Two stories passing each other in this week’s newspapers. Firstly, a good fact-packed briefing from The Times [£] on how demand for studio space is multiplying at the moment, to meet the demands of SVoD productions:
“UK production spend is expected to rise sharply, to more than £11 billion a year by 2026, up from £5.6 billion last year.”
“…the property agency Knight Frank estimates that the UK will need an extra 6 million sq ft of studio space over the next five years if the sector is to keep pace with growing demand…”
Knight Frank may want to ask themselves where the skills capacity to meet that demand is going to be found though? On top of all of the other developments that you can look at on this blog’s UK Studio Watch updates, there’s also this:
“Last year Netflix struck a deal with Segro, the FTSE 100 warehouse landlord, to occupy around 230,000 sq ft of production space in Enfield.”
However, moving in the other direction, there’s the widely reported drop in Netflix subscriptions. As the BBC reported, $50bn has been wiped off Netflix’s value because….
“In a trading update on Tuesday, Netflix said its total number of subscribers had fallen by 200,000 in the first three months of 2022, falling well short of its target. It also said some two million more were likely to quit the service in the three months to July.”
So, this raises a big question: I’ve written about ‘the perfect storm‘ that may hit UK production in the next few years – is “the circus leaves town” a more likely development now? Or is a bit of relief from excessive demand possibly even a good thing for the UK at the moment?
All of this makes the debate around the privatisation of Channel Four more interesting. One argument advanced by HMG is that C4 could become more like Netflix, when it seems that Netflix is planning to start supplementing subscription revenues by taking ads, moving a bit closer to C4’s model.
Adding a personal opinion here, production investment needs nothing more than it needs predictable income. The reason we have the world’s leading production base in the UK is not just that (before the SVoD flood) £xbn was invested each year, but investors had the confidence that it would be invested next year and the year after as well.