The contribution of the UK-based film, TV and TV-related industries to the UK economy, and growth prospects to 2025

The UK-based film, TV and TV-related industries (the “audio-visual” sector) already make a substantial and growing contribution to the UK economy in terms of Gross Value Added (GVA).

It is the largest audio-visual sector in Europe with GVA of £15 billion a year, and GVA per employee significantly higher than the UK average, for all industries. As of 2014, the UK’s AV sector is 20 per cent larger than Germany’s and 50 per cent larger than France’s, and has the greatest lead over the rest of Europe compared with the other creative industries.

UK audio-visual sector GVA has been growing by 3.1 per cent a year since 2010, and the sector makes a £1.9 billion a year trade surplus, including a £1.3 billion a year surplus with Europe.

In recent years, a highly developed but maturing UK domestic TV and film market has been complemented by the establishment of the UK as global hub for audio-visual content, high-end skills, locations and support services, which has helped drive recent growth rates.

This puts the UK in an enviable position to benefit from the likely transformation of the global audio-visual sector over the next ten years, from a largely nationally based sector, with a few notable trade flows (e.g. high-end scripted content from the USA to the rest of the world), to a truly global sector with important global hubs accounting for a rising proportion of global value.

So while domestic sales of the audio-visual sector might grow by only 2 to 3 per cent a year, the value added contribution of the sector to the UK economy could well grow by more than double that rate from 5 to 8 per cent a year, with employment growing by similar levels.

Furthermore, industries closely related to, but outside, the audio-visual sector, such as visual effects (VfX), video-based marketing and advertising, games development and story-telling (fiction publishing) are likely to be both very high growth and dependent on the health and dynamics of the UK’s core audio-visual activities.

By 2025, the UK has a very real opportunity to become the major global hub for the audio-visual and related sectors, most notably becoming:

• a major source of global IP across scripted and non-scripted output;

• the leading co-ordinator and financier of (and a leading location for) global content projects across TV drama, feature films, high end factual and entertainment output;

• the international base for leading global channels, platforms and on-demand aggregators with all the support infrastructure and services that entails (management, marketing, professional services etc.); and,

• a major source of the high-end creative and technical skills needed by the sector.

While London and the South East may well be at the forefront of these developments, recent moves within the TV and film industries to develop mini hubs in the North West, Scotland, South West and Wales should help spread the benefits throughout the UK.

While the private sector will lead developments, government and public policy has an important part to play, most notably in: developing flexible immigration and planning rules, encouraging training and skills development, sustaining public support to PSB in the UK, sustaining and potentially improving targeted fiscal incentives, encouraging investment in broadband infrastructure (especially for SMEs), and encouraging fair global trade rules to support all trade flows (including those with Europe) and respect for copyright both in bilateral negotiations and through world bodies such as the WTO and WIPO.

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