Motion Picture Production in the UK in the UK Industry Market Research Report Now Updated by IBISWorld

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The UK Motion Picture Production industry is heavily influenced by the level of inward investment productions from the major US studios and therefore, industry revenue growth is primarily driven by the exchange rate between the US dollar and the pound, as well as film tax incentives, credit availability and demand for theatrical productions from key markets. Over the five years through 2017-18, industry revenue growth is expected to increase at a moderate rate but the industry will remain volatile with uncertainty over the continuity of the tax incentives and improving economic conditions unfavourably influencing the exchange rate making UK production costs less competitive.

IBISWorld industry market research
Favourable tax incentives keep film producers rolling

The UK Motion Picture Production industry includes all businesses that are involved in the production of films in the United Kingdom, which may be inward investment productions, co-productions or locally financed domestic UK pictures. Industry revenue growth is primarily influenced by the exchange rate between the US dollar and the pound, film tax incentives, credit availability and demand for theatrical productions from key markets. The performance of UK motion picture production also depends on developments in movie production and creative developments worldwide.

Over the five years to 2012-13, industry revenue is expected to grow at a compound annual rate of 7.7% to total £1.65 billion. The industry is characterised by very high revenue volatility, which has been a consistent feature throughout the five-year period. According to IBISWorld industry analyst Andrew Johnson, “fluctuations in the expenditure of the major US studios on productions in the United Kingdom have a prominent influence as inward investment productions account for just over two thirds of industry revenue”. Almost all inward investment is from US-based companies. Therefore, exchange rates are important to industry growth. As a result of exchange rate movements, production in the United Kingdom has become cheaper over the five years, encouraging inward investment. The availability of government tax incentives has supported strong industry growth over the period, particularly for domestically financed productions. In 2012-13 the industry is expected to contract sharply by an estimated 27%, as a result of a slowdown in film production globally reducing inward investment. However, 2012-13 is expected to be a good year for UK independent productions and co-productions.

Over the five years through 2017-18, industry revenue growth is expected to increase at a modest rate. Johnson adds, “revenue growth will remain volatile, with the potential for tax incentives to end in the middle of the period likely to cause revenue falls”. Economic conditions will have a mixed effect on the industry over the next five years as a strengthening domestic economy will lead to improvements in downstream market and credit availability, but it will also unfavourably influence the exchange rate of the pound against the US dollar and make UK production less competitive. Increased production capacity will support future growth, as will new bi-lateral co-production agreements.

The Motion Picture Production industry is characterised by having a small number of large, globally linked operators and a large number of one-off and intermittent producers. Many of these companies are made up of self-employed producers that make very few films. Overall, IBISWorld estimates that the four largest film producers will generate 32.7% of the industry revenue in 2012-13, such that the industry is calssified as having a low level of market share.

For more information on the Motion Picture Production industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.

IBISWorld industry Report Key Topics

Companies operating in this industry are involved in the production of feature motion pictures for screening in theatres and cinemas. Activities may be carried out solely by a UK studio or producer or in conjunction with international studios as part of a co-production film agreement. This industry excludes film post-production activities, such as editing, music, sound, subtitling, titling and special effects.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalisation & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on many UK industries. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in London, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.co.uk or call 0-203-008-6568.

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Gavin Smith
IBISWorld
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