Forecasting Eye
This Sunday, the Dolby Theatre in Hollywood is hosting the 92nd Academy Awards. The night is expected to be the culmination of an already excellent awards season for the UK’s thriving film industry.
The film expected to enjoy the most success is the British war epic 1917. Having already won seven awards at the BAFTAs and three at the Critics’ Choice Awards, 1917 has received ten Oscar nominations, including being the odds-on favourite to win Best Picture.
But the industry is enjoying more than just critical success. Of the ten highest grossing films worldwide in 2019,[1] three were computer-animated and therefore did not require on-site filming. Five of remaining seven were at least partially filmed in the UK, including Avengers: Endgame, which is currently the highest grossing film of all time.
This has been associated with a significant economic uplift – per the latest available data, we estimate that the UK film industry added over £6 billion to the UK economy in 2018. This is more than treble the contribution made in 2012, and a number likely to increase based on 2019 trends. Additionally, growth in the UK film industry has far outstripped wider service sector levels. The industry has increased from constituting 0.4% of the total services sector in 2012, to 0.8% in 2018.
Interestingly, this is not driven by increases in UK cinema attendance. The most contemporary data shows that in 2018, the average UK resident went to the cinema 2-3 times (2.7 to be exact).[2] This is no higher than estimates for ten years earlier in 2008. In 1950 – arguably the heyday of the British cinema industry – we went on average 27.7 times per person, or more than once a fortnight.
So if it not rising attendance, why is the industry doing so well?
Part of the answer is the significant increase in the UK film industry’s global market share. From 2009 to 2018, global film takings rose from $29.5 billion to $41.4 billion, an increase of 40%. Over the same period total global takings from UK films grew by 470%, from $2.0 billion to $9.4 billion.[3] Therefore 62% of the global industry growth is attributable to takings from UK films.
The UK is an attractive location to produce films for several reasons. Extensive infrastructure, studio space, a highly-skilled workforce and technical expertise are all advantages the UK can offer. Generous public funding – with £634 million available in 2017/18 – provides a further incentive.
Future prospects are also promising. Keen cinephiles will have noticed that for the first time Netflix leads in Oscar nominations, with 34. The anticipated ‘streaming wars’ – with Disney and Apple launching streaming services to challenge incumbents such as Netflix, Hulu and Amazon Prime Video – are likely to be the next major disruptive force for the global film industry.
These are also beneficial to the UK. In 2019, Netflix spent £400m on film and TV show production in the UK and the recent long-term lease of Shepperton Studios in Surrey indicates this is likely to continue. In late 2019, Walt Disney Studios announced a similar lease for Pinewood Studios in Buckinghamshire, and Amazon has previously shot content in Bristol. This competition and increase in demand for content should continue to stimulate the UK film industry.
However, at a time when the UK’s future trade relationships are in the spotlight, one word of warning. From 2014-18, ONS data shows that total exports from the film industry were worth nearly £10 billion.[4] Exports to the EU accounted for 40% of this, the US 29% and Asia 16%. UK film is having its moment in the spotlight – any newly forged trading arrangements should seek to continue to allow the industry to flourish.
[1] https://www.boxofficemojo.com/year/world/2019/?ref_=bo_cso_table_1
[2] Per data from the British Film Institute (BFI) and the ONS.
[3] BFI. ‘UK Film and British Talent Worldwide’.
[4] ONS. ‘International Trade in Services
Contact: Owen Good ogood@cebr.com 07367 065075