Hundreds of small UK TV companies have so little cash in reserve that a filming overrun or a delay to a series could send them bust, an industry body has warned, as programme budget cuts by broadcasters threaten their future.
Analysis of the Companies House accounts filings of more than ۲۰۰ of the estimated ۸۰۰ independent TV production companies in the UK by the industry body Indielab has found that ۴۰% face running out of cash within the next two years.
The analysis of three years of filings made by small independent TV producers, the “indies” that make up ۸۵% of the UK’s production sector, identified a dramatic drain on the financial reserves they use to weather tough trading periods.
The reserves of more than half declined over the three-year period, with ۴۰% registering a decline of almost a third, while the financial cushion for ۳۱% was slashed by more than half.
The analysis found that the amount held in reserves by a typical small indie – the median amount of the sample of ۲۰۳ – was only £۴۲,۰۰۰ at the end of the three-year analysis period.
The comparable figure at the beginning of the period was £۵۱,۰۰۰, already a slim reserve fund to rely on to bridge funding shortages.
“[The £۴۲,۰۰۰] buffer would not cover the cost of a single delayed commission, a production overrun, or a series put on hold [by a broadcaster] after delivery,” said Victoria Powell, the chief executive of Indielab. “The picture is stark. Small producers are the most exposed part of the ecosystem. When commissioning spend falls, they feel it first and hardest. Our data shows the sector’s health is being eroded, year on year.”
A string of high-profile TV production companies have already been wound down in the past two years.
These include Euston Films, the maker of the pre-apocalyptic thriller Hard Sun and the train drama Nightsleeper for the BBC, and Dare Pictures, which has produced Channel ۴ shows including Fugitive: The Mystery of the Crypto Queen and UK Prisons Exposed: Sex, Drugs & Corruption.
Other notable production closures include Leeds-based Duck Soup Films, which made the drama Lost Boys & Fairies for the BBC and Channel ۴’s Dreamers, and the factual producer Proper Content, which had credits including the BBC documentary P Diddy: The Rise and Fall, the Channel ۵ royal docuseries The King’s Guard and the Channel ۴ show The School That Tried To End Racism.
“We have seen many notable closures across the sector in the last two years,” Powell said. “We know of many more companies that have quietly closed or mothballed outside the headlines. Our data strongly suggests this trend will accelerate.”
Last week, Everyone TV, the joint venture owned by the BBC, ITV, Channel ۴ and Channel ۵, released a report that warned of a “spiral of decline” affecting the production industry if broadcaster budgets continued to be cut.
Despite the arrival of the deep-pocketed US streamers such as Netflix, Amazon and Disney+, the UK production industry still relies heavily on traditional UK broadcasters for their livelihood.
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The report, by Oliver & Ohlbaum, found that public service broadcasters (PSBs) remain the leading source of UK original commissions and production for small indies, accounting for ۷۱% of UK original content investment in ۲۰۲۴ and ۸۵% of all original hours last year.
However, the total amount spent on commissioning programmes by all UK-based broadcasters has fallen from £۱.۹۹bn in ۲۰۲۲ to £۱.۷۳bn in ۲۰۲۴ – the lowest level since the industry shut down during the Covid pandemic in ۲۰۲۰ – according to the most recent figures from the industry body Pact.
This fall has mainly been because of significant decreases by multichannel broadcasters, such as Sky, where spend has declined by almost ۴۰% over that period.
Figures from the British Film Institute showed that spending on prestige shows – high-end TV costing at least £۱m an hour to make – by domestic broadcasters has declined from £۷۹۴m in ۲۰۲۳ to £۶۸۸m last year.
“PSBs with a statutory duty to support independent production need to consider what that duty really means in practice, and whether they are currently meeting it,” Powell said. “The accounts of ۲۰۳ indie TV companies should be a wake-up call to the sector.”
Indielab’s research focused on small indies with a turnover of less than £۱۰m.
Pact, which represents the wider industry, says it has ۸۰۰ independent production company members, the majority of which are small and medium-sized with a turnover of less than £۵۰m.
