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Economic Development and Cultural Services Review Panel

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					          Economic & Development and Cultural Services Review Panel
                                                20th November 2007
                                                        Item No: 14


                EPIC: East of England Production Innovation Centre
                     Report by the Interim Head of Economic Development


   •     This report brings members up to date with the development and performance
         of EPIC (East of England Production Innovation Centre) since the beginning of
         the year. This report also outlines EPIC’s developing vision as

            A Centre of Excellence for the production and communications sectors
            A Creative Industries Enterprise Hub supporting start-up and established
            creative businesses
            An aspirational educational and training centre
            A centre for the development of new services in the fast-moving media
            environment

   In summary, this period has seen the refurbishment and modernisation of the
   centre, enabled by a Phase II grant of £838k from EEDA, culminating in its wider
   opening for business in September, when a foundation degree course offered by
   Norwich School of Art and Design started. A number of commercial activities have
   also begun in recent weeks and five businesses have already taken space.


   1.       Introduction
   1.1      This report provides a full overview of EPIC, including:

            •    Background about the project
            •    EPIC’s vision and its current and proposed role
            •    An overview of its facilities
            •    An overview of progress to date
            •    Business activity and performance, including how EPIC is being
                 promoted
            •    The financial position

   2        Background
   2.1      The EPIC project was conceived and developed when the opportunity arose
            to acquire the former ITV Anglia production centre at 112-114 Magdalen
            Street Norwich. The initiative was designed to support the substantial
            production community in the county, which faced the prospect of reduced
            access to both markets and production facilities as a result of changes


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ORIGINATED BY: M Wells                                                         CREATE DATE: 24 October 2007
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EPIC
           within ITV. Norwich and Norfolk’s credentials as a centre for the creative
           media would have been seriously eroded, had these facilities been
           permanently lost.

   2.2     Following wide consultation, a number of roles have been identified for the
           Centre.
          •    It provides industry standard production and post-production facilities for
               local, regional and national production companies.
          •    It provides serviced office space for production and allied companies
          •    It provides desk-space for start-ups or sole traders, enabling them to
               operate under professional conditions.
          •    It works with educational providers to develop the creative talents of the
               future
          •    It will develop short training courses of its own, and with others, to enable
               participants to develop or maintain professional skills.
          •    It will provide a base, and work with others, to develop new services and
               to ensure that the broadcast and media industries in the area remain at
               the forefront of new and emerging technologies.

   2.3     The site was purchased in late spring 2006 with a grant from EEDA of
           £1.623m. In December 2006, an additional £838k of EEDA funding was
           granted, together with £100k of Norfolk County Council funding to enable
           improvements to the building and the installation of advanced technical
           facilities. Ideally, at that time, we would have liked to have upgraded the
           facilities to full High Definition (HD) capability, but funding was not available.
           However, EEDA declared a willingness to consider funding a further
           technical upgrade in the future.

   2.4     The Council owns and operates the centre, currently employing 5 staff (4
           FTE) in four positions, providing overall management of the centre,
           including property management, catering services, event organisation and
           management, training and engineering services. Other County Council staff
           provide legal and financial support. Overall responsibility for the Centre lies
           within the Economic Development Unit.

   3       The EPIC vision and its role
   3.1.    The Centre management and the Advisory Board are currently developing a
           marketing strategy. It includes the following vision:

           “A successful EPIC will be a vibrant production community”.

           •   The large studio will be in regular use for sitcoms, dramas, discussions,
               quizzes, Light Entertainment productions and commercials, by
               companies from within the region and beyond. The smaller studios
               (including the Virtual Studio) will be used for smaller scale productions
               as well as by a range of education and training providers, including

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ORIGINATED BY: M Wells                                                         CREATE DATE: 24 October 2007
FILE NAME: t:/admin/committee reports/Ec Dev & Cultural Services/2007-11-20/   AMEND DATE: 1 November 2007
EPIC
               Norwich School of Art and Design. The dubbing theatre and associated
               audio booths will be used for the audio post-production of programmes
               as well as the recording of audio projects – commercials or radio
               broadcasts. The Centre’s facilities will be used by mainstream
               broadcasters, including the BBC and ITV.

           •   The video post-production facilities will be in regular use by
               programme producers, as well as training providers. Portable facilities –
               portable HDV cameras, digital audio recorders, lap-top edit suites and
               location lighting kits – will be used regularly by training providers,
               particularly for specialist CPD courses provided by EPIC and others.

           •   An incubation centre for dynamic production and media companies, as
               well as other high-tech communications companies. A proportion of the
               available office space will be given over to start-ups or smaller
               organisations as open plan accommodation, rented on a desk-by-desk
               basis. Graduates of the training and educational activities will use these
               facilities.

           •   A focus for business networking and support, for the creative
               industries. For example there will be a growing internal trade that will
               develop among local companies, those in the building and nearby, and
               with the Centre and its facilities, as the production community gains
               critical mass. The Centre will develop a growing reputation as a first
               class, leading edge technical resource. Norwich will become known as
               one of the places to make programmes and develop creative content for
               many different platforms. The catering outlet at the front of the building
               will be widely used by creative and media people and will become a
               valuable networking space and informal centre for a growing community,
               which will include educators, students and media professionals.

           •   As well as content production, EPIC will become a technological
               facility for the distribution of content, either as “traditional” TV or in
               the form of new media, which will be developed in the Centre. It will
               become a provider of broadband distribution services (Internet Protocol
               TV and archive) and will have a high level of Internet and broadcast
               connectivity (which it will make readily available to clients).

           •   EPIC will also broker creative or technical partnerships of an
               innovative nature – some of these will be based in the building and will
               be successful in attracting external funding from both UK and EU
               sources.

           •   Other activities, including cultural events, exhibitions and
               conferences will take place at the Centre when its key facilities are not
               being used for broadcast or production purposes. There will be an
               extensive out-reach programme and EPIC will play its part in raising
               the creative and career aspirations of young people, particularly
               through engagement with colleges.

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ORIGINATED BY: M Wells                                                         CREATE DATE: 24 October 2007
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   3.2     More detail about how these various roles and functions are being delivered
           is shown in section 5 below.

   4.      Building Work / Refurbishment (Phase 2)
   4.1.    Phase 2 Building work was scheduled to start in January 2007, but did not
           commence until the beginning of March 2007. The delay came about
           because the late award of EEDA grant (December 2006) had eaten into the
           architect’s and builder’s preparatory periods.

   4.2.    The work was substantially completed by mid June and it was from then that
           the Centre’s own staff were able to begin installation of new equipment and
           the re-commissioning of existing facilities. Although the Centre is now
           substantially operational, installation work will continue until around
           Christmas. Public areas of the building are now finished and most have
           been re-modelled and re-decorated to a high standard.

   4.3.    During the building work, it was possible to use some parts of the building in
           a limited way, including some business occupation. It is only since the
           beginning of October, however, that the Centre could be described as
           largely operational and able to take bookings across the range of its
           facilities. Although later than planned, this complies with the important
           deadline of having facilities ready for the commencement of the Norwich
           School of Art and Design’s degree course at the Centre in September,

   4.4     The Capital value of the second phase of the EPIC project was £944k,
           represented by an EEDA grant of £838k and a Norfolk County Contribution
           of £100k, plus a further £8k to complete the bar/café refurbishment, which
           had not been allowed for. When added to the £270k allocated for
           refurbishment under Phase 1, which was carried forward, the total budget
           available for Phase 2 of the capital works and technical re-equipping was
           £1,216k.

   4.5     The expenditure on Phase 2 of the project is in line with projections of
           paragraph 1.4. The small underspend is a consequence of time-lags in
           financial reporting and accounting at the time of writing (late October):

                                        Budget              Actual to Date        Remaining
                                        £’000               £’000                 £’000

            Refurbishment as                        506                    472                 34
            agreed
            Equipment                               702                    684                 18
            Extra work funded by                      8                      8                  0
            NCC Economic
            Development Unit

            Total                                 1,216                  1,164                 52



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ORIGINATED BY: M Wells                                                         CREATE DATE: 24 October 2007
FILE NAME: t:/admin/committee reports/Ec Dev & Cultural Services/2007-11-20/   AMEND DATE: 1 November 2007
EPIC
   5       Business Activity and Performance
   5.1     This section describes activity within EPIC. However, as many of the costs
           are not attributable to specific business areas, the financial summary is
           shown in section 6.

   5.2     Training and Education at EPIC - During the building and installation
           periods, only limited educational and training activities could be pursued.
           Two short courses were provided by outside companies and two others
           were provided peripatetically by the Centre. Together, this constitutes
           approximately 32 training days.

   5.3     Agreement was reached with the Norwich School of Art and Design to host
           a Foundation Degree in Video and Film at the Centre. This is a two-year
           course, which will be followed by a one year B.A. (Hons.) top-up option.

   5.4     This course was designed for 25 students. Due to the late accreditation of
           the course, and the difficulty in promoting it, it was projected (by NSAD) that
           the initial intake would be in the region of 10-12 students. However, on
           September 24th, 26 students began the course.

   5.5     In view of the clear popularity of the course, it is likely that its intake will be
           extended at the start of the second year. Once the course has reached its
           third year, the original projection that there would be at least 75 full-time
           degree students based at the Centre, will be significantly exceeded.
           Students participating in other courses will further augment numbers.

   5.6     An EPIC Educational Advisory Group, including representation from
           Norwich School of Art and Design, City College Norwich and Gt. Yarmouth
           College, and others, has recently been established. This group will liaise
           between colleges in the area providing foundation degree courses in the
           broadcast and media sectors, enabling them to both differentiate their offers
           and to cooperate on use of resources and the design of follow-on activities.
           Active consideration is now being given to the design of follow-on courses to
           be run at the Centre, including Post Graduate Certificates and Masters
           degrees. Now the Centre is substantially complete, it is possible to offer a
           wider range of professional and short courses and the Educational Group
           will assist in the design, promotion and accreditation of those courses.

   5.7     EPIC has been designed to operate across a range of business and
           educational activities: there is a synergy between these activities, which will
           continue to grow as the centre develops. Due to commercial sensitivities,
           details of Educational income received in the current financial year, and
           projected in future years is not shown. However, in response to earlier
           concerns, it amounts to no more than 20% of total projected turnover in any
           financial year, illustrating that EPIC is not over-reliant on training related
           income.




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ORIGINATED BY: M Wells                                                         CREATE DATE: 24 October 2007
FILE NAME: t:/admin/committee reports/Ec Dev & Cultural Services/2007-11-20/   AMEND DATE: 1 November 2007
EPIC
   5.8     EPIC as a Creative Industries Enterprise Centre - The Centre is running
           ahead of expectation for the take-up of business and company space.

   5.9     In March 2007, a computer animation company moved into new office
           space created within the building’s former canteen. A small publishing and
           events company (with ambitions in the online sector) took a small office in
           April 2007. Over the summer months, three more companies moved into the
           building: one is a growing TV production company with major production
           contracts to service, one is a very young video production company, the
           third is a PR company. In October, a film and TV production company
           previously based in Soho took space.

   5.10    At the time of writing, one other company is actively negotiating for office
           accommodation. It is the UK research team of a major international IT
           company.

   5.11    Many other organisations have visited the Centre and expressed interest in
           taking space, and new contacts and approaches are regularly being made.
           At least two companies have indicated they plan to take space in the New
           Year to enable them to service projected production contracts.

   5.12    As a result of this take-up, most of the “odd corners” of the building are now
           occupied. The upper floor of the new mezzanine gallery (created during the
           building works) is still available and could be partitioned into smaller units. It
           is the intention, however, to keep a substantial part of this area available for
           small companies and start-ups – particularly as students move through their
           education at the Centre and reach the stage when they might want to go
           into business for themselves. Is also important to keep some space
           available for companies using other facilities.

   5.13    A regional launch event for EPIC is being planned for Spring 2008. It will
           include a “Live Pitching Competition” organised jointly by EPIC and the
           Norwich Producers’ Group, which will encourage the development of studio
           production projects by members of the regional production community.
           National commissioning editors and producers will judge the competition.
           The prize will be cash and facilities at EPIC to develop a pilot of the winning
           project, for submission to broadcasters.

   5.14    EPIC as a Production Facility - Even though most of the facilities at EPIC
           have only recently come on-stream, they have already been used for a
           range of production and broadcast purposes

   5.15    Over the summer, the main studio was used for the tele-recording of BBC /
           Mentorn’s flagship political programme, “Question Time”. Later, the studio
           was also used by the commercial’s arm of ITV Anglia for the shooting of a
           national network TV commercial. One of the small TV studios has been
           used for a media-training course.




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ORIGINATED BY: M Wells                                                         CREATE DATE: 24 October 2007
FILE NAME: t:/admin/committee reports/Ec Dev & Cultural Services/2007-11-20/   AMEND DATE: 1 November 2007
EPIC
   5.16    The voice-over and audio facilities have been used a number of times,
           including a booking by BBC Glasgow for the recording of Stephen Fry’s
           commentary for his high profile “HIV and Me” programme.

   5.17    Edit suites in the building have been used for the editing of two broadcast
           TV programmes and the preparatory editing for a new TV series. Corporate
           promotional videos have also been shot and edited in EPIC facilities.

   5.18    The studio has been out of commission for a total of 18 months, and had not
           been actively marketed by ITV Anglia for some years before that. It has
           always been accepted that winning back industry interest and confidence
           would be a slow job. The inability to use the studio during refurbishment
           has limited our ability to raise the profile of the centre. In addition, the
           previously acknowledged, limited lifespan of the existing SD technology
           (which has been further eroded during the extended period of
           refurbishment) has left very little time in which to rebuild industry interest.
           Nonetheless, there have been some encouraging signs and use has been
           made.

   5.19    There has never been any doubt about the need for investment in High
           Definition (HD) technology. It will have a critical impact on the business
           plan and as such two versions of the plan are shown later in the report, one
           based on continuing without HD, the other assuming HD has been
           introduced.

   5.20    In late summer, a revised “concept paper”, on the importance of upgrading
           the main studio to HD was considered by the EEDA Projects Board. As a
           result of those deliberations, EEDA has invited EPIC to submit a full and
           detailed proposal for funding for the HD project.

   5.21    In preparation for this, EEDA has commissioned, in collaboration with EPIC,
           an internationally renowned expert on HD to report on its importance and
           applicability at EPIC and to assist in development of the technical
           specification. A procurement plan will shortly be developed to ensure that
           the equipment can be purchased in time to meet the end of year purchase
           deadline (March 2008) that EEDA would certainly impose.

   5.22    Broadcasting, and the related television production industry, are currently
           going through a very difficult period. Viewing figures for traditional broadcast
           programmes are in decline and advertisers are spreading their spend
           across a wider range of delivery platforms, including the internet. Over the
           last year, legal issues, some business errors and well-publicised PR
           disasters, have contributed to the downturn in the industry. However, the
           range of content production, to service these platforms is growing. In the
           long term, the prospects for production in the area are good – particularly if
           the Centre gains a reputation for technical innovation, of which HD would be
           an important part.




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ORIGINATED BY: M Wells                                                         CREATE DATE: 24 October 2007
FILE NAME: t:/admin/committee reports/Ec Dev & Cultural Services/2007-11-20/   AMEND DATE: 1 November 2007
EPIC
   5.23    Again, it should be repeated in this context that EPIC operates across a
           range of business and educational fronts: it seeks not to be over-reliant on
           any single one of them. The largest financial opportunities accrue to the
           operation of the main studio: but this is also the area of most significant risk.
           Just one or two key projects (and some are currently under consideration
           with industry players) would make a very significant alteration to the bottom
           line. However, rather than rely on optimistic projections, which may not
           materialise, the EPIC business plan has been revised to show a more
           conservative growth in studio business. The essential requirement – to
           balance the budget over the first few years of operation – has been
           maintained.

   5.24    EPIC as a Centre for the Development of New Services and
           Technologies. These are early days, but moves are being made to
           establish EPIC as a Centre of Innovation. Much of the equipment installed in
           the recent rebuild is “state of the art”, and lends itself to advanced
           development work. This applies particularly to some of the portable camera
           equipment, the online-HD edit suites and the Multi-media server system

   5.25    Televirtual, the first company to install itself in the EPIC building, has
           unveiled a unique automated Avatar online news and information service
           which can deliver bulletins and forecasts – news, weather, sport – from
           RSS1 feeds without the need for human mediation. Funding for the project
           was awarded by the County Council; blue-screen video images to develop
           the Avatar virtual model were
           shot on a portable HDV
           camera in one of the EPIC
           studios. Other partners in the
           project, which has been
           demonstrated to the digital
           leads of all the regional
           development agencies at their
           conference in Norfolk, are
           Archant, the Press
           Association and
           Weatherquest. The synthetic
           speech engine which
           furnishes the Avatar’s voice
           was developed by Nuance,
           whose research team, headed
           by Professor Andrew Breen,
           also took space at EPIC in
           October.
                                                           Figure 1 Karena: the news-casting
                                                           Avatar developed at EPIC by Televirtual




   1
    RSS can stand, variously, for “Really Simple
   Syndication”, “RDF Site Summary” or ”Rich Site Summary”. It is a data format which uses the XML protocol.

                                                    Page 8
ORIGINATED BY: M Wells                                                           CREATE DATE: 24 October 2007
FILE NAME: t:/admin/committee reports/Ec Dev & Cultural Services/2007-11-20/     AMEND DATE: 1 November 2007
EPIC
   5.26    EPIC is a participant, on behalf of Norfolk County Council, in the in the
           Digital Content Market Place project, which has been funded by EEDA.
           EPIC will host digitisation facilities in this project, which has been designed
           to set the pace in the development of online trading in digital resources by
           and between rich content providers.

   5.27    With partners around the North Sea, EPIC is formulating a bid to the EU
           Interreg Cross Boarder / North Sea Programme to create a network of
           European Broadband and Creative Media Centres, for which EPIC itself will
           be the UK designated site. Each of the locations will develop as a Centre of
           Excellence with a particular remit within the digital domain. The Centres will
           swap expertise, best practice and exchange students. The total value of this
           project is expected to run to several million Euros, a significant proportion of
           that coming to EPIC.

   5.28    As EPIC finds its place in the world of digital content creation, there is every
           reason to expect this leading edge role to continue to develop.

           Other Activities at EPIC

   5.29    EPIC has become a full member of the Norwich and Norfolk Conference
           Bureau to enable it to build its conference business. Over the summer, a
           number of events have been held within the main EPIC studio, including
           large events for EEDA and Shaping Norfolk’s Future. SNF

   5.30    In late November, the studio is to be the location for a regional debate on
           the future of the EU, organised by the Brussels office of the European
           Parliament. MEPS of all major UK parties are participating. The event will
           take place in the main EPIC studio and the BBC will use the event to record
           a special edition of “The Politics Show”, addressing European issues.

   5.31    As a result of the building renovations, EPIC now has a number of other
           high standard meeting spaces, equipped with projection and audio facilities.
           These have already been used on numerous occasions for meetings,
           screenings and as production offices. It is expected that this role will
           continue to develop.

   5.32    The Norwich Producers’ Group has been encouraged to make maximum
           use of the Centre and regularly holds committee and membership meetings
           there. EPIC has been used as the venue for a regional presentation by the
           Chief Executive of PACT, the Producers’ Alliance for Cinema and
           Television.

   6       Staffing, Organisation and Marketing Strategy
   6.1     Staff at the Centre consists of a Director (Appointed August 2006), an
           Assistant /Administrator, a Head of Engineering and two receptionists
           (sharing one post). A second Broadcast Engineer has been employed as a
           freelance for the time being, but the post has recently been advertised on a

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ORIGINATED BY: M Wells                                                         CREATE DATE: 24 October 2007
FILE NAME: t:/admin/committee reports/Ec Dev & Cultural Services/2007-11-20/   AMEND DATE: 1 November 2007
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           full-time basis. It is envisaged that eventually there should be at least three
           permanent engineering posts, once the centre is being used to its full
           potential. However, recruitment to these additional posts will only be
           undertaken as and when business increases.

   6.2     An EPIC Advisory Board, with members drawn from the creative
           industries, has been formed to give guidance on the direction and objectives
           of the Centre. The board took over from the previous EPIC Steering
           Committee and met for the first time in September. It is Chaired by Ian
           Masters, who also chairs the Creative Industries Board of Shaping Norfolk’s
           Future. A smaller management board will oversee the running of the centre
           and its financial and business activities.

   6.3.    As mentioned earlier, a detailed marketing strategy is being developed for
           the Centre. This exercise makes use of skills available through members of
           the Advisory Board. Over the last year, a number of marketing and sales
           activities have been organised. These are detailed below:

   6.4     Promotional Activities

           The overall promotional strategy is to present the Centre to the media
           community as a hi-tech, state of the art resource, by means of specialised
           trade advertising and events, telephone contact, the web and direct mail /
           email. A decision was taken not to over-promote in the early stages, prior to
           technical facilities and refurbishment being available for use.

   6.5.    The age of some of the technical facilities, particularly in Studio E, the main
           production studio, mitigates against this promotional strategy. That
           equipment, while still meeting all current technical standards, is clearly no
           longer state of the art – this is an issue which an upgrade to HD would
           address.

   6.6     Advertising

           Advertising has been placed in Kay’s Directory. EPIC took a half page in the
           2006/7 edition. Kay’s is an industry “bible”. Placing the advertisement
           procured access to the Kay’s database, which has been used for direct
           mailing (see below) and will be more widely used in future to publicise
           facilities and events.

   6.7     Web

           The web site (www.epic-tv.com) is the main point of contact, the main
           reference to which inquiries can be directed and the easiest way to update
           marketing messages as the centre develops. The site has been developed
           in-house to permit easy and economical (i.e. free) updates. Documents and
           leaflets can be downloaded from the site, which also acts as a portal for
           facilities hire and other queries via Email.



                                                  Page 10
ORIGINATED BY: M Wells                                                         CREATE DATE: 24 October 2007
FILE NAME: t:/admin/committee reports/Ec Dev & Cultural Services/2007-11-20/   AMEND DATE: 1 November 2007
EPIC
           Figure 2 Growth in traffic to EPIC WWW-site, November to mid-October

   6.8     As a technical and trade site, epic-tv.com is not expected to attract a large
           public footfall but it is important that it reaches the targeted market. There is
           evidence that some work has already come in via the WWW site.

   6.9     The site is now attracting between 600-650 visits per month, a visit rate
           which has started to climb following related publicity activities and up-grades
           to the site. Specialist facilities – such as the Virtual Studio – listed on the
           WWW site have already attracted industry interest and inquiries.

   6.10    Direct Mail / Email

           In Autumn 2006, local agency TLC were commissioned to develop a
           database of national production companies and to contact key personnel
           directly by telephone. Listings of potential clients and companies with
           impending studio projects were compiled. These were subsequently re-
           contacted by email and the list has been used for circulation of the EPIC
           Summer newsletter.

   6.11    Some 200+ named key personnel from production companies from the
           Kay’s database were contacted by postcard in June 2007, inviting them to
           the EPIC stand at the Broadcast Live Exhibition.

   6.12    Events

           EPIC co-ordinated, organized and part financed a stand at the Broadcast
           Live Show, Earl’s Court, June 19th-21st 2007. Also showing on the stand
           were NSAD, FDMX, Screen East and specialist studios, Action Underwater.
           This national event – the Broadcast industry’s premier UK exhibition – was
           used to launch EPIC to the professional production community.

   6.13    EPIC is working with the Norwich Producers’ Group on an industry
           “programme pitching event” which has the potential to create studio work.

                                                  Page 11
ORIGINATED BY: M Wells                                                         CREATE DATE: 24 October 2007
FILE NAME: t:/admin/committee reports/Ec Dev & Cultural Services/2007-11-20/   AMEND DATE: 1 November 2007
EPIC
   6.14    Editorial Coverage

           EPIC has attracted good editorial coverage in the Eastern Daily Press and
           the Eastern Evening News. The EDP’s business 2007 supplement carried a
           two-page feature on the Centre and the Creative Industries. More
           importantly, in terms of reaching business contacts, attendance at
           Broadcast Live resulted in a page lead in Broadcast, the leading industry
           weekly.

   7       Financial Position
   7.1     Financial projections have been revised based on the latest information.
           The table below summarises and compares 5 yearly “bottom line”
           projections for 3 scenarios. The first was that presented in January of this
           year, together with two sets of new projections. The first assumes there is
           no further upgrade to HD (ie continue as now); the second reflects the
           improved position such an upgrade could be expected to generate:

                                             2006/7      2007/8     2008/9     2009/10    2010/11

            Budget per       Income           168.8       466.2      627.8        633.1     630.6
            Cabinet          Exp              253.9       514.4      524.4        602.9     653.4
            Paper 8/1/07     Surp (Def)       (85.1)      (48.2)     103.4         30.2     (22.8)
            Projection       Income           102.1       318.0      454.0        523.0     478.0
            assuming no      Exp              131.0       397.6      453.6        507.0     557.6
            upgrade to       Surp (Def)       (28.9)      (79.6)       0.4         16.0     (79.6)
            HD
            Projection       Income              N/A        N/A      469.0        571.0      656.0
            assuming         Exp                 N/A        N/A      453.5        507.0      557.5
            upgrade to       Surp (Def)          N/A        N/A       15.5         64.0       98.5
            HD

   7.2     The figure shown in the table for year 2006/7 (obviously without HD
           upgrades) is based on actual figures (a deficit of £28,900) rather than the
           predicted deficit of £85,100. Although there was a lower level of grant
           received than had been anticipated, expenditure was significantly reduced
           in terms of premises costs and marketing, due to the delayed start.

   7.3     For 2007/8, the deficit is anticipated to be £31k greater than originally
           predicted. As described in section 5.17, the studio has been out of
           commission for longer than was envisaged. It had been expected that a
           number of projects would have taken place over the summer and autumn,
           but it has not been practical to promote the main studio whilst refurbishment
           was taking place. However, revenue expenditure has been maintained at a
           low level to address both the “quiet” period pending opening, and the
           reduced interest in the SD studio. Planned staff posts were also filled later
           than projected. It should be borne in mind that a number of enquiries are in
           the pipeline, and if any one (or more) of them materialises, the actual deficit
           will be improved. What is presented is in effect a worst-case scenario.


                                                  Page 12
ORIGINATED BY: M Wells                                                         CREATE DATE: 24 October 2007
FILE NAME: t:/admin/committee reports/Ec Dev & Cultural Services/2007-11-20/   AMEND DATE: 1 November 2007
EPIC
   7.4     For the succeeding 3 years, the table illustrates the importance of the HD
           upgrade to the main studio. As described in section 5, we have been given
           strong indications that EEDA will be willing to provide further grant aid to
           upgrade the main studio to full HD capability. Given the relatively short
           lifespan remaining for the existing SD (standard definition) facilities,
           reflected in the financial projections above, this is clearly an essential
           development and one which will be pursued with vigour.

   7.5     Again, the worst-case scenario has been presented. It is possible that
           current (or future) enquiries might lead to longer-term business being
           accommodated in the main studio, even without HD. Previous predictions
           had assumed a reasonable level of business.

   7.6     Further detail relating to the financial situation is shown in Appendix A.

   8       Conclusions
   8.1     These are early days for a complex project. The initial indications are that
           EPIC is delivering exactly what it was set up to do and has been exceeding
           customer expectations. It is beginning to provide both a focus for production
           business, and a major resource for education and training, a source of
           inspiration for the creative talents of the future.

   8.2     At time of writing (Late October), EPIC has been operational at something
           approaching full capacity for only a month. It is far too early, therefore, to
           attempt to measure performance against desired outcomes. It is to be
           hoped that the description of activities so far, outlined earlier in this report,
           gives a flavour of the wide progress that has been made across a wide front
           and gives confidence that targets can be met.

   8.3     The importance of HD for the business as a whole, and the bid for relevant
           funding from EEDA, cannot be overstated. Members are urged to give every
           support to this important next stage of the EPIC project.

   9       Resource Implications:
           Financial: Financial implications are described in Section 7
           Staffing: None
           Property: None
           IT: None

   10      Section 17 Crime and Disorder Act 1998
           EPIC is located in Magdalen Street, Norwich – an area which is scheduled
           for significant investment in the future, and where there is a number of
           redundant/unoccupied buildings. Such areas can attract crime and anti-
           social behaviour and this investment is already bringing new life and activity
           to the area, which will hopefully give confidence to other investors.


                                                  Page 13
ORIGINATED BY: M Wells                                                         CREATE DATE: 24 October 2007
FILE NAME: t:/admin/committee reports/Ec Dev & Cultural Services/2007-11-20/   AMEND DATE: 1 November 2007
EPIC
   11      Action Required
           That the Review Panel takes this opportunity to scrutinise the performance
           of the East of England Production Innovation Centre.

           Background Papers
           There are no Background Papers.

           Officer Contact
           If you have any questions about matters contained in this paper, please get
           in touch with: Mark Wells, Director EPIC Tel: 01603 727771
           Email: mark.wells@epic-tv.com




                                If you need this report in large print, audio, Braille,
                                alternative format or in a different language please
                                contact David Dukes on 01603 223142 or minicom
                                   01603 223833 and we will do our best to help.




                                                  Page 14
ORIGINATED BY: M Wells                                                         CREATE DATE: 24 October 2007
FILE NAME: t:/admin/committee reports/Ec Dev & Cultural Services/2007-11-20/   AMEND DATE: 1 November 2007
EPIC
                             Appendix A – Detailed financial information


As presented
To January 2007 Cabinet

                                     2006/07    2007/08   2008/09   2009/10   2010/11

Grant Income                           142.0       50.0      25.0       0.0       0.0
Facility Hire                           26.8      265.9     386.8     357.0     330.0
Education and Training                   0.0       91.7     148.0     198.8     214.0
Office Rental                            0.0       58.6      68.0      77.3      86.6

Total Income                           168.8      466.2     627.8     633.1     630.6

Salaries                                76.7      247.5     244.5     251.5     251.5
Premises                               129.7      135.8     151.8     169.8     169.8
Services                                13.5       65.1      62.1      65.6      66.1
Marketing                               30.0       50.0      50.0      50.0      50.0
Equipment                                4.0       16.0      16.0      66.0     116.0

Total Expenditure                      253.9      514.4     524.4     602.9     653.4

Profit/(Loss)                          (85.1)    (48.2)     103.4      30.2    (22.8)




Revised projection - No HD

                                     2006/07    2007/08   2008/09   2009/10   2010/11

Grant Income                            91.4      155.0     100.0      75.0      75.0
Facility Hire                           10.7       72.0     180.0     217.0     172.0
Education and Training                   0.0       64.0     124.0     156.0     156.0
Office Rental                            0.0       27.0      50.0      75.0      75.0

Total Income                           102.1      318.0     454.0     523.0     478.0

Salaries                                55.3      183.8     222.8     224.7     224.8
Premises                                60.2      150.8     177.8     177.8     177.8
Services                                 1.4       32.0      22.0      23.5      24.0
Marketing                               11.6       15.0      15.0      15.0      15.0
Equipment                                2.5       16.0      16.0      66.0     116.0

Total Expenditure                      131.0      397.6     453.6     507.0     557.6

Profit/(Loss)                          (28.9)    (79.6)       0.4      16.0    (79.6)




                                                                                   1
Revised projection – With HD

                                            2006/07* 2007/08*      2008/09     2009/10    2010/11

Grant Income                                     91.4      155.0      100.0        75.0       75.0
Facility Hire                                    10.7       72.0      190.0       255.0      335.0
Education and Training                            0.0       64.0      129.0       161.0      166.0
Office Rental                                     0.0       27.0       50.0        80.0       80.0

Total Income                                   102.1       318.0      469.0       571.0      656.0

Salaries                                         55.3      183.8      222.7       224.7      224.7
Premises                                         60.2      150.8      177.8       177.8      177.8
Services                                          1.4       32.0       22.0        23.5       24.0
Marketing                                        11.6       15.0       15.0        15.0       15.0
Equipment                                         2.5       16.0       16.0        66.0      116.0

Total Expenditure                              131.0       397.6      453.5       507.0      557.5

Profit/(Loss)                                  (28.9)     (79.6)       15.5        64.0       98.5

                               * Figures for 2006/7 and 2007/8 are identical to the projections for
                               those without HD, as equipment will not be available until 2008/9
                               at the earliest




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