U.K. Spends £1.38 Billion Yearly On Acquisitions

LONDON: @font-face {
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U.K. television spends nearly one-third of its revenue on original domestic production, according to the new study.  With total income of £12.98 billion, U.K. channels invest £2.84 billion (32 percent of the total) in first-run U.K. programming, £1.06 billion in sports rights and £250 million in online and mobile content.

British television spends £1.38 billion (10.6 percent) on acquisitions. Of that total, £1.18 billion goes to buying TV programs and £280 million to movies. The industry study was put together on behalf of ITV, Channel 4, Sky and PACT (the Producers Alliance for Cinema & Television) and is based on estimates made by a range of authoritative sources in 2010.

The U.K. exports more hours of television production relative to the size of its domestic market than any other country, according to the report prepared by Communications Chambers. It shows U.K. exports soaring from £589 million in 2006 to £1.337 billion in 2009. Of that export total, £549 million came from sales of finished programs, £185 million from video and DVD sales, £45 million from co-production finance, and £119 million from format sales plus £41 million from overseas production of U.K. formats.

The format business grew from £56 million in 2006 and at that time there was no additional income from overseas production.  The export total also includes licensing and miscellaneous income.

One of the most important income streams is commissions for U.K. producers from overseas. Over two-thirds of the total of £439 million in production commissioned from the independent sector in 2009 was from international clients (£296 million).

The U.K. exports 1.10 hours of programming for every £1 million in income the TV industry takes in.  That compares with 0.8 hours for the Netherlands, 0.73 hours for the U.S., 0.69 for Canada, 0.31 million for Germany and 0.22 for France (all per £1 million in domestic industry revenue).

According to the study, pay-TV subscriptions account for the biggest chunk of industry revenue at £4.6 billion (35.4 percent of the total). Pay-per-view income stands at £50 million and online subs and transactional income at £40 million.

Advertising generates £3.43 billion (26.4 percent of the total) with 92 percent of that coming from commercials. Online and mobile advertising around TV content (such as pre-roll spots) comes in at £50 million.

The BBC’s licence fee income of £2.82 billion accounts for 21.7 percent of total industry income.