Report: UK prodcos grow by 15% on streaming demand
November 15, 2021
The top 50 UK film and TV companies have seen their turnover rise by 15.4 per cent in the last year to £8.1 billion (€9.5bn) as streaming services’ demand for content drives growth in the industry, shows research by accountancy and business advisory firm, BDO LLP.
The appetite for streaming services such as Netflix, Amazon Prime Video and Disney+ has helped the UK’s film and TV industry continue to grow from strength to strength. The companies are benefitting from the increasing need for content as the online streaming industry grows ever more competitive and these services attempt to attract more subscribers.
The number of UK subscribers to streaming services increased by a third to over 32 million in 2020. New streaming services, such as NENT’s Viaplay, are set to join the established market heavyweights in the UK and intensify the need for even more new content.
Much of this new content is set to come from the UK. Amazon recently announced the location of its highly-anticipated The Lord of the Rings prequel series would switch from New Zealand to the UK for its second season, joining other shows based in the UK, such as Amazon’s Good Omens, Apple TV+’s The Essex Serpent, Netflix’s The Witcher season 2 (pictured), and Disney+’s Star Wars: Andor among others.
Additionally, Netflix recently purchased the rights to the Roald Dahl estate, allowing it to create TV shows and films based on the works of the late author and has signed a long-term deal to make productions at Shepperton, near London.
The wealth of talent in the UK film industry is another reason why the call for UK companies is so high. News of the threat of new strike action from the union that represents over 150,000 of Hollywood’s behind-the-scenes workers is likely to further encourage US companies to produce in the UK, where the workforce is far more flexible that its US counterparts.
Peter Smithson, Head of Film & TV at BDO LLP, says: “Demand from streaming giants is fuelling a boom in the UK film and TV industry. Despite the practical challenges brought by the pandemic, UK film and TV companies had a great year and with demand for new content at a level never seen before, this demand is likely to be sustained for some time yet. The masses of new subscribers gained during lockdown and consequent boom in share prices mean that the big streaming companies have tremendous amounts of capital just waiting to be deployed. Production was entirely shut down for long periods last year and has led to a shortage in new shows and films.”
“To keep subscribers happy and compete with rivals, market giants such as Amazon Prime and Netflix are likely to be keen to produce much more content this year and next. This can only be good news for UK film and TV companies who stand to benefit greatly in the coming years,” added Smithson.
As well as benefitting from the surge in popularity of streaming services, UK film and TV companies were also helped by a £500 million government-backed insurance scheme which reimbursed studios for days lost due to pandemic lockdowns.
The UK also has one of the most favourable tax relief systems in the world for film makers, incentivising production. All films with a subject matter, team, and location that qualify as sufficiently ‘British’ are eligible for a cash rebate of up to 25 per cent on UK qualifying expenditure, making production particularly attractive.