|A Future For British Film
It begins with the audience...
This is the Report to Government by the Film Policy Review Panel
The Minister for Culture, Communications and the Creative Industries, the Hon Ed Vaizey MP, announced on 24 May 2011 that former Secretary of State Rt Hon Lord Smith of Finsbury would be leading an eight-strong independent panel of film industry experts, reviewing the Government’s film policy.
The Panel was asked to identify barriers to growth in the British film industry. The principal objectives of the Review were to:
Provide greater coherence and consistency
in the UK film industry
Determine how best to set policy directions
for the increased Lottery funding
Identify ways to develop and retain UK talent
Increase audience demand for film, including independent British film.
In selecting the Panel, the chairman Lord Smith wanted people with industry experience and expertise who could provide a credible voice to represent each respective link in the value chain for UK film, whilst having a good understanding of the overall complexities of the industry.
The Panel first met on 1 June and issued an online call for evidence on 24 June.
The members were:
Rt Hon Lord Smith of Finsbury, former Secretary of State for Culture, Media and Sport (Chairman)
Will Clarke, Independent film distributor, founder and former CEO, Optimum Releasing
Lord Julian Fellowes, Oscar® winning writer and actor
Matthew Justice, UK film producer and Managing Director, Big Talk
Michael Lynton, Chairman & Chief Executive Officer, Sony Pictures Entertainment
Tim Richards, Chief Executive, Vue Entertainment
Tessa Ross, CBE, Controller of Film and Drama, Channel 4
Libby Savill, Head of Film and Television, Olswang LLP
Iain Smith, OBE, film producer and Chair, the British Film Commission Advisory Board
The project team:
The Panel is indebted to Hugh Muckian, James Butler, Rob Cheek and David Gookey for their hard work and support to the Review; along with Neil Watson, David Steele, Tim Scott and Mary McKevett, they have provided project controls, research and drafting expertise, as well as the Secretariat for this Report. Their assistance has been invaluable.
British film is going through something of a golden period. A run of really good, successful, British-made and British-based movies has been taking not just British cinema audiences but many others around the world by storm.
The astonishing success of The King’s Speech, of course, heads the list; but add to that the final Harry Potter, The Inbetweeners, Tinker Tailor Soldier Spy, Shame, Wuthering Heights, We Need to Talk about Kevin, Johnny English Reborn, and quite a few others, and it’s an impressive picture. We’ve had golden years before, of course, but this has been exceptional. The key question, though, is how do we make this something that lasts for more than just an all-too-brief year? How do we secure greater consistency in the quality and success of British film? Are there things holding back independent British production, in particular, that Government can help to tackle? The answer to these questions is important not just for the enjoyment available to cinema audiences, but is also important for Britain’s opportunities for economic growth.
At the same time as British independent production has been enjoying a run of success, Britain has also continued to be the destination of choice for many foreign studios to make their movies, with well over £1bn of production investment in 2010 alone. The conditions in the UK are well placed to encourage all kinds of film production, from the micro-budget to the blockbuster. These conditions need to be nurtured and sustained. And we need to ensure a synergy – in the development of a growing world-class talent and skills base – between the strong inward investment trends and the potential for a more consistently successful British film sector.
The prize, if we succeed, is of course not only a vibrant choice of British movies for us all to watch and enjoy. It’s the chance to make a major contribution to the growth of the UK’s economy, to the development of attractive and fulfilling careers for young people, and to the creation of job opportunities across the country.
In setting out to resolve some of these questions, our Report starts where any sensible film policy should: with the audience. If British films are going to be successful, filmmakers need to think from the outset about the audience. We know from consumer research that there is a strong appetite for British-made movies amongst the cinema-going audience in the UK. People want to see British movies, and like it when they do. But the percentage of movies actually seen by the overall audience in UK cinemas that could be described as British remains far too low. If we’re ever going to crack this conundrum we have to ensure that filmmakers understand and think about their audience, at the same time as they strive to express their creativity. That’s why, later in the Report, one of our proposals aims to encourage producers to come together with distributors in the very first pitch they make for finance and support. Understanding and respecting the audience is the key to making that audience bigger.
It’s important, though, not only to understand the audience, but to provide that audience with the opportunity to see a broader range of film and to learn more about film generally. How can young people begin to discover the history of film, the excitement of filmmaking, and the riches of British cinema? How can audiences across the UK have access to the whole range of movies, and not just a handful at any one time? How can those not living in towns and cities have better access? How can we help audiences who wish to develop a deeper taste
for British-made movies, and then how can we ensure we supply films to meet that taste?
Fifteen years ago, the then incoming Government established a Film Policy Review – ably led by Stewart Till – which posed many of these questions and produced A Bigger Picture to help find some solutions. Over the intervening period, however, the world of film has changed almost beyond recognition. The advent of digital filmmaking has made unimaginable things possible, from micro-budget movies to the use of astonishing visual effects. The arrival of digital projection has raised the prospect of enormously increased access to movies around the country. There has been an explosion in home entertainment and multi-platform-viewing possibilities. The widespread use of the internet has made both legitimate and illegitimate activity manifestly easier. There has been a growing appreciation of the importance of copyright and intellectual property protection, in helping to stimulate growth in the creative sector. And around the world, a new and growing cinema audience in countries like China, India and Brazil is coming to an appreciation of international film. Here in Britain, we tell stories well, and stories are the stuff of movies that will have long-lasting success. The opportunity to seize the changes that have been happening, and turn them to the advantage of British filmmaking, cannot be missed.
As the demand for story-telling movies grows around the world, there’s a real opportunity for Britain to become a centre for international independent production too. The British have years of experience in financing films the independent way – bringing together a number of different funding sources, negotiating through a maze of investors, production partners and distributors –
and putting together movies in ways that single-studio approaches find far more difficult. Both the international independent distribution market and the large studios will increasingly be looking for good independently produced material. Britain can be the place where this comes from.
One other major change has happened in the course of the last eighteen months: the disappearance of the UK Film Council, and the bringing of its functions and support for the film industry in to the British Film Institute (BFI). The Film Council had accomplished a lot during its decade or more of existence, and The King’s Speech stands as a rather fitting tribute to its achievements. But there is now a real opportunity for the sole, focused leadership of British film – cultural, creative, commercial, educational and representative – to be brought together in the single entity of the BFI. The challenge is for the BFI to use its new-found clout to inspire and nurture and strengthen British film, and we set out some ideas in our Report which we hope will help in this.
Over the past few months we have been exploring all of these issues, and more. We have received over 300 submissions of evidence. We have met with hundreds of people from all parts of the industry, up and down the country. We’ve tried to learn about audience ambitions. Our Report seeks to recommend some of the things that industry can do, that Government can do, and that we can all do, in order to reach that position of sustained success for British filmmaking. And film-going.
What We Know
Recent audience research
A recent evidence-based report1 of how film contributes to the culture of the UK asked a number of questions about attitudes to British film and the related notions of Britishness of film. Overall, there was strong support for British film and filmmaking with only comparatively minor variations across age, gender and ethnicity. The report reveals that 84 per cent of the population are interested in film and that the public are keen to see more British films made, with 78 per cent in favour of public funding for film.
Most people agree that British film is an important part of British culture but over half of people felt there are too few British films shown. Seventy per cent said that they were personally interested when British film stars or films won awards and over three-quarters agreed that when British films or films stars win international awards, it helps to foster a sense of national pride. People also said they want to see films that are representative of all the Nations and Regions of the UK.
In supplementary interviews respondents described what in their view makes a film British and two elements were dominant: cast (“actors are the thing that make it most British”) and story. Interviewees also highlighted British humour (“a sort of dark humour”) and authenticity (“gritty, more like real life”) as British values.
Two recent consumer surveys have supported some of these findings. A survey of over 16,000 Odeon customers revealed that 92 per cent of respondents would like to see more British films released each year. The things respondents expected from a British film were: entertainment (58 per cent), an expression of British attitudes (47 per cent), an accurate portrayal of typically British life (37 per cent), insights into British history (35 per cent), an ideal of British life (20 per cent) and escapism from real British life (11 per cent).
A Lovefilm British Film Survey also suggested a strong level of support for British film. Over eight out of ten (82 per cent) of the 2,000 survey participants stated that it was either “very” (59 per cent) or “quite” (23 per cent) important to support British film. A comparison of British films with those from the USA was explicitly included in the Lovefilm survey. Forty per cent of respondents considered that British films were of better quality than Hollywood films, 45 per cent thought they were of about the same quality and 14 per cent considered that British films were of worse quality than Hollywood films.1
Market share of UK independent films
The UK box office share of UK independent films varies from year to year and is highly dependent on the performance of the top two or three titles. The share shows a slight upward trend over the decade to 2010. Top UK independent titles in 2010 were StreetDance 3D and Kick-Ass. The top UK independent title in 2009 was Slumdog Millionaire. Boosted by The King’s Speech, the box office share of UK independent films increased to 13% in the first half of 2011.
Year UK market share of UK independent films %
H1 2011 12.8
Sources: (1) BFI Statistical Yearbook 2011, p. 15. (2) http://www.bfi.org.uk/filmtvinfo/stats/H1-2011-Box-Office-Report.pdf
Success for British film in 2011
2011 is shaping up to be the most successful year in over two decades for British film at the box office. Oscar® winner The King’s Speech became the highest grossing independent British film of all time, earning £45.7m at UK cinemas and £266m worldwide. The Inbetweeners was a close second, making an extraordinarily successful transition from television to cinema screen with UK theatrical revenues of £45m.
Independent British films’ share of the national market continued to increase through 2011, rising to 15 per cent by the end of October, the highest since box office records began. However, UK independent market share continues to depend on the performance of the top two or three titles and The King’s Speech and The Inbetweeners together accounted for almost two-thirds of independent UK film earnings (10 per cent of the total box office).
Between January and October, British films topped the box office charts for a total of 20 weeks, with independently distributed titles holding the number one spot for 10 weeks.
The final chapter of the Harry Potter saga, Harry Potter and the Deathly Hallows Part 2, has so far earned more than any other 2011 release, grossing over £73m, the third highest total of all-time at the UK box office (its worldwide takings are £851m). The film brings the curtain down on a franchise which has earned in excess of £440m at UK cinemas alone (£4.7bn worldwide).
The strength of UK talent, facilities, locations and post-production skills were also evident in other collaborations with US studios released in 2011 including Pirates of the Caribbean: On Stranger Tides (UK gross £32.9m) and X-Men: First Class (£15m).
We also had the critically acclaimed adaptation of John Le Carre’s Tinker Tailor Soldier Spy which has earned over £14m to date while comedy sequel Johnny English Reborn is entertaining audiences and has grossed £20.4m to date. The same production company was behind the documentary Senna, which became the highest grossing UK-produced documentary of all-time, earning over £3m.
Another feature of British film success in 2011 has been the diversity of genre, from children’s film (Horrid Henry) to comedy horror (Attack the Block), gritty social drama (Neds) and fresh adaptations of literary classics (Jane Eyre). We Need to Talk About Kevin, adapted and directed by Lynne Ramsay and featuring Tilda Swinton in the lead role, premiered in the Official Selection at the Cannes Film Festival in May. Released in October, it has grossed over £2m to date in the UK.
The audience for film is at the heart of this Review. We want public policy to be used to maximise audience access to films of every kind throughout the UK. And we recognise that the key to industrial and cultural success of film rests on the ability to connect films with audiences – at the cinema, and on every conceivable digital device ranging from internet-enabled televisions and DVD players to tablet computers and smartphones.
The Review has been undertaken in the context of an extremely challenging economic climate, in the UK and globally. The recommendations in this Review are designed to help ensure that film, as a key part of the creative industries, is one of the sectors which plays a full role in driving growth, creating jobs and stimulating inward investment and exports.
To help achieve this ambition, the Review proposes measures including a policy to secure much deeper engagement with UK film by major broadcasters with increased prominence for British films on all platforms, Joint Venture funding by BFI Lottery money to encourage producers and distributors to work in partnership and a refreshed strategy for investment in creative talent and the skills base, led by the BFI and Skillset.
The whole of the film sector from production to archive is grappling with the opportunities and challenges presented by the digital age. The Review, which spans the entire value chain of film, sets out proposed measures to help ensure that audience access to film can be enhanced by seizing the opportunities presented by digital media, while maximising the value that film delivers to the UK’s economy. Proposals range from a Research and Development Fund for digital innovation, to a call for a new model around the Virtual Print Fee (VPF) to assist independent distributors, to accelerated action by Government to reduce significantly copyright infringement and theft.
Film also makes a significant contribution to the richness and variety of cultural life in the UK. Yet the cultural role of film has sometimes been under-valued by comparison with other, more traditional art forms.
This Review proposes a series of interventions, including the development of a UK-wide network for cultural film, a UK Register of films and further strategic investment in archives across the UK which are designed to ensure that the cultural value of film is maximised for the benefit of both today’s audiences and future generations.
In a digital age, the ability both to learn about film and to learn from film (in schools, in universities and colleges, or in lifelong learning) could be greatly enhanced. But existing interventions around learning, especially for children and young people, lack cohesion, while engagement with higher education appears ad hoc. To help address this, the Review recommends that a new single offer for education is co-ordinated by the BFI, alongside a far more strategic engagement with Higher and Further Education and lifelong learning.
The BFI, as the Government’s lead agency for film, has a key role to play in enhancing access for audiences in the digital era, in helping to drive industrial growth and in assisting film to secure its rightful place at the heart of British cultural life.
This requires the BFI to work hard and fast to ensure that there is an appropriate balance between its new responsibilities for industrial policy and growing the audience for British films of every kind, and its traditional commitment to the development of film culture. This needs to be reflected both in its strategic interventions and its policies for spending the significantly increased amounts of Lottery money which will be at its disposal.
To help ensure that the UK film sector can respond to the opportunities and challenges of globalisation, the Review recommends that the BFI leads on developing a robust and comprehensive international strategy for UK film, focusing on emerging markets as well as existing ones. The British Film Commission should play a key role in helping to develop this strategy. This strategy should also be focused on boosting exports and thereby helping the UK’s sales agents to grow their businesses.
To help them make a better contribution to the development of film in the UK, producers need to be empowered to attract more investment into their companies. The Review sets out revised proposals for consideration by the BFI around the recoupment of Lottery funds, both for development and production, designed to help incentivise investment in further films.
The Panel would like to see the BFI lead on the development of a British film ‘brand’, working closely with distributors and exhibitors on an annual celebration in the form of a British Film Week. This would provide audiences across the UK with access to the full spectrum of British film, giving them a greater insight into its breadth, depth and originality.
The Review team recognised the patchy nature of reliable evidence in some areas of policy. The Review recommends that the BFI creates a Research and Knowledge function, building on existing research and statistical functions, which would facilitate the further development of rigorous, evidence-based policy for film.
In the current economic climate, it is incumbent upon public sector bodies led by the BFI to work together to aggregate funding, to build partnerships for match funding and to actively seek out further sponsorship deals, and build a network of potential philanthropic donors.
The future development of policy for film needs to be inclusive and transparent, and there is a particular need to ensure that the views of stakeholders throughout the UK are fully taken into account. As the Government’s lead agency for film, the BFI has a crucial role to play in ensuring that both policy and delivery are joined-up across the UK and our recommendations regarding the BFI reflect that.
One consistent message from the Review was that the best practice of the Regional Screen Agencies (RSAs), some of which are now consolidated in Creative England, brokered networks of expertise, support and finance for film that would not otherwise have existed. As a result, the quality of Lottery projects has benefitted from being delivered at a local level, because advice, mentoring and monitoring has been better informed and more engaged. The Panel would like to see this best practice continued.
The Panel warmly welcomes the Government’s recent announcement that the Film Tax Relief has obtained EC State Aid approval until the end of 2015 and highlights the importance of this measure, alongside our world-class talent, facilities and locations, in contributing to the success of the UK film industry.
The unequal distribution of film revenues
The way the film market works, most box office revenues are earned by a tiny minority of films. For example, of 557 films released in the UK in 2010, the top 20 films took 48.2% of the UK box office: £493m out of £1,024m.
The top 100 films took 90% of the revenues. The film business model relies on profits from a few hits covering the losses made on most films released.
Distribution of revenues at the UK and
Republic of Ireland box office, 2006-2010 2006 2007 2008 2009 2010
Number of Releases 505 516 527 503 557
Combined gross £m 845.3 933.8 934.5 1,126.7 1,023.6
Top 20 films (% of box office) 48.1 51.2 49.6 48.6 48.2
Top 50 films (% of box office) 71.1 75.7 72.4 72.9 71.9
Top 100 films (% of box office) 88.6 91.0 90.3 91.1 89.7
Source: BFI Statistical Yearbook 2011, p. 12
Growing the Audience of Today and Tomorrow:
Education. Access. Choice.
Today, the average British person watches over 80 films per year on big and small screens, across a variety of devices and in a range of places and spaces. The British public loves film and film makes a vital contribution to the UK’s economy of £4.2bn a year and is a key part of its cultural life.2 Growing and developing the overall audience for film throughout the UK, across all platforms, remains an important policy objective in the digital era.
With the help of carefully crafted policy interventions, growth in audiences – at the cinema and in all other media – will increase access and choice and benefit films of every kind. For despite the success of some high-profile British hits in recent years, the audience across the UK still gets to see too few British films, especially independent British films and too few films from the rest of the world apart from ever popular Hollywood blockbusters. This is reflected in the low market share of independent British films at the box-office – which averaged 5.5 per cent between 2001 and 2010, while the average share of foreign-language films in the same period was 3 per cent. Similar patterns exist in other media, including television.
Alongside audience development, film education has a vital role to play in ensuring that everyone has the opportunity to engage with film across the UK. By enhancing the stock of knowledge and information about film, in particular among children and young people, film education can assist in growing the audience of today and tomorrow, ensuring that audiences have an improved understanding and appreciation of the value of different kinds of film, whilst stimulating creativity.
From the introduction of the Eady Levy in 1950 onwards, the history of UK film policy has tended to focus much more on interventions to remedy supply-side market failures than on demand-side interventions. Yet the distribution and exhibition of independent film in particular suffers from market failures, in addition to those affecting the production of culturally British films.3
Audiences have “imperfect information” about the full range of films available at the cinema because the high costs of effective marketing and promotion puts smaller companies at a disadvantage. We have heard that there may be difficulties for independent distributors in securing access to, or prominence on, some major platforms in the emerging digital download and streaming market. We also understand that independent distributors have concerns about their access to the BSkyB pay-TV platform.
Such issues may act as a constraint on the ability of independent distributors to invest resources in cinema releases and in acquiring rights.
As a consequence, audience choice in a variety of media is more limited than it would otherwise be, there is a negative effect on innovation, and the growth of the market for film in the UK is hindered. These challenges have a particularly significant impact on audience access to British films, since most independently produced British films, both new and old, are handled by independent distributors. In addition, the theatrical marketplace, in particular, is increasingly crowded and it is much harder to secure and retain audience attention both for new films and rereleases, simply as a result of the volume of material entering the marketplace.4
It was for these reasons, among others, that the Panel put the audience at the heart of its work, and developed a series of recommendations which are intended to increase audience choice across the UK and grow the demand for British and specialised films in the UK and overseas to the benefit of the entire UK film sector. These measures complement the policy measures to support the production of low and high budget culturally British films, and help ensure that those films reach appreciative audiences and stimulate cultural awareness and creativity.
The BFI was asked to lead on developing a set of recommendations specifically around audience development and film education, and that work has been complemented by the results emerging from the online consultation and the detailed deliberations of the Panel.5 Measures to enhance audience access to a broader range of British and specialised film are embedded throughout this Report, with specific recommendations around audience development and film education contained within this chapter. Elsewhere, the chapter on broadcasting outlines measures by which broadcasters can contribute to audience development by screening a broader range of films and engaging more effectively with film culture, while the chapter on international strategy contains recommendations designed to grow the audience for British film beyond the shores of the UK.