Select Committee on Culture, Media and Sport Minutes of Evidence


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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