UK indie sector grows, but warnings of tough times ahead

The value of the UK indie sector continued to increase in 2008, but the rate of growth has slowed. Furthermore, the expectation among producers and distributors is that overall profitability and revenues will decrease this year and next.

However, producers and distributors surveyed by Oliver & Ohlbaum for UK producers group PACT said that although there will be fewer commissions and lower license fees, they expected income from rights exploitation to increase.

The fourth PACT Policy survey and financial census, which covers the 2008, financial year, reveals that the UK indie production/distribution sector grew 1.1% last year, taking the total to £2.16 billion (US$3.57 billion), compared with an average of 6.3% over the past four years.

Revenue from international was one of the notable growth areas, Oliver & Ohlbaum noted, recording 4.2% growth. New media revenues also grew strongly, albeit from a small base, and generated £66 million for UK indies in 2008.

Average profit margins at UK indies slipped in 2008 to 8.2% compared to 9.3% a year earlier. Oliver & Ohlbaum said that companies with turnover in the £1-to-5 million and over-£50 million categories were hardest hit.