Examination of Witnesses (Questions 280
- 299)
TUESDAY 20 MAY 2003
MR JASON
WOOD, MR
DICK PENNY,
MR IAN
CHRISTIE FBA, MR
JOHN WILKINSON
AND MR
BARRY JENKINS
Q280 Mr Bryant: Yes.
Mr Jenkins: I would honestly admit,
and I was one of the chief executives of one of the major companies,
that we were very reluctant in those days to try to put specialised
product into new multiplexes because we felt that the big blockbusters
were where we were going to get the return on investment to pay
for the five or six million pounds that we had spent on the multiplex.
That view has definitely changed over the last few years and I
do not think there is one multiplex circuit that is not prepared
to show one or two screens of specialised product if they can
get the product. One of the problems we have with the Film Council
is that they are talking about £15 million and where they
spend it and included in that £15 million is one million
pounds to distributors on prints and advertising. To be quite
truthful, they should give more to distributors to spend on prints
and advertising because if there is an injection of money into
distributors to bring out more prints of specialised product certainly
there are enough screens out there in the country now to show
that product.
Q281 Mr Bryant: Can I ask something
which is not really about British films but is about the British
cinema-goer, and that is foreign language films? We see remarkably
few of them outside the very specialist, and at the same time
we have fewer and fewer people going on to study foreign languages
at university, which means we have fewer teachers, which means
that fewer kids are studying it at school and so on. This is a
very vicious circle, it seems to me. Where do you think the responsibility
lies? I know you are commercial operators; it is not your prime
responsibility to do that, but how can you get more foreign language
films available and accessible to people?
Mr Penny: We see it very much
as our responsibility. The fact is that it is not commercially
viable on the whole. A limited number of foreign language films
break out and are commercial. Offering it on a regular basis is
usually not commercial. Also, we can add in the access through
educational programmes, through educational materials, through
workshops, through bringing over film makers. Recently as a group
we have brought some films into distribution in this country to
take them on a tour from Europe. It is an area that needs support.
One of the issues that the independent sector feels quite strongly
about is that we very much support the establishment of the Film
Council and the Film Council has made some very strong statements.
I will just quote you one: "Film and moving images are the
single most important source of education, information and culture
in the world today"; yet I feel that the DCMS has given the
Film Council such an overtly industrial remit to build a sustainable
British film industry and then tacked on cultural diversity and
education and social inclusion at the bottom that it has just
got lost in the credit roll.
Q282 Mr Bryant: Are you saying that
the watching of films should be just as important a part as the
making of films?
Mr Penny: Absolutely, and that
it is about a diversity of world cinema. Our nation is culturally
very diverse. We need our young people to be seeing messages from
different cultures. We need different cultures to be reflected
in our daily consumption. We need our new film makers to be sparked
by ideas and inspiration from around the world. If one looks at
some of the other art forms, let us take drama as an example,
through the nineties regional theatre was having a very hard time.
It was getting some very bad press. The Arts Council commissioned
a major review of regional theatre and the conclusion, to everyone's
surprise, was that these are absolutely vital resources, not just
for the local community, not just for education, not just for
developing social inclusion, but are also vital resources for
the next generation of talent for theatre, which was absolutely
acknowledged by the commercial sector. What we have in the cinema
world is a spectrum that does go from, if you like, high art at
one end to out-and-out entertainment at the other but people cross
over between them. There are no divisions. What we have missed
in trying to build a sustainable British film industry is the
sense of film as a cultural form. I think that if you look at
what happened with the drama situation, the Arts Council before
that review, the Boyden Report, was spending £40 million
a year on drama. They are now spending £70 million a year,
real investment in development and access. If we acknowledge that
film is, of all the art forms, the most popular, it certainly
is as diverse as any other, then I think at the minute the level
of investment across exhibition, distribution and production is
inadequate to meet all of the industrial, social and educational
goals that the Government, the DCMS and ourselves would like to
see hit.
Q283 Michael Fabricant: I get worried
that people will start making films that people ought to hear
and watch and then do not want to watch them. It is a bit like
nanny BBC before ITV came along. If I can direct this mainly at
the Cinema Exhibitors' Association, I want Barry Jenkins to reiterate
something he said in answer to a question from Chris Bryant. Did
you say that there are sufficient screens available that if a
half decent film were made and a print were available there would
be no problem with getting it shown?
Mr Jenkins: That is correct.
Q284 Michael Fabricant: When we did
our last inquiry about four or five years into the film industry
it was lack of screens, we were being told. We were told that
the reason why British films and other noteworthy films could
not get shown was because they were being crowded out by films
which were blockbusters. Has the situation changed?
Mr Jenkins: I cannot remember
exactly how many screens there were in the UK four years ago.
Perhaps we have got it on a piece of paper somewhere, but there
are certainly a lot more screens now than there were four years
ago. There is no doubt that if you take all the major circuits,
especially when you are coming to eight, 10, 12 screens in a multiplex
cinema, there is normally always available one screen at least
where we could show specialised product if the distributor is
going to produce a print and also if he is going to spend money
on marketing that print.
Q285 Michael Fabricant: I have just
been told that it was 1996, seven years, so the situation may
indeed have changed.
Mr Jenkins: Oh yes.
Q286 Michael Fabricant: Dick Penny
was talking at some length about digital technology and it is
not quite there yet but it is getting there. Quite clearly that
would get round the problem of the cost of a print, which is a
thousand pounds per print which, if you are showing it on several
thousand screens, is costing a great deal as a proportion of the
marketing and indeed the production budget. What incentive is
there for major cinemas to invest in the capital items required?
We heard that a projector might be £50,000 at present. Then
you have got the storage medium, and we know that that can be
very expensive. Then you have got the reception medium for actually
downloading it from satellite or from cable or whatever, big infrastructure.
What is the incentive from the exhibitor's point of view to invest
in that sort of projection equipment if a distributor can provide
a print for you anyway?
Mr Jenkins: The only incentive
is that you get a better picture on the screen and that you can
call on it immediately. There is no incentive financially and
that is really why there is a sort of go-slow on digital projection
at the moment. The people who are going to benefit are the distributors
or the producers on there, and they are not prepared to help fund
the cost of the projection equipment.
Q287 Michael Fabricant: Would you
like to make a guess as to when you think it will start to be
accepted in mainstream cinemas?
Mr Jenkins: There are already
digital projectors in certain cinemas. When it becomes general
throughout all cinemas, I really do not know. We have been talking
about digital projection for ten or 12 years now or more than
that. Every time it comes up we come back to who is going to pay.
When you are talking of perhaps £70,000 or £80,000 per
screen there is a huge investment there. The exhibition industry
has already invested since 1985-1986 something over two billion
pounds on building new multiplexes for the general public. We
just have not got the money now to invest in the digital projectors
unless we get help from elsewhere.
Q288 Michael Fabricant: Back to your
statement that the screens are available in commercial cinemas.
What is the role then for the independent sector like Dick Penny?
In the past he was showing films which would not be shown by major
exhibitors like yourselves, but you are saying that if the prints
are available you would show them if they were half decent films.
Mr Jenkins: I do not think the
major circuits are out there to put the independents out of business.
With all respect to my colleagues on the left, they only cover
a certain part of the country. There are great gaps throughout
the country where there is not the independent arthouse cinema.
What we can offer as circuits is filling in the gaps without the
huge cost of building new arthouse cinemas anywhere in the country.
There are screens available. Bristol is very successful so I would
not say that there will be a great clamouring from the multiplex
operators to put a specialised screen into Bristol because it
is already being well served there. However, there are many other
areas of the country that are not being well served.
Q289 Michael Fabricant: In Lichfield
we do not have a specialised independent cinema or indeed a multiplex.
In fact, some would say the only entertainment in Lichfield is
me. If I can pursue the line of questioning, back in 1996 when
we did our original inquiry it seemed to us that one of the reasons
why British film, and we are looking at British film after all
in this particular inquiry, did not get the opportunity for exhibitions
was because of lack of vertical integration between the production
companies, between the distributors and then the ultimate cinema
which shows the movie. You are saying all that has changed since
then and it is simply down to distribution, insufficient prints?
Mr Jenkins: That is the main problem,
yes. Going back to your digital question, I think I am correct
in saying that in 2002 there were over 350 films released in the
United Kingdom. Out of those 350 there were only 12 that were
in digital format. Where is the great incentive for exhibitors
to go and spend money when Hollywood or whoever are just not producing
them?
Q290 Michael Fabricant: I think you
have answered our question.
Mr Wilkinson: Last year there
were 62 British films released and 15.6% of the box office was
obtained by British film. It has all changed since six years ago.
Q291 Mr Doran: My constituency is
in Aberdeen. It is very frustrating to read the London papers
and see all these reviews, knowing that most of the films will
not reach us. I have to congratulate City Screen because we have
had a City Screen cinema now for the last four or five years and
that has improved the situation markedly. It does seem to me that
your end of the business is remarkably conservative. The major
new development over the past ten years has been the multiscreen.
Things have got a bit more comfortable, a bit cleaner and tidier,
but there is not a lot else in terms of marketing, and you are
remarkably risk averse. Is that an accusation you would accept
and, if you are going to reject it, tell me why?
Mr Wilkinson: I do not believe
that cinema exhibition in this country is risk averse. It is the
most innovative area in the world as far as exhibition goes. Our
colleagues from the so-called independents, most of whom are members
of the CEA, are at the cutting edge of showing films that would
not generally be shown. In the multiplexes we have invented ideas,
we have increased the screenage but we have also increased the
type of screenage. We have gone into luxury builds in certain
areas because that is what people have wanted. We have invented
things. You might not like it, but the pick-and-mix in cinemas
was a British invention. The idea of ringing up and being able
to book your seat on the telephone, the UK did that the first
of anywhere in the world. We had the first national coverage of
information on the telephone of what was on in every cinema in
the land set up here. I would say that we do take risks and that
we have moved exhibition worldwide. If you look at exhibition
where it has expanded in Asia, and if you look at it in China,
which is trying to be broken into by, I will accept, many American
companies, you will find that the management there has come from
the UK. It has come from the independent, subsidised cinema, it
has come from the small operator who runs the social screens in
the small market towns, which we have not touched on in this conversation
so far, who is doing so much to push cinema out into the population
of the UK and bring culture to everybody.
Q292 Mr Doran: In the main, if you
accept some of the figures I am about to give you, you have failed.
The Chairman of easyJet, for example, is obviously looking to
compete in your market. I read an article of his in the Financial
Times earlier in the week and he is talking about 20% occupancy
rates of seats in cinemas in Britain. If that figure is true it
is staggering, despite all the efforts that you have talked about.
Mr Wilkinson: I totally agree,
but if you look at the population, most people are at work during
the day. We open our cinemas at midday and we do not get many
people in the afternoon. It is a social service. We make our money
on Friday, Saturday and Sunday when we get 60% of the trade. It
is effectively 10% of our admissions on a Monday, Tuesday, Wednesday,
Thursday.
Q293 Mr Doran: He has been a fairly
successful businessman in other areas and he seems to think there
is a market there if you go out and grab it.
Mr Wilkinson: I do not dispute
it.
Mr Jenkins: Sorry; I do dispute
that. He is a very successful businessman but I think he has only
got one company that is making a profit, so I cannot totally agree
with what you are saying.
Q294 Mr Doran: I am not in a position
to argue with that, but he has certainly got a lot more money
in the bank than I have, so that to me is success. This whole
question about programming is one that concerns me because when
I look at my local listings in the newspaper at the weekend, even
the City Screen cinema, which is our local art cinema, if you
like, is having to show the blockbusters. I understand that because
they have got to break even. The same films are repeated time
after time, and then when I go along to see some of these films,
because obviously they are worth seeing, I am sitting in an empty
cinema even at peak times often. That is something that concerns
me because if there is such pressure to show these films why are
people not coming to see them? Clearly, they have got a shelf
life but I cannot remember the last time I went to the cinema
and found it absolutely jam packed, even 60% which you mentioned
just now, Mr Wilkinson. You are all fighting for the same product
in the same market.
Mr Jenkins: I think it is true
to say that Aberdeen is now over-screened and it is going to be
even more over-screened when Odeon open their multiplex. I was
the owner of ABC Cinemas for many years and there was the conventional
Odeon in Aberdeen and the conventional ABC, so between us we had
six screens.
Q295 Mr Doran: Are you saying that
is not mirrored in other parts of the country, like Manchester,
like Liverpool, like Newcastle, like London?
Mr Jenkins: There are a lot of
places that are over-screened, like Aberdeen, and that is why
I am saying to the earlier question that there are screens available
around the country to put specialised product on at.
Q296 Mr Doran: That takes me on to
the next point. There was a discussion earlier when you were speaking
to my colleague, Mr Bryant, about the amount of take that there
is by the exhibitors. We had the Director of Bend It Like Beckham,
Gurinder Chadha, and she said directly to us in evidence that
despite the fact that her film was extremely successful it did
not make a profit in the UK and she blamed the fact that the exhibitors
and distributors took 75% and it did not make a profit until she
broke into the American and Australian markets. That is a fairly
worrying situation, particularly for us, if we are looking at
the health of the British film industry. Can you tell me how that
can happen?
Mr Jenkins: No. To be honest,
I am quite astonished that she said that she could not make a
profit in the UK.
Q297 Mr Doran: She was quite explicit
about that.
Mr Jenkins: We can only answer
for exhibitors, everyone at this table. We know roughly what the
split is, what exhibitors give distributors. I could not tell
you what distributors give the producers.
Mr Christie: The cinema industry
obviously is a very strange kind of industry. Somebody once described
it as a prototype-only industry: every film is a prototype and
has to bear all the costs of development, of being that unique
prototype. A film like Bend it Like Beckham, which will
be very successful indeed, has reached the lift-off point and
a great deal of its revenue will come after money has been spent
on it in the early stages to give it that visibility, to give
it that reach and that spread. It will continue to earn money
at a much higher level than most British films as it moves down
through all the secondary stages of its economic life. It will
be on video shelves, it will be on television, etc, and that is
increasingly where a film of that type earns its money. Indeed,
it is where large budget films also earn their money, but the
prototype effect is very damaging for low budget British films.
It simply cannot get over the hump in the early stages when everything
it stacked against it. Much film exhibition is done at a loss
to the producer.
Q298 Mr Flook: Can we quickly look
at what the cost is of going to see a blockbuster and in the same
town going to see an independent film?
Mr Wilkinson: The average price
paid last year was £4.25 for cinema admissions. That was
the average over the year for everyone. The average cost of going
to a multiplex on a Saturday night after six o'clock when the
full prices come in was £5.37. I am not saying that there
not higher ones but that was the average.
Mr Penny: The independent sector
tends to have a more common pricing structure across the week.
There are some variations but not as many. Just below £5
would be the average, no marked difference.
Q299 Mr Flook: So about 10% cheaper?
Mr Penny: Yes.
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