Examination of Witnesses (Questions 320
- 339)
TUESDAY 20 MAY 2003
MR ALAN
YENTOB, MS
CAROLINE THOMSON,
MR CLIVE
JONES, MR
JOHN CRESSWELL
AND MR
PIERS CALDECOTE
Chairman: Lady and gentlemen, thank you
very much indeed for coming, sorry for a bit of a delay due to
the large number of questions to the previous collection of witnesses.
Michael Fabricant?
Q320 Michael Fabricant: I would like
to ask Alan Yentob, first of all, about the BBC, with fewer people
now working for the BBC and more contract staff, training has
rather been reduced in the Corporation from what it was. In that
sort of context what is it that the BBC does offer British film?
Mr Yentob: I would like to correct
that assumption, as I understand it. The fact is that the BBC
is certainly looking at our training again but we are not training
less than we did and we contribute to the key funding areas for
Skillset, for instance, and for the National Film School. In addition
to that, we are still training cameraman. I knew this was an issue
here and I can say that there were 113 camera training courses
last year and there were over 2,000 delegate days and, of course,
in that sense we are training a much wider cross-section than
just people in the BBC. I think the issue arises for some of these
crafts because we are not training for film any more, we are training
essentially for video, but we are as committed as ever to training
and to making a significant contribution to broadcast skills.
Q321 Michael Fabricant: There is
a very different technique involved in filming and using ENG and
other techniques. Caroline, you were trying to come in.
Ms Thomson: I was going to say,
if I could add to correct the factual point, the training on these
skills areas, outside management training and radio training,
has gone up from £4.8 million to £6.1 million in the
last three years.[6]
Q322 Michael Fabricant: I am glad
you have set the record straight because that is contrary to what
we were led to believe with previous witnesses. There is a perception,
and perhaps that is wrong as well, that the number of films produced
by the BBC for theatrical and television broadcasts has reduced
over the last five years? Can you give us some indication of the
number of finished films that have been produced in each of the
last five years? I do not know if you have that data.
Mr Yentob: I can give you a proportion
if you are trying to compare it with the amount of money and investment
and numbers of American product[7].
Is that what you are referring to?
Q323 Michael Fabricant: Not really,
I am talking about British film, that is what our inquiry is about.
The BBC makes good British films on the whole but the perception
is that the amount of films produced by the BBC has reduced over
the last five years.
Mr Yentob: It is not true. I do
not know if I can give you an absolute list but let me just show
you something I have as a little prop here. I have just come back
from Cannes and I got them free of charge at the Carlton Hotel,
and that is BBC films on the front cover of Variety this
week. This Variety is not just in Cannes, it is Hollywood
Variety.
Q324 Michael Fabricant: Is that an
advert or editorial?
Mr Yentob: This is actually an
advert and if you want to know how much, I can tell you how much
it cost. The point is there are about 10 British films in production
currently or which have gone out this year, so we have absolutely
increased that investment, and there is also an article in today's
Newsweek referring to the phenomenon of the smaller independent
producer who provides an alternative to the American studios which,
by and large, are increasingly franchising their product. In other
words, whether it is Men in Black or The Matrix,
which is opening just now, there tends to be a methodology now
that you do a film and then you replicate it, and I think increasingly
there is a space for the smaller European independent unit.
Q325 Michael Fabricant: You mention
10 films, are these feature length films or does this include
shorts?
Mr Yentob: No, these are feature
films. It is a fact that we are making more films than we made
before. Can I make one point about it which is about how people
make films. Films, by and large, are made in partnership, and
a number of people invest. The key money is in development. Can
you invest in development? Are you prepared to take risks? The
more you invest in development the more you ought to be able to
control the product and be able to concede the film and therefore
I think the investment early on is absolutely crucial, so these
are films and the BBC, with the investment that we make which
is a minimum of £10 million, can actually deliver quite a
lot of films.
Q326 Michael Fabricant: Finally,
may I just ask you this, it is very encouraging what you have
had to say so far, but once you have made these films what are
the arrangements you have with distributors? I think you were
present when we identified that the main problem it would seem
with getting British films distributed is the number of prints
being made available. Does the BBC invest in the production of
the prints and the marketing? Do you do it through an outside
distributor? What are your arrangements overseas for the distribution
of films for cinematographic display?
Mr Yentob: I think one has to
acknowledge that the key distributors are very often the big American
studios. As far as the BBC's policy is concerned, we have made
a point of not having an on-going relationship with any one distributor
because we believe that each film requires an appropriate distributor.
We have found some of the British distributors to be good at that
job. It is a fact that you need marketing skills to distribute
effectively and clearly the American studios, especially if they
are investors in the film, can put some clout behind them, but
the truth is that quite a lot of smaller films do not necessarily
get distributed. I have to say that the BBC's record over the
years has been pretty good. We do not tend to make films which
we do not believe have distribution outlets. I think the problems
come with the art films, the smaller films. I can give you one
example which would not have been made without the BBC, In
This World, the Michael Winterbottom film, which is currently
in distribution here, won the Golden Bear at Venice, that film
is in very small cinemas, places like the ICA and maybe eight
or nine cinemas. I was listening to this idea that you could be
more imaginative about how you window films, in other words, you
could spread them over a longer period but do not put them out
on every screen all the time. I think the real problem arises
around the issue of smaller films. As you know, Channel 4 attempted
to be a distributor as well and they found that very difficult
to achieve.
Q327 Mr Doran: £10 million sounds
like quite a lot but as a proportion of the expenditure on British
films it is quite a small proportion. There was a survey recently
by Screen Finance which suggested that around about 5% of the
UK industry is financed by the television companies, including
the ITV companies, and others, whereas in France and Spain the
figures are very much higher, around 37 and a 0.5%. French film
production is financed by the various commercial and state television
companies. In Spain it is about 35% so on that parameter we do
not do very well in the UK.
Mr Yentob: Again, I may not hold
the same views as everyone else. I believe that films, if they
are going to be made for the cinema, have to be seen at the cinema.
There does not seem any point to me making a lot of films that
do not get distribution. The French have subsidised, it is true,
French film-making over the years though it does not make French
films better than they were 20 or 30 years ago.
Q328 Mr Doran: They are pretty good
20 or 30 years ago.
Mr Yentob: They were, exactly.
Again, it is how strategically you use that money. The key thing
is getting those films off the ground. Once they are off the ground
and you have got talent attached, I think it is quite possible
to get investment from other areas. Production money can be high
risk, again as Channel 4 discovered.
Q329 Chairman: The ITV witnesses
are very welcome indeed to answer questions which they feel relate
to their activities.
Mr Jones: I was going to respond
once Alan had finished.
Mr Yentob: Go ahead.
Mr Jones: I think it is important
to recognise that broadcasting is orchestrated in a different
way and regulated in a different way in the United Kingdom than
it is in France particularly and other parts of Europe, therefore
TF1, which is the French equivalent of ITV, is paying 100 million
euros into the French film industry whereas ITV is paying £250
million in supertaxes to the British Government. We are investing
over £350 million a year into the top end of drama—Dr
Zhivago, Bloody Sunday—some of these things are
shown on theatrical release in the UK, and TF1 is paying nothing
like that. You will not find a lot of American product or a lot
of acquired product in peak time on ITV, you will find original
production, original British programming. That is what we are
required to do, that is what we are encouraged to do under the
previous Broadcasting Act and under the new Communications Act,
so they are not directly comparable.
Mr Doran: I was not going to ignore ITV
just in case you thought I was before the Chairman intervened.
Figures for the BBC by national comparison are poor enough but
ITV, with the exception of Channel 4, is a lot worse.
Chairman: Could you memorise that question.
We will come back as soon as we can.
The Committee suspended from 15.56pm to
16.07pm for a division in the House.
Chairman: Order, we have a quorum.
Q330 Mr Doran: I was asking about
the contribution that the ITV network makes to film-making and
I think the BBC figure I quoted was around about five; I think
the ITV figure is close to zero.
Mr Jones: I do not think it is
close to zero. First of all, there is the training point, the
ITV licensees invested £12 million last year in training,
and I would argue very strongly the investment we put into training,
whether it is into writing, whether it is into cameras, or whether
it is into sound recording, is certainly at the top end of drama
production. There is an enormous interchange between television
and film. We support that interchange between television and film
and we constantly contribute to support that pool of talent whether
it is acting talent or writing talent which works in drama and
works in films made in Britain and films financed in Britain and
made by British technicians entirely. You have to look at the
cycle. Investing in films is a very risky business. You can lose
your shirt and I am running a commercial, public company and I
am here to make money, not lose my shareholders their shirts.
Q331 Mr Doran: Is that because historically,
and Channel 4 is the best recent example, they have not done it
particularly well or is it because it is an innately risky business?
We have heard from Mr Yentob that you can do it selectively and
carefully and I think the BBC had some significant successes,
as did Channel 4 previously.
Mr Jones: I think we have and
I applaud Alan's success and I applauded Channel 4's success,
I think it is a very good thing, but it is an innately risky business.
You can have success and you can have failure and I am trying
to run a mass market channel and deliver success to viewers and
advertisers every night of the week, so I am cautious about investing
money up-front. I could buy a package of films virtually sight
unseen but film-makers rarely want to sell them that way. I do
invest in another way, I do buy films from both British film-makers
and American film studios on the basis of their success at the
box office so I am investing in film, I am just investing at the
back end. There is one further point. Of the 500 top programmes
shown on ITV last year, none of them were films. Only 3.7% of
the top 1,000 programmes shown on ITV last year were films.
Q332 Mr Doran: Is that not because
by the time you get a film it has been on widespread release,
it has been through the video process and pay TV, et cetera?
Mr Jones: I think that is a factor
in it. There was a time 10 or 12 years ago where they did not
go through that cycle where films were more successful on ITV
and BBC but fundamentally I think British television viewers want
to watch British production. They would much prefer to watch the
Caroline Quentin drama that we showed last night and at the weekend
or Inspector Morse or Inspector Frost or Midsomer
Murders or Foyle's War than they would ever want to
watch movies.
Q333 Mr Doran: Obviously Continental
television producers see some virtue in having some control over
the products that you both spend an awful lot of money on, because
you both buy in films for display, and clearly for the films the
BBC produces you have some control over when you show them on
television, what you do with them, whether you release them on
video and all the rest of it, whereas now in competition with
pay-per-view companies and the satellite companies you are quite
a little bit down the pecking order.
Mr Yentob: We are. If you pay
for it you get it, but you have to pay for it so the window for
satellite does mean your transmission is delayed. One of the reasons
that these figures are slightly out about how many films we show
at any time is the period after a film has been made and distributed
in the cinema to the point it gets onto terrestrial television
can be as much as three and a half years. It can take a very long
time. If you want the first window you have to pay more. I look
at it in each case for every film. If it is a film that we have
made and had substantial input in, like Billy Elliot, there
is a not a Sky window or satellite window, it goes straight, but
lots of other films go through that windowing process.
Q334 Mr Doran: I understand that
but you are spending millions on buying these films in and obviously
the Spaniards and French and perhaps other countries that I have
not mentioned see a commercial reason for making the heavy investment
they make, which clearly you do not see, so what is so different?
Mr Yentob: First of all, the French
film industry and, until Vivendi took it over, however you want
to look at it (that was a short-lived scenario mind you) and the
Spanish film industry are in a sense autonomous, they are not
dominated by the American distribution system but if you are,
by and large, involved with the American distribution market and
the American studios, if you invest equity and if it is net when
do you get it back? You see all these disputes going on with the
American studios about what it costs and when they have got their
money back so it is a risky business to invest £5 billion
in equity because you may not get it back for a very long time
and our business is to get the very best work on screen, to try
to get the work which features the British actors and British
writers, and we have been pretty successful at that lately. That
does not mean, however, that when it comes to a very profitable
film that you might necessarily get a huge amount out of it. You
will have of course British rights in perpetuity for a considerable
amount of time and that in itself can be a very valuable asset.
Mr Jones: I think it is also the
point of the differing viewing habits and tastes in the different
parts of the European Union. Whether it is France, whether it
is Germany or Italy, there will be a lot of American acquisitions
on the screen, whether they are series or whether they are movies,
yet if you look at British television, particularly the main terrestrial
channels, I doubt there is any night of the week when there is
not good home-produced drama available on the BBC and ITV and
possibly on Channel 4 and Channel 5 as well, so it is about this
British desire for original British production as distinct from
American acquired series or American movies.
Ms Thomson: If I can add one point,
I do not know the detail about the different regulatory systems,
but just looking through some briefing notes I have here, it may
be that the difference is partly accounted for by the mix of regulation
and tax break systems there are in France and Spain. For example,
in Spain you can offset 25% of your corporation tax against investment
in films and it may well be that that encourages the private broadcasters
to invest in film.
Mr Yentob: It is the same in Germany.
Ms Thomson: In France, Canal Plus
has a regulation that it has to spend a fifth of its budget on
films so that a combination of stick and carrot in the regulatory
tax framework may be one of the things that accounts for it.
Mr Doran: Do you foresee something like
that for the BBC and ITV network?
Q335 Mr Bryant: I take from that
point the fact that we could if we wanted address the concerns
that we have had from a lot of other people who have appeared
before us as witnesses, their concern as broadcasters in the world
of film, and we could start to insist on a few more sticks and
carrots.
Mr Yentob: First of all, if you
are going to provide incentives—and tax breaks are very
valuable, nobody is going to resist that—remember you cannot
prescribe that people are going to go and see the films and in
Spain, I suppose, they want to see French language films and German
language films on the screen. So I would say it is still high
risk. Whatever you put in in terms of incentive, we would have
to take the money from something else, British drama I suppose.
Q336 Mr Bryant: I would have to check
the figures but I think it is true that French cinema-goers watch
more American films than the British do.
Mr Yentob: They do.
Q337 Mr Bryant: It does not seem
as if their quota system really works very effectively. There
are two things that broadcasters do in relation to films. One
is you make films and the other thing is you show films and I
guess many of our childhood experience of watching television
was the big Bond movies on ITV, Chitty Chitty Bang Bang
and the Sound of Music every Christmas and Easter in perpetuity
on the BBC, and a hefty dose of things like Spencer Tracy and
the old films like Brief Encounter and so on and that world
does not seem to exist any more. I am not sure, Clive, whether
you are saying that people do not want to watch films any more
on TV.
Mr Jones: They are still watching
the Bond movies. We are still buying the Bond movies and we are
still putting them out on a regular basis, so that tradition still
continues. I suppose as was discussed earlier, films go through
various iterations before they now get to television. There is
the theatrical release, there might be a first premium pay release,
a pay section in video, a rental section in video and DVD, you
are then going on possibly to a second tier pay window, so it
is three/three and a half years before it gets to television,
so they do not have that uniquely magical appeal, it is not a
new experience or a relatively new experience by the time they
come to television. Apart from a limited number of American blockbusters
in the case of the BBC and ITV we are buying far less films than
we ever did before because it is usually more effective to invest
£600,000, which is the going rate for a hour of British drama,
because you get a high-quality product and in our experience we
get a lot more viewers than buying in American movies. That said,
we still do deals with Universal and Warner Brothers and we still
buy American films and British made films; we just buy less than
we did.
Q338 Mr Bryant: You referred to Midsomer
Murders. Some people accuse American movies of having too
much violence but in Midsomer there is hardly a person standing
in such a small village.
Mr Jones: I think we have murdered
most of Oxford.
Mr Bryant: Can I ask about foreign language
films because it was great to see The Devil's Backbone
on BBC4—
Chairman: I honestly do not want to control
what you are saying and I could not if I wanted to but this is
about British films.
Q339 Mr Bryant: In which case I think
you have forbidden me from asking the question I going to so I
shall not ask it.
Mr Yentob: We have responded in
the paper.
Mr Bryant: If you are saying I cannot
ask my question, I cannot ask my question.
Chairman: Go on and ask it.
6 Note by Witness: The overall training budget
for the BBC was £53.3 million (2002-03). Back
7
Note by Witness: BBC Films has made between six and eight
feature films per year over the last four years. It intends to
continue producing films at this level for the foreseeable future.
Additionally it will continue to make significant films for TV
such as The Gathering Storm and Out of Control. Back
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