SVoD services and global channels drive growth for British indies
International commissioning revenues for UK producers topped £500m for the first time last year, driving an overall boost in indie turnover.
According to the 2018 Pact Census, sales from international commissions increased by 17% year-on-year to hit £549m, more than double the rate of growth from the previous year.
Pact chief executive John McVay said that indies of all sizes are picking up non-domestic commissions, especially from the US.
“Most players are on a plane to New York, Washington and LA on a regular basis,” he said. “There is no barrier to entry - the US wants great stories and we are supplying them.”
Finished tape sales plateaued at £218m due to the shift towards originations, while ‘other international secondary rights’ slipped to £34m.
Overall, international revenues increased by more than 10% to top £800m.
“There is no barrier to entry - the US wants great stories and we are supplying them.”
John McVay, Pact chief executive
Spend from digital services, including SVoD operators, increased by 19% to hit £150m, according to the poll of 71 companies, while linear TV channels grew their investment by 17% to almost £400m.
McVay highlighted that digital services comprise just 8% of overall commissioning revenues.
“The line from the PSBs that they [SVoDs] are taking over the world’ is not true,” he said. “PSBs are still by far the most likely to commission UK indies.”
The census also showed the changing shape of the sector between 2016 and 2017.
There are a slightly higher proportion of indies in the £5m-£10m sector (24% v 23%), in the £10m-£25m brackets (18% v 20%) and in the £25m-£70m grouping (5% v 8%).
Meanwhile, the smallest producers make up a smaller proportion of the market, with companies turning over between £1m-£5m accounting for 42% of producers, compared to 49% in 2016.
“The first three years are the toughest but once you are established, there is an opportunity.”
Sara Geater, Pact chair
“There is more of a lifecycle as a start-up now,” said Pact chair Sara Geater. “The first three years are the toughest but once you are established, there is an opportunity.”
Overall, the market expanded by 6% over the period, the largest increase since a 15% leap recorded in 2011, bolstered by increasing domestic income.
UK income grew by 4% to £1.8bn, after witnessing similar declines in 2016.
British commissions jumped by £50m to cross the £1.5bn mark, with 83% of business generated by the PSBs.
Non-TV revenues, from the likes of apps and merchandise, soared by a third to £110m after slipping below £100m for the first time last year.
Meanwhile, UK VoD revenue grew by almost 50% to £16m and comprised more than 1% of total UK commissioning income.
Of the PSBs, the BBC invested the largest proportion in sub-£10m producers, although this figure dipped slightly from 38% to 36%.
Channel 4 was second with 23%, ahead of Channel 5 (18%) and ITV (14%).
Factual entertainment spending slipped as a proportion of overall spend to 23%, having nearly doubled between 2014 and 2016.
The proportion of spend on drama returned to growth for the first time since 2012 - up 2% to 26%.