Pinewood Studios: Business Case and Economic Impact Assessment

Pinewood Studios LtdPinewood Studios: Business Case and Economic Impact AssessmentJanuary 20133.2.5.2 PwC note that 11 studios worldwide (4 UK; 6 US; 1 Canada) have produced major films withproduction budgets over $100 million in the last three years, with Pinewood the leader bynumber of films produced. The market is intensely competitive globally with other locationsinvesting heavily in infrastructure and skills. In North America, the competitive landscape haschanged as favourable tax incentives in Canada and in Louisiana and Georgia are attractinginvestment instead of the traditional base in Hollywood, where the vast majority of studios arenow used for television productions. These areas will in turn, present a significant challenge toPinewood’s competitive position.3.2.5.3 While there has been substantial investment, and a number of new studios are being opened inAustralia, Spain, Russia, China, Hungary and South Africa, most studios outside the UK, US andCanada are currently considered ‘second tier’ options, and are often used as over-spill facilities(for example, for secondary production units). However, as Pinewood has been running at, orclose to capacity, this has provided opportunities for these areas to attract investment andestablish their credentials – which could impact on Pinewood’s position in the longer term.3.2.5.4 Within the UK, there are a number of other studio complexes that provide facilities for both filmand TV 26 , but only Pinewood offers the scale of facilities to produce a number of majorproductions at any one time.3.2.5.5 In recent years however, Pinewood's competition within the UK has grown particularly from thenewly-renovated Warner Bros (UK) Leavesden Studios. In 2010 Warner Bros (US) purchased theLeavesden site to develop it into a permanent UK major film studio. The development isreported to have cost in the region of £100 million and involved the construction of two newstages. While these stages are currently used for the visitor centre and the Harry PotterExhibition, which will continue for the forseeable future subject to demand, they were designedfor filming in the future - providing an additional 13,500 sq m (145,000 sq ft) of floorspace, tocomplement the existing facilities (approx. 23,500 sq m/250,000 sq ft) which have undergonesignificant refurbishment. The site also benefits from a backlot of 100 acres and car parking.3.2.6 Future studio requirements3.2.6.1 A key element of reviewing the market context involved detailed discussions with 13 majorstudios and production companies in the US, including all of the major customers of Pinewood,to identify future studio requirements. The headline conclusions are that the future demand forfacility space is forecast to grow and the number of major movies is anticipated to increase, butthere is increasing pressure to avoid budget over-runs. This means that producers are likely toselect studios, such as Pinewood, that provide more certainty of delivery.3.2.6.2 Pinewood customers have identified a number of areas for improvement. These tended toreflect an underlying lack of space and included a need for increased production capacity(including greater flexibility of stages), more backlot and ancillary space, and improved security.26Pinewood; Leavesden; Longcross; Elstree; Shepperton; Three Mills; Black Island; Ealing; Black Hangar; Twickenham (all based in London andsurrounding areas); Dragon Studios (Cardiff); The Paint Hall (Northern Ireland)21