BFI RESEARCH AND STATISTICS PUBLISHED AUGUST 2016 THE UK FILM MARKET AS A WHOLE. Image: Mr Holmes courtesy of eone Films

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1 BFI RESEARCH AND STATISTICS PUBLISHED AUGUST 2016 THE UK FILM MARKET AS A WHOLE Image: Mr Holmes courtesy of eone Films

2 THE UK FILM MARKET AS A WHOLE The UK is the third largest film market in the world, generating revenues in excess of 4.1 billion. In 2015, cinema-going remained the most significant component of the film value chain, with revenues of over 1.2 billion. FACTS IN FOCUS The total filmed entertainment market in the UK in 2015 was worth an estimated 4.1 billion, up from 3.8 billion in Revenues across theatrical, digital video and pay TV were up compared with 2014, with pay TV increasing by 71%. Gross revenues for UK film were an estimated 1,095 million, up from 836 million in Overall film revenues in the UK increased every year between 2006 and 2015, with the exception of In 2015, the UK had the third largest filmed entertainment market in the world after the USA and China, but is expected to be overtaken by Japan in the next four years.

3 THE UK FILMED ENTERTAINMENT MARKET AS A WHOLE In 2015, theatrical revenues were the most significant component of the film value chain in the UK. As Table 1 shows, the box office accounted for 30% of the total market value ( 1,236 million) in 2015, compared with 28% ( 1,058 million) in Revenues from theatrical, digital video and pay TV were up on 2014, while those from physical video rental and retail, terrestrial and multi-channel TV were down. Pay TV revenues recorded the largest increase, with a rise in value from 466 million to 795 million and an increase in overall market share from 12% to 19%. (It should be noted that the majority of all television revenues accrue to the television industry rather than to the suppliers of film.) Gross revenues for UK films in 2015 were estimated to be 1,095 million, with the share for British films highest in the theatrical market (45%), followed by terrestrial TV (27%) and physical video rental and retail (both with 25%). Table 1 UK filmed entertainment market, 2014 and 2015 Total gross value ( million) Attributable to UK films ( million) UK film as % of total gross Total gross value ( million) Attributable to UK films ( million) UK film as % of total gross THE UK FILM MARKET AS A WHOLE Theatrical 1, , Physical video rental Physical video retail Digital video Pay TV Terrestrial TV Other multi-channel Total 3, ,145 1, Source: comscore, BASE, Official Charts Company, Attentional, ONS, IHS, BFI RSU analysis Theatrical is the total gross UK theatrical revenues (including VAT) in the calendar years 2014 and 2015 for all films exhibited in the UK. See Box Office report. Physical video rental is the estimated revenue from physical video rental (DVD, Blu-ray, etc) from the number of transactions in the calendar years 2014 and figures have been revised since the 2015 Yearbook. Physical video retail is the total revenue from physical video retail transactions in the calendar years 2014 and See Film on physical video report. The television values are retail equivalent values calculated from the dataset of films shown on UK television. Values are estimated by multiplying the film share of the total channel time by the total revenue applicable to that channel (licence fee, subscription or advertising revenue). Television values cover terrestrial, pay TV and other multi-channel TV. See Film on UK television report. Digital video revenues are derived from IHS estimates of the combined size of the television and online on-demand markets. UK share is based on an estimate derived from knowledge of UK film share in the pay TV and video markets. The above values are gross values and include distributor and exhibitor margins, VAT, prints and advertising costs, DVD/video retail margins, broadcaster and multi-channel TV operator margins in addition to net returns to the film production sector and film investors. The revenues shown here are revenues earned by film in the UK market, whether UK or foreign films. The table does not include export revenues for the UK film industry. See UK film economy report for UK film export revenues. Figures may not sum to totals due to rounding. 3

4 THE UK FILM MARKET AS A WHOLE THE EVOLUTION OF UK FILM REVENUES, Aggregate film revenues increased every year between 2006 and 2015, with the exception of Up to 2013, there was steady growth with increased theatrical, television and digital video revenues compensating for a decline in the value of the physical video rental and retail markets. Overall revenues increased again in 2015, rising to 4.1 billion from 3.8 billion in 2014, an increase of just under 9%. Figure 1 Gross film revenues, all platforms, million 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, Theatrical ,040 1,099 1,083 1,058 1,236 Physical video rental Physical video retail 1,302 1,440 1,454 1,311 1,267 1, Digital video Film on television 1, ,067 1,108 1,173 1,398 1,491 1,557 1,374 1,637 Total 3,537 3,625 3,756 3,767 3,836 4,014 4,014 4,063 3,816 4,146 Source: comscore, BASE, Official Charts Company, Attentional, ONS, IHS, BFI RSU analysis Film on television covers terrestrial, pay TV and other multi-channel. On-demand television-based services are included within the digital video total figure for physical video rental revised since the 2015 Yearbook figures for digital video revised since the 2015 Yearbook. Figures may not sum to totals due to rounding. The revenues shown in Figure 1 are the actual figures; if adjusted for inflation (Figure 2), the figures show that, again with the exception of 2014, revenues have plateaued over the period. 4

5 Figure 2 Gross inflation-adjusted film revenues, all platforms, (expressed in 2015 pounds) 2015 million 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, THE UK FILM MARKET AS A WHOLE Theatrical ,052 1,068 1,101 1,145 1,106 1,061 1,236 Physical video rental Physical video retail 1,566 1,684 1,653 1,461 1,369 1,233 1, Digital video Film on television 1,282 1,163 1,213 1,234 1,267 1,480 1,553 1,590 1,377 1,637 Total 4,255 4,240 4,269 4,197 4,145 4,249 4,180 4,149 3,826 4,146 Source: comscore, BASE, Official Charts Company, Attentional, ONS, IHS, BFI RSU analysis Actual revenues deflated by the UK GDP deflator, which can be found at https://www.gov.uk/government/statistics/gdp-deflators-at-marketprices-and-money-gdp-march Film on television covers terrestrial, pay TV and other multi-channel TV. On-demand television-based services are included in the digital video total. Figures may not sum to totals due to rounding. THE UK FILM MARKET IN THE GLOBAL CONTEXT According to the PricewaterhouseCoopers Global Entertainment and Media Outlook , in 2015 the UK had the third largest filmed entertainment market in the world after the USA and China. The USA accounted for 37% of the world market, with China accounting for 8.7% and the UK for 7.0%. The next largest countries in terms of market share were Japan (6.9%), Germany (4.1%) and France (3.6%). 5

6 THE UK FILM MARKET AS A WHOLE Table 2 Filmed entertainment revenues by country/region, 2015 Country/region US$ million % USA 31, China 7, UK 5, Japan 5, Other Western Europe 3, Germany 3, France 3, Canada 2, Australia 2, India 2, South Korea 1, Other Asia Pacific 1, Other Central and Eastern Europe 1, Brazil 1, Italy 1, Mexico 1, Other Latin America 1, Taiwan 1, Middle East and Africa 1, Russia 1, Spain Malaysia Netherlands Hong Kong Total 85, Source: PwC, Global Entertainment and Media Outlook , Information contained in this table was taken from the Cinema segment and the Home Video section of the TV and Video segment of the PwC Global Entertainment and Media Outlook, , however, some calculations and categorisation of regions are our own. The breakdown of sectors by segments in the current Global Entertainment and Media Outlook differ from those used in previous years; filmed entertainment revenues are now calculated differently. Cinema comprises both box office and advertising. Home video includes both electronic and physical home video of films, TV programming and other premium video content. Revenue comprises sell-through and rental of physical home video, and subscription and transactional revenues from electronic home video; it is from consumer spending. Other Western Europe comprises Austria, Belgium, Denmark, Finland, Greece, Republic of Ireland, Norway, Portugal, Sweden and Switzerland. Other Asia Pacific comprises Indonesia, New Zealand, Pakistan, Philippines, Singapore, Thailand and Vietnam. Other Central and Eastern Europe comprises Czech Republic, Hungary, Israel, Poland, Romania and Turkey. Middle East and Africa comprises Algeria, Bahrain, Egypt, Jordan, Kenya, Kuwait, Lebanon, Morocco, Nigeria, Oman, Qatar, Saudi Arabia, South Africa and the United Arab Emirates. Other Latin America comprises Argentina, Chile, Colombia, Peru and Venezuela. 6

7 According to PricewaterhouseCoopers forecasts, the USA and China will remain the world s top two markets for filmed entertainment over the next four years (although the USA will lose significant share to China), but Japan will overtake the UK to become the third largest market (Table 3). India is expected to rise significantly in the rankings in terms of market share, moving from 10th place to sixth. Four other top 10 territories will drop in the rankings; France and Germany will fall by two places, while Canada and Australia will fall by one place. Table 3 Filmed entertainment revenues by country/region, forecast for 2020 Country/region US$ million % USA 33, China 18, Japan 6, UK 5, Other Western Europe 4, India 3, Canada 3, Germany 3, France 3, Australia 2, Other Asia Pacific 1, Other Central and Eastern Europe 1, South Korea 1, Other Latin America 1, Brazil 1, Mexico 1, Italy 1, Middle East and Africa 1, Russia 1, Taiwan 1, Spain 1, Netherlands Malaysia Hong Kong Total 104, Source: PwC, Global Entertainment and Media Outlook , Information contained in this table was taken from the Cinema segment and the Home Video section of the TV and Video segment of the PwC Global Entertainment and Media Outlook, , however, some calculations and categorisation of regions are our own. Percentages may not sum to 100 due to rounding. See notes to Table 2. THE UK FILM MARKET AS A WHOLE 7

8 Research & Statistics Unit 21 Stephen Street, London W1T 1LN bfi.org.uk/statistics

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