Netflix doubles down on UK productions despite slowdown

Netflix doubles down on UK productions despite slowdown

27 Apr    Finance News, News

Netflix has spent $6bn (£4.8bn) making TV shows and films in the UK since 2020, $2bn more than originally planned, as the streaming giant doubled down on must-watch content amid a global slowdown in new subscribers.

In a rare public announcement on content-spend levels, Netflix has said that it had spent on average almost $1.5bn annually from 2020 through to 2023.

That is a $500m-a-year increase since the streaming company, which makes more than 60 TV series and films annually in the UK, such as The Crown and Heartstopper, last revealed its UK annual spend figure in 2020, when it estimated that it would invest $1bn.

The increasing investment in the UK, the company’s second biggest market for TV and film production after the US, comes as Netflix fights a subscriber slowdown with initiatives including a lower-cost ad-supported tier and a crackdown on free use through password sharing.

Netflix is the biggest spender of the streaming giants – Amazon has said it spent more than £1bn in the UK on TV, movie and live sport between 2018 and 2022 – has long-term production deals at Shepperton and Longcross studios, and shoots in locations across Britain.

About a third of all the productions that Netflix makes in Europe, for its 233 million-strong global subscriber base, are made in the UK.

The boost in Netflix’s content budget puts it on par with ITV, which spent £1.2bn last year but intends to spend more to support new streaming service ITVX, and is approaching double Channel 4’s £671m budget for 2022.

“Our productions are some of buzziest, most watched and zeitgeist-defining in the world,” said Anne Mensah, Netflix’s vice-president of content in the UK. “Between 2020 and 2023, we will in fact have invested almost $6bn creating Netflix series and films here, an increase of nearly 50% on what we originally anticipated.”

Netflix, which makes more than £1.4bn in annual revenues from UK subscribers, is now effectively the joint third biggest spender on content in Britain after Sky and the BBC.

On Wednesday, Netflix announced three new UK commissions including Black Doves, a series starring Keira Knightley; the drama Department Q, an adaptation of novels by Danish author Jussi Adler-Olsen; and the documentary Bank of Dave: The Sequel.

“It is hugely welcome to see Netflix significantly increase its investment in the UK, demonstrating the sheer strength of our TV and film industry as the largest in Europe,” said Rishi Sunak. “Netflix has been a key part of this success.”

A record £6.27bn was spent making films and high-end TV shows (HETV) – those costing at least £1m an episode – in the UK last year, according to industry body the British Film Institute. About £4.3bn of that spend was on HETV series, three times the amount spent in 2018.

The streaming wars have fuelled a content arms race in recent years as traditional TV broadcasters and companies such as Netflix, Amazon, Apple and Disney battle for viewers and subscribers.

However, the global streaming market has seen a significant slowdown. Netflix and Disney+ recorded their first ever subscriber losses in the last year, which has in part been fuelled by consumers looking to cut back on outgoings amid the cost of living crisis.

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