Examination of Witnesses (Questions 193
- 199)
TUESDAY 13 MAY 2003
MR CHRISTOPHER
P. MARCICH
Q193 Chairman: Thank you very much
for coming. We are hoping to see some of your constituent organisations
fairly soon. We are very grateful to you for being here. You have
heard these immensely successful British based film makers and
they have told us how they have got together, as it were, this
portfolio of product. What are we missing that we do not have
more such organisations? Or is a country our size only ever going
to have one organisation of such scope? And what is that, taking
into the account the different context, we can learn from the
MPA?
Mr Marcich: Thank you, first of
all. It is an honour for me to be here and thank you for inviting
me. In our own submission of written evidence, we underscored
a few of what we consider to be the pillars of success of the
British film industry and one certainly has been on the film production
financing side. We emphasised the importance of Sections 42 and
48 to a successful industry here and we believe that those have
contributed to attracting significant investment and that a continuation
and stability and predictability in the structures that are offered
here is important to the future success of the industry to creating
more success of the sort you have just heard from the previous
panel. Beyond that, I could not be so presumptuous as to offer
you a single simple formula that could lead to further successes.
It is a combination of factors that leads to a successful industry.
There was some mention of development which I think cannot be
over-emphasised. Project developments, script development, production
is crucial, distribution also is very important and the overall
regulatory environment in which companies are to function. So
it is a mix of factors, all of them important.
Q194 Mr Flook: I notice in your biography
that quite a large element of your responsibilities is region-wide
anti-piracy activities. Could you just say a little bit about
that and the way in which video tapes take money away from the
people you represent and how that might impact on British film
producers?
Mr Marcich: Yes, I would gladly
speak to that issue. One of our major areas of activity, in fact
something like 80% of the resources of my office, goes to trying
to combat piracy and although video piracy, as such, is important,
right now we are really fixated on what we consider to be a global
threat to the film industry right around the world and that is
digital piracy, that is Internet piracy, it is peer-to-peer piracy.
And there one could slightly modify one of the questions posed
by this Committee and say: will there be an international film
industry, a film industry, five years from now, given the threat
of digital piracy? What we are trying to do is work to make sure
that there is a film industry future for the British film industry,
as well as the worldwide film industry, and to combat piracy.
We are quite involved on a European level in trying to get in
place the proper legislative framework, as well as in trying to
harness technology to make works available on the Internet, but
also make sure that the copyright holders, those who created the
works, are able to count on being able to make those works available
in a secure environment. So it is a crucial battle and it is one
that is going on now and it is global, it is the case in the United
States as well as in Europe and elsewhere.
Q195 Mr Flook: Can you put a figure
on it though in terms of the hard videos against the sort of digital?
Mr Marcich: Piracy rates range
from, in the video world, slightly under 10% of the market to
as high as 85% for a country like Russia right now, which is in
the business of making DVDs on a commercial scale for export,
but pirate. So the range is huge and the losses are in the billions
of pounds.
Q196 Mr Flook: And in the UK are
we looking at 10% or are we the lowest in Europe?
Mr Marcich: The UK has a very
effective anti-piracy organisation called FACT which does a very
good job in combatting video piracy, smart card piracy and now
is looking at the Internet. The problem is that in the future
for the Internet we do not yet have the sort of framework in place
that will be needed in order to make sure that piracy can be contained
in that environment.
Q197 Mr Bryant: There has tended
to be two different world attitudes towards ensuring that you
have an indigenous film industry. The United States model, which
is the free market broadly speaking supported by the MPA, and
in Europe on the whole either State subsidy via forms of grants
or quotas as in France and Catalonia, and various other parts
of Europe which the MPA has tended to campaign against. Are you
still opposed would you still want to see WTO preventing that
kind of quota direction in Europe?
Mr Marcich: The MPA has not supported
quotas, you are absolutely right. Our position with respect to
the need to ensure a local industry and a local forum of expression
of one's culture probably has evolved since the last time we discussed
the issue. I think that there is a much greater awareness now
that one needs to find ways to make sure that the trading system
in which this industry operates is also able to accommodate policies
that are aimed to promote local cultural expression so that grants
for certain types of films, for example, they should not feel
threatened by a trading system. So there has been an evolution
in our thinking. It is not say that we do not favour a market
oriented approach. We absolutely do. It is just that we understand
that within the context of a free market system there is a need
to find a way to accommodate certain other policy objectives.
Q198 Mr Bryant: For the most part
the British model has tended to eschew the quota system as well
and has wanted to have something of a mixed economy, but one of
the major elements, perhaps not as major as many of us would like,
but one of the major elements in the British film industry has
undoubtedly been the role of the broadcasters and, in particular,
the BBC which is, of course, a State subsidy and again that is
something that the MPA historically has campaigned against through
the WTO. Is that still your position?
Mr Marcich: If you mean have we
campaigned against subsidies to public broadcasters, I do not
know that to have been the case in the past. It certainly is not
the case now. What we are interested in seeing is a system in
which the funds that are given to public broadcasters are used
in fulfilment of a public service remit. If subsidies are given
that go beyond that, then they should be looked at and I think
that that is the responsibility of public authorities. But we
are not right now campaigning, in the WTO, context to try to undermine
the support that governments give to public broadcasters.
Q199 Mr Bryant: One of the suspicions,
whether fair or unfair, that has been levelled already by witnesses
to us in this Committee has been that many of your members, because
they have the whole system locked in of distribution, of production,
are able to exclude others from being able to essentially make
a decent living because they have to pay 75p in the pound to ensure
that their film is available in any cinema in the country. Is
that a fair charge or an unfair charge?
Mr Marcich: I think it is not
a fair charge. I read through the record of the previous sessions
and I think there was contradictory information provided in terms
of what that relationship is. There are some, at least through
written evidence, who would argue that distributors are too strong
vis-a-vis exhibitors, then there were a number of witnesses
who argued that the exhibitors are too strong and take advantage
of the distributors and producers. I think that here, as elsewhere,
this is something that should be left to the commercial players
to work out. The terms of trade is something that we do not get
involved in as a trade association.
| 
