Pinewood Studios: Business Case and Economic Impact Assessment

More documents

Recommendations

Info

Pinewood Studios LtdPinewood Studios: Business Case and Economic Impact AssessmentJanuary 201314. Production costs are increasing and are being driven by the use of a greater number of sets,more expansive and elaborate sets, more intricate props, increased use of digital editing andspecial effects and larger production teams. The demand for space, in terms of both the sizeand height of the studios, is also being fuelled by a move away from location filming for highbudget productions and a consequent increased demand for sets constructed within major stageand studio facilities – which gives rise to an increased demand for ancillary space such asworkshops with increased height and production offices.15. Major television productions, such as high-end drama and large-scale live entertainment showsare also driving demand. In response to consumer trends, broadcasters are investing in biggerbudget, large-scale and high quality TV productions that require extensive studio space and topendfacilities such as those provided by Pinewood. The total costs for a premium drama seriescan now be similar to those of a large feature film.16. In addition, there are a wide range of other opportunities including video games, music, visualeffects and animation that will continue to increase demand for facilities like Pinewood with theability to produce audio and video game content. While the growth in digital technology haschanged the way people consume entertainment and media, detailed discussions with key USStudio Heads of Production and other production companies have clearly indicated that the useof new technology, for example computer generated images (CGI) and 3D technology, are not atthe expense of real set construction within major stages and studio facilities. These sets remaina core element of the film and production process, providing actors with a real sense of thescene they are acting in.17. In order to capitalise on these growing markets, studios have to offer a competitive package toattract film and TV productions. Fiscal incentives, exchange rates, the availability of skilledlabour, and the quality and size of the studios and ancillary facilities all contribute to thedecision making process. A number of other locations are investing heavily in infrastructure andskills to compete with Pinewood and the other 10 studios 2 that have produced the major featurefilms with production budgets of over $100 million in the last three years.18. To retain its current competitive advantage therefore, Pinewood needs to respond to themarket and address the underlying lack of space. Specific considerations include the need totake account of stage size (i.e. larger stages), stage height (with significant clearance up to 50 ft),ancillary space (as productions often use as much or more workshop/office space as actualshooting space), backlots (required to build substantial sets), streetscapes and the provision offilm studio complexes, that keep up with advancing digital production technology, ensure highspeed connectivity, and provide security and on-site editing facilities.19. PwC has prepared projections of the potential growth in UK film production expenditure underthree scenarios – inflation only case, base case and 17% market share case. These expenditureprojections have been used to derive estimates of the future amount of stage and ancillarystudio space required to accommodate the projected growth within the UK. As shown in TableES1 below in 2013 PwC project that £395 million of UK film production expenditure will relate toPinewood Studio based productions.2WB Leavesden; Longcross; Universal; Raleigh Manhattan Beach; Sony Pictures; WB Burbank; Raleigh Playa Vista; Raleigh Baton Rouge; andCanadian Motion Picture Parkiv
Pinewood Studios LtdPinewood Studios: Business Case and Economic Impact AssessmentJanuary 2013Table ES1: Projected UK film production expenditureTotal UK film production expenditure2011Act.2012Est.Nominal2013Fcst.2032Fcst.CAGR‘13-‘32Real (2013 prices)2032Fcst.CAGR‘13-‘32Inflation only case 1,259 923 1,129 1,806 2.5% 1,129 0.0%Base case 1,259 923 1,129 2,922 5.1% 1,828 2.6%17% market share case 1,259 923 1,129 3,502 6.1% 2,191 3.5%UK film production expenditure relating to Pinewood Studio productionsInflation only case 395 632 2.5% 395 0.0%Base case 395 1,023 5.1% 640 2.6%Pinewood drive market sharegrowth case395 1,457 7.1% 912 4.5%Act. = actual, Est. = estimate, Fcst. = forecast, CAGR = compound annual growth rate. Real projections are in 2013 price terms andare calculated by deflating nominal projections using a long-term estimate of inflation of 2.5%Source: PwC analysis20. Assuming that the ratio of expenditure to floorspace remains the same, the projected realgrowth in production expenditure can be applied to the current stage floorspace figure toprovide an estimate of the stage floorspace required in 2032 to accommodate the projectedgrowth. In total there is currently estimated to be some 120,000 sq m of stage floorspace in theUK 3 . Applying growth in film expenditure implies that in 2032 the UK will require an additional74,300 sq m of studio space to meet this demand under the base case and 112,900 sq m underthe 17% market share case. As productions often need more ancillary space (includingworkshops and production offices) as stage space there will also be a further requirement for anadditional 111,400 – 169,300 sq m by 2032 based on the projected growth in the UK market.These figures do not include the additional floorspace required to accommodate businessesproviding services to productions.21. These projections demonstrate that there is expected to be more than sufficient demand in themarket to justify the scale of the proposed PSDF development and that Pinewood’s expansionwill ensure that the UK is able to capture a proportion of this anticipated growth for the benefitof the overall economy.22. The PSDF project includes development of both the existing site (West Area) and thedevelopment of a new suite of facilities on adjacent land (East Area). The West area will includea minor reconfiguration of existing facilities, while the East area will include new floorspace. It isproposed to provide some 70,700 sq m of additional stage and ancillary space (includingworkshops and production offices) – this would equate to 38% of the projected additional3This estimate includes stage floorspace in 3 Mills; Dragon; Ealing; Elstree; Leavesden; Longcross; The Paint Hall; Pinewood Studios;Shepperton; Black Hangar; Black Island, and Twickenham.v
Page 1 and 2: Pinewood Studios: Business Case and
Page 3 and 4: Executive SummaryIntroductionPinewo
Page 5: Pinewood Studios LtdPinewood Studio
Page 9 and 10: Pinewood Studios LtdPinewood Studio
Page 57 and 58:
Pinewood Studios LtdPinewood Studio
Page 59 and 60:
Page 61 and 62:
Page 63 and 64:
Page 65 and 66:
Page 67 and 68:
Page 69 and 70:
Page 71 and 72:
Page 73 and 74:
Page 75 and 76:
Page 77 and 78:
Page 79 and 80:
Page 81 and 82:
Page 83 and 84:
Page 85:
show all

Pinewood Studios: Business Case and Economic Impact Assessment

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?