Two new studies from main UK producer group Pact present the stark impression of the COVID-19 pandemic on the UK unbiased manufacturing sector, with the group’s CEO John McVay warning that “it may take many years for the industry to build back to where it was prior to the pandemic”.
According to Pact, the findings of the annual Pact Census and a specifically commissioned Covid Long Term Impact Study elevate specific considerations within the context of the Government’s proposal to privatise Channel 4, with small and medium-sized indies particularly involved about their future prospects.
Pact Census key findings
UK TV manufacturing sector revenues have been hit exhausting by the pandemic in 2020, leading to a 14% decline from 2019 to £2.9BN – the bottom determine since 2017.
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International revenues remained above £1BN for the second yr working – regardless of falling by 13% -driven by worldwide main commissions and gross sales of completed applications.
Revenue generated by commissions from on-demand providers reminiscent of Netflix and Amazon Prime grew year-on-year, though at a a lot smaller price than current years, by 6% reaching £356m.
Domestic TV revenues have been hit hardest, declining by £257m (13%) on account of a discount in main commissioning spend from the UK – the bottom since 2011.
However, secondary revenues elevated to over £500M as indies regarded to generate profits by different means whereas productions have been paused and even cancelled.
After a number of consecutive years of progress, spend on drama commissions fell in 2020 with leisure commissions changing drama as essentially the most worthwhile style, accounting for one third of UK commissioning spend in 2020. Spend on factual leisure additionally elevated by 5 share factors reflecting the power for producers to make these sorts of exhibits extra simply in the course of the pandemic.
Unsurprisingly, spend on new commissions throughout 2020 declined considerably, accounting for simply 30% of total spend. The BBC was the biggest spender on new commissions, regardless of a decline on earlier years, while ITV and Channel 4 barely elevated their spend on new programming and Channel 5 proportionally spent essentially the most.
Despite declining commissioning spend throughout the sector, the proportion spent on commissions exterior of London grew to 45% (up two share factors) with Wales and South West England accounting for greater than 50% of commissioning spend exterior of London, in accordance with the Census Nations and Regions annex.
The Pact Census has been carried out by media administration consultants Oliver and Ohlbaum since 2008.
Covid Long-Term Impact Study
Earlier this yr Pact carried out a separate piece of analysis from 3Vision which regarded on the difficulties confronted by UK unbiased manufacturing firms all through the COVID-19 international pandemic, in addition to assessing the restoration and reflecting on indies’ expertise of working with UK and worldwide commissioners.
The findings present that while the sector is a way off from recovering to pre-pandemic ranges, the introduction of varied measures – together with the Government Production Restart Scheme – meant many indies have been capable of survive by the disaster, adapting their companies to take advantage of the modified panorama. Worries about future prospects – particularly amongst smaller indies – do nevertheless persist.
As a results of the pandemic, 65% of respondents have been seeking to diversify and develop different areas of their enterprise, whereas 74% have been seeking to goal extra SVOD commissioners reasonably than simply free to air channels. Smaller manufacturing firms expressed extra intent in altering their content material focus, budgets and plans. Although the survey nonetheless discovered that Free to air TV is the most important commissioner for UK productions representing 48% of commissions.
The variety of pitches made by manufacturing firms surveyed elevated year-on-year to all nationwide UK broadcasters by 18%. The whole variety of commissions additionally elevated, with the commissioning price additionally rising from 13% in 2019/20 to 16% in 2020/21.*
Production firms in London have been the primary beneficiaries from the elevated variety of commissions year-on-year, most notably from Channel 5. In line with their Charter commitments and targets for nationwide illustration, the BBC commissioned essentially the most from exterior of London, with Channel 4 additionally buying content material significantly from the remainder of England.
Overall response occasions to pitches have been slower all through the pandemic than within the previous 12 months with the typical time slipping from 5.2 to five.7 weeks. The BBC took longer to answer submissions (7.4 weeks on common) however does obtain much more pitches than all different UK commissioners.
1 / 4 of all respondents had a present cancelled between April 2020 and March 2021, with the bulk having one cancellation. Production firms based mostly within the Nations have been extra more likely to have a present cancelled than these based mostly in England.
The monetary impression of the pandemic affected all sizes of manufacturing firm based mostly throughout the UK with most experiencing a notable lower in money reserves, with these with decrease revenues within the earlier yr the probably to really feel the consequences.
When requested about future progress for his or her firms, there are worries, significantly within the quick time period from smaller manufacturing firms over their prospects for the subsequent 1-2 years. There is nevertheless extra optimism for the mid-term (i.e. 3-5 years).
Commenting on the 2 items of analysis, Pact CEO John McVay mentioned: “The trade has taken an enormous hit from the pandemic and we’re nonetheless within the restoration part. The Government’s Production Restart Scheme has performed an vital half in that restoration and it might take a few years for the trade to construct again to the place it was previous to the pandemic.
“In particular smaller, out of London companies have been detrimentally affected by the pandemic and with the future sale of Channel 4 on the cards, it’s those indies – who see Channel 4 as one of their primary buyers – who are going to suffer most.”
Hakan Kousetta, Co-Founder of 60Forty Films and Pact Chair added: “What these findings clearly show is that, whilst the Government Restart Scheme has been hugely successful in getting the production sector back to work, it hasn’t eradicated the severe financial impact Covid has had on the production sector. With SMEs accounting for such a large proportion of production activity it’s vital that they are able to recover and build back to pre-pandemic levels. Extending the Government’s Production Restart Scheme past the end of the year will be essential to that, as will maintaining the existing commissioning ecology. We await to hear from Government on any extension; but we are also really concerned that the prospective sale of Channel 4 is going to have a very detrimental effect on an already battered and beleaguered sector.”
It needs to be famous that the time frames for each items of analysis are completely different – the rise in commissions just isn’t mirrored on this yr’s Census outcomes.