Jon's submission to the DCMS Film Policy Review

Jon Williams

Boss Bad Lad
Cast & Crew
The DCMS has requested comments and suggestions about what should be the country's future film policy, to be sent to them by 9 September. This is a draft of what I will be sending. If you are a film producer or director with feature film credits, or with a feature in pre-production; or if you are the director or programmer of a film festival, especially one in the North West, and you'd like to support this proposal, please send me your details + email address. Cheers, Jon.

1. The Box Office is the key

1.1. Box office success is the only predictor of a film’s DVD sales; and it determines how much the film is likely to make in other markets: setting the price for sales to Pay TV, broadcast TV, Video-on Demand, and so on.

1.2. Box office success means that the film had a general release, that it was exhibited on a screen in every mainstream UK cinema. The number of people who actually went to see it is less important than the fact that ‘on general release’ establishes the film as being of ‘mass’, as against ‘minority’ appeal.

1.3 The main financial rewards of box office success flow to the rights owners: the distributors. The largest go to vertically integrated companies that control acquisition, production, distribution, TV networks, and so on within global frameworks, i.e. The Hollywood majors. These are best placed to secure huge subsidies from tax breaks, and to avoid paying taxes through transfer pricing and other accounting measures – for example the Harry Potter films have made billions for their franchise holder, Warner Bros, but not one has so far recorded a profit.

1.4 Britain has world class film production and post-production facilities, but they are almost completely dependent for their survival on Hollywood film contracts – of which some are for films with British themes and locations, as well as British actors speaking with British accents.

2. British films – access to the audience

2.1. The distribution arms of the Hollywood majors control around 95% of the UK box office. The French distributors: Pathe, Gaumont and Optimum Releasing, together with a small number of other transnational companies have most of the remainder, leaving some 80 or so independent UK companies with as little as 1%.

2.2. The Hollywood majors maintain control over the majority of UK screens through a set of restrictive practices. Cinema exhibitors obviously want to screen the latest Hollywood blockbusters, but a part of the deal is that the exhibitor is obliged to also agree to take a number of the studio’s other lower budget production, often sight unseen, in deals negotiated months in advance. The same tactics are used when it comes to TV sales, with broadcasters being obliged to accept the films that they want as parts of packages filled with other studio products.

2.2. A ‘British’ film is only likely to be on general release if it was either a Hollywood production, such as MGM.’s Bond films and Warner’s ‘Harry Potter’ franchise; or a US/UK co-production developed in partnership with one the US majors. Most typical are the films produced by Working Title. Best known for such hits as Four Weddings and a Funeral, Shaun of the Dead, and the Bridget Jones films, Working Title is a wholly owned subsidiary of Universal Studios and it develops projects in consultation with its US parent company.

2.3 If a ‘British’ film is not the result of a US acquisition, the production company’s second best option is with one of the French companies. In most cases the film will not achieve a UK general release, although it may be on in between 50 and 150 screens – as against as 400+ for a run of the mill Hollywood film, and 500+ for a blockbuster. Hence the film will achieve neither the visibility, nor ‘mainstream’ acceptance, but, paradoxically due to the system of European film subsidies, it will be exhibited on many more screens in France. British directors, such as Ken Loach, Stephen Frears and Mike Leigh are thus much more highly regarded abroad than they are at home.

2.4 EU film policy assumes that individual member countries take various steps in order to protect their own filmmakers from US dominance: from subsidies to quotas, and from support for national distribution companies to more diverse forms of cinema ownership. Of course it is argued that language differences also protect continental Europe, although this is overstated as Hollywood simply dubs films as appropriate. But in order to help sustain filmmaking across the EU, subsidies are awarded for the distribution and exhibition of films from other EU countries. But in US-dominated Britain this actually disadvantages UK independent filmmakers as it is these subsidies which keep most of the many small independent UK distributors afloat.

2.5. The EU policies which work on the continent also disadvantage British independent films when it comes to exhibition. Most of the ‘Art House’ cinemas are part of ‘Europa Cinemas’, an EU network whose, as they state on their website, “…objective is to provide operational and financial support to cinemas that commit themselves to screen a significant number of European non-national films….”

2.6 The EU also provides subsidies to film festivals in return for their screening ‘European non-national films’, which serves to further disadvantage UK independent film producers.

2.7. The best that many UK independent producers manage to obtain is a distribution deal with an small under-funded distributor who manages to negotiate a one or two week long run of the film at an independent London cinema as the price of getting the film reviewed in the national press. It then goes straight to DVD and, in more than 19 out of 20 cases, according to the UKFC’s own data, fails to break even.

3. But surely British Films would find an audience if the were good enough?

3.1. The box office is a very crude way of measuring a film’s popularity. To begin with the published figures only detail each weekend gross, thus skewing the data towards films aimed at the younger market; the more mature audience preferring to go on weekdays.

3.2. A US film in the lower half of the box office top ten may be there because it is on in 400 screens, although it’s site average is may be well below that of a British film which is on in only 25% of that number. But, no matter how popular the British film may prove to be where it’s on, other potential exhibitors will not respond to the obvious demand by taking off a poorly performing US studio production and booking the British film in instead.

3.3. The British Film, An Education, makes the point. It opened 30 Oct 2009 on 93 screens and was no.8 at the box office. But in terms of site average it grossed over £1,000 more than the 3rd placed Fantastic Mr Fox which was on in 483 screens. For week after week An Education, in terms of site average, continued to deliver returns which put it firmly in the top 15, and often top 10 performing films. The film remained on release for an incredible 31 weeks, and it was still delivering a top 15 site average when it finally closed. But because it never got the number of screens which any sort of commercial sense says it should have, it only grossed £2,588,491. However Fantastic Mr Fox closed after 15 weeks when it’s site average had slumped to just £156 – less than a quarter delivered by An Education for the same weekend – but it had grossed almost £9 million.

3.4 An Education is a particularly dramatic example, but the same story is repeated over and over again with many British films. The Ian Dury biopic, Sex & Drugs and Rock and Roll, opened with a no.8 site average, and for most of it’s run was firmly in the top 15. But, because for most people, it was never on at their local cinema, it closed having grossed only £880,219.

3.5 The Ray Winstone gangster vehicle, 44 inch Chest, suffered a similar fate. It opened with a top 10 site average, but on only 75 screens. Seven weeks later it had closed having grossed only £400,000.

3.6 Time and time again British films are chalked up as box office failures, and that this is the fault of the film-makers for not making films people want to see, or a lack of skills and training, lack of investment, and so on. Any study of site averages clearly shows that this is not the case: they fail because, unless US distributors get the proceeds, most people can’t get to see them, and so they are not worth investing in. This is the one single issue which has to be addressed; anything else is of no relevance.

4. There is one simple solution – the reintroduction of quotas

4.1. The 50’s, 60’s and 70’s were a golden age of British cinema. We had large integrated companies which rivalled the Hollywood studios, and British films, directors and stars were internationally acclaimed. This industry had been allowed to develop and flourish under the protection of the system of quotas first introduced in 1928. And it had been further protected by the 1960 Film Act which banned distributors from forcing exhibitors into taking particular films.

4.2 In 1983, for reasons which remain opaque, government withdrew the quotas, with the result that British film-making went the same way as the car industry.

4.3 The scrapping of quotas has led to the same disaster elsewhere: for example when in 1992 the Mexican government caved in to US pressure to scrap them, Mexican film production plummeted from more than 100 films per year to single figures.

4.4. The introduction of quotas produces the reverse effect: for example South Korea had no film industry to speak of until it began phasing in quotas in 1967, starting at 10% and rising to 40% by 1985. This created the conditions which made film production an attractive investment, and Korean films soon came to outstrip even the biggest US blockbusters at the box office.

4.5 We take quotas for granted when it comes to broadcast television. If we want to have a viable film industry we need to do the same. Quotas need to cover both cinema exhibition and televised screenings.

4.6 Clear definitions of what defines a ‘British film’ need to be established in order to protect against abuses. At the moment the definition is so weak that attempts were made to even claim Batman Begins as a ‘British film’.

4.7 Many countries operate quota systems: France, Brazil, Argentina, Korea, China; and quotas have revitalised such as Spanish film production.

4.8 However the most restrictive quotas are operated by the USA where the government continues to allow the Hollywood majors cartel to operate a monopoly over at least 95% of film distribution and exhibition – a masxsive quota in all but name.

5. Developing Future Talent

5.1 Over the past decade the digital revolution has made it possible for anyone to make HD movies using domestic equipment and personal computers. And this has provided an outlet for the many thousands of graduates from film, media and performing arts courses to exercise their talents without resorting to any state funding at all. They do it purely because they are driven by passion.

5.2 This in many ways mirrors the flowering of fringe theatre which was to transform such as the Edinburgh festival, and to bring travelling theatre companies to alternative venues: pubs, community centres, and even village halls. That flowering was not driven by technology but by the scrapping of theatre censorship in 1968.

5.3 Today in every major city locally and regionally produced short and feature length films are regularly screened without having had to endure the costs of BBFC certification – local councils are well aware that this is no relevance to such films and their audiences, and that there is no motivation for anyone to attempt to abuse the existing legislation governing such as obscenity.

5.4 However, although audiences are free to watch these independent productions, they can’t be offered for sale on DVD without certification. For example local film clubs and local film festivals could easily compile DVD compilations of their ‘best of’ films; and, quite literally, make copies to order. But BBFC certification could cost them in excess of £1,500. Similarly many feature films are being produced on less than £1,000 budgets, but fully complying with BBFC regulations covering theatrical exhibition, DVD, and the list of DVD ‘extras’ which audiences have come to expect, would land the film-makers with a £3,000 bill.

5.5 The USA, Denmark, Austria, Canada, to name but a few, allow such films to be released as ‘unrated-18’. And some of those films may go on to achieve levels of success which mean that certification costs are no longer a deterrent.

5.6 The internet is the main point of sale for ‘fringe film’ movies, with the buyers being, by definition 18+ credit/debit card holders.

5.7 Films offered for sale by download do not require certification, but sending customers hard copies through the post is a criminal offence.

5.8 But what if a customer buys a download and then burns it to DVD? Have they then made the vendor guilty of a criminal act? When asked the only comment that the Video Standards Council would make about this was that ‘it was a whole can of worms’, whilst adding that they were only really interested in taking action against DVD piracy.

5.9 For the mainstream film industry classification is part of a film’s marketing strategy – it tells the consumer at a glance what to expect, whether they know anything about the film or not. ‘Fringe film’ has more in common with specialised print publishing and should be governed by the same regulations.

5.9.1 The introduction of an ‘unrated-18’ classification would not only resolve all this confusion, but it would also add up to awarding a £3,000 subsidy to every aspiring film-maker at no cost to the tax-payer at all.

6. Recommendations

6.1. Restore quotas for cinema exhibition with a clear definition of what is a British Film. The fact that cinemas are subject to local authority licensing would allow for a quota enforcement system which simply required cinemas to make an annual return as part of the licence renewal process.

6.2. Introduce quotas for British film screenings on free television channels.

6.3. Introduce measures which favour the screening of British independent films at art house and independent cinemas.

6.4. Introduce measures which reward the screening of British independent films at film festivals.

6.5. Assist the development of new talent by allowing independent producers and retailers the same freedom as in the USA to have the option of making available their films as ‘unrated-18’.