Australia’s screen production sector can look forward to modest growth in revenues and profits over the next five years, according to a new study.
Market researcher IBISWorld predicts film, TV and video production revenues including production services will expand from $2.4 billion in 2014-2015 to $2.7 billion in 2019-20, an annual growth rate of 2.5%.
Its Motion Picture and Video Production in Australia report estimates industry-wide profits at $270.4 million in 2014-2015, a margin of 11.3%, up from 10.6% in 2009-2010 due to lower costs and higher revenues stemming from increased demand for content.
In the next five years it expects profit margins will improve fractionally to 11.8%. “The major influences on the industry’s performance will be continued demand from TV networks, and government support for film and TV production companies,” it says.
“The availability of digital pay-TV services and multi-channelling by free-to-air TV operators is leading to a significant rise in channels and demand for new and expanded TV programs and film productions.
“However the production industry will face a number of challenges in the next five years, including continued competition from foreign content and pricing pressures from broadcasters.
“A restructuring of the industry is expected to occur, with many local companies forming strategic alliances with larger international companies or allied post-production companies.”
IBISWorld estimated TV programming accounts for 44% of the $2.4 billion production pie, with feature films at 17%, commercials 14% and production services 12%.
Other content including corporate, training and educational content reps 8%, with other production services such as royalties from TV shows and films and leasing and rental income at 5%.
It reckons FremantleMedia Australia is the market leader with 5.2%, followed by GTV Holdings (Global Television) 3.6%, Endemol Australia 3.1%, ITV Studios Australia 2.1% and Beyond 1.5%.
That overlooks significant players including Shine Australia, Essential Media and Television and Matchbox Pictures.