'Media Companies Struggling' Say Thornton

An international business and financial organisation has conducted an online survey to monitor recent productivity in the media industry.
Grant Thornton UK LLP, with offices in 30 locations nationwide, have revealed that 69% of key media figures are currently experiencing difficulty funding their productions in the current climate.
Their online poll was a live 'webinar' recently held to debate the options available to media companies to maximise their revenue.
The survey also revealed that 85% of respondents do not have all of their content tied up with one distributor, indicating the growing need to diversify risk during the current economic climate. 89% regarded distribution income as a significant part of their growth strategy. In addition, respondents felt the Asian (72.7%) market to be the most important sales territory, followed by North America (54.5), Europe (non-UK 45.4%) and Australia/New Zealand (13.6%).
Christine Corner, Media Partner at Grant Thornton said: "The TV industry is facing unprecedented challenges. A sharp drop in advertising revenues against the backdrop of a severe economic slowdown has inevitably impacted companies across the industry and there has been much talk of cost reductions and restructuring."
Corner continued: "Advertising levels are likely to remain flat for the best part of 2010 and the drastic fall in advertising revenues (by between 15-17% in 2009) has led to the need to increase deficit funding.
"We are seeing a growing trend towards companies seeking alternative sources of funding. These include overseas tax credits, advertiser funding and monies from NGOs and companies wanting to promote their CSR messages."
The panel, consisting of Peter Bazalgette (Media Consultant), Louise Pederson (All3Media), Justin Thomson-Glover (Artists Studio) and Thomas Dey (Corporate Finance Partner at Grant Thornton), also considered how companies can maximise income in their business through the monetisation of international distribution rights.
Corner explained: "Monetisation has developed out of all recognition over the last 10 years.
"The need for media companies to have multiple sources of revenue is the main driver of this growing trend. Digital rights are particularly of increasing importance to TV production company owners."
She concluded by stating that India and China have the key markets: "These are some very big territories that have funding and are likely to catch up with the rest of the market."
Their current model allows foreign ownership of 70% of a company.
"They also have significant government support," she added.
(BMcN/GK)