The studios behind the headlines, part 2: Sky Studios Elstree
In a new series launched last month, Frame 25 looks at what’s driving the recent development of several large-scale studios in the UK.
Setting the scene…
The nation’s creative industries were thriving before the Covid-19 pandemic hit.
The sector was the UK economy’s fastest-growing in 2018, creating jobs at twice the rate of the country’s average employment growth.
The following year, spending on high-end TV and film production in the UK reached £3.62 billion.
Intense competition among the leading SVOD players, such as Netflix and Disney+ – whose popularity has rocketed during the pandemic as people have been asked to stay at home – has led to a surge in demand for both content and production capacity.
And while locating UK studio space has seldom been easy, conditions today have driven the huge investments in studio facilities we’re seeing.
But why the surge in investment in the UK, specifically?
There are a number of reasons:
1. Financial incentive 1: tax breaks
While the UK’s tax incentives aren’t unusual in the global industry – similar schemes are available in many other countries – relief of up to 25% is available for films and high-end TV programmes that qualify as British, either via a cultural test or as an official co-production. Effectively that means productions shot in the UK but backed by Hollywood qualify.
2. Financial incentive 2: a weaker pound
The relative weakness of the pound against the dollar in recent years has added to the UK’s appeal to US producers.
3. The availability of on- and off-screen talent
The UK’s highly skilled, talented and experienced workforce is respected throughout the global industry. Very few countries can locally crew major productions – the UK and the US among them. London, in particular, is home to one of the world’s greatest concentrations of film and TV expertise.
4. The long-term growth opportunities attract institutional investment
The founder and chief executive of studio developer Quartermaster, Katya Baker, says: “Our experience is long-term institutional debt and equity investors in various territories are keen to invest in this particular space.”
5. History and experience
While the shortage of studio space is not unique to these shores – it’s global – it’s possible that the traditional imbalance between demand and supply that’s been prevalent in the UK historically has sharpened facilities owners here, and their experience at operating in such a competitive environment has left them better at attracting big investment.
Netflix and Disney’s long-term deals to take over existing space at Shepperton and Pinewood Studios respectively are regarded by Baker as “a win for both them and their landlord”.
“All UK production houses need to take a similar strategic longer-term view when it comes to their studio requirements, to control costs,” she says.
Part 1 recap/TLDR
Part one went behind the scenes at Twickenham Studios in south-west London. Here’s what we learned:
- Twickenham Studios are part of a project operated by TIME + SPACE Studios.
- TIME + SPACE Studios’ sister company, The Creative District Improvement Company, is backed by a global consortium worth more than £500 million.
- Twickenham Studios are receiving investment to expand and add more stages and workspaces.
- Kent’s Ashford International Studios, and Littlewoods Studios in Liverpool, are also part of that project.
- Time + Space Studios has committed to creating 5,000 jobs and operating one million square feet of production space by 2024.
Part 2: Sky Studios Elstree
Location: Borehamwood, Hertfordshire (15 miles north of central London).
The existing Elstree Studios (located on Shenley Road and to be featured later in this series), the BBC’s Elstree Centre (Eldon Avenue), and the forthcoming Sky Studios Elstree (Rowley Lane and highlighted here) are all located/to be located in Borehamwood, rather than Elstree, in the borough of Hertsmere.
Elstree, a neighbouring town, was once the larger of the two. Although Borehamwood is now significantly bigger, the facilities’ names remain.
Story: Sky Studios Elstree received planning approval in July 2020 to build a 32-acre, state-of-the-art film and TV studio.
The £400 million development, which will be located a short distance from the existing Elstree Studios, will create more than 2,000 jobs (900 during the construction phase and 1,500 when the studio is operational).
Construction began within weeks of Hertsmere Borough Council’s unanimous decision to approve the plans, and will contribute £230 million to UK GDP.
Scheduled to open in 2022, the studios are forecast to attract £3 billion of production spend within five years.
Who they are: Sky Studios Elstree is a joint project between Sky’s parent, Comcast, its sister company NBCUniversal, and Legal & General.
What they say: Oliver Dowden, culture secretary and Hertsmere MP: “Sky Studios Elstree will become home to the best-loved films and TV shows of the future, championing British creativity on the global stage.”
Sky Group: “It is expected that Sky Studios Elstree will become the most sustainable film and TV production site in the world when it opens in 2022.”
Roger Morris, MD, Elstree Studios: “It’s a fantastic new massive studio development just up the road from Elstree Studios. It’s probably one of the most substantial film and TV industry developments in the last 20 years, and will provide jobs, income into the local and UK economy, and re-establish Elstree as one of the major TV and film areas.”
Nigel Wilson, chief executive, Legal & General: “This is the most exciting project in Britain at the moment because it’s a world-leading provider of entertainment services, consolidating in the UK, and it’s a massive regeneration of what is a wonderful, historic site.”
What’s the plan? The new production complex will include 12 sound stages, production offices, a set-construction workshop, screening cinema and post-production facilities. It will cover an area the equivalent of 17 football pitches.
The sound stages will offer flexibility, with the ability to merge or sub-divide to accommodate productions of all sizes. The biggest Elstree sound stages will be able to expand to 60,000 square feet if needed, while the facilities will also enable remote production.
Sky has promoted the new facility’s green credentials: the site is expected to have the capability to generate 20% of its own energy through solar power (Sky says no fossil fuels will be used to power day-to-day operations), and it will harvest rainwater for use onsite.
Single-use plastics will not be allowed in its operations, and the company has planned for how cast and crew will use the studio on a day-to-day basis, and has incorporated green spaces and landscaping across the facility.
Sky intends to use its Elstree base to support young and diverse creative talent.
The big picture: Sky Studios Elstree is among a number of new creative hubs in the UK to be developed. Atlanta-based Blackhall Studios has announced plans to create the UK’s largest purpose-built studio complex, Netflix and Disney have both signed deals to take over existing space at Shepperton and Pinewood Studios respectively, and there is the Elstree Studios expansion which is to be featured soon as part of this series.
Dagenham is another UK town soon to benefit from huge industry investment: Hackman Capital Partners, one of Hollywood’s biggest property developers, has agreed a £300 million deal to build the Eastbrook Studios complex in the east London location.
The series continues over the coming weeks.
In The Frame - April '23
In The Frame - March '23