“How Do We Value Our Industry?” That was the question in focus during a Tuesday afternoon panel at the Royal Television Society’s (RTS) London Convention 2024.

The session, following morning appearances by Netflix co-CEO Ted Sarandos, Peaky Blinders creator Steven Knight, and BBC director-general Tim Davie, touched on what investors are looking for after the recent $1.45 billion takeover of All3Media by RedBird IMI and whether consolidation is the only way forward.

The panelists were Jane Featherstone, co-founder and chief creative officer of production firm Sister, Harry Hampson, global chairman – investment banking/corporate & investment bank EMEA at J.P. Morgan, and former BBC chair Richard Sharp, now partner at asset management firm SW7.

Featherstone argued that after a big jump in production activity, the market has contracted again. “There was probably too much,” she said, mentioning that at the height of the production boom there were around 1,400 shows being produced a year in the U.K., while now that is back down to around 1,000.

“We are making a lot less to do the same,” she said though in highlighting the business challenges.

Mergers and acquisitions are one likely path being pursued by some players. “There will be … more consolidation of some kind in order to get us through this,” Featherstone said. “It’s definitely challenging.”

She said that starting a new production business at this time is very challenging, but predicted that “value will come back to producers” in the future.

Asked about the benefits of M&A, Hampson, who worked on the All3Media deal, said: “One of the ways in which you can create a sustainable business is to consolidate, because you can share the costs across the bigger base. You can smooth out the dips. When you have a dip in revenue, you’ve got other things which fill in the gaps, and you can use it as a way to attract talent. So in my view, consolidation is a natural reaction to a world where your customers are largely consolidated already, very large and will probably get larger.” He concluded: “Broadcasting is a challenged industry, and there will be, in my view, fewer broadcasters in the future.”

Sharp addressed the broader issues of the U.K. media and entertainment sector. “The question for all of you is: what is the ecosystem that capitalizes on the U.K.’s competitive advantage and will continue to ensure that we don’t get hollowed out in terms of capabilities,” he said. “First of all, there’s AI, there’s technology, and it may be uncomfortable for some people, but that needs to be embraced and leveraged with skill. Secondly, we have the English language that’s very important.”

His takeaway: “I’m optimistic, but I think we’re in peril.” Addressing the BBC, he said: “There are some very hard decisions on cost to be taken … I think the opportunities are great. We have the competitive advantage. We have the companies. But I do think policy will be quite important, and supporting the BBC is a central part of that, providing the BBC itself delivers on that challenge.”

Asked if BBC Commercial or its largest part, BBC Studios, could be spun or sold off from the public broadcaster, Hampson said that could work if the relationship with the rest of the public broadcaster gets sorted. But he and Sharp highlighted that the commercial arm of the BBC is a key revenue generator for the broadcaster, plus, Sharp noted, it also brings “a commercial mentality” to the BBC.