The United Kingdom’s entertainment industry is set to undergo a period of rapid expansion driven by factors including studio construction, advertising expenditure, government funding, and emerging technologies. The local sector is poised to become one of the most competitive markets in the West outside of Hollywood, attracting international productions and private investment.
Studio Construction Signals Confidence in Local Production
In the wake of the streaming content production boom during the pandemic, permit consent applications for new studio construction increased by 45%. This included an expansion of Shepperton Studios, which recently opened an additional 17 sound stages this year, with plans to add another 1.5 million square feet approved last year.
Other studios include Reading’s new Shinfield Studios, a 1 million square foot film and TV complex with 18 soundstages, production offices, and a backlot. More studios set for expansion include Warner Bros. studios in Leavesden and Sky Studios in Elstree. The studios have benefited from a government tax break worth £470m, with 40% relief on gross rates until 2034 awarded.
The incentives have been welcomed by the industry after the 2023 US writers’ and actors’ strike saw film and television production spending down 32% in 2022. More than 290,000 people are employed in the British sector, with film and television bringing in more than £17 million in revenues annually.
Online Entertainment and Advertising Drives Digital Growth
According to a recent report by multinational account firm PwC, revenues from the UK Entertainment and Media Market are set to generate £121 billion in revenues per year by 2028. Much of this is fuelled by an increase in earnings in digital advertising, with streamers seeking to find additional revenue streams outside of subscription fees.
The streaming market has almost doubled in size since 2020, and despite fears of a contraction due to fierce competition, it continues to expand rapidly. The cinema sector is also set to recover from the US strikes, with a revenue growth of 6% per annum forecasted over the next four years.
The local online gambling sector is also facing a boom, with more than £15 billion generated in 2023 across the UK. Gambling sites such as Paddy Power generate plenty of activity by allowing players to play online roulette for real cash using sophisticated technologies and immersive online environments.
Government Support Fosters Industry Growth
In the wake of the pandemic, the UK government has established numerous funds to invest in the future of the local entertainment sector. This included a £500 million scheme to protect local productions, which saw 18 films awarded significant funding and more than 340 projects supported to ensure completion.
In 2023, the government also invested almost £150 million in labs to develop technology to support the next generation of special effects. This includes the construction of a £75.6 million research and development virtual production network across Europe.
As for the music industry, there are growing calls in parliament to see a £1 ticket levy added to concert arenas to establish a fund to help support the local independent music industry.
