TThe UK film and TV production industry could receive nearly £3 billion in annual investment from Hollywood studios and streaming companies by 2025, as the pound’s decline against the dollar in recent months favors Britain. location for shooting movies and TV series on a big budget .
The UK production industry is enjoying a post-Covid boom with a record £5.6 billion spent last year on films such as Tom Cruise’s action title Mission: Impossible 7 and dramas such as Bridgerton and Star Wars: Andor.
The pound has recovered from its dip against the dollar following Kwasi Kwarteng’s ‘mini budget’ on September 23. However, at around $1.13, it has still lost more than 10% in value against the dollar in the past six months, so the UK can look forward to an additional boost from US companies seeking foreign filming locations and production facilities.
Investment firms, from Blackstone and Hudson Pacific to Legal & General, which are funding a wave of Hollywood-style studios, are also likely to benefit greatly from an increase in demand for UK-produced film and TV shows as a result of the decline of the pound against the dollar.
“If you look at the pound versus the dollar, I’d be rubbing my hands at the prospect of moving manufacturing to the UK,” said Jeremy Rainbird, the co-founder of the Creative District Improvement Company, who developing a number of sites including Twickenham Studios.
“Now, on top of the fantastic incentive of government tax breaks, there is actually a big financial rebate for UK production. Streamers and studios will be looking at exchange rates around the world, there will definitely be an increase in demand here. to be.”
The UK hosts Hollywood productions, including films such as Wicked, Barbie and Fast X, and TV productions such as The Crown, Loki and The Witcher.
Of the nearly £6 billion spent on UK TV and film productions last year, £4.77 billion came from inward investment by Hollywood studios such as Warner Bros, Disney and Universal Studios, as well as streaming companies such as Amazon’s Prime Video, Netflix and Apple .
Netflix spends nearly £1 billion annually on output from the UK, making it the streaming company’s second largest production market worldwide, after the US.
Adrian Wootton, the chief executive of the British Film Commission (BFC), the agency responsible for attracting film and TV productions, believes the rebound in the weak pound alone could help boost inward investment to a staggering £7.5 billion by 2025.
“Looking back at the year, it may have been the biggest ever in terms of inward investment,” he said. “It looks that way. It’s a bit crowded here in the UK and the demand curve is strong. We could go to £7bn or £7.5bn in inward investment annually by 2025, and that excludes spending increases from the domestic TV and film market [£870m in 2021].”
The boom, fueled primarily by the high content spend associated with the streaming revolution, has fueled a race for studio space as existing production facilities expand and new sites try to open to keep up with demand.
Pinewood Studios, home of the James Bond franchise and with Disney as its long-term tenant, plans to double in size.
Shepperton Studios, owned by Pinewood, has signed a deal with Netflix, while Amazon also signed a long-term lease with the south-west London studio earlier this year, famed for productions of Mary Poppins Returns to Alien.
Sky and Universal Studios, both owned by American cable company Comcast, are building a studio complex in Elstree, north London, backed by Legal & General.
Just off the M25 in Broxbourne, Blackstone-backed Sunset Studios, a Los Angeles production facility that has produced films such as La La Land, Zoolander and the first in the X-Men franchise, creates what it claims is the biggest movie and campus TV. -studio. In nearby Borehamwood, property developer Bidwells is trying to create Hertswood Studio.
Numerous other developments are underway, including the £300 million “Hollywood of London” site of the Barking and Dagenham borough, supported by Hackman Capital Partners, the owner of Culver Studios in Los Angeles and Silvercup Studios in New York.
Despite the construction boom, real estate consultancy Lambert Smith Hampton (LSH) believes the UK will need a further 2.3sqm of studio space by 2033, the equivalent of four large studios.
However, there are those who believe that developers queuing up to build more big studios may find that they won’t find the productions to fill the space.
“The demand profile is shifting,” says an industry manager. “Netflix, Disney, Warner Bros, Universal, Amazon – the biggies have largely met their long-term space requirements. There aren’t really any other players behind productions that need a million square feet for themselves. Everyone tries to emulate the success of the giants: Pinewood, Shepperton and Leavesden. While I don’t think there will necessarily be an oversupply, in the long run the market has responded to the boom with the wrong product.”
However, with studios in the UK running at around 95% capacity according to Chris Berry of LSH, a boom fueled by the decline of the British pound will in the near term put pressure on the already under-staffed film industry. and TV industry.
Industry association the British Film Institute (BFI) estimates that the film and TV industry will need 27,000 new full-time employees by 2025 to keep up with the current growth rate of productions made in the UK.
Rainbird is concerned that while a lot of additional studio space is being built, the UK production sector could face a skills shortage.
“It is being addressed, but more needs to be done. These large facilities coming online are a challenge for the entire industry – how do we populate them?”