turned Big Brother into a huge international hit. He denies this, though he is proud of the show’s success. ‘It was a good show before it came to the UK but our team at EndemolUK, working with Channel 4, made it better.’ He said it was Channel 4 that decided that evictions should happen weekly, rather than fortnightly, to create an ‘event’ on Friday nights. Other new elements suggested by Endemol UK were the theme music and the look of the programme – the ‘eye’ logo and a warmer, more stylish set.

A spin-off series was to create even more headlines a few years later, when Celebrity Big Brother sparked global ructions, after a housemate’s remarks about the Bollywood actress Shilpa Shetty were widely construed as racist. Yet it had all started so innocently. ‘People forget that the first time we made Celebrity Big Brother was with the BBC. It was for Comic Relief and we showed it on both BBC One and Channel 4!’ said Bazalgette.

Big Brother was one of several TV formats made popular around the world by UK independent producers, making several of them rich in the process. They included the appropriately named Who Wants To Be A Millionaire? hosted by Chris Tarrant, The Weakest Link with Anne Robinson, Survivor, and the talent shows Pop Idol, Britain’s Got Talent (which spawned huge American hit shows) and The X-Factor.

The digital holy grail

Bazalgette and Endemol were particularly successful financially. ‘At Endemol, we benefitted from the dot com boom,’ he said. ‘Because we’d been using interactivity and the web in our programmes, we were seen by investors to be linking the TV to the telephone and the Internet – the digital Holy Grail. In March 2000, we were bought by the Spanish telecoms company Telefonica at the very height of the market – the day that Lastminute.com floated – for 5 billion Euros, a multiple of 100 times earnings.’

In 2005, Endemol’s founder John de Mol departed and the Spanish owners asked Bazalgette and his longtime colleague Tom Barneycote to step up and run the group internationally. Bazalgette became chairman of Endemol UK and chief creative officer of the global Endemol group. Meanwhile, the fortunes of UK independent producers had been transformed by another decision of the regulators and politicians. ‘The 2003 Communications Act played a huge part because it gave independent producers the rights to sell their programmes overseas and without that the companies could have no real value,’ Bazalgette said.

The change didn’t come without a fight. PACT – the Producers Alliance for Cinema and Television – had been campaigning to persuade the Independent Television Commission and the Department of Culture Media & Sport that the UK would sell far more programmes and TV formats abroad if the producers, rather than the broadcasters, held most of the rights. They said it would also encourage the growth of fewer, stronger production companies.

The broadcasters were strongly resistant. Greg Dyke, director general of the BBC, famously told MPs on the Culture Media & Sport Committee in 2003 that the BBC was not there to make independents rich. ‘That was a catastrophic remark,’ said Mark Thompson, then the chief executive of Channel 4. ‘The BBC then missed its quota and that was appalling… and PACT was able to drive a hard deal’. Brown observed: ‘The independents won the opportunity to build up real assets, instead of being the cost-plus producers they had been since the start of Channel 4. A number built up sizeable businesses and either amalgamated, accepted takeover offers or floated on the stock exchange.’

Endemol was a big beneficiary, as Bazalgette recalled: ‘In 2005 we did an IPO on the Dutch stock exchange for 9 Euros a share. Eighteen months later, in the summer of 2007, we sold the company for almost three times as much – 24 a half Euros a share – just before the credit crunch. The buyers were a consortium of Goldman Sachs, John de Mol and Silvio Berlusconi’s Mediaset. I left a few months later and became a boulevardier!’

Under its new owners, Endemol continued to grow, before merging in a $2billion venture with 21st Century Fox’s Shine and Core Media Group, the owner of American Idol. As well as Big Brother, the group’s productions include Deal Or No Deal, Peaky Blinders, The Bridge, The Island with Bear Grylls, MasterChef, Grantchester, Broadchurch and Humans. Other independent producers took similar advantage of the 2003 terms of trade to grow into super indies.

Shine was set up by Elisabeth Murdoch (daughter of Rupert), after leaving Sky where she had been managing director of programming. It grew as a programme-maker from 2002 to 2005, when it took over two of the most highly regarded producers, Kudos – maker of Spooks, Life on Mars and other groundbreaking dramas – and the factual producer Princess Productions. After further acquisitions, it was bought in 2011 by Rupert Murdoch’s 21st Century Fox and was merged into Endemol Shine in 2015.

Shed Productions was another independent producer that grew organically to start with. Co-founded in 1998 by the former Granada producer and LWT managing director Eileen Gallagher, it made its name with the popular ITV dramas Bad Girls and Footballers’ Wives. In the indie ‘gold rush’ following the 2003 Communications Act, it took over three highly-regarded factual producers – Ricochet (Supernanny), Wall to Wall (Who Do You Think You Are?, Back in Time for Dinner) and the current affairs producer Twenty Twenty Television. Other hit productions include Waterloo Road, The Voice, Gareth Malone’s The Choir franchise, Don’t Tell The Bride and the Oscar-winning film Man on a Wire.

In 2010, Shed Media sold a majority stake to Warner Bros and in 2014 it became a wholly-owned subsidiary, changing its name to Warner Bros Television Production UK. All3Media took a different route, setting out to buy up production companies, merge their back office functions and gain economies of scale. It began as the management buyout of Chrysalis Group’s TV division, led by the former ITV executives Steve Morrison, David Liddiment, Jules Burn and John Pfeil.

Between 2003 and 2014 they swallowed up Bentley Productions, North One, Cactus TV, Company Pictures, Lion Television, Lime Pictures, Maverick, Objective Productions, Zoo Productions, Studio Lambert, One Potato Two Potato, Optomen, John Stanley Productions, Little dot studios and Apollo 20. Its best-known productions include Midsomer Murders, Hollyoaks, The Only Way Is Essex, Skins, Shameless, The Village, The White Queen, Undercover Boss, Gogglebox, Horrible Histories and Gordon Ramsey’s cooking and lifestyle shows. In 2014 the company was taken over by the US Discovery group and Liberty Global, owner of Virgin Media.

Victims of their own success?

In August 2014, a headline in The Guardian read: ‘British indie TV producers avictim of own success as foreign owners swoop’. The story began:

‘In a world where media giants are trying to woo viewers with high-class programming, the UK’s flourishing independent TV production companies have become prime bid targets…. The most recent to succumb was the UK’s largest “super indie” All3Media, maker of shows including Skins and Midsomer Murders, which accepted a £550m offer from John Malone’s Liberty Global, which owns Virgin Media, and US entertainment group Discovery’

Chris Graves, a director of the corporate finance firm Ingenious, who helped sell Shed Media to Warner Bros, said: ‘The UK has a hugely creative production sector: it is the biggest net exporter of TV formats worldwide and English language shows travel well. And the UK has the strongest regulatory framework to protect production companies: they own the intellectual property of the content, which is critical in terms of making money from a show.’ 

Later that month, giving the 2014 MacTaggart Lecture at the Edinburgh Television Festival, the chief executive of Channel 4 David Abraham sounded a warning: 

‘Our independent sector, built up and nurtured over decades, is being snapped up almost wholesale and acquired by global networks and sold by private equity investors. It is estimated that soon the proportion of turnover of UK production that will qualify as “independent” will drop from 76 per cent to around 50 per cent. The term “super indie” has, in effect, become redundant. And while UK production is an undoubted commercial success story, I wonder if it will continue to be a creative one. Scale demands an increased focus on cost-cutting and margins. Reformatting ideas is more efficient than the messy business of finding new ones.’ 

Perhaps not surprisingly, Sir Peter Bazalgette is less concerned. ‘You can’t have an open-border, free-trade market and also have protectionism’ he said. ‘Where there are public service obligations, laid down by a regulator, an overseas company has to abide by them. And the evidence is that most US companies now want to keep strong local companies who provide strong local content – not just American content as they sometimes did in the past.’

Bazalgette is proud of the super-indies phenomenon. ‘The change in the terms of trade has been a great success’ he said. ‘Exports of finished UK TV programmes have more than trebled and we now have half the world market in entertainment formats. I think that consolidation is absolutely fine provided you still have lots of new companies and new ideas coming through. After all, people don’t have to sell up!’ But is it as easy for new companies to get established these days? Mark Sweney’s Guardian report stated in August 2014: ‘Channel 4 admitted that the number of production companies it used last year fell dramatically, from 460 to 367, partly due to consolidation in the sector.’ 

Bazalgette said: ‘I think Channel 4 has played – and still plays – a critical role in commissioning small and medium companies and encouraging new ones. It still commissions almost 350 independent producers. But the BBC is also very important. In my early days, Changing Rooms and Ground Force sold all over the world. One of the reasons the UK does so well internationally is that we have more competing channels trying out new programme ideas than anywhere else in the world.’

Would that survive any change in status at Channel 4 or the BBC? Only time will tell.

This is an edited extract of a chapter from WHAT PRICE CHANNEL4? Edited by John Mair, Fiona Chesterton, David Lloyd, Ian Reeves and Richard Tait. Published by Abramis. Price £19.95. Copies are available to OurBeeb readers for £15.00 from [email protected]