Next Saturday, the fourth series of Strictly Come Dancing enters its final phase. The show has been a huge hit not just here but in the US, where BBC Worldwide has set up its own production base to make the US version - Dancing with the Stars - for ABC.
Buoyed by this success, Worldwide's new director of Content and Production, Wayne Garvie, recently announced plans for the BBC to develop further production bases worldwide to produce this and other hit formats. The announcement raised a few eyebrows about whether the BBC should be investing in delivering hit shows to viewers in America and Australia. But there's no principled reason why not. Worldwide's job is to make a profit and deliver cash back to the BBC and last year it wrote the licence payers a cheque for £185m.
The bigger question is whether the idea makes commercial sense. At first sight, Wayne's logic seems impeccable. If anyone is going to make a go of a global production business, it ought to be a British company. British producers account for 45 per cent of the format's market around the world; that's more than twice our nearest competitor, the US.
Producers can make significantly higher margins by producing programmes than by simply licensing the format for an agreed fee. The BBC's Los Angeles production office, which makes Dancing with the Stars, generated revenues of £19m and profits of £3m last year. And producing a successful show can significantly raise a company's profile in foreign markets.
But there's a big gap between making a hit show in a foreign market and trying to sustain a long-term business on the far side of the world. My company, Wall to Wall, has successfully produced shows throughout the US but if you commit to a long-term base in a single city then the overhead has to be paid for - week in, week out.
Many British companies have produced successfully in the US but equally many have struggled to maintain a profitable long-term presence there. Companies such as Granada, Mentorn and RDF Media have been forced to restructure and relocate their US businesses as hit shows came and went and the needs of their US customers changed.
There is an alternative. BBC Worldwide makes Dancing with the Stars in the US but elsewhere it licenses the format to local companies. The returns are smaller, but then so are the risks. It's a strategy which makes sense for smaller companies such as ours. The last few weeks have seen our House format launch in Spain, our game show Five Things I Hate About You in Italy and Who Do You Think You Are? begin production in both Canada and Australia. In each case, we've licensed the format to a local producer who is producing it with our guidance and support.
The company producing our show in Italy is a little producer called Endemol. Wayne Garvie could point to both Endemol and Fremantle as examples of companies who have bucked the trend and built global production businesses. That's true. But it's also possible to argue that they are the exceptions that prove the rule. Endemol's success has been driven by what is probably the single most successful television format of the last 10 years - Big Brother. The profits from that show continue to fund a development operation which is now generating a whole raft of new hits - Deal or No Deal, for example, and 1 v 100.
Fremantle is sustained by the other global television phenomenon - Pop Idol. Unlike Endemol, Fremantle did not grow organically but was assembled from a series of acquisitions - Reg Grundy (Australia), All-American (US) and latterly Thames and Talkback in the UK. That infrastructure meant that when Pop Idol became a hit, Fremantle was able to roll it out with astonishing speed. But what keeps Fremantle boss Tony Cohen awake at night is not counting his money but thinking about where the next global hit is coming from. Strictly Come Dancing is a palpable hit but it's yet to match the impact of Pop Idol or Big Brother. And even if it does, its mirrored ball will eventually lose its shine and need to be replaced. If BBC Worldwide is serious about building a global production business it isn't just a question of finding the talent to make the shows. It has to be confident there's a limitless supply of new hits to make. Can Wayne Garvie buck the trend and boldly go where - so far at least - most UK producers have failed to go? Perhaps. But it's a big punt and I'm sure the rest of us - including Fremantle's Tony Cohen and Endemol's Peter Bazalgette - will be looking over Garvie's shoulder.
Alex Graham is chief executive of the independent producer Wall to Wall and is chair of Pact, the trade association that represents the commercial interests of the independent film and television sectorReuse content