ANNEX 1
According to PriceWaterhouseCoopers, the worldwide
consumer spend on all media and entertainment is forecast to reach
$1,400 billion by 2006. In 2001, the worldwide consumer spend
on filmed entertainment alone was $59 billion. The current compound
annual rate of growth in filmed entertainment is about 5.7%.
At the start of last year in the UK, 94% of
the population aged between 25 and 44 had a VCR, 84% had Teletext,
50% had stereo television, 50% had a personal computer, 45% had
access to the Internet, 35% had satellite television, 27% had
widescreen television, 26% had a DVD player and 22% had cable
TV.
The growth in these revenue sources is important
because they fuel continued investment in film and related audio-visual
industries. It is against this background of explosive growth
across the media and communications industries that we should
view British films.
FILM PRODUCTION
UK film production has returned to relatively
good health, having recovered from the catastrophic collapse of
1992 and 1993. In those two years, only 70 productions were made
in the UK, with total investment of £257 million, of which
72% was provided by overseas companies investing in the UK. In
the last five years £2.73 billion has been invested in UK
production, of which £1.7 billion, or 62%, has been provided
by overseas investors. Those funds were invested in 482 productions,
of which 157, or 33%, were overseas productions shooting in the
UK.
On average, each of the last five years has
seen £546 million (of which £339 million has come from
overseas) invested in 97 productions (of which 31 originate from
overseas). The British Film Commission estimates that 70% of overseas
investment comes from the USA, the bulk of it from the member
companies of the MPA.
CINEMA EXHIBITION
Cinema admissions continue to rise. 156 million
tickets were sold in 2001, an increase of 9.4% on the previous
year. With a gross box-office in excess of $1 billion, the UK
was the third-largest market in the world, after the USA and Japan.
By the end of 2001, the UK accounted for 7.1% of the world box-office,
compared with France's 6.1%, Germany's 6% and Italy's 3.7%.
An even bigger jump was recorded last year,
when, according to the CEA, 176,000,000 tickets were sold. The
UK now boasts just under three admissions per head per year (up
from fewer than one per head in the mid-1980s).
Thanks to a massive programme of investment,
there are now 3,248 cinema screens in the UK, compared with 1,789
in 1991. Much of that investment was provided by MPA member companies.
FILM DISTRIBUTION
Momentum and Helkon have joined the ranks of
UK distributors alongside Entertainment Film Distributors, which
has enjoyed outstanding success, partly thanks to product supplied
by subsidiaries of MPA member companies. Last year, Entertainment
achieved a market-share of 16.7%, making it the number two distributor
in the country. Despite the demise of Film Four Distributors,
UK film distribution presents a very healthy picture, especially
for new independent companies.
Throughout the world, local films are gradually
capturing a larger share of a growing box-office. Although the
share of the local box-office taken by British films fell from
an outstanding 21.2% in 2000 to 11.7% in 2001, the latter is still
a creditable figure. It is often said that Britain is hamstrung
by sharing a common language with Hollywood, which makes the UK
vulnerable to domination by bigger-budgeted and more commercial
American movies. However, this observation could just as easily
be turned on its head and the common language seen as an opportunity.
Certainly, the examples of Harry Potter and James Bond,
at one level, and, say, Billy Elliott, Bridget Jones
and About a Boy, at another, demonstrate that the world
market can and will embrace commercial British films.
VIDEO AND
DVD
In 2001, an astonishing 122 million video and
DVD units were sold in the UK, an increase of 18% on the previous
year. DVD accounted for 38 million of those units, and increase
over the previous year of 127%. (By the end of 2001, there were
three million DVD players in the UK, representing 12% of TV households.)
The BVA estimates that the total value of DVD hardware and software
in 2001 was £2 billion, an increase of 35% on the previous
year.
At the end of 2001, the UK accounted for 33.5%
of all European VHS sales (France came second with 17.8%) and
34.3% of all European sales of DVDs (France again in second place
with 22.6%). The incredible strength of the UK video and DVD market
is a factor on which British film-makers should be able to capitalise.
TELEVISION
UK broadcasters spent £4.3 billion on programming
in 2001, more per head of population than is spent in the USA.
Partly as a consequence, the UK was again the world's second largest
exporter of programmes after the USA, with sales of £430
million in 2001.
DIGITAL TELEVISION
The UK has the highest digital TV penetration
in Europe, with 37% of households connected. The rate of growth
in the UK has accelerated, with 5.7 million digital homes connected
in 2001, compared with three million in France, 2.1 million in
Italy, two million in Spain and 1.4 million in Germany.
DIGITAL CINEMA
Digital cinema is in its infancy and the UK
is playing a very constructive role. The bfi is creating
a digital testbed at the National Film Theatre and Odeon has created
its own experimental venture in its flagship cinema in Leicester
Square.
SATELLITE AND
CABLE HOMES
The huge investment in satellite and cable services
has resulted in 3.6 million cable homes and more than five million
satellite homes in the UK, all of them receiving multi-channel
television and the vast majority of them now receiving interactive,
digital services.
INTERNET ACCESS
By February 2002, 11 million households, representing
45% of the population, were connected to the internet. This represented
a very significant increase from the 30% figure achieved the previous
year.
BROADBAND TAKE
UP
Flat rate offers from BT, AOL, Freeserve and
Telewest, among others, have led to an explosive growth in broadband
take-up in the UK. By October 2002, the number of broadband connections
had jumped to more than one million. BT recently announced that
it is signing up 25,000 broadband subscribers every week and it
now claims to have 650,000 in total. A recent article in The
Sunday Times (16 February 2003) reported that there were now
1.5 million broadband homes and businesses in the UK.
CONSOLE GAMES
The electronic games market in Britain exceeded
£1 billion in 2001, overtaking the value of the cinema box-office.
Very significantly, Britain is a powerhouse for games development,
with an enviable pool of creative talent supplying games to publishers
all over the world.
MOBILE COMMUNICATIONS
Mobile telephony is not yet a significant factor
in entertainment, but it is expected to play an increasing role
with the advent of the next generation of equipment and services,
which will bring interactive entertainment content. 78.3% of the
UK population subscribed to mobile services at the end of 2001,
compared with 60.5% in France.
The worlds of Internet, broadband, console games
and mobile communications are part of the emerging fabric of tomorrow's
content industries and they will play an increasingly important
part—creatively, as means of distribution and as platforms
for marketing—in the audio-visual sector. As such, they
have tremendous potential for creating further employment and
extending the skills of the UK's interrelated entertainment industries,
of which film is a key part.
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