A steep downturn in television advertising has been blamed for a £400m drop in UK TV production revenue which has seen programming budgets being slashed.
The total revenue for last year’s UK television production sector dropped by £392 million (8.4%) to £3.61 billion, according to the 2024 edition of industry body Pact’s annual census.
Published today, the report reveals that plunging advertising revenues across the sector – as well as a shift to streaming platforms and a freeze on the BBC licence fee – have led to broadcasters spending less on commissioning new programmes. spending reduced to the lowest level since the pandemic.
Overall, traditional UK-based broadcasters such as ITV, the BBC, Channel 4 and Sky spent 10% less on commissioning programmes than they had in 2022, with investment dropping to £1.78bn, the lowest since the industry shut down during the pandemic in 2020.
This decline was primarily down to a steep drop in commission revenue from multichannel broadcasters such as Sky, where investment budgets plummeted by more than 35%.
The report attributed difficulties in this segment of the market to exposure to a “difficult advertising market” putting pressure on broadcaster margins.
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Both Channel 4 and ITV have each cut hundreds of jobs this year as they have been forced to react to the wider UK ad industry downturn with layoffs and restructures. Channel 4 also announced plans to relocate from its £90m London headquarters.
“The 2024 census shows how many producers are really feeling the impact of the financial crisis and tough market conditions, but also that producers are resilient and are able to diversify during these tough times,” said Pact chief executive John McVay.
“Next year’s census will give us a clearer idea of the longer term impact of the uncertainty of the past few years.”
The report also revealed that spend by subscription video-on-demand services (SVOD) – such as Netflix, Amazon Prime Video and Disney+ and Amazon’s Prime Video – shrank by just £13 million.
