‘Peak TV is behind us’: UK developers pivot from building studios to datacentres amid AI boom

Hollywood blockbusters including the eagerly anticipated Beatles biopics and big-budget TV series such as Bridgerton have been keeping the UK’s film and TV studio facilities packed.

But as the streaming wars recalibrate having passed “peak TV”, a slowdown in the content arms race is prompting property developers to switch to building datacentres amid the AI boom.

When the British Film Institute (BFI) finalises the figures on the number of films and high-end TV shows made in the UK in 2025 later this year, it is expected to show a third consecutive annual overall decline.

“Peak TV production is behind us now,” says one senior industry executive. “The great British studio building boom is officially over. Property companies thought riding that wave would be a big success; now datacentres are the new studios.”

Four years ago the industry hit peak TV as the streaming wars fuelled a record £7.8bn spend on UK-made productions, amid a race to restock film and TV catalogues that had been drastically depleted after the pandemic resulted in the UK-wide closure of facilities.

This prompted a new wave of plans for studio building and expansion, as well as spurring the “meanwhile use” sector – the use of temporary sites such as old carpet factories, military sites and other spaces as demand outstripped capacity.

In 2023, the combined Hollywood actors’ and writers’ strikes froze production, at a time when streaming companies shifted focus from a heavily loss-making race for scale to more judicious spending on content in the quest for sustainable profitability.

In recent years, the increasingly under-pressure finances of domestic broadcasters, such as the BBC, ITV and Channel 4, have also meant a pull-back on content commissioning.

“A colossal amount of studio space was built,” says Adrian Wootton, the chief executive of the British Film Commission (BFC). “More was built here in three- to three-and-a-half years than any country in the world. The UK went from 3m sq ft in 2020 to more than 6m sq ft. It was unsustainable.”

The list of casualties is becoming increasingly prodigious.

Even Pinewood, the home of James Bond and Disney franchises from Marvel to Star Wars, has received planning permission to turn 78% of its proposed 1.4m sq ft expansion – 21 sound stages – into a datacentre.

Last year, the private equity group Blackstone and Hudson Pacific Properties abandoned a plan to build a £700m Hollywood-style studio complex in Hertfordshire, and are in talks about alternate uses including datacentres.

The closure of Stage Fifty, a leading player in the provision of “meanwhile” space, led to proposals for Wycombe Film Studios, in High Wycombe, Buckinghamshire, being scrapped, with a £265m plan for six datacentres.

Slowing demand also resulted in Sunderland’s Crown Works Studios, a £450m attempt to create a huge production powerhouse in the north of England, faltering after its leading backer, Cain International, pulled out.

Earlier this year, Michael Mordey, the Sunderland city council leader, said the initial plans for 19 sound stages was “absolutely crazy”, adding that there was “no need or demand”, and that only a small-scale development would go ahead.

There continues to be some expansion, notably at the venerable Ealing Studios in west London, and late last year ministers gave the green light to a studio development in Marlow, Buckinghamshire, but the UK appears to have hit peak studio space.

“I think we are pretty close to an equilibrium between production demand and studio space,” says Chris Berry, a director at the property consultancy Lambert Smith Hampton (LSH), and co-author of the report Sites, Camera Action. “Land for datacentre development is worth at least twice as much, possibly three times, as studios ever were. It is a very lucrative spin to move planning consent.”

While there has been a decline in commissioning – most notably in the number of prestige TV series that cost at least £1m an hour, such as Bridgerton, Adolescence or the forthcoming Harry Potter series – it is not all doom and gloom for the UK industry.

Almost £7bn was spent on film and TV production in the UK last year, the third highest amount recorded by the BFI, whose figures highlight the critical importance of US-based studios and streamers to the UK industry.

Just under 80% of the £2.8bn spent on shooting films in the UK came from leading Hollywood studios or streamers, which also accounted for 82% of the £4bn spent on high-end TV production.

Figures from LSH’s latest Sites, Camera, Action! report show that the US continues to struggle to win TV and film productions, with countries such as the UK offering better tax relief as well as highly skilled labour and world-class facilities.

Disney has a long-term deal in place for production at Pinewood, while Netflix and Amazon have similar deals in place at its sister studio Shepperton. Amazon also acquired Bray Film Studios, where it filmed the second season of The Rings of Power, while Netflix has a long-term lease at Longcross Studios in Surrey, where films including Skyfall and Guardians of the Galaxy were shot.

Warner Bros began leasing Leavesden in 2000 to make the Harry Potter films, buying it outright in 2010 backed by a £100m expansion and revamp, and it is now home to all of its DC superhero franchises as well as the location for the forthcoming TV series about the young wizards destined for HBO Max this Christmas.

And the recently expanded Sky Studios Elstree serves as the European production base for NBCUniversal, which owns Universal Studios, maker of Fast & Furious and Jurassic World, and Sky, both owned by the US pay-TV company Comcast.

“All the major players have established homes here now, and they don’t need more space,” says Wootton. “The UK is also benefiting from the fact that there is a lot of stability from so many core franchises that continue to be made here: the likes of Bridgerton, Outlander, House of the Dragon, Rings of Power and Harry Potter. And in high-end film the Avengers, Marvel and DC superhero franchises, as well as Star Wars.

“Costs have increased considerably and globally there is less being made, but it is new shows where we are seeing fewer commissions. I am not sure what the new normal is yet. Production may not get back to peak TV levels, but I am cautiously optimistic that there is more growth to come.”