Research from international audit, tax and advisory firm Mazars has revealed insolvency in small UK TV and film production companies has jumped by 69 per cent in the past year, from 67 to 113.
According to Mazars, many of the insolvencies were what it describes as financially weaker production companies that missed out on last year’s UK film and TV industry boom as they couldn’t recruit staff. They were also impacted by the Covid lockdowns, which left them unable to work.
The rise in insolvencies marks a sharp turnaround for the industry, as streaming services have begun to cut shows a year after a record £5.64 billion spend on British film and TV in 2021, up from £4 billion in 2020, according to figures from the BFI.
Last year, streaming platforms fuelled spending with a record £737 million UK film and TV investment. However, as the major streaming services, including Netflix and Amazon Prime, cut content amid falling subscription levels, further insolvencies are expected.
According to Adam Harris, partner at Mazars, the move has made traditional lenders reluctant to lend to film and TV producers, as the industry’s recent successes were tied to spending from streaming giants.
“Many production houses are reliant on work from streaming services,” he said. “Losing a contract from a streaming service can be a major blow, especially as large production houses will also hire dozens of smaller firms for the project. Many of these will be let go as a knock-on effect of cost cutting.”