Joint Committee on The Draft Communications Bill Appendices to the Minutes of Evidence


Memorandum submitted by the Film Council

  On behalf of the Film Council, I would like to submit the enclosed contribution to the deliberations of the Joint Committee on the Draft Communications Bill. Please accept my apologies for the delay in entering this submission. This was because the submission needed the approval of the Film Council Board.

  This submission aims to set out why we believe that there should be clear acknowledgement in the Bill that the broadcasters should engage with the British film industry.

  While seeking to adhere closely to the "light touch" principles set out in the Bill, the Film Council is keen to seize the opportunity afforded by the passage of the Bill to contribute to the advancement of the objectives set by the Government for the British film industry and for the Film Council.

  I would be delighted to help in any way I can if the Committee has any questions or comments it would like to put to my Film Council colleagues or myself.

  I am copying this letter to Lord Puttnam.

Sir Alan Parker CBE



  1.  The Film Council was established in April 2000 in the wake of the Government's Film Policy Review. The Film Council's role is to advance the twin objectives that emerged from the policy review process:

    —  To help create a sustainable UK film industry, and

    —  To develop film culture in the UK.

  2.  The Film Council is making this submission to the Joint Committee as a result of discussions by its Board regarding proposals the Council intends to publish in September 2002. These proposals are aimed at taking forward the objectives set for it by DCMS. The Film Council has recognised that the Communications Bill represents a vital opportunity to address some aspects of the landscape in the UK that have tended to hinder the effective implementation of Government policy towards film.

  3.  The first part of this submission examines the consequences of the failure of the broadcasters to engage with the British film industry. In the view of the Film Council, if broadcasters are to make a sustained and meaningful commitment to British film, it is only likely to be on the basis of obligations agreed with and overseen by OFCOM.

  4.  Although we are not advancing specific amendments at this stage, the Film Council would like to see some acknowledgement in the Bill that the relationship between the broadcasters and the British film industry can and should be addressed.

  5.  The second part of the submission sets out the Film Council's commitment to assist OFCOM in carrying through its responsibilities to promote media literacy.


  6.  In its report, A Bigger Picture, the DCMS Film Policy Review Group (1997-98) wrote:

    "The broadcasters are a vital and integral component of the British film industry . . . The Review Group is concerned that overall there is too great a mismatch between the benefits that the broadcasters reap from film—which accounts for around 10 per cent of TV viewing time—and the resources that they put back into film, whether through licensing of films or direct investment in production . . . If we are to develop a sustainable British film industry, there must be a steady stream of investment from such important and powerful end-users. Such investment in British film will help broadcasters meet the requirement under EU law that they devote at least 50 per cent of their schedules to European audiovisual works."

Paragraphs 3.25-3.26

  7.  The Review Group proceeded to propose that DCMS should hold meetings with the broadcasters to discuss their plans for future investment in the British film industry.

  8.  When, however, the Review Group reconvened in September 1998 in its new guise as the Action Committee, any idea that the broadcasters would follow the guidance of the Review Group was swiftly abandoned. The cornerstone of the recommendations set out in A Bigger Picture was the All-Industry Fund, a voluntary mechanism to pay for the initiatives (such as investment in script development and the distribution business) the Review Group proposed. It soon became clear that the main contributors to any All Industry Fund would be the broadcasters. For this reason, the broadcasters were implacably opposed to the establishment of the All Industry Fund. They did not propose any alternative mechanism. The Fund itself failed to materialise.

  9.  In the four years since the Action Committee, the position of broadcasters vis a" vis British film has only changed insofar as it has deteriorated. Two companies established by broadcasters to invest in film—Carlton Films and Sky Pictures—have effectively closed down. BBC Films and Granada Films continue to operate with modest ambitions and Channel 4's Film Four is currently being drastically scaled back.

  10.  Why is it that the initial willingness of broadcasters to develop strategies around investing in UK film has atrophied? Why is it that, to the extent that UK broadcasters schedule films for mainstream audiences, they have not sought a greater involvement in ensuring an adequate supply of British films? The answer to these two questions lies in the structure of the UK television market. There has historically been little or no competition between broadcasters to acquire rights and their need for titles to fill the slots allocated to the kind of feature films they require has been almost entirely met from the output deals they have with the US majors. This is a low-risk, relatively low-cost strategy. By contrast, investing in British films is relatively high-risk. UK broadcasters, in the main, are not set up to cope with the vagaries of the film business. They prefer not to accept the long delays between a film's production and its availability for transmission. Instead, it is more efficient and lucrative to pick up finished product. Unlike sports rights, there are no "must-have" films and even the most desirable British films can be easily substituted. In short, there is no compelling incentive to invest upstream—in theatrical distribution, or development or production.

  11.  So even if UK broadcasters are key economic beneficiaries of feature film activity there will continue to be no compelling business case to increase involvement in British film.

  12.  The Film Council is currently finalising policy proposals to address the persisting structural weaknesses in the British film industry and to help make it more competitive in the global market place. The underlying principle of these proposals will be to give the strategy to promote investment in the British film industry a distribution-led focus. The Film Council's diagnosis is that the independent UK distribution sector is of insufficient scale and scope to realise adequately the potential of the UK film industry. The sector is currently unable to effectively access either the UK or the international market.

  13.  Perhaps the most striking manifestation of this weakness in UK distribution structures, then, is the near total absence of television broadcasters from the market for British film. In the life cycle of the exploitation of a film in the market place, free and pay television are key in terms of both the audiences for films and the economic value generated by them. If UK broadcasters do not play a full part in that the exploitation cycle of British films, then the potential for creating a sustainable British film industry capable of capitalising on our creative strength, is radically diminished.

  14.  The free market and existing policies and regulatory regimes have clearly failed to bring about adequate engagement, even by pure public service broadcasters like the BBC, on anything like a level commensurate with their counterparts in other European markets.

  15.  The leading investor in and exponent of film across Europe is Canal Plus. The pay-TV broadcaster is the largest player in feature film in France, Italy, Spain and Poland. It is a major contributor to film in Scandinavia. In France, advertising-funded broadcasters, TF1 and M6 have both developed internationally-successful film investment and sales operations. Pure public service broadcasters, France Television, La Sept and Arte, are also significant backers of feature film as are Italian broadcasters, RAI and Mediaset.

  16.  In fact the only UK audiovisual distributors of any scale at all are the broadcasters. But in the view of the Film Council, if UK broadcasters are to make a meaningful commitment to British film, it is unlikely to be on the basis of any short-term logic but only on binding obligations agreed with and overseen by OFCOM.

  17.  In setting out this principle, the Film Council is seeking to address a problem brought about by the inherent structure of the UK television market. There may be competition issues associated with the relationship between powerful broadcasters and weak film companies, but the Film Council believes these can be addressed in the context of general competition regulation.

  18.  Accordingly, the Film Council is proposing that the Communications Bill include, alongside the regional and independent production requirements, a measure that recognises the objective of advancing Government policy in relation to British film and empowers OFCOM to establish, in consultation with the broadcasters, effective means for supporting the British film industry. This would help to build critical mass to the benefit of both the UK's TV and film industries. The Film Council considers the principle of agreeing obligations valid for all three tiers of regulation which it is proposed OFCOM should oversee.


  19.  Like the Draft Communications Bill, the Film Council places great emphasis on the role of media literacy as an essential component of citizenship and an instrument of social inclusion. The Film Council inherited from the British Film Institute (bfi) for which it now has responsibility the task of promoting education about and access to film and the "moving image".

  20.  What is already clear is that the Film Council has the remit and the resources to foster education about and access to cinema. We see an understanding and appreciation of cinemas as an important component of media literacy and a major way of promoting it.

  21.  There is no nationwide body with the specific remit to promote media literacy and with the necessary resources and capabilities. On the one hand, we would aver that media literacy extends beyond film and television to encompass the press, advertising and multimedia. On the other hand, we note that not only does the UK lack an institution that can engage the issues of education across and about all the media, but of late we have tended to lose some of our assets in this area, for example, with the closure of two internationally-recognised and historically significant centres for media research, the Centre for Cultural Studies in Birmingham and the Centre for Mass Media in Leicester. This makes even more telling the absence of a centre for skills and learning related to media literacy.

  22.  Promoting media literacy implicates a variety of agencies and principally two Government departments—DCMS and DFEE— but a lead body needs to be identified that can take responsibility for implementation.

  23.  The Communications Bill ought formally to recognise the Film Council's role in working actively with Ofcom and other agencies to identify that lead body and to assist it in its work.

July 2002

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