Analysis of TV Production Companies

Cite this

Introduction

A TV production company is a business where the focus is on providing the physical and technical necessities for producing TV shows and other content aired on TV. These elements consist of technical teams, for example, producers, actors, technical specialists, and others. Typically, TV production companies work under the network where their content is aired or sell their series. This paper will examine the TV production business’s external environment in Germany using PESTLE and Porter’s 5 forces.

On-Time Delivery!
Get your customized and 100% plagiarism-free paper done in as little as 3 hours
Let’s start
322 specialists online

Background

Germany is an attractive market for TV production because of political stability and economic prosperity. In Germany, there were 884 TV production companies in 2018 (“Number of active cinema and TV production companies in Germany,” 2020). The state is oriented towards film production and TV production, and “the capital region Berlin-Brandenburg is one of the leading media locations in Germany and is characterized by a creative production landscape,” which accounts for yearly revenue of 1.9 billion euros (“Film and television industry,” n.d.). Hence, TV production in Germany is well-developed and received substantial profits.

PESTLE

Political

In general, Germany is a politically stable state with an established political hierarchy and policies. Perera (2018) defines political factors as anything related to policy, restrictions, tax, and political stability in a state. The state is part of the European Union, with well-established laws and regulations. The only concern for TV production is taxation, which is at high levels in Germany. However, the German government supports production, for example, in 2019, they provided a 10 million euros grant to companies cooperating with international production firms (Meza, 2019). Hence, the political environment in Germany is welcoming to TV production companies.

Economic

From an economic viewpoint, Germany is a wealthy state. The median income of a household is $34 297 per year, which is higher than the median income globally (OCED, n.d.). The employment rates are high, although there is a significant gap between the richest and most impoverished populations. Hence, the economic environment allows for TV production because consumers have substantial incomes.

Social

The social environment encompasses the values, perceptions, preferences, and behaviors of the people living in a state (Prera, 2018). The median population age in Germany is 45.9 when compared to 34.4 years in the United States (“Germany country factfile,” n.d.; “Median age of the resident population of the United States.” 2020). The fact that Germany’s population is older affects the type of content that TV production companies shoot. Hence, there should be fewer programs and TV series directed at teenagers and young adults.

Technological

The development of technology and decrease of its cause led to more households having a TV set. In 2016, 39.1 million German households had access to TV (“Number of TV households in Germany,” 2020). Considering that the total number of households in this state is 41 million, the vast majority of people in Germany have access to TV and therefore consume Tv content (“. Moreover, the development of the Internet allows viewing TV programs online, also contributing to consumption. Hence, technological developments create a suitable environment for growth from the viewpoint of German TV production companies. The development of satellite and cable companies, the multi-channel networks, and online platforms that offer TV content contributes to the industry’s development.

Legal

Copyright is perhaps the essential element of the legal framework for film and TV production. In Germany, the Copyright Act explicitly mentioned that the content creator has the right to exploit it as they choose (Bolte, 2019). This state has established the legal framework for protecting the rights of creators is important for the TV production industry because it means that their content is less likely to be used without consent and pay. Apart from copyright laws, Germany has laws on par with the rest of the European Union. Thus, the legal environment of Germany is beneficial for TV production companies.

Yes, we can!
Our experts can deliver a custom Analysis of TV Production Companies paper for only $13.00 $11/page
Learn More
322 specialists online

Environmental

At first glance, ecology does not appear to be linked directly with TV production because the process relies on human talent rather than natural resources. Some considerations important for this industry are increasing costs of energy and a transition towards green energy. Bairstow (2020) describes a SkyStudious project, where 20% of the energy is generated on-site using solar panels, which should be completed by 2022. This project is directed explicitly at producing TV and film content without the use of fossils and non-renewable energy and to reduce carbon emissions. TV producers in Germany may be required to rebuild their studios in line with this project, considering the state’s orientation towards green energy use.

Porter’s 5 Forces

New Entrants

One can examine the likelihood of new companies entering the TV production business in Germany entering the market by assessing how easy it is to establish such a company and the investment required. Since, in general, TV production is linked to TV networks, one can argue that establishing these companies independently is challenging. Netflix and Amazon have become the most recent additions to the state’s TV production industry (Meza, 2016). However, these are international companies with access to capital and the ability to distribute their content to the global audience, which is a unique scenario. Other than these new TV production businesses, the threat of new entrants is low.

Power of Buyers

The buyer’s ability to negotiate prices and conditions of a contract depends on the number of buyers in the industry in comparison to the number of TV production firms. In Germany, there are both state-owned and private TV networks. For the 884 TV production businesses, eight largest TV networks are accounting for most views from people aged 14 and older (“Audience market share,” 2020). Out of these, RTL accounts for 11.4% of views from adults, ProSieben has 9.1% of views, and other networks have an audience market share of less than 8% (“Audience market share,” 2020). Hence, buyers’ power is strong because there are only eight largest companies that account for a substantial portion of the German TV market share with over 800 production companies.

Competitive Rivalry

The rivalry is the intensity of competition in an industry. As mentioned, there were over 800 TV production companies in Germany in 2018 (“Number of active cinema and TV production companies in Germany,” 2020). There were 941 production companies during the previous year, which is the highest number since 1998 when there were only 443 businesses registered (“Number of active cinema and TV production companies in Germany,” 2020). Hence, the rivalry in the TV production industry has decreased. However, because there are many TV production companies in Germany, the overall rivalry level is high.

Threat of Substitutes

When examining a substitute for TV production as a business, there is a low level of threat. Due to the fact that these TV firms are responsible for the production process, from selecting screenplays to scheduling, budgeting, and filming. Moreover, Meza (2019) argues that “the quality of German TV is quite often similar to that of theatrical productions” (para. 17). However, the TV content itself is under the threat of consumers substituting it with online viewing and using online cinema theatres. A transition towards viewing content online rather than offline would mean that TV production companies have fewer TV conglomerates’ orders. Since there is an option to sell the TV series to online platforms and TV networks, the threat of substitutes is low.

Power of Suppliers

Suppliers for a TV production are talent managing agencies, scriptwriters, and outsourcing companies. Recently, more talent has an interest in working on TV series rather than feature films. Meza (2019) states that “more filmmakers are interested in doing long-running series and attracting top acting talent because series offer unique narrative advantages” (para. 17). Hence, although there is a limited number of suppliers such as well known actors, talented screenwriters, and other individuals, their interest in TV production makes the power of suppliers less strong.

Conclusion

In summary, the TV production industry is becoming more attractive globally, with more attention dedicated to TV series rather than feature films and more talent interested in working on TV series. According to PESTLE, Germany is an excellent state for TV production because of political stability and economic factors. However, Porter’s 5 forces show that German’s TV production market is challenging because of the high buyer’s power and competitive rivalry.

Cut 15% OFF your first order
We’ll deliver a custom Company Analysis paper tailored to your requirements with a good discount
Use discount
322 specialists online

References

Audience market share of selected television stations in Germany in 2020. (2020). Web.

Bairstow, J. (2020).Most sustainable film and TV production site in the world’ given green light. Future Net Zero. Web.

Bolte, M. (2019). Copyright in Germany. Lexology. Web.

Film and television industry. (n.d.). Web.

Germany country factfile. (n.d.). Web.

Median age of the resident population of the United States from 1960 to 2019. (n.d.). Web.

Meza, E. (2019). Germany drives up television production. Variety. Web.

Get a custom-written paper
For only $13.00 $11/page you can get a custom-written academic paper according to your instructions
Let us help you
322 specialists online

Number of active cinema and TV production companies in Germany from 1998 to 2018. (2020). Web.

Number of TV households in Germany from 2008 to 2016. (2020). Web.

OCED. (n.d.). Germany. Web.

Perera, R. (2018). The PESTLE analysis. Independently Published.

Cite this paper

Select style

Reference

BusinessEssay. (2022, May 3). Analysis of TV Production Companies. Retrieved from https://business-essay.com/analysis-of-tv-production-companies/

Reference

BusinessEssay. (2022, May 3). Analysis of TV Production Companies. https://business-essay.com/analysis-of-tv-production-companies/

Work Cited

"Analysis of TV Production Companies." BusinessEssay, 3 May 2022, business-essay.com/analysis-of-tv-production-companies/.

References

BusinessEssay. (2022) 'Analysis of TV Production Companies'. 3 May.

References

BusinessEssay. 2022. "Analysis of TV Production Companies." May 3, 2022. https://business-essay.com/analysis-of-tv-production-companies/.

1. BusinessEssay. "Analysis of TV Production Companies." May 3, 2022. https://business-essay.com/analysis-of-tv-production-companies/.


Bibliography


BusinessEssay. "Analysis of TV Production Companies." May 3, 2022. https://business-essay.com/analysis-of-tv-production-companies/.