Calculus Capital speak to Wealth Briefing about the UK Creative Content EIS Fund, and the opportunity and benefits of investing in the UK creative sector.
The COVID-19 crisis has cut both ways for the creative industries. The shuttering of cinemas forced new releases to be mothballed, while social distancing rules largely ground work on new film and TV productions to a halt. On the flipside, demand for new content (and platforms) soared as captive audiences whiled away those tedious months – to the extent that Statista predicts worldwide video streaming revenues will have risen by almost 12 per cent to $27.1 billion this year.
There have been some admirable efforts by this ever-adaptive sector to work around restrictions. But the strictest are now coming to an end; just this week it was announced that essential cast and crew working on international film and “high-end” television productions will be exempt from the 14-day isolation requirement for those travelling from many countries abroad. Film and TV production companies are ready to spring back fully into action and a flurry of production activity – and investment from HNW individuals – is expected for autumn, industry figures say.
Cupboards close to bare
The first, very readily understood, driver is that “content cupboards” may be getting alarmingly close to bare at this point. Original content is what drives subscribers to streaming platforms, with these figures having a huge effect on share prices (as well as advertising revenues where these apply).
“Once restrictions are fully lifted, we could see a double or even triple whammy effect of pent up demand on activity levels,” says Dan Perkins, MD of Great Point Investments, the FCA regulated arm of the Great Point Group, set up in 2013 to help finance independently produced film and television content. “Traditional broadcasters, as well as the streamers, are currently thinking, ‘We need to finish the projects that we had to pause, as well as get started on new projects to fill the schedules over the next six to eighteen months’.” The mood music at the likes of giants Amazon and Netflix, along with more recently launched platforms like Disney+ and Peacock, as well as the more traditional broadcasters will therefore be, “We’ve got to commission a lot of high-quality content, and fast”.
“There should be a lot of bandwidth for producers with interesting ideas to have conversations with broadcasters to get deals in place so these productions can get up and running fast. In turn, this presents “a great opportunity from a financing perspective,” Perkins says.
“The growth of content consumption, and the desperate need for more of it, should prove to be a significant opportunity for content creators,” adds John Glencross, chief executive at Calculus Capital, a pioneer in tax-efficient investments and fund manager of the UK Creative Content EIS Fund in association with the BFI. “Given this, alongside the slow reopening of physical production facilities after a production hiatus, it is highly likely that there will be a number of opportunities searching for funding in Q3/Q4 2020.”
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