Is the UK The New Hollywood?

What would you make with an extra $2.2 billion? That's a question Disney gets to answer after it just received subsidies from the UK government over the last 15 years.

They got the money as part of a kickback in production incentives for companies making stuff in the United Kingdom.

This makes the House of Mouse the single largest beneficiary of the UK's film and TV tax relief program.

And many other companies are following its lead and heading to the UK to shoot.

A new report from the Financial Times talks about how Netflix, Amazon, and other major Hollywood players are also flocking to the UK and turning it into a production powerhouse.

But is this a good thing for everyone?

Let's dive in.

U.S. Studios Rule the U.K.

According to the British Film Institute (BFI), foreign studios like Disney, Netflix, and Amazon accounted for a whopping 87% of the £1.6 billion ($2.2 billion) spent on UK productions last year.

And it's clear this trend isn't slowing down. Disney has pledged to invest another $5 billion in UK and European content over the next five years. That’s on top of the $4.8 billion it has already spent since 2019.

Why the UK? It's All About the Money

The UK's secret weapon is its Audio-Visual Expenditure Credit (AVEC). This program offers a hefty tax reimbursement to productions that shoot in the country: a 25.5% reimbursement on qualifying production expenses.

For a blockbuster with a nine-figure budget, that’s a massive saving.

The Disney+ series Andor alone received a massive $138.1 million in UK credits. Just sixteen Marvel productions collectively claimed nearly $700 million.

And it's something America should be looking at and replicating as fast as they can if they want to keep jobs here.

This incentive has made London and the surrounding areas a go-to destination for Hollywood.

Nearly a third of Marvel's films have been shot in the United Kingdom. Disney even has a long-term lease at Pinewood Studios.

American Films Are No Longer Shot in America

Here's the interesting part. A lot of these "British" films qualifying for these tax breaks are American productions, financed and distributed by Hollywood studios, that just happen to be filmed in the UK.

In other words, they're not movies or TV shows about the UK; they're just American films shot and made outside of America.

This influx of foreign productions has created a ton of jobs and brought a massive amount of money into the UK economy.

Again, we need these things in America right now, our country is losing billions of dollars.

The Downsides for Local Filmmakers

But what about the local British filmmakers? This is where it gets a bit tricky. The massive demand from Hollywood has created a shortage of crew and studio space.

This makes it harder and more expensive for independent British filmmakers to bring their projects to life. They are essentially being priced out of their own market.

Still, for those who can afford it, they 're competing for time with the biggest names in he business, which is also not easy.

Even people like Edgar Wright have struggled to find space to shoot things in the UK.

While the UK government is celebrating the economic boom, some are worried that the country's unique cinematic voice could be drowned out by Hollywood blockbusters.

I think it is probably hard to argue with the economy booming, though.

What's Next?

The UK government is doubling down on its strategy, hoping to attract even more foreign productions. Meanwhile, US states are trying to compete by beefing up their own tax credit programs.

But the UK is way ahead here, and unless the United States gets aggressive, it will have a hard time keeping up.

Let us know what you think in the comments.