JUNE 5, 2019
Netflix has been on the hunt for studio space in the United Kingdom for the last year in an effort to expand its European programming.
According to several sources, Netflix is close to signing a ten-year deal to lease significant space at Pinewood Studios.
Studio Netflix UK
After finally earning studio status by purchasing ABQ Studios in Albuquerque, New Mexico, Netflix has been pursuing studio space in the U.K. for the last year.
The lease is expected to include more than one-third of Pinewood’s Buckinghamshire 80-year old studio, and home to 59,000 square-foot 007 stage. The lease will include over 150,000 square-feet of studio space and offices, at a cost of £6.5 million per year.
Netflix has already started ramping up operations in the U.K. with staff and an office in London. Over the last year, the streaming giant has produced or co-produced over 40 productions in the U.K.
Of Netflix’s 150 million global subscribers, it currently has roughly 10 million in the U.K.
The company wants to produce more content in the United Kingdom, but demand for studio space far outstrips supply. Netflix and several other companies have backed efforts to expand Shepperton Studios, the U.K.’s largest studio complex, which is owned by Pinewood.
Netflix was initially interested in buying studio space, but given the company’s extreme debt-load, they seem satisfied to lease space for now.
Netflix is slated to produce or co-produce 225 television shows and films in Europe this year, at a cost exceeding $1.7 billion. This massive production output is a 57% increase from 2018.
Brexit concerns aside, Netflix and Amazon see the U.K. as a foothold for their European expansion. Both companies combined spent an estimated £155 million in the U.K. in 2018.
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Studio Netflix US
Netflix finally earned film studio status after buying ABQ Studios in Albuquerque, New Mexico at an absolute steal. The initial purchase price, which closed in October, was less than $30 million. However, after receiving generous taxpayer funds, Netflix will only spend around $15 million out-of-pocket.
Netflix will receive a total of $14.5 million in government funds for the purchase, which includes $10 million from the state of New Mexico and $4.5 million from the city of Albuquerque.
ABQ Studios was built in 2007 for $91 million following the state’s production boom that developed after the launch of New Mexico’s incentive program. The latest assessed value of the property was only $22.7 million, according to the Bernalillo County Assessor’s office.
The complex entered Chapter 11 bankruptcy in 2010 after the housing crisis turned the area into a ghost town. New York-based Amalgamated Bank then acquired the studio in 2011.
The site includes eight sound stages totaling 132,000 square feet of space, plus 100,000 square feet of production offices and a large backlot.
Netflix has a lease on the Sunset Bronson soundstage facility next to its Los Angeles headquarters, but ABQ is its first wholly owned production space.
Having been shut out of China, Netflix is more adamant than ever to expand operations in Europe. As the U.S. market nears saturation, European markets present the next best opportunity for expansion.
Many European markets have proved resistant to Netflix’s U.S. content. Combined with local-production quotas, Netflix will have to produce more quality local content to please picky European tastes.TwitCount Button