Investors are showing continued confidence in UK film and TV production amid growing demand for content from streaming platforms, boosting an industry seen as crucial to urban regeneration and the post-pandemic recovery.
On November 3, US-based Hackman Capital Partners announced plans to transform an east London industrial estate into a film production complex, pledging £300m ($397.4m) of investment over the next three years.
The Eastbrook Studios will feature 12 sound stages to become London’s largest studio campus once complete, contributing an estimated £35m per year to the local economy and creating 1200 jobs.
Darren Rodwell, the leader of Barking and Dagenham Council, who campaigned for the site’s development over the past four years, said that his local area “used to be famous for factories and Fords but in the future, we will be equally famous for making films”.
The project is one of many recent investments made by international developers into UK studio space, such as US-based Blackhall Studios’ plans to build a £150m studio in Reading.
In the first nine months of 2020, the UK attracted nine greenfield FDI projects into the motion pictures and recording studio sub-sector, ranking second globally only to the US’s 10 projects, according to investment monitor fDi Markets.
London mayor Sadiq Khan, who has championed the sector with his vision to create the world’s largest creative production corridor in London and the south-east of England, said that he was “confident that this industry and these world class studios can help to power our economic recovery from this pandemic”.
Mr Khan’s vision for a Thames Estuary Production Corridor – which includes other creative hub developments in Ashford, Kent and Purfleet-on-Thames, Essex – is a key strategy of regenerating urban areas. The corridor is projected to create 50,000 jobs and generate £3.7bn for the UK economy annually.
UK film flurry
Global FDI into motion pictures and recording studios has accelerated in the last four years, as investors capitalise on growing demand for studio space from streaming platforms pouring record levels of investment into content production. In 2019, the UK became the leading destination globally for studio investment in terms of greenfield projects, overtaking the investment into the US for the first time in a decade, according to fDi Markets.
Jason Hariton, chief real estate officer at the MBS Group, the film and TV real estate company that will run the Dagenham studio complex, said that the supply of studio space in the UK “drastically underserves the demand”.
The British Film Institute, an industry body, found that international productions spent a record-breaking £3.04bn in the UK in 2019. Research firm Ampere Analysis found that more than three quarters of that spend was inward investment from streaming platforms such as Netflix and Amazon.
Adrian Wootton, the chief executive of the British Film Commission (BFC), the agency responsible for attracting and supporting major international film and TV production, told fDi that streaming platforms have been a “game changer” and led to continued demand for UK studio space despite the pandemic.
“We’ve worked hard to put together a critical package… people want to utilise the skills, talent and ingenuity of the UK, which has the best concentration of acting talent in the world outside the US,” he adds.
The BFC has championed initiatives to make the UK more competitive for the industry, such as film tax relief that allows production companies to claim a rebate of up to 25% on their expenditure in the UK.
“We engineered a tax credit that was transparent, simple, incredibly effective and intelligible. It gave us a seat at the competitive table,” says Mr Wootton.
Spending on high-end TV production rose from £640m to almost £1.7bn in the five years to 2019, according to BFI figures.
Regeneration and recovery
While the majority of studio investment is concentrated in London and the south-east, in line with the regional divide seen across most sectors, film and TV production hubs in other parts of the UK have emerged in recent years.
In Northern Ireland, where the popular fantasy TV show Game of Thrones was filmed, the industry has brought in significant investment, training opportunities and tourism to the area. Other cities are joining the race, with Liverpool announcing plans in October to build a new studio in the city’s historic Littlewoods building.
“Studios are now looking like a much better investment. It attracts companies to come and film there, and because it is heavily television, it attracts other ancillary service companies to locate around them and creates long-term job opportunities,” says Mr Wooton.
Given the potential of the film and TV production industry, which supports more than 180,000 jobs and contributes more than £12bn to the economy each year, the UK government has rolled out support due to national lockdowns and stalled activity.
In October 2020, the UK government provided a total of £500m to support productions that have to close due to coronavirus-related delays or abandonment.
Rishi Sunak, the chancellor of the exchequer, said upon announcing the scheme that “our world-leading film and TV industry supports tens of thousands of jobs and is hugely important to the UK’s cultural life”.
He added: “This targeted scheme will help to fill the gap created by the lack of available insurance, and help get our world renowned film and TV industry back up and running.”