Insolvencies soar at film and TV production companies

INSOLVENCIES among British film and TV production companies have soared 69pc in the past year, as the industry struggles to recover from the lingering effects of the pandemic.

More than 100 businesses went bust this year, according to the tax firm Mazars, as smaller companies were hit by rising debt and staff shortages.

A temporary measure to protect businesses from insolvency during the pandemic ended in March, leading to a wave of creditors going after heavily indebted production companies.

Mazars also found that many skilled TV and film staff switched jobs during the height of the pandemic, when government restrictions shut down productions – and still have not returned to their original employers.

Adam Harris, of the firm, said that the dual impact of pandemic era debt and chronic staff shortages were hitting production houses hard.

“Staff shortages meant that many film and TV production companies were unable to take advantage of upswing in orders following the pandemic, having already endured a difficult lockdown,” he said “Once creditors were allowed to file winding up petitions, many in the sector simply ran out of road.”

The firm warned that the industry could be facing further insolvencies this year, as online streaming platforms such as Netflix and Amazon Prime – who fuelled spending on British film and TV last year – suffered from falling subscriptions. The number of UK Amazon Prime subscriptions fell by 590,000 in the second quarter of this year, according to research commissioned by the media regulator Ofcom. At Netflix, global subscribers dropped by 210,000.

Mr Harris noted that this had made traditional lenders more reluctant to lend to film and TV producers, as recent success in the industry was tied closely to spending from streaming giants.

Last year, streaming platforms spent a record £737m on British film and TV, according to the British Film Institute.