Netflix pulled out all the stops for the ‘Luther’ movie
Netflix
Netflix has revealed that it spent $125 million to tempt one of the BBC’s biggest franchises to its platform.
Called Luther, the psychological crime thriller debuted on the BBC in 2010 and stars Idris Elba as a determined detective in London who is so consumed by the crimes he solves that he ends up meting out justice himself.
The television series was a smash hit despite being limited by the BBC’s budgets. The broadcaster is funded by the British public so it has to justify its spending and can’t pour bottomless sums into shows regardless of how popular they are.
Luther ran for five seasons with the latest finishing in 2019 when the streaming wars were just getting started. The battle between the studios escalated the following year when the pandemic led to viewers being stuck indoors all day with little else to do but watch streaming services.
It led to studios searching for franchises that they could bring to their platforms to give them an edge over their competitors. Luther was one of them.
In July 2020, Elba told Deadline that although there were no “formal plans” for another season of Luther he would like to return to the role in a film which was close to getting the green light. Just over a year later Netflix announced that it would debut on its platform and no expense was spared as Elba would be joined by Cynthia Erivo and Andy Serkis. It was a dream ticket for the show’s creator Neil Cross.
He told Britain’s Radio Times that “what we’ve been able to do – having delivered every episode of Luther on budgets which are comically small – is to have a wider canvas and a bigger budget to tell the kind of stories that we’ve always wanted to be able to tell.” It paid off.
Luther: The Fallen Sun debuted on Netflix in 2023 and picked up where the TV series left off. Having broken the law to catch criminals, Luther is arrested and imprisoned at the start of the film but breaks out of prison to pursue a sadistic serial killer who is terrorizing London.
Within two days Luther: The Fallen Sun reportedly topped the Netflix movie charts. Audiences rated it a respectable 85% on review aggregator Rotten Tomatoes while critics were a little less generous awarding it 67%. Although it came at quite a price, it actually cost less than expected.
Luther: The Fallen Sun’s U.K. filming locations included an abandoned prison
Netflix
Luther: The Fallen Sun was filmed at Pinewood and Shepperton studios in London as well as on location in and around the capital. London’s famous Piccadilly Circus and Chinatown are the settings for key scenes while shooting also took place in a disused prison in south-west England. It wasn’t just for the sake of authenticity.
Studios filming in the U.K. benefit from the government’s Audio-Visual Expenditure Credit (AVEC) which gives them a cash reimbursement of up to 25.5% of the money they spend in the country. However, it comes with a catch.
To qualify for the reimbursement, movies must pass a points test based on factors such as how many of the lead actors are from the U.K. and how much of the production work is done there. Furthermore, at least 10% of their core costs need to relate to activities in the U.K. and in order to demonstrate this to the government, studios set up a separate Film Production Company (FPC) there for each picture.
This lifts the curtain on precisely how much it costs to make movies as each FPC has to file annual financial statements. It takes a bit of detective work to get to the bottom of them.
The FPCs usually have code names so that they don’t raise attention with fans when filing permits to film on location. Tallying the code names with the productions they are responsible for requires deep industry knowledge which my colleague and I have built up over nearly 15 years of reporting. We are the only journalists worldwide who specialize in covering the financial statements of U.K. film production companies for national media and we have reported on them for more than 10 leading titles including The Times of London, The Guardian, The Daily Telegraph, The Independent and the London Evening Standard.
Once the code names have been correctly tallied with the films, the financial statements of the relevant FPC can be consulted to reveal how much the movie cost to make. That’s because the terms of the reimbursement state that each FPC must be “responsible for pre-production, principal photography/shooting and post-production of the film; and for delivery of the completed film.” In short, the FPC’s financial statements have to show the production’s entire costs, not just those incurred in the U.K. Studios aren’t allowed to hide costs in other companies as the terms also state “there can only be one FPC in relation to a film.”
The Netflix subsidiary behind Luther: The Fallen Sun is called Lively Productions and, as with all U.K. companies, its financial statements are released in stages long after the period they relate to. This starts during pre-production and continues after the premiere to give the production team time to ensure that all the bills are paid.
It explains why the latest set of filings were filed just over a month ago and cover the year to December 31, 2024. They show that by then the movie had cost a total of $125 million (£98.4 million) which is far from a bargain basement price. However, it was actually less than Netflix expected to spend as the filings reveal that the total was “less than the budgeted costs.”
That wasn’t even the end of the story as the government reimbursement packed a powerful punch. The reimbursement is calculated on up to 80% of core expenditure so in order to get back the maximum 25.5% of the money they spend in the U.K., production companies need to ensure that 20% of their core costs are spent outside the country.
Netflix made the most of this as it also filmed on location at Lite Studios outside of Brussels, Belgium, and in Iceland for a wintery landscape scene. The incentives on offer there are nowhere near as generous as in the U.K. so their impact on the bottom line tends not to be material, especially as they can only account for up to 20% of core expenditure without studios losing out on the more lucrative reimbursement.
Key scenes were also filmed in Iceland © 2023
John Wilson/Netflix
The financial statements show that a total reimbursement of $25.1 million (£19.7 million) was banked in the U.K. with a further $1.3 million (£1 million) paid for the production work outside the country.
This brings the net spending on the picture down to $98.6 million with one of the biggest expenses being the $9.7 million (£7.6 million) in staff costs. The crew peaked at a monthly average of 151 employees which doesn’t even include freelancers, contractors and temporary workers as they aren’t listed as employees on the books of U.K. companies but often represent the majority of the crew on a film shoot.
The latest data from the British Film Institute (BFI) shows that in 2019 film making generated 37,685 jobs in London and 7,775 throughout the rest of the U.K. The BFI’s triennial Screen Business report added that when the wider impacts of the film content value chain are taken into consideration, 49,845 jobs were created in London in 2019 and 19,085 throughout the rest of the U.K.
In February the BFI released its latest annual data which showed that foreign studios contributed a massive 87% of the $2.6 billion (£2.1 billion) spent on making films in the U.K. in 2024. Between 2020 and 2023 Netflix alone invested almost $6 billion in the U.K. shooting shows and films there. However, it remains to be seen how long the U.K. will continue to get a glow from attracting American studios away from their home country.
In May President Trump rocked Hollywood with the announcement that a 100% tariff will be applied to movies entering the United States that are produced in “foreign lands”. It was an attempt to bring film making back to the U.S. and although it has yet to be implemented, it hasn’t been forgotten.
On Monday Trump wrote on social media that “in order to solve this long time, never ending problem, I will be imposing a 100% Tariff on any and all movies that are made outside of the United States.” It nails his colors to the mast because if he doesn’t follow through with this threat to force studios back to the U.S., he will have to roll out the red carpet with incentives for them in order to compete with the U.K.
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