BBC warns it could find it increasingly hard to compete in ‘golden age’ of drama as online competition drives up price
Doctor Foster was one of the BBC's hit dramas this year
Craig Holleworth, the BBC’s head of business, drama, films and acquisitions, has warned that the rising costs to produce a quality programme puts public service broadcasters with "limited" funding at risk.
Speaking at the MIA Market TV and film conference in Rome, Holleworth spoke of a climate in which the cost to produce a programme has risen from under £1m about five years ago, to between £2m and £4m now, driven in the UK by tax credits and the rising prominence of Netflix and Amazon.
He warned: "It’s difficult for a public service broadcaster, particularly when funding is limited. We’ve had the same license fee for around eight years, so it is about how we partner with people to meet those budgets."
"I wonder when the bubble will burst, at some point it probably will," he added.
Netflix and Amazon have committed $6bn (£4.58bn) and $4.5bn (£3.43bn) to content this year, compared to the £2.4bn TV budget the BBC has.
Netflix's drama The Crown was said to be the most expensive TV series ever made, with a budget of £100m. This budget could double to as much as £200m in Series Two, according to reports. Stranger Things 2, released last Friday (27 October), is reported to have cost $8m (£6.1m) an episode. The last season of Game of Thrones on HBO was priced at $10 million (£7.6m) an episode.
To compete with these budgets, the public broadcaster is striking co-production deals with Netflix, with the two currently collaborating on three projects. The BBC will have the UK rights to these productions, and Netflix will have the global rights.
But Holleworth cautioned whether the broadcaster will have "plateaued" after opting for a co-production model.
"I hope the bottom doesn’t drop out of the market at that point," he said.
Holleworth added that its not just online streaming services that are luring talent away from the BBC, but traditional broadcasters such as ITV, Channel and American broadcasters that are "picking up our best talent".
“Are we getting the best writers and producers when there’s so much opportunity there? It has become more difficult,” he said. “Will we ever get it back? I think a lot of the power sits with writers at the moment, they’re setting up their own companies, I haven’t seen that before."
There's also the imminent threat of Facebook, Google and Apple - Silicon Valley giants turned Hollywood studios - who could drive up the cost of production more.
However, a spokeswoman from the BBC told the Telegraph the broadcaster was confident in its ability to compete against new and rising competition.
"The licence fee gives us the freedom to enable creative talent to take risks and do their most ambitious work on the BBC; we are confident we can compete in an ever-changing market and our co-production partnerships allow the licence fee to go further, whilst importantly supporting the UK creative industry," the spokeswoman said.