Memorandum submitted by the Film Distributors'
Association
Is there a British film industry?
The Film Distributors' Association (FDA) is
the trade body representing theatrical film distributors in the
UK. Originally formed in 1915, FDA today has 14 member companies
whose releases account for 98% of all UK cinema admissions. Among
the 14 members are most of the UK's independent film distributors,
as well as all the local offices of the multi-national studios.
The UK's independent (non-studio) distributors claimed a 26% share
of the UK cinema market in 2002.
As Film Council Chair, Sir Alan Parker CBE,
identified in his keynote address in November 2002, film distribution
is the locomotive driving cinema admissions. It is the distributors
who acquire, position, license and market feature films to audiences,
motivating cinema visits.
FDA members invested more than £255 million
in 2002 alone in film prints (supplied to cinemas) and advertising.
Some 90% of the UK population go to the cinema at least once a
year, so distributors' communication is clearly reaching its target.
UK cinemas sold £812 million worth of tickets in 2002, 14%
more than in 2001. UK distributors normally receive 25-40% of
this box-office gross—among the lowest shares in Europe—with
exhibitors retaining the lion's share. Distributing films in cinemas
is costly and risky; only a minority of cinema releases ever returns
a profit.
In many ways, cinema is a launch pad for a film's
entire life cycle, which as you know encompasses DVD and VHS,
pay-TV and free-to-air TV platforms. The investment made by the
theatrical distributor to launch an individual title may well
pay dividends down the line—although the theatrical distributor
would not normally share in the revenues generated from any subsequent
windows.
The UK is the world's number three market for
cinema (by ticket sales), behind only the US/Canada and Japan.
When DVD and video are taken into account as well as cinema, then
the UK overtakes Japan to become the world's number two market
for film media. Overall, the global film media market (all formats)
has recently been estimated at $60 billion. But this commercial
value does not take into account film's cultural and social values:
film supplies the world with many of its heroes, its unifying
talking points, sometimes spanning continents and generations.
It is human nature to tell stories. Audiences
crave good narratives, while for storytellers there is no finer
canvas than the big screen. Every generation in every country
will produce filmmakers, just as it will spawn talents in design,
business, sports, invention, exploration, politics and assorted
other endeavours. Audiences are motivated primarily by stories—their
characters and situations—rather than by any given film's
nation(s) of origin or scale of production budget.
Given the economic and social contributions
of film, it is of course highly desirable that British and international
films continue to be made at UK studios and locations. In 2002,
wholly British films grossed £67 million at UK cinemas; UK
co-productions a further £58.6 million. A key reason why,
uniquely in Europe, UK cinema admissions rose by a healthy 13%
in 2002 was the regular yet diverse flow of well-made films with
British content, including About A Boy, Bend it Like Beckham,
Gosford Park, Ali G Inda House, Anita & Me and Die
Another Day. The first two films in both the Harry Potter
and The Lord of the Rings series—based on British
novels, of course—grossed £124 million in UK cinemas
in 2002 alone—a phenomenal achievement.
New films can reverberate beyond the cinema
screen to influence other leisure sectors, including book and
music sales. Feature films are an important source of programming
for broadcasters, and "network premieres", as well as
occasional re-runs, can deliver good ratings. The licence fees
paid by broadcasters for the right to screen films on television
represent a vital source of income to distributors, for whom such
"pre-sales" can make the difference between the viability
or otherwise of a deal to acquire a film for UK release in the
first place. As with other rights fees, TV sales fees are increasingly
being squeezed—a concern to several FDA member companies.
But there is much more to broadcasters' potential
contribution to film than just showing a broad range on their
channels. Given the widespread public interest in film, it is
disappointing how few programmes are devoted to celebrating and
exploring aspects of cinema. BBC One runs its on-going Film 2003
in a late slot, and BBC Two's Newsnight Review on Friday
evenings regularly includes new films. But that's about it—little,
if anything at all, is scheduled on other terrestrial channels.
Granada's long-running and well-regarded Cinema and Clapperboard
magazine programmes, for example, have long since disappeared.
Compared with other activities, such as sports or cooking, film
is not best served by broadcasters.
FDA endorses Film Council's drive to encourage
broadcasters—again, not just the BBC and Channel 4—to
support original film production in the UK. But it is also important
to note that problems for the UK production sector would be exacerbated
further in the event of reduced inward investment from the multi-national
studios. In today's global market, where relatively inexpensive
production facilities are available in many other countries, the
pursuit of inward investment remains a priority for a sustainable
UK industry.
Over the last three years, the Film Council
has been effective in causing the various sectors of the film
industry to view themselves as part of a whole, not least by bringing
together under one roof the previously atomised constituent organisations.
Also to its credit, it has been very open to consultation with
the industry at large, and it has adopted a more pragmatic, business-friendly
approach than some previous industry bodies. FDA supports Film
Council's establishment of new funds this year to help the wider
promotion and distribution of "specialised" films, British
films and releases with subtitles and audio description. In fact,
FDA members provided more releases with digital subtitles in 2002
than were made available even in the giant US market, and this
investment by distributors' is increasing further in 2003. The
Film Council has also recently raised the point that tax breaks
have been available to assist film production but not film distribution
in the UK—even though, as we have noted, it is distributors'
work which actually puts bums on seats for every film.
Without any Film Council funding to date, the
UK distribution sector has developed considerably and strongly
over recent years. It operates very ambitiously and competitively,
and is entirely focused on delivering the largest possible cinema
audience to each individual film. In 2002, an average of seven
new films was released every single week—on top of all the
hold-overs from the previous week(s).
FDA members come into contact with the Film
Council-supported British Film Institute mainly through its organisation
of the annual London Film Festival, its talent interviews and
screenings at the National Film Theatre, and its archiving of
film prints. Existing voluntary agreements concerning national
archiving seem to be working adequately. With a new Chair and
Director taking up post at the bfi, the organisation may
soon adopt a more outward-looking, audience-friendly approach
and this would be greatly welcomed. The BFI closed its old Museum
of the Moving Image in 1999, and if its new managers were to consider
ways to create a viable and attractive new museum, FDA may well
offer its support.
In the area of schools and students, FDA members
regularly commission digital or paper-based curriculum-related
teaching resources linked to their new films, or strands of films,
not from the bfi but from Film Education, the industry
charity established in the 1980s. Film Education's annual National
Schools Film Week is an excellent initiative—one of the
largest media events specially for young people in the UK, in
fact. FDA would welcome more well-promoted, coherent events or
themed festivals that present a fuller range of films to all UK
audiences, because this may help overall cinema admissions to
continue to rise.
We hope these notes are of some use and would
be happy to address further questions in due course, if needed.
28 February 2003
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