Indielab warns 40% of UK indies could fail within two years as cash reserves fall

Around 40% of the UK’s small independent production companies are at risk of closure within the next two years, according to a new study by Indielab, the accelerator scheme for UK-based indies.

Victoria Powell

The indie support network examined filings made by 203 prodcos with annual turnovers of under £10m (US$13.5m) made to Companies House.

Specifically, the analysis looked at net assets, meaning the financial reserves a company can rely on to survive a gap in income.

The findings of the research paint a bleak picture of the embattled UK production ecosystem, with 114 indies (56%) seeing their reserves fall over that period. Within that group, the decline was often severe: 83 companies (40%) lost over 30% of their reserves and 63 (31%) lost at least half.

The typical small indie now holds just £42,000 in reserves. Indielab claimed that buffer would not cover the cost of a single delayed commission, a production overrun or a series put on hold after delivery.

At the current rate of decline, Indielab believes around 40% of small indies are at risk of going under within the next two years.

Victoria Powell, CEO of Indielab, said: “The picture is stark. Small producers are the most exposed part of the ecosystem; when commissioning spend falls, they feel it first and hardest, and our data shows the sector’s health is being eroded year on year.

“Not all of the picture is bleak. Forty-two percent of the companies in our panel grew their reserves over the same period. What distinguishes them is not luck. They’ve built resilient business models suited to today’s market.

“The question for the sector is how to help more companies get there, and that requires sustained investment in the skills, knowledge and support that enable small producers to build for the long term.

“We have seen many notable closures across the sector in the last two years, including Dare Pictures, Duck Soup and Proper Content, and we know of many more companies that have quietly closed or mothballed outside of those headlines. Our data strongly suggests this trend will accelerate. This matters beyond the balance sheets of individual companies.”

Indielab’s analysis follows a similarly sobering report by Oliver & Ohlbaum Associates for Everyone TV, the organisation behind the UK’s free streaming platform Freely. It warned of a risk to UK storytelling and called for urgent reform to secure the future of public service broadcasters (PSBs).

Indielab claims urgent action is needed to support PSBs during a global TV industry downturn. “Two things need to happen,” Powell said. “First, the PSB environment needs to be protected – government must work with the sector on reforms that strengthen, rather than weaken, public service broadcasting. Indielab supports that call.

“Second, the small indie sector needs specific protection and support within that environment. PSBs with a statutory duty to support independent production need to consider what that duty really means in practice, and whether they are currently meeting it.

“The accounts of 203 indie TV companies should be a wake-up call to the sector. If the ecosystem crumbles, it will be the result of a failure to act while the evidence was sitting in plain sight.”