Global Revenues Down Lowest Level Since 2017 – Deadline

The UK TV boom that brought you the likes of Netflix’s The Crown may be slowing, with producer trade body Pact’s latest Census showing the lowest level of international TV revenue since 2017 and streamer spend dropping by £50M ($57.7M).

While the overall UK TV market almost returned to pre-Covid levels due to a £500M ($577M) boost in domestic revenue in 2021, the report cited a worrying 12.5% drop in international turnover to £950M ($1.1B), which is almost one-quarter behind 2019’s record figure.

In recent years, the Pact Census has shown major gains in UK TV revenues from global players, with studios and streamers taking advantage of the plethora of British on and off-screen talent, cheaper production costs and the nation’s fabled tax credit.

But last year, spend by streamers including Netflix and Amazon Prime Video fell by 16% to £299M, the lowest level since this data started being recorded in 2018.

Speaking to journalists yesterday morning, Pact CEO John McVay said it is too early to tell whether the figures are a longer-term trend or Covid-induced blip due to delays in production caused by the pandemic.

He also flagged the streamers’ bringing shows in-house and the likes of the Warner Bros. Discovery merger leading these conglomerates to “take their eye off the ball” in the UK.

“We think there are various forces at play and will know better next year,” added McVay, who said he had witnessed a strong appetite for UK content at the recent Realscreen market.

McVay rejected the notion that streamers and U.S. studios are moving investment from the UK to other nations such as France to cater for the non-English-language-content boom.

“I don’t think Netflix is robbing Britain to pay France,” he added. “The UK is still a major player and money is not shifting from one market to the other.”

McVay’s comments, however, came a day after a similar French TV market report showed record international spend of €678M ($672M) driven by the success of France’s Tax Rebate for International Production.

Cost-of-living

He also shrugged off concerns that the damaging cost-of-living crisis will encourage buyers to reject the UK, although he urged UK broadcasters to help indies with these spiralling prices, comparing the situation to extra Covid costs.

“We are monitoring this very closely,” he added. “[Spiralling costs] are fundamentals that we can’t control and [UK] buyers need to be sympathetic to that. We need a sensible discussion around navigating these costs.”

Domestic spend on the UK market made up for the international shortfall, with a £500M increase leading to a domestic record of £1.9B. This brought the overall size of the market back up to £3.25B, close to 2019’s record £3.33B.

McVay put this mostly down to the BBC, ITV, Channel 4 and Paramount-owned Channel 5 upping spend after a pandemic-impacted 2020 in which they had to cancel dozens of projects, although multichannel spend, mainly from Sky, also doubled to £443M.

He urged the BBC in particular to keep increasing spend and open up more of its schedules to new IP, coming at a time when the corporation is facing pressure for rebooting old hits such as Survivor and Gladiators.

More than one-third (35%) of overall spend went towards drama, an increase of 6 percentage points from 2020, which McVay expects to continue rising for the lucrative genre. The figure was 40% in 2019.

Notably, the annual Census also showed how UK indies are consolidating and growing.

Almost 10% of producers turned over more than £70M last year, double the 5% from the year prior.

Channel 4 evidence

Channel 4 spent almost two-thirds (61%) of its budget on these larger indies – an increase from 2020’s 55% – which McVay argued is a good reason to keep the It’s a Sin broadcaster in public hands, as the privatization battle rages on under a Liz Truss premiership.

“This is a great consequence of Channel 4’s model,” he added. “If you’re a small business looking to grow then a Channel 4 commission gives you the capital to invest and go global.”

Pact has argued staunchly for privatization to be reversed and most recently sent an open letter to Truss and her Conservative leadership challenger Rishi Sunak from more than 750 indies urging the winner to halt the “damaging” move.

He said the lobbying will continue once Truss has installed a Culture Secretary to replace Nadine Dorries, likely later this week.