Netflix, Amazon take UK int’l prod spend to £468m

UK production companies made £468 million (US$606.7 million) in commissions from international broadcasters and SVOD services between 2015 and 2016, according to data from a new census.

A new report released this morning showed a 5.3% increase in what UK indie producers body Pact terms as ‘primary international commissions’, a figure in part driven by SVOD platforms such as Netflix and Amazon.

During that period, Netflix commissioned series such as The Crown (pictured) and a third season of Black Mirror, while Amazon began spending on movies such as War Machine.

In total, SVOD players spent £126 million on UK originals, which was almost double the £62.5 million spent in 2015.

Both companies are building out their UK commissioning teams. Netflix has put a number of commissioning executives on the ground and is being heavily linked with Channel 4’s outgoing content chief Jay Hunt, while Amazon hired FremantleMedia International’s Georgia Brown as director of original television.

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Pact’s data showed that international finished programme sales were holding steady year-on-year, at £166 million. This an increase of 166% since 2008, Pact noted.

However, overall TV production revenues in the UK declined 2.9% on the 2015 figure, but held relatively steady at £2.5 million. This was mainly down to falling UK commissioning revenues and rights income from public service broadcasters (PSBs).

UK commissioning spend was down to £1.5 billion, the lowest level since 2011, though non-PSB orders rose 13% as digital channels attempted to cut through their with own network-defining shows.

Non-PSBs also commissioned the highest number of new commissions, with 61% of originals being first seasons or fresh shows. ITV, which is heavily reliant on big-ticket shows such as Britain’s Got Talent, spent 19% on new shows, with Channel 5 at 26% and the BBC and Channel 4 at 32%.

Other takeaways from Pact’s latest census showed spend on drama had nearly halved since 2008, with factual entertainment nearly doubling in the same time as shows such as Gogglebox, The Great British Bake Off and First Dates have scored strong and consistent ratings.

“It’s encouraging that the world continues to want high quality content of British TV and this important revenue stream enables indies to reinvest back into UK plc,” said Pact CEO John McVay.

John McVay on…

Netflix’s payment structures, which some sources claim is putting financial pressure on indies
There’s always fear about recouping money and payment times, and if you don’t fear that you’re probably not a very good company.
These are big cheques and you are taking a big risk – for a period of time – but Netflix tend to work with people who have the capacity and experience to do that. They’re not asking tiny little start-ups to carry £10 million for six months. That’s not what’s happening.
Left Bank [producer of The Crown] is owned by Sony, and has access to the cashflow and corporate structures to do that. I can’t imagine they don’t worry about it, but smaller companies are not being required to do [the same].

Recent European investment in UK production

Our skill set is way more competitive than many of our competitors, which is why you see companies like Newen moving to London – it’s because of that environment. That’s a good thing, as they’re bringing money and investment to get a piece of the action.
The UK is one of the most interesting TV markets on the planet. A lot of money pro rata per head goes into our broadcasting system; we have a culture that wants new, high quality things. We have production talent, access to global markets and are English language.
London will be a prime territory regardless of Brexit, which I don’t think will have a lot of effect.