IMAGINE YOUR BUSINESS IN LONDON
WHY LONDON FOR CREATIVE INDUSTRIES
A UNIQUE REPUTATIONTALENT London boasts some of the world’s most gifted
designers, advertisers, film production specialists, games programmers and animators, artists, musicians and writers
ENVIRONMENT Industry diversity, combined with a rich cultural mix,
makes London a unique environment for firms looking to be innovative within their respective fields while drawing on talent from other creative sectors
London is strong in all of the sub sectors of the industry including: architecture, computer software, film and video, music, interactive leisure, design and fashion, TV and radio, performing arts, publishing, advertising, broadcasting and animation
LONDON’S CREATIVE INDUSTRY IS THE CAPITAL’S
SECOND LARGEST SECTOR,
WORTH $32 BILLION PER YEAR, GENERATING 16% OF THE CITY’S ANNUAL GROSS
VALUE ADDED (GVA)
A GLOBAL HUB OF TRAINED CREATIVE MINDS:
MORE THAN 429,000 PEOPLE WORK IN
LONDON’S CREATIVE INDUSTRIES
A UNIQUE REPUTATIONACCESS London is the perfect base to reach a large customer
base: 12 million in the London Metropolitan area, and 500 million in Europe (within 3 hours)
INNOVATION London is also at the forefront of hybrid business
models, combining elements of telecommunication, mobile, broadcast, social networking, gaming and advertising such as Last.fm, the pioneering online music service sold to CBS Corporation for $280 million
POSITION London is considered to be one of the top three
world leading technology and media centres second after New York, according to professionals in the technology, media and telecommunication sectors (Real Estate BNP Paribas 2012 TMT survey)
THE RIGHT ENVIRONMENTLegal / IP environment: Received particularly favourable ratings and responses with regard to
the enforcement of data protection laws and the perceived fairness of the UK regulator (the Information Commissioner’s Office) in the Global Intellectual Property Index 2011, Taylor Wessing
Design IP rights: the UK come 2nd after Germany; likely to improve due to the revamping of the Patents County Court to ease the cost burden of all intellectual property litigation, including design disputes. London now has a proportionate, specialist and efficient court procedure for design right infringement cases
The UK stays in 2nd place for the third time in a row, and is also 2nd for cost-effectiveness of enforcement
Wide array of legal firms specialising in IP / Patent legislation
London as a place for companies to thrive & grow: Technology, Media and Telecommunication companies (TMT) are
considering London are the place to grow: 54% plan London headcount increases by 2015, on average increasing staff numbers by one-third (BNP Paribas real estate study, Oct 2012)
At 89% the results showed unanimously that organic growth will be the main driver behind the planned staff increases over the next three years. The relocation of existing staff into London from either the UK or abroad scored lowly at 7%
GOVERNMENT SUPPORT As of 2012, it was estimated that the film tax credit,
helped generate over £1 billion of film production investment in the UK in 2010/11.
Corporation tax reliefs from April 2013 for the video games, animation and high-end TV production industries from April 2013
£100m for ultra-fast broadband infrastructure improvement
4G in London by end 2013 – early 2014: will change the mobile world with faster / bigger downloads on mobile phones / tablets
TechCity ‘acknowledgement’ by UKTI & creation of TCIO is promoting the cluster growth
In 2012, the Mayor of London has invested more than £2.3 million in the British Fashion Council, Film London and the London Design Festival to help boost creative talent and attract inward investment
PROVEN TRACK RECORD IN CREATIVE INDUSTRIES
London has a proven track record in attracting more investments in the creative Industries since 2003 than any of its major European competitor cities
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Mad
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Mun
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Amst
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Dublin
Mila
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Barce
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Bruss
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Stock
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Zurich
Gen
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Vienna
Frank
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Rome
0
50
100
150
200
250
300
Number of Greenfield FDI projects in Creative Industries attracted into the location since 2003
Source: fDi Markets (www.fdimarkets.com) ; fDi Intelligence, from the Financial Times Ltd (2012)
NEW PRODUCT DEVELOPMENT& INNOVATION
NEW PRODUCT DEVELOPMENT
London is an ideal location for customising products to European markets, combining a good understanding of the European culture and markets: London offers a globally
inclusive location, with over 233 languages spoken in the capital
It is estimated that 35-40% of Londoners were born outside the UK
‘INNOVATIONRCA’ INCUBATOR
InnovationRCA Incubator launched by the Royal Academy of Arts, following collaboration projects with business school of Imperial College of London
Brings together talented teams from design, business and technology backgrounds, helping them transform innovative ideas, products, service concepts and prototypes into viable business propositions
The incubator has three main objectives: To develop a new community of design entrepreneurs empowered to
act as change agents in industry To pioneer new models for interdisciplinary incubation of design-led
ventures To demonstrate the value of this approach through a flow of
commercially successful projects
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ADVERTISING & PUBLIC RELATIONS
ADVERTISING & PUBLIC RELATIONS Advertising generates £6.2 billion annually for the UK economy The UK leads the world's ranking for advertising excellence and the UK has
the third biggest advertising sector in the world after the USA and Japan London overwhelmingly chosen as the European hub for major agencies -
around 70% of the industry is based in London. It is a young industry with 47% of the workforce under 34 UK advertising revenue grew by an estimated 3.8% and 2.6% in 2010 and
2011, respectively, to a total of £16.18bn There are 13,640 advertising agencies in the UK, 3,855 in London Despite subdued business confidence in 2012 and careful spending, Key
Note & PwC both expect that the advertising industry will keep growing. Total UK advertising expenditure is expected to increase by 4.2% to £16.86bn in 2012, a positive trend that is expected to continue for the next 5 years
85 of top 100 interactive agencies are located in London demonstrate London’s leadership on digital media advertising
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ADVERTISING AGENCIES IN CENTRAL LONDON (WEST END)
E-COMMERCE
E-COMMERCE 88% of London residents use Internet, above the UK average of 84% in 2012 There are 875 million e-buyers globally and 84% of the world’s Internet users now shop online
and Internet spending is expected to account for 40% of all retail sales by 2020 The UK has 37 million online shoppers, and the e-retail market is growing at 16% per year; it
is the fastest growing online retail market in Europe and is second only to the United States globally, testament to the diverse range of businesses and great ideas that make up the UK marketplace
On average, each of us spends almost £2,000 per year online, generating total revenues of over £50billion, and 12.0% of UK retail trade
London’s edge in e-commerce: entrepreneurial spirit coupled with strong digital ecosystem and financial backing thanks to an ecosystem facilitating networking and growth: e-commerce expo; VC & private investors
London is a place for innovation and a location to build a successful business quickly: London-based Shutl currently offers delivery in under an hour to almost two-thirds of Britain
Results from 2012 Start-up Genome report: London is the market place for e-commerce products (50% more likely to succeed than in
the Silicon Valley) and project management software (twice as more likely to succeed than in the SV)
London is the best place to attack existing markets with better products Deemed low risk compared to silicon Valley & NY
16
E-COMMERCE EU MARKET COMPARISON
17Source: CRR research commissioned by Kelkoo
Forecast
Increase Online Sales
2011-12
2012 online
share of all retail business
UK 14.0% 13.2%
Germany 13.0% 10.0%
Switzerland 16.0% 9.9%
Denmark 14.0% 9.1%
Norway 17.0% 9.1%
France 22.0% 8.7%
Sweden 18.0% 8.0%
N/B/L 14.0% 5.7%
Spain 16.0% 4.1%
Poland 24.0% 3.8%
Italy 18.0% 1.6%
Average Europe
16.1% 8.8%
RADIO & TV BROADCASTING
RADIO & TV BROADCASTING Over 59,000 people are employed in radio and TV
broadcasting in London (incl. 18,400 self employed) Watching online content through broadband
connection is becoming highly prevalent throughout the London and UK demographic
With 88% broadband coverage in London alone, data relating to online video streaming point to the ever increasing need for ISPs and broadband TV providers in London to enhance their video streaming capabilities for the UK and European market. This provides good opportunities for companies streaming programmes from outside of the UK
There are over 50 broadcasting firms with a primary listing on the London Stock Exchange. Two are FTSE 100 members - BSkyB and ITV. These two blue chips account for 77% of the sector's market capitalisation, whilst the 43 AIM companies together account for just 5%
19
GAMES, APPLICATIONS & DIGITAL CONTENT
GAMES, APPLICATIONS & DIGITAL CONTENT
London has a world-wide reputation as a place to undertake computer-generated imagery (CGI) work
The UK’s videogames and interactive entertainment industry is one of the biggest in the world.
The UK boasts 48 of the world’s most profitable games studios, all of which have a proven track record of developing, publishing and distributing first-class content. From Tomb Raider to Grand Theft Auto to Little Big Planet, UK-made games rank among the most popular in the world
Some 70% of the UK population enjoys playing games 19% of the computer games workforce is based in London, making the city
the main cluster in the UK; other easy to access cities with a concentration of games developers include Guildford, Cambridge and Brighton
London universities provide courses in games development to ensure flow of talent and the attractiveness of London as creative location
21
FILM INDUSTRY
LONDON IS THE 3RD BUSIEST PRODUCTION
INDUSTRY IN THE WORLD AND ACCOUNTS FOR
ABOUT 75% OF THE UK INDUSTRY
FILM INDUSTRY The UK film industry contributes around £4.5bn annually to UK GDP and supports 100,000
jobs (around 80,000 in London) 2011 saw a record production spend of over £1billion spent in the UK Total public funding for film in 2010/11 was £358 million, the majority coming from the film
production tax relief (56% of public funding), grant-in-aid from central government (14%), and the National Lottery (12%). Film production took 73% of the total financial support, followed by archives and heritage (6%) then education, young people and lifelong learning (5.5%)
Further investment from the government through the British Film Institute new five year plan, Film Forever
Tax relief: for films with a total core expenditure of £20 million or less, the film production company can claim payable cash rebate of up to 25% of UK qualifying film production expenditure; for films with a core expenditure of more than £20 million, the film production company can claim a payable cash rebate of up to 20% of UK qualifying film production expenditure
UK has International Co-Production Agreements in place with Australia, Canada, India, Jamaica, New Zealand, South Africa and the European Union
London has city agreements with Rio, Paris Ile de France, Rome, Toronto, Melbourne and Mumbai
Video on Demand: expected that the UK film VoD market, worth around £166 million in 2011 (£114 m on TV, £52 m online) will grow as new services are rolled out to reach £252 m by 2015. Globally, the market is forecast to reach $18 billion by 2016, with online VoD set to expand by 21% per year, to eventually reach $11 billion from its current $4.3 billion
24
FILM INDUSTRY ECOSYSTEM The global film and broadcast commissioning companies are in London along with film industry associations
(British Film Institute – encompassing the UK Film Council; British Film Commission) Home to global leaders:
London hosts major European offices for the world’s six largest film studios (Sony Pictures, Warner Brothers, 20th Century Fox, UIP, Paramount and Disney)
The world’s four largest media companies (Walt Disney, News Corporation, Viacom and Time Warner) have a major European office in London
Other major broadcasters (including the BBC, Channel 4, MTV, Sony, Discovery, CBS and Turner) also have European offices, broadcast centres or their European HQ in London
In Oct 2011, David Cameron announced the extension of the film tax relief until at least 2015. In 2009/10, the policy provided around £95 million of support to the British film industry, supporting over £1 billion worth of investment in 208 feature films (including Pirates of the Caribbean, World War Z, Prometheus, Snow White and the Huntsman and the latest James Bond movie Skyfall)
In 2011, there were nearly 5,000 film production companies and over 2,200 post-production companies in the UK
London dominates the production, post-production industries, and distribution with respectively 56, 51 and 56% of all film companies based in the UK. London’s domination is even greater when looking at the turnover: it accounts for 67% of UK film production revenues, 77% of post-production and 97% of film distribution revenues.
Behind the scenes, there is a sophisticated film finance sector (mobilising hedge funds, Enterprise Investment Schemes and other financial instruments) and a pool of people with specialist skills in the business management and legal dimensions of the film economy. This is cited as one of the main reasons for the industry cluster in London as a global financial centre
UK Film Council and the British Film Institute merged, with BFI taking over most of the UKFC's functions and funding from 1 April 2011. The BFI is therefore responsible for all Lottery funding for film—currently in excess of £25 million per year
25
FILM STUDIOS IN LONDON & NEARBY
LATEST STUDIO DEVELOPMENTS Large-scale capital investment projects recently finished or within the
pipeline for the UK film industry including the £100 million investment by Warner Bros. at Leavesden (20 min from central London), after acquiring the production studios in 2010
From 2007 to Q2 2012 total capital investment by Pinewood (30 min from Central London) amounted to £63 million; a proposed major development scheme to extend studio capacity is also planned at Pinewood to respond to demand for production space following a record year in 2011 whilst in April 2012, the 30,000 square feet Richard Attenborough stage officially opened. Additional stage capacity is also planned at Shepperton Studios
Future investment plans have also been highlighted by Elstree Studios (20 min away from central London) which is planning to build a 30,000 square feet studio and the production company was recently awarded a £2 million grant from the Hertfordshire Local Enterprise Partnership Board, for a job creation scheme which will develop new film and TV facilities on site
LONDON’S FILM INDUSTRY TALENT
London offers a large, talented and flexible film and broadcast workforce About 80,000 people are employed directly in film, video and broadcasting in London:
29,000+ in film and video; 49,000 radio and television Nearly 60% of all employees in film and video are in companies with 10 or fewer
employees They are a particularly flexible workforce: 43% of those employed in production are
freelance allowing companies to scale up to meet the needs of specific projects and with the ability to work on a variety of projects – three quarters (73%) of people working on feature films also work on other projects such as TV programmes (51%) and commercials (34%) The workforce is highly educated: For instance, 70% of the film production workforce are university educated, with
either a postgraduate degree (24%) or an undergraduate degree (46%). This compares with 31% of the population of working age in the UK educated to degree level or above)
The core UK film industry also attracts many highly skilled foreign workers to the UK: around a tenth of all UK-based production staff are non-British, while in sub-sectors like visual effects this can rise to more than 30% (Source: The Economic Impact of the UK Film Industry - June_2010)
A higher proportion of women are graduates than men (83% compared to 63%)
28
LONDON’S FILM INDUSTRY TALENT
Film Forever initiative: £21 million investment for skills and talent development through Creative Skillset as skills and talent development are highlighted as a critical component to support the future success of the UK film industry: £4 million per year of investment to deliver a new four year film skills strategy building
upon the work to date A new commitment of £5 million over four years to provide capital investment in the
UK's film schools ‘A Bigger Future', the UK film skills strategy developed by Creative Skillset and funded by
the Creative Skillset Film Skills Fund. The Creative Skillset Film Skills Fund is supported by the National Lottery through the BFI and the film industry through the Skills Investment Fund (SIF), a voluntary levy on all productions shooting in the UK. The following five key funding priorities have been identified to deliver the greatest impact in the future success and sustainability of the UK film industry: training in new technologies; improving business skills; developing creative talent; supporting new industry trainees; enhancing health and safety skills
Creative Skillset is the licensed Sector Skills Council for the Entertainment Media, Fashion and Textiles, Publishing and Advertising. We are owned and invested in by employers working in social partnership with unions. They aspire to have the best skills and talent in the world to drive growth of the industries and the UK economy. Creative Skillset brings all parts of the Creative Industries together to add value through collaboration on workforce development.
29
TAX RELIEF IN FILM INDUSTRY Tax relief is available for British qualifying films:
Films must either pass the Cultural Test or qualify as an official co-production
Films must be intended for theatrical release Films, including those made under official co-production treaties,
must reach a minimum UK spend requirement of 25% Tax relief is available on qualifying UK production expenditure on
the lower of either: 80% of total core expenditure; or the actual UK core expenditure incurred. Note: There is no cap on the amount which can be claimed. The FPC responsible for the film needs to be within the UK
corporation tax net.
FINANCIAL & LEGAL SUPPORT IN CREATIVE INDUSTRY
Prominent UK-based financiers in film
Aquarius Aramid (hedge fund) CinemaNX (Isle of Man) Footprint Film fund Future Films HS films (Hammer/Spitfire) Ingenious Films Limelight (EIS) Prescience Quickfire (EIS)
Financiers in other creative
Hummingbird Ventures (high-growth digital media and software companies)
UPS strategic venture capital fund (Information technologies)
Angel investors: Paul Birch (e-commerce; Internet), Mark Zaleski, Robert Dighero (e-commerce)
ARCHITECTURE
ARCHITECTURE London is an inspiring magnet for world-class architecture and
design talent with landmarks such as Canary Wharf and the Shard, alongside Wren’s creation
London is home to a large and established architecture sector, which employs over 31,000 people (incl. 7,500 self employed)
In 2010/11, there were over 11,780 students studying Architecture or Building related courses at London’s Universities, and 4,590 graduates
Existing players: leading London-based architects include: Rogers Stirk Harbour + Partners, Foster and Partners, HOK International Limited, Future Systems and Terry Farrell and Partners
The London-based Royal Institute of British Architects (RIBA), is one of the most influential architectural institutions in the world and has been successfully promoting architecture and architects since 1837
33
ENTERTAINMENT & MEDIA
ENTERTAINMENT & MEDIA FORECAST
PwC predict the UK Entertainment & Media sector will grow by 3.1% from 2012 to 2016 to a value of £63 billion
The growth will be driven by internet advertising, which is forecast to grow at 12% annually
The UK will remain in leading position as EMEA’s largest internet advertising market
35Source: The outlook for the Entertainment & Media industry to 2016, PwC
“LONDON IS ONE OF THE WORLD’S MOST
EXCITING CULTURAL CITIES
THIS WAS ONE OF THE KEY REASONS FOR SETTING UP HERE, COUPLED WITH THE FACT
THAT LONDON IS A HUB OF KNOWLEDGEON THE DESIGN FRONT
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