The UK’s traditional broadcasters cut the amount spent on British-made shows to the lowest point in a decade last year, as the pandemic played havoc with channel budgets and filming schedules.
However, that was partly offset by international streaming services such as Netflix and Amazon boosting their spending on big budget UK-made shows such as The Crown and All or Nothing: Tottenham Hotspur, with overall investment rising 6% to £356m.
While spending by the streaming giants increased in a bid to keep pace with a boom in lockdown home viewing – Britons spent a third of their waking hours watching TV last year – the overall amount spent on UK productions by all broadcasters slumped, hitting channels’ ability to fill their schedules.
The pandemic postponed the filming of major programmes such as the BBC dramas Peaky Blinders and Line of Duty and ITV hit Love Island, while Channel 4 announced a £150m budget cut as advertising revenue plummeted.
“The industry has taken a big hit from the pandemic and we are still in the recovery phase,” said John McVay, chief executive of Pact, the body that represents independent UK production companies. “It may take many years for the industry to build back to where it was prior to the pandemic.”
Pact said spending on new UK commissions plummeted last year, accounting for just 30% of overall spend, as budgets were pulled or shows simply could not be made due to filming restrictions.
It said a quarter of the 171 production companies that participated in its annual report had at least one show cancelled between Aprillast year and March.
As a result, the total revenues of the UK’s hundreds of independent production companies, including from selling shows and hit formats to overseas broadcasters, fell by almost £500m. UK TV production sector revenues declined by 14% to £2.9bn, the lowest level since 2017.
The BBC remained the highest spender on new commissions, investing £126m last year, albeit almost half the £235m the corporation spent in 2019.
Independent production companies sought to shore up their finances by making money from their intellectual property while TV productions were put on hold or cancelled.
Secondary rights revenues, income such as licensing existing shows to broadcasters at home and abroad or selling a programme format to be remade overseas, grew to more than £500m last year – the highest level since 2015.
McVay said separate research looking at the future prospects of production companies found that those based outside London, which rely more on commissions from broadcasters such as Channel 4, are most concerned.
“Smaller, out of London companies have been detrimentally affected by the pandemic,” said McVay. “And with the future sale of Channel 4 on the cards it’s those independent production companies, who see Channel 4 as one of their primary buyers [of shows] who are going to suffer most.”