“Everyone Working a Little More Closely Together”: The Transnationalization of Creative Production in TV Production Conglomerates

Transnational Integration as Competitive Advantage

In media industry, the pursuit of economies of scale and scope dictates companies’ behavior (Doyle 2013). Diversified and integrated groups are best suited to survive and exploit industrial changes because they have greater market power, reduce risk through diversification, and can establish efficiencies and synergies. The competitive advantages of transnationally integrated TV production groups revolve around the bundling of programs for sales purposes; the central funding and support of R&D activities; brand power; and the strength, size, and diversity of their program catalog (Esser 2016). The formation of production networks is the indisputable corollary of de-risking strategies and the hunt for full ownership of the global value chain of TV formats. Generating, distributing, and exploiting intellectual property (IP) in-house and across various local markets is at the center of production networks’ management objectives (Chalaby 2016).

The worldwide trade in IP is both driver and outcome of transnational network structures and organizational patterns, which are characterized by cooperation, jointly coordinated activities, and knowledge exchange (Altmeppen et al. 2007; Baltruschat 2010). The increasing importance of IP rights reinforces flows of ideas, information, and expertise across borders and makes international connections essential (Chalaby 2016). Format franchising networks soundly exhibit the organizational dynamics of a transnational networked production ecology, characterized by trust relationships, interdependencies, collaboration, and the exchange of ideas and production know-how across borders (Baltruschat 2010; Chalaby 2009).

To achieve the advantages of transnational integration, production groups have adopted similar corporate structures, consisting of one central distribution office and multiple production subsidiaries in different markets (Esser 2016). Also, creative teams operate on the level of the central office to facilitate exchange among local teams and to make IP travel (Chalaby 2012). These networks simultaneously operate on a global and local level, facilitating integration, collaboration, and interdependence between the two levels, which is a core feature of transnationalization (Esser 2007). Hence, examining the roles and activities of the central office and the local companies, the (power) relations between the two levels, and inner practices and routines is vital to understanding the transnational operation of TV production networks.

Shifting Production Conditions

Shifting ownership structures, competition, revenue models, and management processes can change industrial practices and norms (Lotz 2017). In general, globalization of the media market has caused international relations, experiences, and orientations to play an increasing role in production cultures and executives’ judgments (Havens 2002). With conglomeration and the format trade, concrete production practices have shifted toward increasing pooling of resources, transfer of know-how, consultation, and negotiation across national borders (Baltruschat 2010). For example, format catalogs have become key tools for finding ideas to pitch to broadcasters (Keinonen 2018), and local management and production decisions are increasingly based on international format owners (Kjus 2009). Both examples point at the importance of studying the organization of global-local collaboration and international exchange practices.

The alignment of global and local resources and activities guides the strategic alliances between transnational media corporations (TNMCs) and their subsidiaries. Global resources include capital, content, brands, and expertise; local resources cover knowledge of and access to the local TV ecology in terms of policy, market, decision makers, audiences, and cultural idiosyncrasies (Oba and Chan-Olmsted 2007). While brands and formats travel globally, production processes, professional norms, and daily routines tend to be highly localized (Fernández-Quijada 2013; Kuipers 2015). Local producers possess a firm grasp of unique market conditions and audience preferences (Gershon 2000; Moran 2009; Ndlela 2013), and it is believed that ideas for new (global) programming spring from local resources (Chalaby 2012). Hence, from a management perspective, scholars (and industry members) have pointed at the risks of pursuing global synergies through centralization and standardization, as well as the importance of local actors’ autonomy and creativity in TNMCs (Chalaby 2012; Gershon 2000; Lampel et al. 2006; Schulze et al. 2005).

Whereas the tension between commercial control and creative autonomy has always been intrinsic to cultural production and creative labor (Hesmondhalgh and Baker 2011), the transnational integration of production companies adds a global-local dimension, a tension between global control and local autonomy. It has been amply demonstrated that the unpredictability of the success of cultural products essentially leads to management practices of “formatting creativity” (Ryan 1992) and industry members’ “safety-first attitude” (Gitlin 2000; Lotz 2014b). In a transnational industry, these management practices and logics of the creative-commercial process are performed on a different scale and in different ways. Production methods that have proven profitable are reproduced and established in other contexts, and commercially viable local trends are exploited on a global scale (Havens 2013), of which the trade in TV formats itself is an example.

For people working in TV production, the autonomy to develop new ideas and to independently engage in creative practices is an important reason for staying involved in a sector that is characterized by insecurity and precariousness (Hesmondhalgh and Baker 2011). Managers of local TV production companies also have a strong sense of autonomy; their desire is to make (creative) decisions and develop strategies in “their company.” It has been argued that centralization of control forms a threat to (the experience of) autonomy (Hesmondhalgh and Baker 2011). Hence, the fact that executives of acquired production companies often leave the new networked organization (Chalaby 2016; Esser 2017) might be the result of “autonomy removal,” which often occurs after a merge or takeover (Ahammad et al. 2012). Because losing key talents forms a great risk for production companies, group executives strongly advocate avoiding excessive centralization (Chalaby 2012).

Despite the focus on facilitating (creative) autonomy and acknowledging flexibility, the creation of true network collaboration and synergy not only requires resource intensive coordination but also entails compromise, inflexibility, and control mechanisms (Flew 2007; Sydow et al. 2010). Although limited “parental control” and decentral management practices in TV production groups have been observed so far (Chalaby 2012; Esser 2017; Schulze et al. 2005), the aim to exploit scale effects and profit from transnational expansion continues to make coordination and standardization across borders strongly desirable. The central office will exercise control when it is in the interest of the group and will only allow local flexibility provided it can continue to profit (Esser 2017). Hence, decentralized collaboration is often kept in balance with centralized decision-making (Baltruschat 2010).

Transnational Management Processes

Since transnationalization is directed toward establishing competitive advantages, managing creative-commercial and global-local tensions is of pivotal importance for TNMCs. Hesmondhalgh and Baker (2011) and Hollifield (2001) indicate that the implications of both tensions for organizational dynamics in media industries are mainly examined in business and management studies and often from a functional perspective. Insights from this field, nonetheless, provide a useful lens for our purpose of analyzing conglomerate operation and global-local (power) relations.

A central concern in the management of multinational organizations is how to establish the advantages of integration while minimizing the risks. Bartlett and Ghoshal (1998) describe “the transnational management solution” as a combination of global efficiency, scale, and control and local sensitivity, responsiveness, and autonomy. Reaching the advantages of both requires subtler management tools and processes, such as encouraging a shared vision and establishing interdependencies to incentivize cooperation without imposing coordination. For example, transnational TV channels like MTV gave local managers the autonomy to adapt the brand to the local market and localize schedules while sharing resources, programming, and their broadcasting philosophy (Chalaby 2009).

A hierarchical headquarters-subsidiary relationship in which local managers “struggle to retain their freedom” and global managers pursue control would result in underutilizing local assets and demotivating local managers (Bartlett and Ghoshal 1998, 115–6). Following “the transnational management solution,” subsidiaries are important sources of information and knowledge; their diversity should be maintained because it would trigger innovation. Innovation is thereby organized as locally leveraged and globally linked which requires autonomy in local companies, as well as central coordination network coordination for worldwide adoption (Bartlett and Ghoshal 1998).

The central department works as an internal integrator, which connects and supports people while also monitoring, controlling, and coordinating projects and activities in the network (Schulze et al. 2005). Bartlett and Ghoshal (1998) distinguish three coordination processes: centralization, formalization, and socialization. Centralization implies decision-making and direct interventions on the level of the headquarter, formalization includes the installation of practices and procedures across the network, and socialization refers to the subtler process of building a common culture and shared values through close, informal personal relationships.

Socialization processes are directed toward the internalization of a model of behavior, “indoctrinating” local managers with shared objectives and priorities. Supporting and encouraging them through access to central resources and coaching would provide trust and establish commitment. Furthermore, through the exchange of information and shared knowledge on best practices, a common culture is established and interdependent relationships are developed. This reciprocal dependency seems crucial, as it incentivizes local managers to cooperate to achieve their own interest, thereby breaking down the global-local hierarchy (Bartlett and Ghoshal 1998).

While direct interventions often meet with resistance, socialization leaves more room for autonomy (Bartlett and Ghoshal 1998). However, creating consensus and establishing shared values also function as control and coordinating mechanisms (Ouchi 1980). Especially in creative environments, tacit mechanisms of coordination and informal modes of control are employed (Flew 2007; Ryan 1992). Moreover, it is of strategic importance to develop a group identity in media conglomerates that were created through mergers and takeovers. To get all of the personnel “pulling in the same direction,” practices of internal brand building such as collective activities work as “antidotes to help contain threats to managerial control and cohesiveness” (Caldwell 2008, 265–6). Hence, analyzing the transnational management practices in TV production networks enables an examination of global control over cultural production.

Generating and Exploiting IP Transnationally

The analysis confirms that IP rights play a central role in the management and organization of transnational production of TV entertainment (cf. Chalaby 2016; Esser 2016). Groups need international rights to “grease the corporate wheel,” making their core mission to create content that can be exploited beyond its country of origin (Littleton 2016). Consequently, the double focus on generating new content (IP) within the network, as well as selling formats in as many markets as possible, characterizes the dual relationship between the central office and local companies (Beale in Daswani 2016). While there are differences between networks and not all subsidiaries perform the same role within the group—some are pure “satellites” to produce local format adaptations, while others are also IP creators—subsidiary companies are conceived as resources and/or sellers of IP and are expected to expand the “creative pipeline” and “geographical footprint” of the group. To perform these roles, a convincing creative track record with good reverberation among local audiences, as well as strong ties with broadcasters, is deemed pivotal to ensure inclusion in the network (Goes in C21Media 2011).

The so-called creative pipeline and geographical footprint are tools to achieve competitive advantages in terms of scale and (financial) power. An integrated network facilitates the exploitation of IP because reselling formats to companies within the group is easier, and local adaptations can be controlled better. Managers’ beliefs also reveal the conviction that the search for, and generation of, novel and useful ideas is a matter of collective, transnational efficacy: “[e]very rock is being overturned to find that next big hit as it really can come from anywhere now” (Pollak in World Screen 2013a). This opening up of the marketplace can be both driver and outcome of transnational integration (see Esser 2016). Due to increasing competition and consolidation, the continuous search for creative talent and innovative ideas has intensified and is now carried out transnationally. In the words of several industry members, having “eyes and ears everywhere in the world” to find new ideas that “feed the catalogue” is crucial for production groups.

For subsidiaries, the main advantage to being part of a network is the opportunity to sell their shows internationally via the group’s catalog and international network of production companies, as well as to adapt programs from the catalog. “We have our own development that we always try to push [into the network]. Then, we have the catalogue from which we pull, taking content and adapting it to the Dutch market” (Chief Creative Officer, Zodiak Netherlands, personal interview). Moreover, local network producers can “connect with top creative producers from around the world to bring some of their ideas to the marketplace in a much bigger way than they could do themselves” (Burnett in World Screen 2013b). Local managers confirm this advantage: “when you are part of a group [. . .] you have a much wider reach, they have much more power internationally” (General Manager, BlazHoffski Netherlands, personal interview).

The generation and sales of IP are not only important group objectives but are also essential to subsidiaries’ survival, which establishes shared goals and reciprocity between the two levels. Central managers stress this reciprocity and the advantages for local companies: “as a local company, if you have got an idea, you benefit from any sales around the group; from that you see the upside of playing with the rest of the companies within group” (CEO Creative Networks, Endemol Shine Group, personal interview). In this way, local companies are incentivized to collaborate internationally and share their creative ideas, knowledge, and commercially sensitive information.

Creative Synergy and Operational Efficiency

Next to the concrete focus on IP, industry members describe advantages of operating as a network in terms of efficiency and (creative) synergy. Processes of consolidation and integration are aimed at “everyone working a little more closely together” and “improving production work flows” (Hogg in World Screen 2011). Central managers believe that local companies are facing the same challenges in trying to find ideas and talent, controlling risk, selling to broadcasters, and finding (format) trends and societal issues to respond to, whereas the central team can provide support and establish efficiencies in all those activities. “From Brazil to Australia, from Stockholm to Los Angeles—our producers are talented people doing much the same thing and some are even working on the same shows” (Salmon in World Screen 2018). For example, format licenses are purchased for several territories at once, and “format acquisition days” bring together all the local managers so they do not have to chase interesting content on a market-by-market basis.

Transnational collaboration is further presented as learning from each other’s successes and failures. Getting a grip on what does and does not work is valuable information in an industry characterized by insecurity and risk. Also, not having to reinvent the wheel and the possibility of building on existing ideas (accessible through the group) is believed to facilitate the creative process of program development. The objective, therefore, is formulated as “forming a creative collective” (Oerlemans in Keslassy 2013) or “building a creative engine on an ambitious scale” (Murdock in Littleton 2016). Combining cultures and ways of thinking is also believed to help the development of formats that can travel (Armoza in Daswani 2016).

To profit from international expansion through mergers and takeovers, it becomes important to build a closely connected network. “Even though companies are strong on their own, we want them to start sharing ideas and know how; intensifying the dialog between our creatives, both vertically and horizontally” (Bassetti in World Screen 2014). Sharing and supporting are returning terms in transnational managers’ explanations of the objectives and ways of collaboration:

The moment we stop sharing, whether it’s from the center [. . .] out to the production companies or from the production companies to each other, then we’re in trouble. Because then we are operating not as a group [. . .] but as a collection of individual companies. And in that case, there is no point of having a group. The only value in having a group is being able to share and support each other. (VP Format Development and Production, Warner Bros. ITVP, personal interview)

From the local perspective, too, advantages of transnational integration are formulated in terms of professionalization, inspiration, and learning from each other.

Centralization and Direct Interventions

Direct interventions from the central office in local companies mainly occur on the level of strategy and financial administration. The group sets commercial targets, business plans are developed in collaboration with the local management, and financial reporting systems are implemented throughout the network. While local managers admit that this increases the workload, they understand this is an inevitable consequence of being owned by a group.

Nonetheless, group executives also interfere in more creative local decision-making. Multiple local managers express that central managers sometimes try to push formats into the network by repeatedly asking them to pitch a format to local broadcasters. Local managers find this experience to be annoying—they know the local market and their chances with broadcasters better than the group and thus do not want to weaken their relationships with broadcasters by pitching unsuitable or impossible ideas. They further explain that they can only (successfully) pitch ideas they really believe in:

When something is being pushed down from the group, [when they say] you must sell this, this often encounters opposition. But eventually you do it, because you think, well, how bad is it? If I have to sell one or two programs and I am free to decide on the other 30 shows we make, I would definitely conform to that. (Creative Director, Warner Bros. ITVP Netherlands, personal interview)

Another local manager describes this process as “a political game”:

You can’t just say to the group “we won’t do that, we won’t use it” because two weeks later you want to plug your own format. You can’t be too stubborn. If you don’t make the effort to take their ideas on board, they will do the same with your ideas. (Anonymous, personal interview)

Local managers tolerate some intervention, centralization, and loss of autonomy because they profit from the advantages of being part of a group such as using the network for selling their ideas internationally.

Managing the Catalogue

Expanding and diversifying the catalog is a direct aim of most takeovers. Through this process, groups can gain access to specific formats, creative talent, or expertise. Through acquisitions of programming and developing content in-house, the catalog is being optimized to quickly respond to upcoming trends, the demands of local broadcasters, and divergent tastes in different markets (Director of Research and Insight, Endemol Shine Group, personal interview).

Management of the catalog, which is done by the central office, keeps guiding the relation and collaboration with the local companies after the takeover. Groups can financially and creatively support local development projects if they believe the program idea has international potential and forms a relevant addition to the catalog. To this end, a continuous, central overview and coordination of local R&D activities in the network—the transnational creative pipeline—is crucial. For example, the Chief Creative Officer of Endemol Shine Group noticed their catalog lacked a new music entertainment show, so he put out a call in the network; a U.K. subsidiary came up with a new format in that genre, which the group then rolled out internationally (Salmon in World Screen 2018).

Central coordination of the transnational network implies ensuring that local decisions are consistent with the interest of the group (Bartlett and Ghoshal 1998). As an example, BlazHoffski Netherlands had to negotiate their expansion into producing drama series with the central office of Warner Bros. because the Dutch company was initially acquired to feed their group catalog with nonscripted formats. Arguments about creative aspirations from local makers and local broadcasters looking for domestic drama eventually provided BlazHoffski with the freedom to expand into drama (General Manager, BlazHoffski Netherlands, personal interview). Here, local autonomy challenged global coordination, but creating a supportive and encouraging environment prevailed.

Coordination, Collaboration, and Exchange

Some of the primary tasks of groups’ central offices include providing support, establishing collaboration, and organizing communication among subsidiaries. Central creative managers recommend shows from other markets to local managers for inspiration; bring producers in contact with experienced colleagues; or contribute to a brainstorm session themselves (VP Format Development and Production Warner Bros. ITVP, personal interview). In addition to these vertical, global-local cooperation and knowledge flows in production networks, more horizontal collaboration among subsidiaries is encouraged and organized under the supervision of headquarters.

Transnational knowledge exchange is not limited to format-specific information and flying producers overseeing local format adaptations. Cross-border collaboration is embedded in the production of both formatted and nonformatted programming and in all stages of TV production, from the development of new ideas to pitching, selling, and producing. One interviewee mentioned that when international colleagues are interested in what the local team is developing in the Netherlands, they are invited to join a brainstorm or visit production days (Head of Research and Development, BlazHoffski Netherlands, personal interview). Creatives from the Warner Bros. network once got together in Copenhagen for a session on developing crime series to learn from the Danish experts in their network. Another time, local managers presented program ideas to each other that never made it in the original territory but that could possibly work in another market. In yet another meeting of this kind, general tips and tricks around sales pitches were exchanged (General Manager, BlazHoffski Netherlands, personal interview).

While the exact network operation differs from company to company, the TV production groups that were included in this study organize creative exchange meetings where all (creative) managers meet each other face-to-face at least two times per year just before the MIP trade markets. The goal of these meetings is to keep each other informed about successes and trends in every market and what is being developed within the network to “arm subsidiaries with the latest market intelligence” (Littleton 2016), to gather “a huge pool of ideas that can inspire and educate” (Kulkarni in Alessi 2016), and to make sure “that all local executives have some fresh input of ideas and formats to bring to their own clients” (MD Entertainment, Warner Bros. ITVP Belgium, personal interview). Next to their directly integrative function of exchanging information and ideas, group meetings are aimed at getting to know each other to promote and facilitate direct, horizontal contact, and consultation between people and offices. “You meet each other, you talk to each other, have dinner together [. . .] and the next time you want to make a show that has been produced in Portugal, you just call the CEO of Portugal” (CEO, FremantleMedia Belgium, personal interview). While central group offices play an important role in the organization of face-to-face contacts to achieve efficiency, subsidiary members experience these social bonding moments as inspiring and essential to their industry know-how, occupational identity, and professional culture.

Centralized Information Management

One of the central management’s key tasks is the distribution of local resources and knowledge (Bartlett and Ghoshal 1998). The central creative teams of the analyzed production networks also operate as a library and distribution center of information and know-how. They collect data from the local markets, analyze target audiences and viewer ratings, scan the globe for “the next big hit,” and try to identify trends. Local offices thereby function as providers of knowledge about specific markets. They report on their activities, upcoming pitches and commissions, the status of current productions, and the reception of newly launched shows. In addition, local managers provide the group with information about local broadcasters’ (presumed) wants and needs, market trends, and their explanations for flops and successes. They also deliver materials like production bibles, written program ideas, and audio-visual material (see Figure 1).

OPEN IN VIEWER

Figure 1.

Information flows in TV production networks.

Based on this “feedback loop” from the local companies, central offices “piece that intelligence together” (Salmon in World Screen 2018). Transnationally built corporate knowledge flows from the headquarters to the network in the form of advice, warnings, examples, and inspiration through e-mail updates, reports, meetings, and calls. The flow of knowledge, information, and content is a “two-way street” (Director of Research and Insight, Endemol Shine Group, personal interview) between the central office and the subsidiaries, as both send and receive information to align global and local resources. “I have access to everybody’s development pipelines, and there are things that they will either bring to my attention or we’ll bring to their attention something that we’re really keen on” (Clark in World Screen 2015). Local managers and producers select which ideas and information can be applied to the local context. They describe this information flow as “feeding” or “nurturing” them:

The headquarter in London is on the one hand an administrative and financial center and on the other hand a creative center [. . .] The people in London know what is being produced in every country, what is successful and why [. . .] So, they try to feed us. (MD Entertainment, Warner Bros. ITVP Belgium, personal interview)

As an illustration of the implementation and consequences of these knowledge flows, one interviewee mentioned that the central office informed her that animal shows were very successful in the United Kingdom at the moment. This made her think of a local commissioner she knew who loved dogs, and it convinced her to (successfully) pitch one of the animal shows created by her British colleagues (Creative Director, Warner Bros. ITVP Netherlands, personal interview).

By collecting and spreading certain information around the network, the central office not only identifies global trends, but might also create them. At least, group managers oversee and coordinate activities in the network from the center through the collection, analysis, and distribution of information and know-how. They can “push down” formats into the network for global exploitation, decide which ideas and programs to support and distribute, and interfere in local activities under the veil of supporting, feeding, and inspiring local producers.

Organizational Culture and Group Identity

The construction of a group identity is part of the strategic, transnational management practices. Socialization processes mediate tensions between centralized control and local freedom and incentivize sharing and collaboration without imposing control (Bartlett and Ghoshal 1998). In addition to the already discussed reciprocity between the global and local level, our analysis shows how shared activities and the use of “group speak” contribute to an integrated organizational culture.

In the published interviews and documents, the network is repeatedly compared to a family, with subsidiary companies as brothers and sisters working under the umbrella of the parent company. We noticed this discourse is copied by local managers: “We are a family that is put together, and it takes a while before you are a real family, but when I am on a creative exchange I feel very strong that we are all Warner” (Creative Director, Warner Bros. ITVP Netherlands, personal interview). Organizing group meetings in which best practices are shared and personal relationships are established contributes to the goal of “creating a family” that is willing to collaborate and share (sensitive) information. Other examples of group speak that seem to avoid discussion on competition, hierarchy, and power include “sharing,” “supporting,” “cross-fertilization,” and “feeding creativity,” terms used to stress the advantages of integration and collaboration.

Industry members at both the group and subsidiary levels perceive and present the network as a nonhierarchical, decentralized organization in which local producers have almost complete autonomy. Explicitly emphasizing the decentral operation of the network and diminishing the role of the central office helps to break down hierarchy. As one of the central creative managers illustrated, any sense of global-local hierarchy is avoided: “Some people refer to us here as the HQ [. . .] but I don’t like that phrase, personally. I always see us as a service provider” (VP Format Development and Production, Warner Bros. ITVP, personal interview). The attention is being redirected from the central office to local managers: “I want [local managers] to feel that they’re running the local show and that they are the local hero, and most of them feel that they are” (EVP and Head of International TV Production, Warner Bros. ITVP, personal interview). One local manager recognized this group strategy as “giving you the feeling that you are still autonomous” to prevent key creatives leaving the company (Chief Creative Officer, Zodiak Belgium, personal interview).

Next to internal brand building for optimizing transnational integration, emphasizing local autonomy appeared crucial for TNMCs’ credibility with broadcasters. On the websites of production groups, the local character of their management and output—their “boutique approach”—was stressed. The importance of local flexibility and autonomy for the relationship with broadcasters also ran through the interviews: “In our daily activities there is no one from London telling us what to do, that just doesn’t work, I think commissioners would laugh” (MD Entertainment, Warner Bros. ITVP Belgium, personal interview). Some local managers admitted that they were sometimes being accused or suspected of being dependent puppets of foreign conglomerates. Because this affects their reputation and chances with local broadcasters, they have to assure them of their independence from group management. Thus, in addition to the positive effects of being part of a group for local companies’ reputation (e.g., appearing financially stable), local managers also experienced negative effects of being perceived as “American mastodon,” which also explains why TNMC members emphasize local autonomy.