Thebritishfilmindustry2014

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AS Media Studies

Study Notes

Unit G322 Section B

Audiences and Institutions

The Film Industry

Part 3

The British Film Industry

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The British Film Industry in 2013

The UK remains the third largest consumer market for filmed entertainment in the world, and is predicted to overtake Japan by 2018. In 2013, it generated revenues in excess of £4 billion.The

UK film industry is a valuable part of the British economy and contributed £2.9 billion in 2012.

The global film market was worth almost $36 billion in 2013;UK films earned $4.1 billion

(11.4%),down from (15%) in 2012.

BFI STATISTICAL YEARBOOK 2014

The increasing importance of China and Russia

In the international market in 2013, UK films earned just over 11% of global box office receipts ($4.1 billion). Fast & Furious 6 was the top grossing UK film [How does that count

as a UK film?!] worldwide with earnings of $788 million, while Red 2 was the top grossing independent UK film with earnings of $142 million. Data became available for the first time

on the performance of British films in China and Russia, showing UK films had a market share of 8% and 12% respectively, earning $266 million and $164 million.

Q. What films have recently addressed these two growing film

markets?

Q. UK box office receipts in 2013 were £1,083 million, down 1% on 2012 while UK cinema admissions were down 4% on 2012. Why might revenues

and admissions be flat year-on-year?

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Admissions in 2013 were the lowest since 2008, but from the early 2000s attendances have been fairly flat, with most years’ admissions being in the range 165-170 million.

At the UK box office, in 2013 revenues exceeded £1 billion for the third year in succession, based on 165.5 million cinema admissions. Some 698 films were released at the cinema for a

week or more, an increase of 51 (7%) on 2012.

Q. What might explain the long term decline of cinema admissions since the end of the Second World War? And why has it picked up since the 80s? The highest earning film of the year was Despicable Me 2 which grossed over £47 million. Key UK successes at the box office were Les Misérables (£41 million), Gravity (£31 million)

and Fast & Furious 6 (£25 million). The top UK independent films at the box office were Philomena (£11million) and Rush (£10 million).

Skyfall tops the list of highest grossing films at the UK box office, but no 2013 releases feature in the top 20. The top film of 2013, Despicable Me 2, is at number 27 in the list.

Animation, the highest earning genre of 2013, accounted for only 5% of releases but took 21% of the total box office.

Q. Animation is now our favourite genre. Why might that be?

For the first time, animation was the UK’s favourite genre grossing 21% of box office receipts from 5% of releases, while action was the top genre for UK films.

A total of 446 specialised films were released in the UK in 2013, earning almost £110 million (9.5% of the box office). Forty per cent of these were foreign language films, the highest

earning of which was a Hindi film, Dhoom: 3, which grossed £2.7 million.

46 3D films were released in 2013, up from 43 in 2012. The box office revenue generated from 3D film screenings was £207 million. This was 18% of the total box office (the same as in 2012).

Q. Why has the total box office for 3D films flat-lined in the last 2 years?

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2013 was a turning point for the growth of the UK digital video market as a whole, where for the first time in recent years the combined physical DVD/Blu-ray and Video on Demand market increased in value, but not for film.

Q. If DVD/Blu-ray continues to decline and VOD grew but not for films,

how can you explain the increase in the VOD market? What might be holding back the VOD market? The film video market decreased slightly but by a smaller amount than previous years, and the signs are that 2014 will be the year that the digital film video market grows. Feature film

video sales and rentals in the UK generated just over £1.1 billion in 2013, while film revenues from on-demand services reached £323 million. The value of VOD services grew by 37%

compared with 2012 to account for 8% of total film revenues. UK talent leads the world

The strength and depth of UK talent driving the industry was rewarded and showcased to the

world at the leading international award ceremonies in 2013/14. UK films and talent won 26 major film awards in 2013/14, including six Oscars® and 13 BAFTAs, with Steve McQueen’s 12 Years a Slave winning the best film award at both ceremonies. This was the

first time a film by a black director has won the best picture Oscar®. The success of Gravity gave deserved

recognition to the UK special effects industry, as it won four BAFTAs and five Academy

Awards®, including those for sound and visual effects. The awards for Gravity (whose visual effects were produced by the British company

Framestore), reflect wider British talent and UK innovation in this area, as seen in the economic

data. UK film, video and TV post-production turnover accounts for 22% of total film industry turnover, and has grown by 67% since 2008 to

£1.6 billion.

Changes to the UK cultural test for film which came into effect in April 2014 will further boost the special effects industry.

Tax relief continues to make a difference

The existing film tax relief plays a major role in attracting international productions to the UK

and provides vital support for UK independent productions. The value of film production spend

in the UK reached £1.1 billion in 2013, up from £994 million in 2012. Three quarters of UK production spend was associated with inward investment features, and sixteen big budget films accounted for 72% of this total, including Guardians of the Galaxy and Jupiter

Ascending. Expenditure on independent domestic UK films (such as Alan Partridge: Alpha Papa and Pride) also increased between 2012 and 2013, from £134 million to £150 million.

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Looking to 2015 audiences can anticipate: 1. The turning point for the film video market, as the growth of on-demand services

finally outpaces the decline of physical video.

2. A strong year for production in our screen industries, with a further expected boost from the introduction of a new tax relief for video games.

3. The creative economy continuing to grow thus increasing exports and foreign investment.

Film Production in 2013

35% of all films released in the UK in 2013 were exclusively from the USA and these films accounted for 73% of total box office earnings. Include UK/USA co-productions backed by a major Hollywood studio and they account for 37% of all releases but a massive 88% of all

box office.

Q. Show me the money. What do these figures suggest about the health of the British Film Industry? UK films, including co-productions, represented 20% of releases (down from 25% in 2012) and shared 22% of the box office, of which UK independent films earned 7% and UK studio-

backed titles 15%. Films whose countries of origin lie outside the UK and USA accounted for 45% of releases (almost the same as 2012) but only 5.1% of earnings.

Q. What does this suggest about the audience for films in the UK?

The UK/US studio global market share fluctuates significantly from year to year and is highly dependent on the performance of a small number of titles. The peak in 2011 was largely due

to two hugely successful releases: Harry Potter and the Deathly Hallows: Part 2 ($1.3 billion) and Pirates of the Caribbean: On Stranger Tides ($1 billion).

The share for UK independent films has stayed around 2% over time; the increase in market share of independent UK films in 2011 was mainly due to the success of one title, The King’s

Speech, which grossed $389 million worldwide. In 2012, the UK independent market share fell by one percentage point from 2011’s record level, and this was followed by another slight fall in 2013.

While a small number of large budget films are responsible for the majority of UK production

value, most domestic films produced in the UK are low and micro-budget features. Just under a half (48%) of ALL independent domestic UK films with production

budgets of £500,000 or more shot between 2003 and 2011 were released within two years of production being completed. Of the 200 UK domestic features made in 2011, 62% were produced with budgets of LESS THAN £500,000. Over 86% of UK films at this budget level

failed to secure a theatrical release.

Q. Where do you think these films end up being shown?

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Punching above our weight – Of the top 200 global box office successes of 2001-2013,

32 films are based on stories and characters created by UK writers. Together they have

earned more than $23 billion (£15 billion) at the worldwide box office. Eight of the top 20

global box office successes of the last 13 years are based on novels by UK writers. Nearly two thirds of the top 200 films released worldwide since 2001 have featured UK actors in lead or prominent supporting roles. UK directors were behind 26 of the 200 biggest films of the last

13 years with Harry Potter director, David Yates, topping the box office league.

Film Distribution in 2013

The theatrical marketplace is dominated by a few very large companies. In 2013, the top 10 distributors generated £1.14 billion in theatrical revenues, while the remainder made less than £42 million.

The top 10 distributors had a 96% share of the market in 2013, slightly higher than in 2012.

The market share for distributors outside the top 10, at 4%, was the lowest since 2005. Weekdays (Monday to Thursday) accounted for 41% of the box office in 2013, slightly less

than in 2012 which, at 42%, was the highest since records began.

Q. Why do you think there are more people going to the cinema mid-week? Who are more likely to attend the cinema outside of opening weekends?

Opening weekends represented 28% of the total box office. The estimated total amount spent by distributors on advertising films released theatrically was just over £189 million.

The average advertising spend for studio-backed UK films was £1.4 million, compared with £1.7 million in 2012.

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Film Exhibition in 2013

The overall number of screens in the UK continues to rise, although the number of screens per person and admissions per person vary considerably across the country. Augmenting

commercial cinema is a thriving voluntary sector in film exhibition; film society admissions are highest in areas less well served by commercial cinemas.

At the end of 2013, the UK had 3,867 screens, 50 more than 2012, in 756 cinemas. There were six screens for every 100,000 people, the same as in 2012, but lower than countries such

as the USA (12.4), France (9.1), Australia (8.6), Spain (7.8) and Italy (6.5). Over 98% of all screens in the UK were equipped for digital projection. The average ticket

price at commercial cinemas was £6.54. Multiplexes made up 39% of all cinema sites in 2013. 94% of all screens in the UK were located in town or city centres, edge of centre, ‘out

of town’ or suburban locations. At the start of 2014, the five largest exhibitors owned 75% of all UK screens.

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Less popcorn, fewer profits Exhibitors’ revenues from concession sales were £289.7 million in 2013, a 2% decrease from

2012’s. Advertising income also decreased. The top five exhibitors had an 81% share of gross box office in the UK in 2013, and more than 70% of the box office was shared between the

top three exhibitors.

D-cinema and event screenings Event cinema, alternative content or non-feature film programming has become a regular

feature over the past five years in the UK as more cinemas become equipped with digital screens. The availability of a digital screen base has widened the range of content on the big screen, allowed interactivity between the screen and the audience and potentially improved

the use of auditorium capacity during typically quiet periods. Also, since events usually have only one or two screenings they can often generate higher occupancy rates than feature films.

DVD Sales & Rentals in 2013 Despite falling revenues, particularly in the rental market, DVD/Blu-ray remains a crucial

element of the film value chain. In 2013, feature film video sales and rentals in the UK generated just over £1.1 billion.

There were 119 million sales of feature film on DVD/Blu-ray (127 million in 2012) and 53

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million rentals of film on video (78 million in 2012). Film accounted for 73% of the volume of the video sales market and 65% of the value. UK

films accounted for around 24% of all films sold on video. The most popular purchase on both DVD and Blu-ray disc in 2013 was Skyfall.

Online video rental with postal delivery accounted for 69% of all feature film video rental transactions in 2013, up from 46% in 2011. LOVEFiLM (www.lovefilm.com/) & Netflix

(www.netflix.com/UK) & Amazon Prime (https://www.amazon.co.uk/gp/prime)

Q. Why do you think there has been a decline in DVD/Blu-ray sales in the last few years?

Hardware – DVD & Blu-ray players

In 2013 some 3.3 million DVD players were sold in the UK. Sales of DVD players have been decreasing each year since 2008 but over 60 million units have been sold in the UK in the last 10 years and over 90% of the population has access to a device that can play DVDs within the

household. Also, 1.2 million Blu-ray players were sold in 2013, one third of which were 3D players. Sales of Blu-ray players in 2013 were slightly lower than in 2012 (1.3 million units in

2012) but more than 5.5 million Blu-ray players have now been sold in the UK, and 21.2% of households own at least one player (compared with 17.6% in 2012).

Video-on-Demand

The total VoD film market was estimated to be worth £323 million in 2013, up 37% on 2012, and up over 400% since 2002. Online VoD revenue was greater than television-based income:

£193 million compared with £130 million. Subscription services accounted for the majority of online film revenues, overtaking digital retail for the first time. Apple was the highest earning VoD provider in the UK, but YouTube is the most used provider to access feature film on

VoD, with over 39% of online film viewers, followed by LOVEFiLM, with 25% of viewers and Netflix with 24%.

16% of online viewers access films on demand, less than catch up television services (40% of viewers) and short video clips (53%).

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Online VOD services in the UK employ four basic types of business model: 1. Rental VOD – one-off rental eg from Google Play or Blinkbox; 2. Retail to own VOD eg iTunes or Xbox Video;

3. Subscription VOD – unlimited access to content for a fixed monthly sum eg Amazon Prime Instant Video or Netflix;

4. Free/advert-supported VOD from catch up services eg BBC iPlayer or 4oD.

Film Audiences In 2013, the 15-24 age group made up the largest proportion of UK cinema admissions, at

33%. Hangover Part III had the largest above-average audience share among the 15-24 age group,

while Quartet had the largest share among cinema-goers aged 55 and above – the Grey Pound remains strong…

A wide range of genres appealed to women, whereas action films, comedies and thrillers were

popular with men, with Captain Phillips and Alan Partridge: Alpha Papa drawing larger than average audiences.

UK films were popular across all demographic groups, with a particularly strong appeal for those aged 45 and above. Older audiences also showed a strong preference for UK

independent films.

Q. Summarise the five most important things you have learnt about the UK film market?

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How do films get funded in the UK?

The UK does not have the massive studio structure that Hollywood has in terms of producing films but there are now many more ways in which a film can be produced in the UK than ever before and it is almost impossible to find out about in detail, because of the myriad of

companies and consortia involved and the legal and financial minefield about rights, loans, investment deals, tax breaks and funding criteria involved.

In the past, there were great British studios that produced successful films, some of which became international hits, for example, Denham Studios, Ealing Studios and the Hammer

Studios in Bray. However, during the 1970s and 1980s, film-making in the UK became more and more reliant on Hollywood funding and its cultural and artistic influence.

A Bit of Film History

To change this, in May 1997, the then Labour government announced that £92 million

pounds of lottery funding was to be designated from the Department of Culture Media and

Sport (DCMS) over six years to create three UK mini-studios to produce successful British films that could compete in the international market place and make a profit for funders and

investors. The three successful bidders were:

1. PATHÉ PRODUCTIONS – Pathé UK has a major presence within the UK film

industry, operating as a fully integrated studio. It is involved in all aspects of film-

making, from production and development through to international sales and distribution. Pathé UK's productions range from Stephen Frears' The Queen to Danny

Boyle's Slumdog Millionaire (2009). (http://www.pathe.co.uk/) 2. THE FILM CONSORTIUM – partners included Scala Productions and Virgin,

whose previous hits had included The Crying Game (1992) and Michael Collins

(1996). Its last film was produced in 2005. 3. DNA Films – headed by Duncan Kenworthy (producer of Notting Hill and Four

Weddings...) and Andrew MacDonald (producer of Trainspotting and Shallow Grave). The funding given by the DCMS was not to fund all costs for production – each company

would have to find the rest of the finance themselves through co-

production deals with other countries (usually Europe or the US), loans, grants from other

organisations or private investment. The companies

gained some successes: Pathé co-produced Slumdog Millionaire (2009) with Film4,

which took £31 million at the UK box office and they even saw a mountaineering drama

documentary Touching the Void (2003) take £12.4 million.

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DNA Films and The Film Consortium have had varying degrees of success. DNA has released titles including Danny Boyle's horror hit, 28 Days Later (2002), The History Boys & Last King of Scotland (both 2006) and were also one of the many hands in Love Actually.

Steve Coogan's comedy The Parole Officer (2001) proved less successful. They are now 50% by Fox Searchlight, the 'Indiewood' arm of 20th Century Fox. They have most recently

produced Never Let Me Go (2010) and Dredd 3D (2012) The Film Consortium has not been as successful as

was hoped, although titles such as Michael Winterbottom's acclaimed In This World (2002)

fared well (at least critically). The Lottery franchise project failed as it didn't

really set up a permanent studio system creating a series of commercially successful titles for an

international market place. Maybe that is impossible to do in the UK with such a diverse range of film-makers, and social and ethnic groups, with many

stories and ideas relevant only to a regional or even local environment. Other ways films are funded in

the UK, apart from via the three above companies are:

Assistance with funding from one of the Regional Screen Agencies across the UK who may help

with finding crews, training or seed/development funding for scripts. The Damned Utd (2009) about Yorkshire based football club Leeds Utd and This Is England (2006) both received help from

Screen Yorkshire because of parts of the production and filming taking place there.

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Investment from Europe — Bend It Like Beckham (2002) had assistance from the

Hamburg Film Fund in return for shooting some sequences in Germany, Mike Leigh has a deal with CanalPlus in France for part-funding of his films and Ken Loach's Looking for Eric

(2009) had investment from Germany and Spain.

BBC Films (http://www.bbc.co.uk/bbcfilms) and Film4 (http://www.film4.com/film4-

productions/current-slate) are still an important source of British cinema by funding work for the small screen but which is then released into cinemas. The BBC has invested in films since

the 1970s, although on a much smaller scale than Channel Four, whose Film4 channel was made available on digital Freeview in 2006, and screens seasons of British films. Working in

partnership with companies, the BBC has funded some significant films. ITV companies have participated in film finance to a lesser extent. The expansion of cable and satellite TV has made more films available on the small screen, but movie channels are in fierce competition

with sports and other popular channels.

Q6. How does film production in the UK seem to be very different from

the Hollywood model of large, powerful studios?

How do you make a ‘British’ film? The Secretary of State for Culture, Olympics, Media

and Sport (DCMS) is responsible for issuing British Film Certificates on the basis of recommendations made by the Certification Unit. In 2011 this Unit

became part of the British Film Institute (BFI) when the BFI assumed responsibility for the majority of the

UK Film Council’s functions. Makers of certified British films can apply for tax relief on qualifying films or apply for Lottery funding from the BFI and

other sources. (http://industry.bfi.org.uk/qualifying)

Schedule 1 films are films certified as British

under Schedule 1 of the Films Act 1985. To qualify,

films must pass a UK Cultural Test. Points are

awarded for UK elements in the story, setting and characters and for where and by whom the film was

made. A wide variety of films qualified as British under the Cultural Test in 2011, from The Chronicles

of Narnia: The Voyage of the Dawn Treader, The Eagle and Jane Eyre to We Need to Talk About Kevin and Wuthering Heights.

Films can also qualify as British if they are certified under the various official UK co-production agreements. Official co-productions must be certified by the competent

authorities in each country as meeting the certifying criteria, which include the creative, artistic, technical and financial input from each co-producer. Films which received final co-production certification in 2011 include Africa United, The Imaginarium of Dr Parnassus and

Route Irish.

In 2011, a total of 189 films (170 in 2010) received final certification as British under the

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Cultural Test. The total budget of finally certified films increased from £1,002 million in 2010 to £2,119 million in 2011. This increase reflects the higher number of big budget inward investment films made in 2010 feeding through to a higher value of final certifications in

2011. So we made a great number of Schedule 1 films in 2011, yet there are few well known 'purely British' films. This paradox becomes more complicated when we start to explore

where the money comes from. For example, if a film is made by a British film company, but that company is owned by a

larger American group, is the production financed in the UK? And what is the significance of distribution? If a film is 'purely British' at the production stage but it is distributed in this

country by an American company (who then claw back a chunk of the box office profits), is this film really a success story for the British Film Industry?

British studios are used by overseas companies and a number of blockbusters have been

produced in the UK, including the Harry Potter films which have British content but are largely

American-financed. For many this situation compromises British cinema, confirming its

dependency on American involvement and its inability to develop an independent infrastructure.

On the other hand, co-production arrangements are a reality of contemporary film-making and

these do not necessarily prevent interesting films from being made.

Another major problem

with defining a 'British' film is that in the main, British cinema has

meant English cinema, in terms of language and

setting. Scotland, Wales and Ireland all have their own funding bodies and Film

Development organisations and a number of diverse and

innovative films have been produced there. It is important therefore to

consider films such as Ratcatcher (1999), The

Guard (2011) and Twin Town (1997) as very much productions of their home nations rather than just 'British' films.

Q. What is the benefit to a film producer of their film being branded as British? What is it about ‘Britishness’ that is attractive to investors from

outside the UK? What is it about ‘Britishness’ that makes it easy for Hollywood studios to dominate our film market?

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UK Films – the 2005 Crisis!

UK film production experienced a crisis in 2005 and early 2006. Investment in the making of films dropped, largely due to the rate of the English pound

against the American dollar and the availability of low cost studios in Eastern Europe. But later in 2006 and since, investment has returned, and this is related to the Government policy

of tax relief. This allows producers to be exempt from certain tax payments. Previously there had been a

compulsion for films to be mainly shot in the UK for them to qualify for the avoidance of tax, but in March 2006 this was revised to allow for more overseas filming, an attractive

amendment for investors.

UK cinema Admissions 2002 - 2009

This is a great example of the importance of politics in understanding the media .

It is impossible to critically assess the relationship between British films and audiences by only thinking about cultural reasons why British cinema is more or less successful in relation

to Hollywood blockbusters. 'Behind the scenes' there are financial, political and institutional reasons why films do or don't get made and released and seen by a potential audience.

A recent good example of Hollywood's dominance is the record-breaking box office performance of Pirates of the Caribbean 2 (2006), seen by industry commentators as a victory

of blanket marketing. Cynics suggest that a film of this scale does not need to be critically well received, as the efforts and dollars put into promoting the film so lavishly will guarantee an audience on the opening few nights and subsequent 'buy first, review later' DVD sales. In

this case over £50 million was made at the UK box office, and 1.5 million copies of the DVD were purchased in the ten days after its release.

A study of the ways in which the big Hollywood studios time the release of films is another area of key institutional knowledge for you. The timing of releases in relation to the Oscars,

school holidays, the spring/summer blockbuster period and DVD releases at Christmas is strategic, and any British release attempting to get attention amidst this marketing stealth will

be at the mercy of this.

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Case Study - BBC Films - www.bbc.co.uk/bbcfilms/about British films have experienced a boom since 2006, largely due to a renaissance of television companies' involvement

in production and distribution. The BBC and Channel 4 have both invested far more in film than at any time since

the 1980s. The recent television licence fee increases has meant that the BBC have had more money to invest in domestic film production - another example of cross-

media political/institutional events being hugely important in cultural developments.

BBC films are co-funded with an overseas investor, usually American. The most successful of these in 2006

was The Queen, produced without major Hollywood finance. Clearly The Queen, despite its indigenous

qualities, can be seen as following the typical route of making films about English culture with an eye to the US audience, previously achieved by films such as Notting

Hill and Bend it Like Beckham.

Q. How many of these could be considered British films? How many of

them are co-productions where the majority of the money leaves the country? What does this say about the scale of the UK film industry?

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In the 1990s, British film makers tried to imitate the Hollywood genre approach, most notably with the proliferation of gangster films in the wake of the success of

Lock Stock and Two Smoking Barrels (1998) and Snatch (2001) This is now seen by the industry and its

commentators as fatal, as this statement from Ian George, managing director of Twentieth Century Fox UK, demonstrates:

The films that have succeeded have not tried to ape

Hollywood. They have been typically British subjects, done in

an entertaining, confident way. (Grant 2007)

The institutional relationship between BBC/Channel 4 and

film is always changing, in the last few years it has been in a healthy state with the BBC co-funding Streetdance 3-d, Brighton Rock, An Education, Revolutionary Road and the

TV spin-off In the Loop. With the current financial situation though, funding to TV from both Government and advertising has slowed or even crashed, meaning less money for less films

and more pressure on those films to succeed. In the UK the cinema tradition has been less protective of film culture than other countries and

more concerned with commercial viability...Nowadays, television plays an important part in the

process, investing real money in the real marketplace while remaining cushioned from the direct

economic constraints of failure by the nature of TV accounting. The 'return' on the investment

is represented by the broadcast rights to the film, money that would otherwise have to be spent

to acquire some two hours of programming. (Roddick 2007)

Q. Which one of these two films recently released in the UK do you think is a BBC co-production and why?

Find out here - http://www.bbc.co.uk/bbcfilms/about/

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Case Study – UK Film Council closed in 2010. Why?

What was it? The UK Film Council (UKFC) was the lead agency for film in the UK, covering the economic, cultural and educational areas, and representing the UK cinema industry abroad.

Established by the Labour government in 2000, the UK Film Council was mainly concerned

with the economics of film production, attempting to create a healthy, competitive UK film production base. It has assisted with the funding of a range of titles including in the last year Made in Dagenham, The King's Speech, Centurion (all 2010), Harry Brown (2009), Glorious

39 (2009), Brighton Rock (in production) and Dorian Gray (2009).

What did it do? As well as supporting film production, the UKFC also has a remit to invest in a series of other initiatives including:

Film Distribution and Exhibition There were two major initiatives here that allowed more people the chance to see a wider

range of films (though not necessarily all from the UK).

The Digital Screen Network Fund allowed theatrical and non-theatrical (that is, non-

cinema based) venues to project films on DVD or video which will provide greater accessibility for non-mainstream (i.e. silent cinema, classics, foreign language) films for

groups like film societies, schools and community groups. It also allowed new film-makers to show their work without having to pay for a massively expensive transfer to 16mm or 35mm film prints. Eventually it is hoped that films will be screened via computers or the web and

transmitted 'down the line' without any traditional projection equipment.

The Regional Screen Agencies Nine organisations across England were set up to administer UKFC funding (around

£7.5 million) to film projects, cinemas and film clubs, production companies, and

training initiatives. One example is Screen Yorkshire (http://screenyorkshire.co.uk/) based in Leeds. Another is Film London

(http://filmlondon.org.uk/) which help set up the Microwave scheme that led to the

production of Shifty (2009)

The other major initiative with regard to film distribution was the Prints and Advertising

Fund, which can pay for increased publicity and advertising space and also increase the

number of prints available to screen. The fund has made grants to a wide range of films,

including Oscar-winner The Lives of Others (2006) as well as award winning British titles like the Red Road, Control, London to Brighton and This is England. These films already had

a certain amount of cross-over appeal – that is to say they may have played successfully in a small amount of art-house screens – but could also appeal to a more mainstream audience. The scheme has been seen as a great success, as it brought a range of titles to British

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audiences who may otherwise never have experienced them.

Film Production The money UKFC invested came from both the government, via the DCMS, and cash raised

from the National Lottery and it is likely that any UK produced film or major UK co-production released over the last 10 years would have had some input from the Film Council at some time.

Films were funded via a series of different channels:

1. The Premiere Fund, which looked at financing commercial mainstream titles with a broad international appeal many of which have already been listed.

2. The New Cinema Fund, which helped to support more specialised, independent work

and 'cutting edge film-making' particularly assisting with productions from the English regions. Recent examples have included In the Loop (2009), Man on Wire (2006) and

Adulthood (2005). 3. The Development Fund, which assisted film-makers to get ideas off the ground,

concentrating specifically on raising the quality of screenwriters. Most UK films of

the last few years would have received financial assistance of up to £25,000 for their original drafting from this fund.

Funding feature films is a complex combination of public money, overseas investment, bidding wars between sales agents and distribution and sponsorship deals. What the UK Film

Council did for budding movie-makers was to offer them a place to go first in search of funding.

Although there were a number of successful initiatives funded by the

UKFC, as well as a stream of critically and commercially successful films, there

were also some criticism of it as an organisation, mainly from areas of the right wing tabloid press attacking the fact

the 'public money' has been used to fund a 'vile sex film' such as Sex Lives of The

Potato Men’ (2004) or Lesbian Vampire Killers (2008). And they were rubbish, to be fair.

Criticism is not just levelled at the content of some UKFC funded films, but the fact that they

are not 'value for money', losing money at the box office and unable to compete in the international market.

Prime minister urges British film to be more ‘mainstream’

David Cameron announced in Jan 2012 that National Lottery money: “will be directed at ‘mainstream’ films that could become commercial successes, rather than

‘art house’ cinema that generates limited box office sales. A strategy for exporting British film-making expertise will also be announced as part of a drive to exploit the potential of the

£40billion industry to create jobs. The Prime Minister will outline the plans during a visit to

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Pinewood studios in west London, where the next James Bond adventure is being filmed. The proposal to focus lottery money on films that are likely to be commercially successful films could be criticised by some independent film-makers, who are already aggrieved at the

Coalition’s decision to abolish the UK Film Council. Mr Cameron believes that resources should be focused on fully exploiting the potential to make the film industry even more

lucrative. He said he wanted to build on “the incredible success of recent years”. “Our role should be to support the sector in becoming even more dynamic and entrepreneurial, helping UK producers to make commercially successful pictures that rival the quality and impact of

the best international productions,” he said. “Just as the British Film Commission has played a crucial role in attracting the biggest and best international studios to produce their films

here, so we must incentivise UK producers to chase new markets both here and overseas.”

Reasons for scrapping the UKFC

In the government's opinion, the Film Council did not work; or at least not well enough to

justify its survival.

Over the past decade, it has ploughed £160m of Lottery money into more than 900

productions (some good, some awful!). It has also funded the British Film Institute and Skillset, which furnishes the industry with a steady supply of trained technicians. Veteran

producer David Puttnam has hailed it as the strategic glue that binds a disparate sprawl of auteurs, craftspeople, circus barkers and market traders and its abolition sparked fierce criticism, both here (where 50 big-name actors signed a letter of protest) and in the US (where

Clint Eastwood and Steven Spielberg waded into the fray).

Even its most ardent supporters, though, will concede the UKFC was far from perfect. It has

been accused of cronyism, arrogance and waste. It has been attacked for throwing public money at the art house (courtesy of its New Cinema Fund) on the one hand and for backing

mainstream work (courtesy of its Premiere Fund) that would surely find funding elsewhere on the other. Its foes, meanwhile, revile the UKFC as a classic example of state bureaucracy – an all-powerful quango that presumes to tell businesses what films they can and cannot make.

For the film-maker Julian Fellowes, the body is a "behemoth" that epitomizes "the anti-commercial mindset of the film elite". For Michael Winner, that bumptious remnant from the

unregulated days of British film production, it's a needless extension of the welfare state. "The council gives a lot of work to people who are out of work and who probably deserve to be out of work," he says.

Case Study – What happened next? The BFI 31 March 2011 was the final official day of business at the UKFC's offices in Little Portland

Street, London, and former Film Council staff today find themselves working for the British Film Institute, which will take over many of the abolished body's functions. Others, including the office of the British Film Commissioner, have been transferred to regional agency Film

London, which will oversee the task of promoting the UK as a film-making destination.

The decision to hand the BFI responsibility for distributing lottery funding to film-makers came in November, partly assuaging widespread concern that the government had not considered the future of public investment in British movies when making its decision to axe

the council. At the same time Ed Vaizey, the culture minister, further sugared the pill by announcing that the £28m lottery grant the industry receives would be increased to around

55

£43m by 2014. If ministers were rattled by the vocal support for the council, they might have been cursing

their luck in February when The King's Speech, a film part-funded by the UK Film Council, took four Oscars at the annual Academy Awards ceremony in Los Angeles. Other productions

in the last five years alone that might never have made it to the big screen without the council's support include Nowhere Boy, Fish Tank, In the Loop, Man on Wire, Hunger, Happy-Go-Lucky, This is England, Vera Drake and The Last King of Scotland. Of movies

recently in cinemas or due to arrive on the big screen, Richard Ayoade's critically acclaimed first film Submarine, Andrea Arnold's Wuthering Heights and the forthcoming Joe Cornish-

penned comedy Attack the Block all received UKFC funding. Three weeks ago, a National Audit Office report roundly criticised the UKFC's axing,

suggesting it was "not informed by a financial analysis of the costs and benefits of the decision". The UKFC's entire annual budget was a reported £3m, while the cost of closing it

down and restructuring is estimated to have been almost four times that amount.

Q. Why do you think the Coalition government decided to close down the

UKFC?

How does a film make a profit?

Box office income does not all go back to the film-makers. After tax is deducted, a percentage is given to the film distributor which could be between 35-60 % and the cinema exhibiting the film is left with the rest. So, if a film makes £l million at the box office, the rough sums would

look like this:

£1,000,000 in gross UK box office takings minus VAT @ 20 % (£200,000) leaves

£800,000

minus distributor share of 45 % (£360,000) leaves £440,000

minus UKFC investment payback of £200,000 leaves £240,000

minus payback for other investors of £120,500 leaves £119,500

So a film that takes £1 million gross box office will leave a profit of £119,000!

There might also be other payments such as bank loans, outstanding bills and payments, or percentage cuts for some cast and crew who have deferred on a salary and opted for profit

share in the profits.

Unless a British film has the backing in terms of money, resources, expertise and sheer clout from a major US studio (Working Tide films has Universal, Harry Potter has Warner Bros., the Bond movies have MGM, United Artists and 20th Century Fox) it will be very hard for it

to make a profit.

Q. Do you think the UK film industry needs a body like the BFl? Why?