UK film and TV – the hero driving economic growth

Recently released statistics from the British Film Institute show a record-breaking year in 2019 for Film and high-end TV production in the UK, with £3.6bn being spent, a 16% increase on 2018.

The film, TV and music industry were the fastest growing part of the UK economy.

Seven of the top 15 highest grossing films worldwide between 2001 and 2018 had British input and spend. In 2019 nearly 190 films were made in the UK and the BFI reported a total spend of £1.95 billion, 6% more than 2018.That number may continue to grow as global players commission new content in their bid to maximise audiences.

Studio growth

The UK government first recognised the importance of film production to the British economy in 1927 when the Cinematograph Films Act first set quotas for British-made films. The success of the act led to the opening of new studios in Elstree and Teddington. Nearly a century later, tax credits for UK-based productions are encouraging a ‘golden age’ of UK film and TV and driving unprecedented levels of investment.

Studios in Elstree have been associated with many film companies including Warner Brothers and MGM. Well known box-office hits include Paddington and The King’s speech. A concentration of local expertise helped persuade Sky to invest £3bn building a new facility nearby. Opening in 2022 it will cover 32 acres and employ 2,000 people.

Further round the M25, Netflix is creating its UK production hub at Shepperton studios near Slough, where recent productions such as Avengers Endgame and Aladdin were hosted. Netflix produced 40 films in the UK in 2019, spending £385m. The new investment will deliver another 14 sound stages, workshops and office space. Not to be outdone, Disney has taken a long-term lease on most of Pinewood studios.

Hit TV shows are being produced around the UK including His Dark Materials (Cardiff) and Game of Thrones (Belfast). There are plans for a major new TV and film production facility near Edinburgh. A report from a specialist property firm estimates that the equivalent of four giant new studios will need to be built over the next 15 years and the English regions are queuing up to capitalise on the opportunity. One company is planning to develop studio space in Liverpool, Manchester and the Midlands.

Netflix, Apple and Disney are the driving force behind the demand for high quality content. As they continue to pursue new viewers the world’s largest media companies’ global content spend has risen to over £107bn. Helped by a large English-speaking pool of writers, directors, producers and stars to choose from, nearly three quarters of investment on films in the UK is by a major US studio.

Sustainability

Is the boom in the film and TV production sector sustainable? Will the ‘content land grab’ continue or will local authorities investing in studios end up with empty facilities when the public lose interest in box-set bingeing? This is not likely – the public have learnt what high quality content looks like and will continue to demand it. The UK is the world’s busiest production hub and demonstrates the continued world-class excellence of UK talent, crews, VFX and production services, locations, the supportive fiscal environment created by the UK’s creative sector tax reliefs and the work of the British Film Commission with international producers.

According to Amanda Nevill CBE, CEO of the BFI said “This is a sector that continues to grow, delivering billions to the economy and a wide spectrum of jobs all over the UK.”

UK Creative Content EIS Fund 

It is against this vibrant backdrop that the UK Creative Content EIS fund was launched in association with the BFI. It will enable investors to share in the growth of the TV and film production sector by investing in creative content businesses.

The fund was established following a report commissioned by the BFI into the financing of the industry. It highlighted the need to channel private investment capital to the most promising content businesses and Calculus Capital and Stargrove Pictures were chosen to manage the fund following a competitive process.

Calculus Capital has over 20 years’ experience running EIS funds and Stargrove Pictures is a media consultancy with a long history of investing in the screen industries.The managers of the UK Creative Content EIS fund are targeting £2 return for every £1 invested over a four to six-year investment horizon. This does not include the generous EIS tax benefits.

The fund is looking to raise £20 million to invest in a portfolio of the most promising companies in the UK screen industry. It has already made its first investment – into Wonderhood Studios, an innovative TV/ad agency hybrid run by former Channel 4 head David Abraham. Although a new company, it has already won commissions from the BBC, Channels 4 & 5 and major commercial brands.

The Fund is on the cusp of making an exciting second investment, and will announce this in the coming weeks, watch this space.