Everything you needed to know about the industry: Independent Production Companies

Independent production companies are companies that are on their own, they are privately owned by an individual or a company. These companies  purpose is to co-operate with a number of commercial broadcasters such as ITV in order to produce content. They are not as famous as broadcasters like ITV, but 40% of what ITV put live on air are thanks to these independent production companies, and are most likely the creators of some of your favorite shows.

An example of an independent production company is Tiger Aspect Productions, a British independent production company that are famous for producing the world famous sit-com 'Mr. Bean'. They fully produced the show, meanwhile ITV decided to air it and of course give Tiger Aspect Productions a cut of the profit. Other independent production companies include Endemol, Four Two Productions and Lime Productions who also produce content for commercial broadcasters to use.

A huge benefit of a commercial broadcaster like ITV using content from independent producers is that ITV don't need to spend anything on production. Because a show like Mr. Bean was already filmed and edited, the only work left for ITV to do was air it, which saves them a lot of money.

A disadvantage of commercial broadcasters using independent production companies is because the independent production company will demand a huge cut for allowing a company like ITV to air their show. Although no cost will go into production, ITV will have to buy the rights, so it may end up being more expensive if the show is a flop.

However, an advantage of creating an independent production company is that you get to keep all the profit made, although this comes at a cost as a disadvantage on the independent production company itself is that they're is so much competition it may be hard for an unestablished independent production company to thrive. Which is why many production companies like to team up with bigger companies and broadcasters for the extra safety feature.

How are these companies funded, and how do they thrive in this competitive business? Well firstly, they usually collect their fundings via commercial production companies buying the rights to their productions, which allows them to get profit and gain the fundings for their future productions. However, nearly all independent production companies start off as small, part time companies. Endemol, which is probably one of the biggest production companies in the world, started out in 1994 as a small time company, but in 2000 was sold the Spanish telecom and media corporation Telefónica. And in 2011 they had to get a loan to overcome debt issues. Many small independent production companies will use loans to hopefully make their break into the competitive business. However, where one company is successful, another one flops, so it is a very risky decision to draw a loan, and should be thought about.

Sources

• http://en.wikipedia.org/wiki/Tiger_Aspect_Productions
• http://en.wikipedia.org/wiki/Mr._Bean
• http://en.wikipedia.org/wiki/Endemol