UK television, film eye £1.3bn opportunity

Richard Broughton

A £1.3 billion opportunity is set to present itself to the UK’s television and film industries despite uncertainty over Brexit, according to a market briefing.

Ampere Analysis said that economic growth meant despite uncertainly consumers meant consumers still had “room to spend on entertainment”, despite a declining home entertainment market.

Ampere agreed SVOD viewing was “eating into” home entertainment revenues, but that the two mediums did not compete “like-for-like in terms of content”.

Indeed, just 10% of features and movies released in 2015 and 2016 that Ampere tracked in SVOD were available in both SVOD and digital retail formats.

The majority of those titles were only available in TVOD format from the likes of iTunes, Sky Store and other digital retails services.

Increases in the price of DVDs and Blu-ray discs had helped to partially offset drops in home entertainment market revenues, Ampere added.

The research house noted it is difficult to make exact forecasts due to the uncertainty as to when the UK leaves the European Union following the vote this summer.

Currently, however, it noted that “even the worse case scenario” for 2017 was better than industry declines witnessed during the 2009 recession. “The caveat is that a triggering of Article 50 [which begins the format process of removing the UK from Europe] without a clear roadmap would almost certainly have a substantially worse effect.”

Ampere noted uncertainty would lead to certain effects, beginning with a hit on the advertising market, then theatrical and home entertainment about a year later as confidence loss hits consumers, and finally pay TV and public television.

The latter mediums initially show resilience, “but suffer late on in the economic cycle as subscription contracts end and pressure is placed on public funding”, according to Ampere.

“Overall consumer spending on film and TV products in the UK has been in decline since 2009 relative to overall economic gains,” said Richard Broughton, director at Ampere. “But this translates to a potential £1.3 billion opportunity for film/TV companies to return to a comparable market position. Alongside ongoing growth in digital retail, the specific opportunity for home entertainment in the near-term is the introduction of UHD formats and the industry has a chance to stabilise if it moves more aggressively on price.”