It’s been the TV drama of the year so far. Mr Bates vs The Post Office was event TV, won good overnight viewing figures and brought the Horizon scandal back to public attention.
It was also relatively cheap for a drama. It was not a lavish production and some of the cast apparently accepted lower fees than they might have been able to command.
Yet ITV says it has lost more than £1m on the series.
This is profoundly depressing and worrying.
The economics of commercial broadcasting are complex. It’s about more than what a programme attracts in ad revenue.
For a start some programmes will be funded entirely by one broadcaster – others will be co-productions with two or more partners.
Product placement may also augment the budget.
Against this comes the return on the investment – advertising during the screening, sponsorship, sales to other channels, DVD sales, international sales.
ITV hasn’t given a full public explanation of the losses but presumably there are two key factors.
Firstly the amount of advertising during the programme. What was the airtime worth despite the good ratings?
Secondly, and inevitably, a programme like this is unlikely to sell well outside the UK.
But if you care about commissioning and producing quality television which matters, questions need to be asked.
Historically ITV was full of cross subsidies.
Popular, cheap output like soaps and quiz shows allowed for riskier output not to mention a large amount of output which was simply not commercial in nature at all.
Today you would assume all output which is not a legal obligation is designed to be profitable.
The worrying thing is that pressure from investors could lead to even more output which is cheap (or at least cost effective) or which will sell well to digital channels and overseas broadcasters.
It is difficult to see what can be done to stop this. A commercial broadcaster cannot in any sense be obliged to run “loss-making” drama. Presumably if a programme was not a PSB obligation it was never meant to lose money in the first place.
But would finally abandoning the limits on advertising on C3, C4 and C5 potentially help make losses easier to stomach?
With this pressure on commercial broadcasters, it is more important than ever for the BBC to continue to invest in a full range of drama – some of which will get low ratings and not sell well outside the UK.
C4 should have a role too: in its battle against privatisation it emphasised how popular, profitable output allowed it to subsidise non-commercial activity.
In recent years this has been far less obvious to viewers than was once the case.
More bold commissions would certainly make it easier to argue C4 should stay in the public sector long term.
But frankly, news Mr Bates vs The Post Office lost money should be setting off alarm bells.
It is the sort of TV which all major broadcasters – including mainstream commercial channels – should aspire to producing.
Acknowledgements
PICTURED: Mr Bates v The Post Office opening titles. COPYRIGHT: ITV plc.