UK mainstream broadcasters have slashed the amount spent on UK production programming to the lowest point in a decade last year, as the pandemic wreaked havoc on channel budgets and filming schedules.
The BBC, ITV, Channel 4 and Channel 5 spending on UK production company programming fell 10% to £ 1.16 billion, the lowest level since 2011 and the first decline in five years.
However, this was partly offset by international streaming services such as Netflix and Amazon increasing their spending on big budget UK-produced shows such as The Crown and All or Nothing: Tottenham Hotspur, with an investment. overall up 6% to £ 356million.
As spending by streaming giants has increased in an effort to keep pace with the home viewing boom – Britons spent a third of their waking hours watching TV last year – the total amount spent on UK productions by all broadcasters has plummeted, hitting the capacity of channels to fill their schedules.
The pandemic has postponed the filming of major programs such as the BBC dramas Peaky Blinders and Line of Duty and ITV hit Love Island, while Channel 4 announced a budget cut of £ 150million as advertising revenue collapsed.
“The industry has been hit hard by the pandemic and we are still in the recovery phase,” said John McVay, managing director of Pact, the body which represents independent UK production companies. “It may take many years for the industry to return to what it was before the pandemic. “
Pact said spending on new UK commissions fell last year, accounting for just 30% of overall spending, as budgets were withdrawn or shows simply could not be made due to filming restrictions.
He said a quarter of the 171 production companies that took part in his annual report had at least one show canceled between April last year and March.
As a result, the total revenues of hundreds of independent UK production companies, including the sale of hit shows and formats to overseas broadcasters, have fallen by almost £ 500million. UK TV production sector revenues fell 14% to £ 2.9 billion, the lowest level since 2017.
The BBC remained the biggest consumer of new commissions, investing £ 126million last year, although nearly half of the £ 235million spent by the company in 2019.
Independent production companies sought to consolidate their finances by making money from their intellectual property while television productions were suspended or canceled.
Revenue from secondary rights, such as the licensing of existing shows to domestic and foreign broadcasters or the sale of a program format to be remade overseas, reached over £ 500million on the last year – the highest level since 2015.
McVay said separate research examining the future prospects of production companies has found those based outside London, which rely more on commissions from broadcasters such as Channel 4, are most affected.
“Smaller businesses outside of London have been hit hard by the pandemic,” McVay said. “And with the upcoming sale of Channel 4 on the cards, it’s these independent production companies, who see Channel 4 as one of their main buyers. [of shows] who will suffer the most.