Multichannel, international sectors propel production to £3.3BN market

Editor | 20-02-2014

Research on the UKTV production industry from Apex Insight has calculated that the market is now valued at over £3.3 billion after what it calls “modest but sustained” growth.

The analysis shows that this growth is being driven by both broadcasters and customers, with the traditional UK public service broadcasters accounting for over three-quarters of the market. Yet this proportion is falling, down five percentage points comparing 2012 to 2013, as PSBs face revenue challenges such as leakage of ad revenues to the Internet or the freeze in the BBC Licence Fee until 2016 at the earliest.

The largest television producers remain the two major in-house production arms of the leading networks, BBC and ITV. Yet Apex found that led by BSkyB, multichannel players are driving growth as such broadcasters have, in recent years, significantly increased their levels of commissioning of original UK programming. The analyst noted that even though ITV is firmly committed to production being at the core of its business, many believe that the BBC will increase its use of external productions beyond current levels in the future.

Superindies such as Endemol, FreemantleMedia and Zodiak were seen to be benefiting from extensive international operations which provide distribution capability to help them maximise revenues from content and to exploit new revenue streams such as digital rights. However, the industry is still relatively fragmented with potential for further mergers to occur. That said, Apex expects to see the independent sector continue to grow, potentially at a higher rate than in recent years as the outlook for advertising revenues improves.