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.”

Start-up cycle

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.”

Domestic revenue

Overall, the market expanded by 6% over the period, the largest increase since a 15% leap recorded in 2011, bolstered by increasing domestic income.

Indie revenues

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%.