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Netflix Commissions Help Offset Falling U.K. Production Revenues

Orders from Netflix and international services for U.K. programming grew at a healthy clip last year, helping to offset a decline in revenues from domestic production.

UK producers association Pact carries out an annual census, measuring production activity in the U.K. by genre, revenue, and source.

The 2016 report shows the revenues U.K. producers generated from international commissions and sales increased 5.3%, taking the total to £789 million ($1 billion). Since 2010, international business has increased by 13%.

Digital services spurred the international commissioning total of £468 million, and Pact singled out Netflix as a major contributor, with its orders for U.K.-originated dramas including “The Crown” and “Black Mirror.” Netflix and its international SVOD peers commissioned £126 million worth of U.K. programming in 2016, Pact said.

The producers’ group also noted healthy ongoing distribution activity for U.K. programs, with “Sherlock,” “Downtown Abbey,” and “Midsummer Murders” all big hitters beyond British shores.

John McVay, chief executive, Pact said: “It’s encouraging that the world continues to want high quality content of British TV and this important revenue stream enables indies to reinvest back into UK plc”.

If the international picture is rosy, falling revenues hit home in the U.K. where commissioning spend of £1.5 billion was the lowest since 2011.

By genre, spending on drama continued to fall in 2016 and programming spend committed to factual entertainment continued to increase. Scripted accounted for 24% of the total commissioning spend, the lowest level since Pact started measuring output in 2008.

The U.K. terrestrial networks – the BBC ITV, Channel 4, and Channel 5 – accounted for over 80% of homegrown commissions, down year-on-year, as the multichannel players increased their cumulative spend to £275 million, from £222 million a year earlier.

The Pact figures cover all U.K. production companies that are not wholly-owned by the public service broadcasters. Overall U.K. TV production revenues were down 2.9% at £2.6 billion.

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