Film and TV sector adds billions to UK economy
The UK’s film and television industry plays a crucial role in driving GVA growth, outpacing the overall economy by over three times. A recent study also reveals that this sector contributes significantly to a trade surplus of nearly £1 billion each year.
The film industry is booming, making the silver screen a potential gold mine. In fact, global cinema box office revenues have exceeded $42 billion in 2019. While many focus on the profits of major studios, little attention is given to the industry’s broader impact. It seems to be discussed as if it exists in a vacuum.
According to a recent study commissioned by the National Film and Television School (NFTS), the film industry in the UK is experiencing significant growth in terms of gross added value (GVA) when compared to other sectors of the economy. While the country’s overall GVA growth is at 4%, slightly below that of the creative industries as a whole, both film and high-end television (HETV) – which have similar production cycles – are seeing impressive increases at 16% and 15%, respectively.
Based on the NFTS report, the UK’s creative industries experienced a significant 12% surge from 2014 to 2017, resulting in an impressive total of over £3.6 billion. The majority of this growth can be attributed to film production, which had already surpassed £2 billion by 2017 and is likely to have continued its upward trajectory since then. This has not only brought valuable economic gains through taxes for Britain as a whole, but also for local economies where these productions are based.
According to a 2018 analysis conducted by Film London, local economies in boroughs receive an additional £2.76 for every pound spent by feature films on local authority charges. Out of this amount, £1.79 is directed towards supporting local businesses like cafes, shops and hotels, while the remaining 97p goes towards strengthening local supply chains. To put this into perspective, a feature film that typically spends £10,000 per day on council fees would generate an extra £27,600 for the local economy. This is equivalent to supporting 1,680 full-time jobs in London’s economy.
According to the report, the UK audio-visual production industry has been thriving due to a “golden age” marked by growth in film, high end TV, video games, and animation. This growth can be attributed to an increase in high-budget, foreign-produced projects. These investments not only lead to award-winning content and a growing trade surplus, but also have a significant cultural impact due to their global viewership.
When it comes to the top spenders, UK broadcasters are still the dominant force in the country. The BBC alone has a production budget over £2.4 billion, while Sky and ITV each have around £1 billion to work with. On the other hand, US studios invest significantly less, with NBC Universal leading at £398 million and Sony following closely behind at £319 million. This difference can be attributed to the fact that most US studio productions happen within the US. Additionally, UK broadcasters such as BBC, Sky, and ITV have to stretch their budgets further to fill out their television schedules with a larger amount of content.
The UK film industry has been a major contributor to the country’s export market. It has successfully sold its films to numerous countries around the world, generating significant revenue for the country.
The UK’s thriving film industry has encouraged companies to invest in local productions, driven by the country’s successful export of film content and audio-visual services. This demand for intellectual property royalties has contributed to a substantial trade surplus, exceeding £900 billion in 2016 according to NFTS. The UK’s strong presence in the market enables its films to reach a global audience.
The trade surplus has seen a significant rise since the 2000s, illustrating the industry’s recent accomplishments. In the early 2000s, intellectual property royalties from the UK film industry stood at approximately £500 million. However, this amount has skyrocketed to £1.4 billion by 2016. Despite a minor setback in that year, audio visual and related services sales reached around £700 million annually in both 2014 and 2015 – a substantial increase compared to the £200 million recorded in 2000.