SlideShare a Scribd company logo
1 of 12
Download to read offline
RELATED INDUSTRIES
                                                        TV film production
                                                       Music (soundtracks)
                                                                Publishing
                                                               Advertising
                                                           Merchandising
                          CORE ACTIVITIES
                            Screenwriting
                        Feature film distribution
RELATED ACTIVITIES
                              Distribution
Set design/building            Exhibition
Catering
Equipment manufacture
Photographers
                                                   TELECOMMUNICATIONS AND IT
PR companies
                                                                 Video on demand
                                                           Internet film distribution
                                                                   Movie websites
                                                    Post-production/special effects
                                                                          Soho-Net
                                                                  Computer games
                                                                        Multimedia
film
049




      .07 FILM
SECTION




This analysis covers
the core film industry
activities of screenwriting,
feature film production,
distribution and exhibition.
050




  SECTION          .07 FILM

  INDUSTRY REVENUES

  The UK film industry attracted gross revenues of £920m in 1997, including UK consumer spending on UK films of £160m,1
  overseas receipts of £545m and £217m spent by foreign producers shooting in the UK.

  Number and Value of UK Films


800

700

600

500                                                                                                                                                            Production Cost
                                                                                                                                                               (£m)(1997 prices)
400

300

200

100                                                                                                                                                            Titles Produced

  0


          1981     1982        1983   1984     1985     1986      1987     1988      1989     1990      1991     1992      1993      1994     1995      1996   1997

                                                                                                                                                               Source: BFI Handbook; 1997 data; Screen Finance

  Share of UK Box Office
         1%      7.7%          6.5%   6.6%



                                                      Other

                                                      US films
      90.2%      83.7%     81.7%      73.5%
                                                      UK films




      8.8%       8.6%      11.8%      19.9%

      1994       1995      1996       1997


  UK film production is currently undergoing a renaissance. Film production spend on UK films has risen dramatically over
  the 1990s, from £105m in 1989 to £558m in 1997. The UK film industry is now making over 100 titles a year.

  UK MARKET SIZE

                                                                                            of which
 1997                                         Total £m                                      UK film


 Box office spend                                     512                                       102
 Video/DVD feature films                              880                                         35
 Pay-TV consumer spend                              4802                                         19
 Terrestrial TV film rights                          1003                                           4


 Total                                        £1,972m                                       £160m


  In 1997, UK audiences spent almost £2bn on films, £160m of it on UK films.



1 Assumes UK films achieved 20% of box office and 4% of video feature film spend, consumer Pay-TV spend on films and terrestrial TV spend on films
2 Assumes that 70% of BSkyB subscribers take a movie channel and that £9 of their total monthly subscription price can be attributed to films
3 Categorised as consumer expenditure, because it is either funded through licence fee, or paid for by advertising, the cost of which is ultimately passed
  on to consumers in the price of the goods they buy
051




  SECTION          .07 FILM

  Cinema admissions reached 139m,4 a 12% increase over the previous year and their highest level since 1974. Total UK box office
  takings exceeded £512m, a 16% increase over 1996. UK films accounted for £102m of this (20%). This was boosted by the
  success of The Full Monty, which has taken more than £48m, making it the highest-ever grossing film at the UK box office.

  The UK video market has been growing steadily, and £880m can be attributed to feature films, of which £35m was on UK films.

  UK broadcasters spent around £350m on film rights, the bulk (£250m) attributable to BSkyB. The table above shows Spectrum’s
  estimate of the share of Pay-TV spend attributable to feature films.

  BALANCE OF TRADE

  Overseas Transactions of the Film Industry, 1986-1996 (£m)


600

500                                                                                                           Receipts

400                                                                                                           Payments

300

200

100                                                                                                           Net Receipts

  0


           1986     1987        1988   1989    1990    1991     1992      1993       1994   1995       1996

  In 1996, overseas revenues for films made in the UK were £522m, more than double the 1986 figure. Imports amounted to
  £431m, resulting in a trade surplus of £91m. Over the last ten years, the UK has consistently had a surplus in film. However,
  this is partially misleading, since so much of the revenue from films made in the UK flows out of the country.

  In 1996, UK films took over $50m at the US box office, and this is likely to be far exceeded by 1997 figures. The recent success
  of UK films abroad has resulted in the UK industry becoming second only to Hollywood in the UK box office.

  The Film Policy Review report, A Bigger Picture, in March 1998 pointed to the need to put structures in place to ensure that this
  success can be sustained and improved upon. The establishment of an All-Industry Fund would encourage better development
  and distribution of more commercial British films, while a film marketing body would raise the profile of film in Britain.

  EMPLOYMENT

  Breakdown of Employment in the UK Film Production, Distribution and Exhibition Sectors

  by Age                                                                                       by Employment Status

                            30%                                                                                D


                                       23%                                                         C

                                                                                                                                   A
                                               16%
                  14%

                                                                                                   B
      6%
                                                        5%         4%
                                                                                2%                                 A   Full-time employees (61%)
                                                                                                                   B   Self-employed without employees (19%)
                                                                                                                   C   Part-time employees (16%)
      16-19       20-24     25-34      35-44   45-54    55-59     60-64   65 and over                              D   Self-employed with employees (4%)


  The UK film industry employs over 33,000 people. Actors, producers and directors account for 21% of the total. Around half the
  total are employed in “non-cultural” occupations, such as management or cinema operation.

  58% of workers are male and 42% female. 96% are white, and 1% each Black-Caribbean, Indian, Pakistani and other Asian.5


4 Source Screen Finance Jan 1998
5 Source Employment in the Arts & Cultural Industries Arts Council of England
052




SECTION         .07 FILM

INDUSTRY STRUCTURE

UK Film Industry Structure

                                                      Channel Four, Polygram, Miramax, Lottery franchises


     Training            Ideas Creation/       Development/          Investment             Finance            Sales Agent         Distributors         Exhibition
                             Writers            Production

National Film and    Simon Beaufoy         Renaissance         ACE                 Guinness Mahon        Capitol Films       Guild                Virgin
Television School    John Hodge            Figment Films       Channel 4           F.I.L.M.S.            J&M                 Entertainment        UCI
London Screen        Peter Morgan          Carnival            BBC                 Barclays              Icon                Portman              Rank (Odeon)
Writers Workshop                                                                                         Entertainment
                     Nick Hornby           Recorded Picture    Capitol Films       E.C. Funds                                First Independent    Showcase
Moonstone                                  Company                                                       Intermedia                               (S. Redstone)
International        Ronan Bennett                             Winchester Films    I.N.G.
Screen Lab                                 Company Pictures                        Coutts                Distant Horizons                         Warner
                                           Scala                                   Lloyds                                                         Mayfair (Curzon)

                                                                                   Lombard North
                                                                                   Central (NatWest)


The UK film industry is essentially a cottage industry, characterised by a large number of small production companies making, on
average, less than one film a year. Risk is not therefore spread over a slate of films, and economies of scale cannot be generated.
The industry is still heavily dependent on US studios and UK television companies for financial backing.

Generating a Producer’s Net from a Theatrical Release



                                                                     Gross box office revenues


                                                               40%                                60%

                                             Distributor’s gross                                          Exhibitor

                                                                                            Distributor recoups P & A
                                     50%                              50%
                                                                                            Distributor recoups advance
                    Distributor’s fee
                                                                                            Recoupment of equity investors




                                                                        Producer’s gross




                                        Residuals and deferred fees                                     Producer’s net


                                                                                            50%                              50%

                                                                           Equity investors                                          Producer




Although UK films may perform well at the box office, little of this revenue reaches the producer, meaning there is little net profit
to re-invest into production. Overall, there is insufficient profit to offset the UK distributors’ advances and to pay for the real costs
of making and promoting British films. Recommendations in A Bigger Picture are designed to go some way towards addressing
this problem.
053




SECTION             .07 FILM

Investors in British Film, 1997
 £86.9m                                                                                                                                                                                                                            Notes
                                                                                                                                                                                                                                   Chart details main British investors in
                                                                                                                                                                                                                                   UK films, plus Polygram and Miramax
                                                                                                                                                                                                                                   Figures apply to Calender Year 1997,
                                                                                                                                                                                                                                   or to most recent financial year,
                                                                                                                                                                                                                                   where appropriate
                                                                                                                                                                                                                                   Investment includes equity and
                                                                                                                                                                                                                                   pre-buys that contributed towards a
                                                                                                                                                                                                                                   film’s production financing, but not
                                                                                                                                                                                                                                   pick-ups of completed movies or
                                                                                                                                                                                                                                   development financing
              £44m       £43.6m
                                                                                                                                                                                                                                   Source: Variety
                                                                                                                                                                                                                                   1 Includes $8.5m Greenlight Fund
                                                                                                                                                                                                                                   2 These funds are invested through
                                                                                                                                                                                                                                     British Screen Finance
                                            £23.7m
                                                          £19.4m   £19.4m
                                                                               £13.1m
                                                                                               £10m             £7.6m        £6.8m               £6.2m              £5.1m          £5m              £3.8m
                                                                                                                                                                                                              £1.12m      £0.85m
   Polygram



               Miramax



                          Arts Council of
                                England 1



                                              Channel 4



                                                            BBC



                                                                     Granada


                                                                                        J&M
                                                                               Entertainment



                                                                                                Capitol Films



                                                                                                                Winchester
                                                                                                                     Films



                                                                                                                               British Screen2


                                                                                                                                                 Arts Council of
                                                                                                                                                       Scotland

                                                                                                                                                                            Euro
                                                                                                                                                                   Co-production
                                                                                                                                                                           Fund2


                                                                                                                                                                                    Handmade Film



                                                                                                                                                                                                     BSkyB2


                                                                                                                                                                                                               Glasgow
                                                                                                                                                                                                              Film Fund



                                                                                                                                                                                                                            BFI
FILM PRODUCTION FINANCE

Initiatives including the Lottery franchise scheme are designed to address structural problems within the UK industry, by
encouraging vertical integration and providing investment of over £100m. In addition, the Arts Council of England awarded
£45m of Lottery money to 53 projects between September 1995 and November 1997, and will continue to make awards to
individual films.

However, the most successful British films are made with foreign investment. The Full Monty, The English Patient and Bean
were backed by Fox, Buena Vista and Polygram respectively. Miramax and MGM set up substantial UK bases during 1997.
In all, approximately 60% of UK production is accounted for by US money.6

UK terrestrial television companies are also major financial backers of British film. The BBC invested over £10m in UK film in
1997. The ITV network is committed to providing film finance, and Film Four has recently secured additional funding worth £40m
over the next four years from C4. BSkyB has so far made little direct investment in UK film, but has recently announced that it will
make five feature length films in the next two years, each costing between £2m and £6m.

Most private investors are still wary of the UK film industry. The Lottery franchises have prompted some interest from the
investment community, but few commitments. The big banks are wary of investing in film, but equity funds such as Baltic Media
and Flashpoint are bringing some private investment into production. Matrix Securities, the tax-based investment adviser, recently
established a multi-million pound investment vehicle which could put as much as £30m into British film by the end of 1998.

FOREIGN PRODUCTIONS

The large number of US films being made in the UK also brings substantial investment to the industry. In spite of the strong
pound, it is still around 20% cheaper to shoot in the UK than in the US.6 The UK also offers US film makers highly skilled
technicians and no language problem. Pinewood, Shepperton and Elstree Studios all have plans to expand in order to meet the
increasing demand.

POST-PRODUCTION AND SPECIAL EFFECTS

The UK post-production and special effects sector is small but booming, thanks largely to the growing number of US films
shooting in the UK. In the new US film, Lost in Space, British technicians demonstrated that their special effects were way ahead
of those available on the West Coast of America. Main players include The Computer Film Co., Cinesite and Moving Pictures.
There is increasing co-operation between rival post-production houses. A new digital fibre-optic network called SohoNet connects
twelve London-based production houses, and links the UK to California. This may be extended to Pinewood and Shepperton
Studios, allowing US producers to send daily rushes back to the US. There is, as yet, no US equivalent to SohoNet.

DISTRIBUTION

More than 80% of UK distribution is still accounted for by the US majors. Some 35-40% of box office takings are passed on to
the distributor, roughly 10% less than in the US.7 UK independent distributors are small, and find it hard to represent a slate of
commercially successful films and invest in the required P&A budgets and adequate information systems.



6 Source Screen International Oct 1997
7 Source Moving Pictures Jan 1998
054




SECTION      .07 FILM

UK films are still finding it hard to secure theatrical distribution, due to the nature of the product (too small, with an average
budget of £1.6m, often not commercial enough and sometimes compromised by budget constraints) and the weak position of
UK independent distributors. Also, since most UK films are financially backed by television, their distributors are often left with
no television rights to sell.

Less than 25% of UK films made in 1995 secured a wide theatrical release in the UK. The marketing spend of the US majors is
increasing, and Hollywood blockbusters are opening to ever more screens. However, the increasing number of screens should
eventually make it easier for independent distributors to secure a limited release for their pictures. The All-Industry Fund proposed
in A Bigger Picture is intended to compensate for the market failures arising from the structure of the industry and the revenues
would be dedicated to measures to cure them.

EXHIBITION

The exhibition sector is strong. There are currently over 2,000 cinema screens in the UK. This compares with 1,800 in Japan
but 4,500 in France.8 Multiplexes account for more than half of cinema admissions. It is estimated that more than £100m was
invested in building and upgrading cinemas during 1997.9 The market is becoming increasingly competitive as the prime sites
become filled, and branding and luxury facilities are becoming increasingly important.

INTERNATIONAL CRITICAL ACCLAIM

Since 1990, British films, actors and filmmakers have won 21% of all the major Oscars, 18% of all the major prizes at the Cannes
Film Festival and 15% at the Berlin and Venice film festivals. The last two years in particular have seen major success at the
Oscars, with British talent winning almost one-third of all the awards in 1996 and almost half in 1997.

SECONDARY ECONOMIC IMPACT

It is estimated that in 1997, film production in the UK created indirect economic benefits of around £1.4bn, a multiplier effect
of 2.5 on £558m film production expenditure.

This figure includes expenditure on services, such as restaurants, hotels and taxis, and on indirect earnings associated with the
production of a film.

Film production supports 18,000 jobs through indirect employment, a multiplier of 1.7 on current direct employment of 10,700.

The UK film industry also plays a crucial role in the international perception and marketing of Britain, helping to promote other
creative industries as well as inward tourism, providing exposure for the UK in over 15 major countries and to more than 100m
viewers worldwide.

POTENTIAL FOR GROWTH

Industry revenues                              1997                   2007
                                              actual                forecast


UK consumer spending                          £160m                 >£400m
Overseas receipts                             £545m                c. £800m
Foreign productions in UK                     £217m                 >£200m


Total                                         £922m                 >£1.4bn


Spectrum estimate that the contribution of the UK film industry to the economy could grow from £922m to over £1.4bn
by the year 2007.




8 Source Screen Digest Aug 1997 (1996 data)
9 Source Sunday Times 18 January 1998
055




   SECTION        .07 FILM

   Overseas Receipts of the UK Film Industry (£m)


800

700

600

500

400

300

200

100                                        Historic Data                                                                       Forecast

  0


       1986     1987    1988     1989    1990     1991      1992   1993     1994    1995     1996      1997   1998     1999    2000E 2001E 2002E 2003E 2004E 2005E 2006E 2007E


   This forecast relies mainly upon the assumption of continuing growth in overseas receipts, which could grow to £800m even
   with a relatively modest growth rate (as indicated in the chart above). This would help perpetuate a virtuous circle of increased
   production levels, improved negotiating power for UK producers and increasing access to US distribution.

   ESTIMATED UK CONSUMER SPEND

                                                                                            of which
    2007                                            Total                                  UK film


    Box office spend                               £880m                                     £220m
    Video/DVD feature films                      £1,200m                                     £100m10
    Pay-TV consumer spend                       £1,000m                                       £80m
    Terrestrial TV film rights                     £200m                                       £16m11


    Total                                       £3,280m                                     £416m


   UK consumer spending on UK film is forecast to more than double to over £400m. This will be supported by the multiplication of
   television outlets with the development of digital technology. UK film makers already earn more from UK Pay-TV returns than they
   do from UK box office, and the importance of this source of revenue can be expected to grow. The home-viewing market will also
   be further stimulated by the launch of the Digital Video Disc (DVD) during 1998.

   The flow of foreign productions shooting in the UK is notoriously sporadic, but if economic conditions are favourable, the level of
   inward investment could be maintained beyond £200m. The establishment of a UK Film Office in Los Angeles, which was one of
   the recommendations of A Bigger Picture, is expected to encourage greater inward investment from the US.

   In July 1997, the Government introduced a 100% tax write-off for production costs in a film’s first year, applicable to films
   budgeted at less than £15m. It has been calculated that this could reduce production costs by 10% per film.12

   Over £92m of National Lottery money will be invested in British films over the next six years through the studio franchise
   scheme. This will be used to produce 90 films with a total value of some £460m.

   With the current production boom, screenwriters are more likely to get their films made and are choosing to stay in Britain.
   Writers and producers are also becoming more cinema-oriented and more commercial, rather than theatre and television-based.
   The industry is benefitting from a new wave of young screenwriting talent, such as Joe Penhall, Lee Hall, Amy Jenkins and
   Darren Bailie.

   In this context, the opportunity exists for the UK not merely to be the second largest consumer of Hollywood films, but to
   become the second largest producer of films, after the US, within a global market.

   Growth at the level predicted by Spectrum could see employment in the industry grow by between 10-20,000 over the current
   level of 33,000.

10 This is a lower percentage than box office because of the video industry’s skew towards A-list Hollywood blockbusters and US animation
11 Assumes same proportion of market is achieved by UK films for video
12 Source Screen International Jan 1998
056




   SECTION       .07 FILM

   Current and Projected New UK Multiplex Sites

                                                                        Sites to be added
                                          End of 1997                    by end of 20001


   ABC                                        2                                15
   CINE-UK                                    4                                20
   National Amusements                       14                                 6
   Odeon                                     16                                31
   UCI                                       26                                 8
   Virgin                                    29                                22
   Warner Village                            17                                25
   New operators                              -                                26

                                                                                                                                   Notes: New sites of five or more screens
   The exhibition sector is expected to continue to experience strong growth. Many new multiplexes are planned by the end          Source: Screen International Oct 1997
   of the century. By the year 2000, cinema admissions are forecast to pass 180m,13 making the UK the biggest movie-going
   country outside the US. Multiplexes are expected to account for 75% of admissions, compared to 50% currently.

   Cinema advertising revenue has doubled in the last eight years, reaching £73m in 1996, and will continue to grow with the
   increase in cinema screens and attendances. Related sales, such as movie merchandise and refreshments, can also be
   expected to increase.

   GROWING THE SECTOR – POINTS FOR CONSIDERATION

   Growing the UK film industry depends crucially on being able to sustain the current production boom while ensuring that
   the quality of the product is maintained and that films are properly targeted at an international commercial market. There are
   a number of key issues, many of which are addressed in A Bigger Picture, including:

   the improvement of available training for film-makers, scriptwriters and others on whom the industry depends for a quality
   product, and encouraging the industry to invest more in training

   investment in script development, to ensure that more scripts reach their full potential – in comparison with the US, the
   UK film industry spends little time or money on script re-writes

   the provision of guidance and support for the industry, including information on locations, markets, audience profiles and
   revenue forecasts

   the impact of current government initiatives, including the Lottery franchise scheme and fiscal incentives, to promote UK
   film production

   the encouragement of foreign film making in the UK, particularly if a strengthening in the UK economy threatens the level
   of US productions

   support and encouragement for exports

   action against piracy

   the improvement of communications between the industry and the City

   increasing the industry’s understanding of audience preferences

   improving film education and cine-literacy




13 Source Screen International Oct 1997
057




      .07 FILM
SECTION
058




      .07 FILM
SECTION

More Related Content

What's hot

Capital Markets Day 2011 Yulia Moskvitina
Capital Markets Day 2011 Yulia MoskvitinaCapital Markets Day 2011 Yulia Moskvitina
Capital Markets Day 2011 Yulia MoskvitinaCTC Media, Inc.
 
ConferêNcia Bear Stearns 2006 Telecom & MíDia AméRica Do Sul En
ConferêNcia Bear Stearns 2006 Telecom & MíDia   AméRica Do Sul EnConferêNcia Bear Stearns 2006 Telecom & MíDia   AméRica Do Sul En
ConferêNcia Bear Stearns 2006 Telecom & MíDia AméRica Do Sul EnTIM RI
 
Press Release 4 Q99 Tele Celular Sul En
Press Release 4 Q99   Tele Celular Sul EnPress Release 4 Q99   Tele Celular Sul En
Press Release 4 Q99 Tele Celular Sul EnTIM RI
 
Xm satellite final0
Xm satellite final0Xm satellite final0
Xm satellite final0waleed sayed
 
Emedia Pack DM Digital TV
Emedia Pack DM Digital TVEmedia Pack DM Digital TV
Emedia Pack DM Digital TVramanjeet
 
CCI Media Milan and Rome inventory
CCI Media Milan and Rome inventoryCCI Media Milan and Rome inventory
CCI Media Milan and Rome inventoryCCIMediaSwitzerland
 
Eastern Promises – Capital Markets Day, May 2011
Eastern Promises – Capital Markets Day, May 2011Eastern Promises – Capital Markets Day, May 2011
Eastern Promises – Capital Markets Day, May 2011Modern Times Group MTG AB
 
Grant Goddard, Totally Radio, Music 4.5 Smart Radio
Grant Goddard, Totally Radio, Music 4.5 Smart RadioGrant Goddard, Totally Radio, Music 4.5 Smart Radio
Grant Goddard, Totally Radio, Music 4.5 Smart RadioMME 4.5 / Music 4.5 / 2Pears
 
Capital Markets Day 2011 Anna-Maria Treneva
Capital Markets Day 2011 Anna-Maria TrenevaCapital Markets Day 2011 Anna-Maria Treneva
Capital Markets Day 2011 Anna-Maria TrenevaCTC Media, Inc.
 
Managed transmission - an alternative approach to delivering backhaul
Managed transmission - an alternative approach to delivering backhaulManaged transmission - an alternative approach to delivering backhaul
Managed transmission - an alternative approach to delivering backhaulstephen_arnold
 
news corp 3rd Qtr - FY07 - March 31, 2007 - US Dollars
news corp 3rd Qtr - FY07 - March 31, 2007 - US Dollars news corp 3rd Qtr - FY07 - March 31, 2007 - US Dollars
news corp 3rd Qtr - FY07 - March 31, 2007 - US Dollars finance9
 
Iab brasil iabglobal_summit_2012_2
Iab brasil iabglobal_summit_2012_2Iab brasil iabglobal_summit_2012_2
Iab brasil iabglobal_summit_2012_2HandsMobile
 

What's hot (17)

Viacom
ViacomViacom
Viacom
 
Capital Markets Day 2011 Yulia Moskvitina
Capital Markets Day 2011 Yulia MoskvitinaCapital Markets Day 2011 Yulia Moskvitina
Capital Markets Day 2011 Yulia Moskvitina
 
ConferêNcia Bear Stearns 2006 Telecom & MíDia AméRica Do Sul En
ConferêNcia Bear Stearns 2006 Telecom & MíDia   AméRica Do Sul EnConferêNcia Bear Stearns 2006 Telecom & MíDia   AméRica Do Sul En
ConferêNcia Bear Stearns 2006 Telecom & MíDia AméRica Do Sul En
 
Press Release 4 Q99 Tele Celular Sul En
Press Release 4 Q99   Tele Celular Sul EnPress Release 4 Q99   Tele Celular Sul En
Press Release 4 Q99 Tele Celular Sul En
 
Xm satellite final0
Xm satellite final0Xm satellite final0
Xm satellite final0
 
Nielsen Social TV
Nielsen Social TVNielsen Social TV
Nielsen Social TV
 
Emedia Pack DM Digital TV
Emedia Pack DM Digital TVEmedia Pack DM Digital TV
Emedia Pack DM Digital TV
 
CCI Media Milan and Rome inventory
CCI Media Milan and Rome inventoryCCI Media Milan and Rome inventory
CCI Media Milan and Rome inventory
 
WiZE Bd Road Map
WiZE Bd Road MapWiZE Bd Road Map
WiZE Bd Road Map
 
Eastern Promises – Capital Markets Day, May 2011
Eastern Promises – Capital Markets Day, May 2011Eastern Promises – Capital Markets Day, May 2011
Eastern Promises – Capital Markets Day, May 2011
 
Grant Goddard, Totally Radio, Music 4.5 Smart Radio
Grant Goddard, Totally Radio, Music 4.5 Smart RadioGrant Goddard, Totally Radio, Music 4.5 Smart Radio
Grant Goddard, Totally Radio, Music 4.5 Smart Radio
 
Capital Markets Day 2011 Anna-Maria Treneva
Capital Markets Day 2011 Anna-Maria TrenevaCapital Markets Day 2011 Anna-Maria Treneva
Capital Markets Day 2011 Anna-Maria Treneva
 
Managed transmission - an alternative approach to delivering backhaul
Managed transmission - an alternative approach to delivering backhaulManaged transmission - an alternative approach to delivering backhaul
Managed transmission - an alternative approach to delivering backhaul
 
news corp 3rd Qtr - FY07 - March 31, 2007 - US Dollars
news corp 3rd Qtr - FY07 - March 31, 2007 - US Dollars news corp 3rd Qtr - FY07 - March 31, 2007 - US Dollars
news corp 3rd Qtr - FY07 - March 31, 2007 - US Dollars
 
Latin Energy 12/2005
Latin Energy 12/2005Latin Energy 12/2005
Latin Energy 12/2005
 
Iab brasil iabglobal_summit_2012_2
Iab brasil iabglobal_summit_2012_2Iab brasil iabglobal_summit_2012_2
Iab brasil iabglobal_summit_2012_2
 
Sectors of the media sectors
Sectors of the media sectorsSectors of the media sectors
Sectors of the media sectors
 

Similar to British film industry facts

Filmturisme 2010 - Filmturisme som fenomen, Dr Simon Hudson, University of So...
Filmturisme 2010 - Filmturisme som fenomen, Dr Simon Hudson, University of So...Filmturisme 2010 - Filmturisme som fenomen, Dr Simon Hudson, University of So...
Filmturisme 2010 - Filmturisme som fenomen, Dr Simon Hudson, University of So...filmturisme
 
Vodafone bid for Mannesmann
Vodafone bid for MannesmannVodafone bid for Mannesmann
Vodafone bid for Mannesmannml_andrew
 
UK cinema Warp films & Working titles
UK cinema Warp films & Working titlesUK cinema Warp films & Working titles
UK cinema Warp films & Working titlesHamza94
 
La Espectacular Nueva Zelanda: el entretenimiento como un motor económico
La Espectacular Nueva Zelanda: el entretenimiento como un motor económicoLa Espectacular Nueva Zelanda: el entretenimiento como un motor económico
La Espectacular Nueva Zelanda: el entretenimiento como un motor económicoconsejodelacultura
 
Bfi statistical-yearbook-2013
Bfi statistical-yearbook-2013Bfi statistical-yearbook-2013
Bfi statistical-yearbook-2013xxyewyxx
 
Uk film industry presentation
Uk film industry presentationUk film industry presentation
Uk film industry presentationmichaeldixonuk
 
The film industry by fateha
The film industry by fatehaThe film industry by fateha
The film industry by fatehahaverstockmedia
 
Graphite Presentation
Graphite PresentationGraphite Presentation
Graphite Presentationsaituysal
 
Sony ontbijtsessie 3D Mpjc 2011
Sony ontbijtsessie 3D Mpjc 2011Sony ontbijtsessie 3D Mpjc 2011
Sony ontbijtsessie 3D Mpjc 2011Media Perspectives
 
Radio 2.0 Andomediagroup presentacion Daniel Karlsson organized by Actuonda
Radio 2.0 Andomediagroup presentacion Daniel Karlsson organized by ActuondaRadio 2.0 Andomediagroup presentacion Daniel Karlsson organized by Actuonda
Radio 2.0 Andomediagroup presentacion Daniel Karlsson organized by ActuondaACTUONDA
 
Bfi statistical-yearbook-2014
Bfi statistical-yearbook-2014Bfi statistical-yearbook-2014
Bfi statistical-yearbook-2014wurld
 
Bfi statistical-yearbook-2013
Bfi statistical-yearbook-2013Bfi statistical-yearbook-2013
Bfi statistical-yearbook-2013wurld
 
Sait uysal presentation - amorphous graphite
Sait uysal   presentation - amorphous graphiteSait uysal   presentation - amorphous graphite
Sait uysal presentation - amorphous graphitesaituysal
 
Copy of bfi conference 2009 slumdog and quantum
Copy of bfi conference 2009 slumdog and quantumCopy of bfi conference 2009 slumdog and quantum
Copy of bfi conference 2009 slumdog and quantumRicardo Molloy
 
BFI Summary of the Film Industry -companies June-2015
BFI Summary of the Film Industry -companies June-2015BFI Summary of the Film Industry -companies June-2015
BFI Summary of the Film Industry -companies June-2015Naamah Hill
 

Similar to British film industry facts (20)

02 g322 section b film industry introduction 2013
02 g322 section b   film industry introduction 201302 g322 section b   film industry introduction 2013
02 g322 section b film industry introduction 2013
 
Filmturisme 2010 - Filmturisme som fenomen, Dr Simon Hudson, University of So...
Filmturisme 2010 - Filmturisme som fenomen, Dr Simon Hudson, University of So...Filmturisme 2010 - Filmturisme som fenomen, Dr Simon Hudson, University of So...
Filmturisme 2010 - Filmturisme som fenomen, Dr Simon Hudson, University of So...
 
Warp films
Warp filmsWarp films
Warp films
 
Warp films
Warp filmsWarp films
Warp films
 
Vodafone bid for Mannesmann
Vodafone bid for MannesmannVodafone bid for Mannesmann
Vodafone bid for Mannesmann
 
UK cinema Warp films & Working titles
UK cinema Warp films & Working titlesUK cinema Warp films & Working titles
UK cinema Warp films & Working titles
 
La Espectacular Nueva Zelanda: el entretenimiento como un motor económico
La Espectacular Nueva Zelanda: el entretenimiento como un motor económicoLa Espectacular Nueva Zelanda: el entretenimiento como un motor económico
La Espectacular Nueva Zelanda: el entretenimiento como un motor económico
 
Bfi statistical-yearbook-2013
Bfi statistical-yearbook-2013Bfi statistical-yearbook-2013
Bfi statistical-yearbook-2013
 
Uk film industry presentation
Uk film industry presentationUk film industry presentation
Uk film industry presentation
 
The film industry by fateha
The film industry by fatehaThe film industry by fateha
The film industry by fateha
 
Graphite Presentation
Graphite PresentationGraphite Presentation
Graphite Presentation
 
CBS qr1q 03
CBS qr1q 03CBS qr1q 03
CBS qr1q 03
 
Sony ontbijtsessie 3D Mpjc 2011
Sony ontbijtsessie 3D Mpjc 2011Sony ontbijtsessie 3D Mpjc 2011
Sony ontbijtsessie 3D Mpjc 2011
 
Radio 2.0 Andomediagroup presentacion Daniel Karlsson organized by Actuonda
Radio 2.0 Andomediagroup presentacion Daniel Karlsson organized by ActuondaRadio 2.0 Andomediagroup presentacion Daniel Karlsson organized by Actuonda
Radio 2.0 Andomediagroup presentacion Daniel Karlsson organized by Actuonda
 
Bfi statistical-yearbook-2014
Bfi statistical-yearbook-2014Bfi statistical-yearbook-2014
Bfi statistical-yearbook-2014
 
Uk+publishing+sector
Uk+publishing+sectorUk+publishing+sector
Uk+publishing+sector
 
Bfi statistical-yearbook-2013
Bfi statistical-yearbook-2013Bfi statistical-yearbook-2013
Bfi statistical-yearbook-2013
 
Sait uysal presentation - amorphous graphite
Sait uysal   presentation - amorphous graphiteSait uysal   presentation - amorphous graphite
Sait uysal presentation - amorphous graphite
 
Copy of bfi conference 2009 slumdog and quantum
Copy of bfi conference 2009 slumdog and quantumCopy of bfi conference 2009 slumdog and quantum
Copy of bfi conference 2009 slumdog and quantum
 
BFI Summary of the Film Industry -companies June-2015
BFI Summary of the Film Industry -companies June-2015BFI Summary of the Film Industry -companies June-2015
BFI Summary of the Film Industry -companies June-2015
 

More from Armthorpe Media

More from Armthorpe Media (20)

Magazines covers
Magazines coversMagazines covers
Magazines covers
 
G322 Mark Scheme (2011)
G322 Mark Scheme (2011)G322 Mark Scheme (2011)
G322 Mark Scheme (2011)
 
Editing cutting
Editing   cuttingEditing   cutting
Editing cutting
 
Postmodern signifiers
Postmodern signifiersPostmodern signifiers
Postmodern signifiers
 
Postmodern key features
Postmodern key featuresPostmodern key features
Postmodern key features
 
Submarine production notes_2011
Submarine production notes_2011Submarine production notes_2011
Submarine production notes_2011
 
The matrix as postmodern
The matrix as postmodernThe matrix as postmodern
The matrix as postmodern
 
Art postmodrnism
Art postmodrnismArt postmodrnism
Art postmodrnism
 
Editing
EditingEditing
Editing
 
Mise en scene
Mise en sceneMise en scene
Mise en scene
 
Basic shot types & angles
Basic shot types & anglesBasic shot types & angles
Basic shot types & angles
 
Production log
Production logProduction log
Production log
 
Production schedule
Production scheduleProduction schedule
Production schedule
 
Effective research
Effective researchEffective research
Effective research
 
Proposals
ProposalsProposals
Proposals
 
General questions on trailers
General questions on trailersGeneral questions on trailers
General questions on trailers
 
Trailers answer sheet
Trailers answer sheetTrailers answer sheet
Trailers answer sheet
 
British cinema since 1990 (2)
British cinema since 1990 (2)British cinema since 1990 (2)
British cinema since 1990 (2)
 
Tv drama tech terms handout
Tv drama tech terms handoutTv drama tech terms handout
Tv drama tech terms handout
 
Composition rule of thirds
Composition rule of thirdsComposition rule of thirds
Composition rule of thirds
 

Recently uploaded

How to Manage Cross-Selling in Odoo 17 Sales
How to Manage Cross-Selling in Odoo 17 SalesHow to Manage Cross-Selling in Odoo 17 Sales
How to Manage Cross-Selling in Odoo 17 SalesCeline George
 
How to Make a Field read-only in Odoo 17
How to Make a Field read-only in Odoo 17How to Make a Field read-only in Odoo 17
How to Make a Field read-only in Odoo 17Celine George
 
Quality Assurance_GOOD LABORATORY PRACTICE
Quality Assurance_GOOD LABORATORY PRACTICEQuality Assurance_GOOD LABORATORY PRACTICE
Quality Assurance_GOOD LABORATORY PRACTICESayali Powar
 
3.21.24 The Origins of Black Power.pptx
3.21.24  The Origins of Black Power.pptx3.21.24  The Origins of Black Power.pptx
3.21.24 The Origins of Black Power.pptxmary850239
 
ARTICULAR DISC OF TEMPOROMANDIBULAR JOINT
ARTICULAR DISC OF TEMPOROMANDIBULAR JOINTARTICULAR DISC OF TEMPOROMANDIBULAR JOINT
ARTICULAR DISC OF TEMPOROMANDIBULAR JOINTDR. SNEHA NAIR
 
3.26.24 Race, the Draft, and the Vietnam War.pptx
3.26.24 Race, the Draft, and the Vietnam War.pptx3.26.24 Race, the Draft, and the Vietnam War.pptx
3.26.24 Race, the Draft, and the Vietnam War.pptxmary850239
 
Drug Information Services- DIC and Sources.
Drug Information Services- DIC and Sources.Drug Information Services- DIC and Sources.
Drug Information Services- DIC and Sources.raviapr7
 
How to Create a Toggle Button in Odoo 17
How to Create a Toggle Button in Odoo 17How to Create a Toggle Button in Odoo 17
How to Create a Toggle Button in Odoo 17Celine George
 
Unveiling the Intricacies of Leishmania donovani: Structure, Life Cycle, Path...
Unveiling the Intricacies of Leishmania donovani: Structure, Life Cycle, Path...Unveiling the Intricacies of Leishmania donovani: Structure, Life Cycle, Path...
Unveiling the Intricacies of Leishmania donovani: Structure, Life Cycle, Path...Dr. Asif Anas
 
How to Show Error_Warning Messages in Odoo 17
How to Show Error_Warning Messages in Odoo 17How to Show Error_Warning Messages in Odoo 17
How to Show Error_Warning Messages in Odoo 17Celine George
 
What is the Future of QuickBooks DeskTop?
What is the Future of QuickBooks DeskTop?What is the Future of QuickBooks DeskTop?
What is the Future of QuickBooks DeskTop?TechSoup
 
Protein Structure - threading Protein modelling pptx
Protein Structure - threading Protein modelling pptxProtein Structure - threading Protein modelling pptx
Protein Structure - threading Protein modelling pptxvidhisharma994099
 
Over the counter (OTC)- Sale, rational use.pptx
Over the counter (OTC)- Sale, rational use.pptxOver the counter (OTC)- Sale, rational use.pptx
Over the counter (OTC)- Sale, rational use.pptxraviapr7
 
AUDIENCE THEORY -- FANDOM -- JENKINS.pptx
AUDIENCE THEORY -- FANDOM -- JENKINS.pptxAUDIENCE THEORY -- FANDOM -- JENKINS.pptx
AUDIENCE THEORY -- FANDOM -- JENKINS.pptxiammrhaywood
 
In - Vivo and In - Vitro Correlation.pptx
In - Vivo and In - Vitro Correlation.pptxIn - Vivo and In - Vitro Correlation.pptx
In - Vivo and In - Vitro Correlation.pptxAditiChauhan701637
 
Optical Fibre and It's Applications.pptx
Optical Fibre and It's Applications.pptxOptical Fibre and It's Applications.pptx
Optical Fibre and It's Applications.pptxPurva Nikam
 
A gentle introduction to Artificial Intelligence
A gentle introduction to Artificial IntelligenceA gentle introduction to Artificial Intelligence
A gentle introduction to Artificial IntelligenceApostolos Syropoulos
 
Diploma in Nursing Admission Test Question Solution 2023.pdf
Diploma in Nursing Admission Test Question Solution 2023.pdfDiploma in Nursing Admission Test Question Solution 2023.pdf
Diploma in Nursing Admission Test Question Solution 2023.pdfMohonDas
 
How to Add a New Field in Existing Kanban View in Odoo 17
How to Add a New Field in Existing Kanban View in Odoo 17How to Add a New Field in Existing Kanban View in Odoo 17
How to Add a New Field in Existing Kanban View in Odoo 17Celine George
 

Recently uploaded (20)

How to Manage Cross-Selling in Odoo 17 Sales
How to Manage Cross-Selling in Odoo 17 SalesHow to Manage Cross-Selling in Odoo 17 Sales
How to Manage Cross-Selling in Odoo 17 Sales
 
How to Make a Field read-only in Odoo 17
How to Make a Field read-only in Odoo 17How to Make a Field read-only in Odoo 17
How to Make a Field read-only in Odoo 17
 
Quality Assurance_GOOD LABORATORY PRACTICE
Quality Assurance_GOOD LABORATORY PRACTICEQuality Assurance_GOOD LABORATORY PRACTICE
Quality Assurance_GOOD LABORATORY PRACTICE
 
3.21.24 The Origins of Black Power.pptx
3.21.24  The Origins of Black Power.pptx3.21.24  The Origins of Black Power.pptx
3.21.24 The Origins of Black Power.pptx
 
ARTICULAR DISC OF TEMPOROMANDIBULAR JOINT
ARTICULAR DISC OF TEMPOROMANDIBULAR JOINTARTICULAR DISC OF TEMPOROMANDIBULAR JOINT
ARTICULAR DISC OF TEMPOROMANDIBULAR JOINT
 
3.26.24 Race, the Draft, and the Vietnam War.pptx
3.26.24 Race, the Draft, and the Vietnam War.pptx3.26.24 Race, the Draft, and the Vietnam War.pptx
3.26.24 Race, the Draft, and the Vietnam War.pptx
 
Drug Information Services- DIC and Sources.
Drug Information Services- DIC and Sources.Drug Information Services- DIC and Sources.
Drug Information Services- DIC and Sources.
 
How to Create a Toggle Button in Odoo 17
How to Create a Toggle Button in Odoo 17How to Create a Toggle Button in Odoo 17
How to Create a Toggle Button in Odoo 17
 
Unveiling the Intricacies of Leishmania donovani: Structure, Life Cycle, Path...
Unveiling the Intricacies of Leishmania donovani: Structure, Life Cycle, Path...Unveiling the Intricacies of Leishmania donovani: Structure, Life Cycle, Path...
Unveiling the Intricacies of Leishmania donovani: Structure, Life Cycle, Path...
 
How to Show Error_Warning Messages in Odoo 17
How to Show Error_Warning Messages in Odoo 17How to Show Error_Warning Messages in Odoo 17
How to Show Error_Warning Messages in Odoo 17
 
Finals of Kant get Marx 2.0 : a general politics quiz
Finals of Kant get Marx 2.0 : a general politics quizFinals of Kant get Marx 2.0 : a general politics quiz
Finals of Kant get Marx 2.0 : a general politics quiz
 
What is the Future of QuickBooks DeskTop?
What is the Future of QuickBooks DeskTop?What is the Future of QuickBooks DeskTop?
What is the Future of QuickBooks DeskTop?
 
Protein Structure - threading Protein modelling pptx
Protein Structure - threading Protein modelling pptxProtein Structure - threading Protein modelling pptx
Protein Structure - threading Protein modelling pptx
 
Over the counter (OTC)- Sale, rational use.pptx
Over the counter (OTC)- Sale, rational use.pptxOver the counter (OTC)- Sale, rational use.pptx
Over the counter (OTC)- Sale, rational use.pptx
 
AUDIENCE THEORY -- FANDOM -- JENKINS.pptx
AUDIENCE THEORY -- FANDOM -- JENKINS.pptxAUDIENCE THEORY -- FANDOM -- JENKINS.pptx
AUDIENCE THEORY -- FANDOM -- JENKINS.pptx
 
In - Vivo and In - Vitro Correlation.pptx
In - Vivo and In - Vitro Correlation.pptxIn - Vivo and In - Vitro Correlation.pptx
In - Vivo and In - Vitro Correlation.pptx
 
Optical Fibre and It's Applications.pptx
Optical Fibre and It's Applications.pptxOptical Fibre and It's Applications.pptx
Optical Fibre and It's Applications.pptx
 
A gentle introduction to Artificial Intelligence
A gentle introduction to Artificial IntelligenceA gentle introduction to Artificial Intelligence
A gentle introduction to Artificial Intelligence
 
Diploma in Nursing Admission Test Question Solution 2023.pdf
Diploma in Nursing Admission Test Question Solution 2023.pdfDiploma in Nursing Admission Test Question Solution 2023.pdf
Diploma in Nursing Admission Test Question Solution 2023.pdf
 
How to Add a New Field in Existing Kanban View in Odoo 17
How to Add a New Field in Existing Kanban View in Odoo 17How to Add a New Field in Existing Kanban View in Odoo 17
How to Add a New Field in Existing Kanban View in Odoo 17
 

British film industry facts

  • 1. RELATED INDUSTRIES TV film production Music (soundtracks) Publishing Advertising Merchandising CORE ACTIVITIES Screenwriting Feature film distribution RELATED ACTIVITIES Distribution Set design/building Exhibition Catering Equipment manufacture Photographers TELECOMMUNICATIONS AND IT PR companies Video on demand Internet film distribution Movie websites Post-production/special effects Soho-Net Computer games Multimedia
  • 3. 049 .07 FILM SECTION This analysis covers the core film industry activities of screenwriting, feature film production, distribution and exhibition.
  • 4. 050 SECTION .07 FILM INDUSTRY REVENUES The UK film industry attracted gross revenues of £920m in 1997, including UK consumer spending on UK films of £160m,1 overseas receipts of £545m and £217m spent by foreign producers shooting in the UK. Number and Value of UK Films 800 700 600 500 Production Cost (£m)(1997 prices) 400 300 200 100 Titles Produced 0 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 Source: BFI Handbook; 1997 data; Screen Finance Share of UK Box Office 1% 7.7% 6.5% 6.6% Other US films 90.2% 83.7% 81.7% 73.5% UK films 8.8% 8.6% 11.8% 19.9% 1994 1995 1996 1997 UK film production is currently undergoing a renaissance. Film production spend on UK films has risen dramatically over the 1990s, from £105m in 1989 to £558m in 1997. The UK film industry is now making over 100 titles a year. UK MARKET SIZE of which 1997 Total £m UK film Box office spend 512 102 Video/DVD feature films 880 35 Pay-TV consumer spend 4802 19 Terrestrial TV film rights 1003 4 Total £1,972m £160m In 1997, UK audiences spent almost £2bn on films, £160m of it on UK films. 1 Assumes UK films achieved 20% of box office and 4% of video feature film spend, consumer Pay-TV spend on films and terrestrial TV spend on films 2 Assumes that 70% of BSkyB subscribers take a movie channel and that £9 of their total monthly subscription price can be attributed to films 3 Categorised as consumer expenditure, because it is either funded through licence fee, or paid for by advertising, the cost of which is ultimately passed on to consumers in the price of the goods they buy
  • 5. 051 SECTION .07 FILM Cinema admissions reached 139m,4 a 12% increase over the previous year and their highest level since 1974. Total UK box office takings exceeded £512m, a 16% increase over 1996. UK films accounted for £102m of this (20%). This was boosted by the success of The Full Monty, which has taken more than £48m, making it the highest-ever grossing film at the UK box office. The UK video market has been growing steadily, and £880m can be attributed to feature films, of which £35m was on UK films. UK broadcasters spent around £350m on film rights, the bulk (£250m) attributable to BSkyB. The table above shows Spectrum’s estimate of the share of Pay-TV spend attributable to feature films. BALANCE OF TRADE Overseas Transactions of the Film Industry, 1986-1996 (£m) 600 500 Receipts 400 Payments 300 200 100 Net Receipts 0 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 In 1996, overseas revenues for films made in the UK were £522m, more than double the 1986 figure. Imports amounted to £431m, resulting in a trade surplus of £91m. Over the last ten years, the UK has consistently had a surplus in film. However, this is partially misleading, since so much of the revenue from films made in the UK flows out of the country. In 1996, UK films took over $50m at the US box office, and this is likely to be far exceeded by 1997 figures. The recent success of UK films abroad has resulted in the UK industry becoming second only to Hollywood in the UK box office. The Film Policy Review report, A Bigger Picture, in March 1998 pointed to the need to put structures in place to ensure that this success can be sustained and improved upon. The establishment of an All-Industry Fund would encourage better development and distribution of more commercial British films, while a film marketing body would raise the profile of film in Britain. EMPLOYMENT Breakdown of Employment in the UK Film Production, Distribution and Exhibition Sectors by Age by Employment Status 30% D 23% C A 16% 14% B 6% 5% 4% 2% A Full-time employees (61%) B Self-employed without employees (19%) C Part-time employees (16%) 16-19 20-24 25-34 35-44 45-54 55-59 60-64 65 and over D Self-employed with employees (4%) The UK film industry employs over 33,000 people. Actors, producers and directors account for 21% of the total. Around half the total are employed in “non-cultural” occupations, such as management or cinema operation. 58% of workers are male and 42% female. 96% are white, and 1% each Black-Caribbean, Indian, Pakistani and other Asian.5 4 Source Screen Finance Jan 1998 5 Source Employment in the Arts & Cultural Industries Arts Council of England
  • 6. 052 SECTION .07 FILM INDUSTRY STRUCTURE UK Film Industry Structure Channel Four, Polygram, Miramax, Lottery franchises Training Ideas Creation/ Development/ Investment Finance Sales Agent Distributors Exhibition Writers Production National Film and Simon Beaufoy Renaissance ACE Guinness Mahon Capitol Films Guild Virgin Television School John Hodge Figment Films Channel 4 F.I.L.M.S. J&M Entertainment UCI London Screen Peter Morgan Carnival BBC Barclays Icon Portman Rank (Odeon) Writers Workshop Entertainment Nick Hornby Recorded Picture Capitol Films E.C. Funds First Independent Showcase Moonstone Company Intermedia (S. Redstone) International Ronan Bennett Winchester Films I.N.G. Screen Lab Company Pictures Coutts Distant Horizons Warner Scala Lloyds Mayfair (Curzon) Lombard North Central (NatWest) The UK film industry is essentially a cottage industry, characterised by a large number of small production companies making, on average, less than one film a year. Risk is not therefore spread over a slate of films, and economies of scale cannot be generated. The industry is still heavily dependent on US studios and UK television companies for financial backing. Generating a Producer’s Net from a Theatrical Release Gross box office revenues 40% 60% Distributor’s gross Exhibitor Distributor recoups P & A 50% 50% Distributor recoups advance Distributor’s fee Recoupment of equity investors Producer’s gross Residuals and deferred fees Producer’s net 50% 50% Equity investors Producer Although UK films may perform well at the box office, little of this revenue reaches the producer, meaning there is little net profit to re-invest into production. Overall, there is insufficient profit to offset the UK distributors’ advances and to pay for the real costs of making and promoting British films. Recommendations in A Bigger Picture are designed to go some way towards addressing this problem.
  • 7. 053 SECTION .07 FILM Investors in British Film, 1997 £86.9m Notes Chart details main British investors in UK films, plus Polygram and Miramax Figures apply to Calender Year 1997, or to most recent financial year, where appropriate Investment includes equity and pre-buys that contributed towards a film’s production financing, but not pick-ups of completed movies or development financing £44m £43.6m Source: Variety 1 Includes $8.5m Greenlight Fund 2 These funds are invested through British Screen Finance £23.7m £19.4m £19.4m £13.1m £10m £7.6m £6.8m £6.2m £5.1m £5m £3.8m £1.12m £0.85m Polygram Miramax Arts Council of England 1 Channel 4 BBC Granada J&M Entertainment Capitol Films Winchester Films British Screen2 Arts Council of Scotland Euro Co-production Fund2 Handmade Film BSkyB2 Glasgow Film Fund BFI FILM PRODUCTION FINANCE Initiatives including the Lottery franchise scheme are designed to address structural problems within the UK industry, by encouraging vertical integration and providing investment of over £100m. In addition, the Arts Council of England awarded £45m of Lottery money to 53 projects between September 1995 and November 1997, and will continue to make awards to individual films. However, the most successful British films are made with foreign investment. The Full Monty, The English Patient and Bean were backed by Fox, Buena Vista and Polygram respectively. Miramax and MGM set up substantial UK bases during 1997. In all, approximately 60% of UK production is accounted for by US money.6 UK terrestrial television companies are also major financial backers of British film. The BBC invested over £10m in UK film in 1997. The ITV network is committed to providing film finance, and Film Four has recently secured additional funding worth £40m over the next four years from C4. BSkyB has so far made little direct investment in UK film, but has recently announced that it will make five feature length films in the next two years, each costing between £2m and £6m. Most private investors are still wary of the UK film industry. The Lottery franchises have prompted some interest from the investment community, but few commitments. The big banks are wary of investing in film, but equity funds such as Baltic Media and Flashpoint are bringing some private investment into production. Matrix Securities, the tax-based investment adviser, recently established a multi-million pound investment vehicle which could put as much as £30m into British film by the end of 1998. FOREIGN PRODUCTIONS The large number of US films being made in the UK also brings substantial investment to the industry. In spite of the strong pound, it is still around 20% cheaper to shoot in the UK than in the US.6 The UK also offers US film makers highly skilled technicians and no language problem. Pinewood, Shepperton and Elstree Studios all have plans to expand in order to meet the increasing demand. POST-PRODUCTION AND SPECIAL EFFECTS The UK post-production and special effects sector is small but booming, thanks largely to the growing number of US films shooting in the UK. In the new US film, Lost in Space, British technicians demonstrated that their special effects were way ahead of those available on the West Coast of America. Main players include The Computer Film Co., Cinesite and Moving Pictures. There is increasing co-operation between rival post-production houses. A new digital fibre-optic network called SohoNet connects twelve London-based production houses, and links the UK to California. This may be extended to Pinewood and Shepperton Studios, allowing US producers to send daily rushes back to the US. There is, as yet, no US equivalent to SohoNet. DISTRIBUTION More than 80% of UK distribution is still accounted for by the US majors. Some 35-40% of box office takings are passed on to the distributor, roughly 10% less than in the US.7 UK independent distributors are small, and find it hard to represent a slate of commercially successful films and invest in the required P&A budgets and adequate information systems. 6 Source Screen International Oct 1997 7 Source Moving Pictures Jan 1998
  • 8. 054 SECTION .07 FILM UK films are still finding it hard to secure theatrical distribution, due to the nature of the product (too small, with an average budget of £1.6m, often not commercial enough and sometimes compromised by budget constraints) and the weak position of UK independent distributors. Also, since most UK films are financially backed by television, their distributors are often left with no television rights to sell. Less than 25% of UK films made in 1995 secured a wide theatrical release in the UK. The marketing spend of the US majors is increasing, and Hollywood blockbusters are opening to ever more screens. However, the increasing number of screens should eventually make it easier for independent distributors to secure a limited release for their pictures. The All-Industry Fund proposed in A Bigger Picture is intended to compensate for the market failures arising from the structure of the industry and the revenues would be dedicated to measures to cure them. EXHIBITION The exhibition sector is strong. There are currently over 2,000 cinema screens in the UK. This compares with 1,800 in Japan but 4,500 in France.8 Multiplexes account for more than half of cinema admissions. It is estimated that more than £100m was invested in building and upgrading cinemas during 1997.9 The market is becoming increasingly competitive as the prime sites become filled, and branding and luxury facilities are becoming increasingly important. INTERNATIONAL CRITICAL ACCLAIM Since 1990, British films, actors and filmmakers have won 21% of all the major Oscars, 18% of all the major prizes at the Cannes Film Festival and 15% at the Berlin and Venice film festivals. The last two years in particular have seen major success at the Oscars, with British talent winning almost one-third of all the awards in 1996 and almost half in 1997. SECONDARY ECONOMIC IMPACT It is estimated that in 1997, film production in the UK created indirect economic benefits of around £1.4bn, a multiplier effect of 2.5 on £558m film production expenditure. This figure includes expenditure on services, such as restaurants, hotels and taxis, and on indirect earnings associated with the production of a film. Film production supports 18,000 jobs through indirect employment, a multiplier of 1.7 on current direct employment of 10,700. The UK film industry also plays a crucial role in the international perception and marketing of Britain, helping to promote other creative industries as well as inward tourism, providing exposure for the UK in over 15 major countries and to more than 100m viewers worldwide. POTENTIAL FOR GROWTH Industry revenues 1997 2007 actual forecast UK consumer spending £160m >£400m Overseas receipts £545m c. £800m Foreign productions in UK £217m >£200m Total £922m >£1.4bn Spectrum estimate that the contribution of the UK film industry to the economy could grow from £922m to over £1.4bn by the year 2007. 8 Source Screen Digest Aug 1997 (1996 data) 9 Source Sunday Times 18 January 1998
  • 9. 055 SECTION .07 FILM Overseas Receipts of the UK Film Industry (£m) 800 700 600 500 400 300 200 100 Historic Data Forecast 0 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000E 2001E 2002E 2003E 2004E 2005E 2006E 2007E This forecast relies mainly upon the assumption of continuing growth in overseas receipts, which could grow to £800m even with a relatively modest growth rate (as indicated in the chart above). This would help perpetuate a virtuous circle of increased production levels, improved negotiating power for UK producers and increasing access to US distribution. ESTIMATED UK CONSUMER SPEND of which 2007 Total UK film Box office spend £880m £220m Video/DVD feature films £1,200m £100m10 Pay-TV consumer spend £1,000m £80m Terrestrial TV film rights £200m £16m11 Total £3,280m £416m UK consumer spending on UK film is forecast to more than double to over £400m. This will be supported by the multiplication of television outlets with the development of digital technology. UK film makers already earn more from UK Pay-TV returns than they do from UK box office, and the importance of this source of revenue can be expected to grow. The home-viewing market will also be further stimulated by the launch of the Digital Video Disc (DVD) during 1998. The flow of foreign productions shooting in the UK is notoriously sporadic, but if economic conditions are favourable, the level of inward investment could be maintained beyond £200m. The establishment of a UK Film Office in Los Angeles, which was one of the recommendations of A Bigger Picture, is expected to encourage greater inward investment from the US. In July 1997, the Government introduced a 100% tax write-off for production costs in a film’s first year, applicable to films budgeted at less than £15m. It has been calculated that this could reduce production costs by 10% per film.12 Over £92m of National Lottery money will be invested in British films over the next six years through the studio franchise scheme. This will be used to produce 90 films with a total value of some £460m. With the current production boom, screenwriters are more likely to get their films made and are choosing to stay in Britain. Writers and producers are also becoming more cinema-oriented and more commercial, rather than theatre and television-based. The industry is benefitting from a new wave of young screenwriting talent, such as Joe Penhall, Lee Hall, Amy Jenkins and Darren Bailie. In this context, the opportunity exists for the UK not merely to be the second largest consumer of Hollywood films, but to become the second largest producer of films, after the US, within a global market. Growth at the level predicted by Spectrum could see employment in the industry grow by between 10-20,000 over the current level of 33,000. 10 This is a lower percentage than box office because of the video industry’s skew towards A-list Hollywood blockbusters and US animation 11 Assumes same proportion of market is achieved by UK films for video 12 Source Screen International Jan 1998
  • 10. 056 SECTION .07 FILM Current and Projected New UK Multiplex Sites Sites to be added End of 1997 by end of 20001 ABC 2 15 CINE-UK 4 20 National Amusements 14 6 Odeon 16 31 UCI 26 8 Virgin 29 22 Warner Village 17 25 New operators - 26 Notes: New sites of five or more screens The exhibition sector is expected to continue to experience strong growth. Many new multiplexes are planned by the end Source: Screen International Oct 1997 of the century. By the year 2000, cinema admissions are forecast to pass 180m,13 making the UK the biggest movie-going country outside the US. Multiplexes are expected to account for 75% of admissions, compared to 50% currently. Cinema advertising revenue has doubled in the last eight years, reaching £73m in 1996, and will continue to grow with the increase in cinema screens and attendances. Related sales, such as movie merchandise and refreshments, can also be expected to increase. GROWING THE SECTOR – POINTS FOR CONSIDERATION Growing the UK film industry depends crucially on being able to sustain the current production boom while ensuring that the quality of the product is maintained and that films are properly targeted at an international commercial market. There are a number of key issues, many of which are addressed in A Bigger Picture, including: the improvement of available training for film-makers, scriptwriters and others on whom the industry depends for a quality product, and encouraging the industry to invest more in training investment in script development, to ensure that more scripts reach their full potential – in comparison with the US, the UK film industry spends little time or money on script re-writes the provision of guidance and support for the industry, including information on locations, markets, audience profiles and revenue forecasts the impact of current government initiatives, including the Lottery franchise scheme and fiscal incentives, to promote UK film production the encouragement of foreign film making in the UK, particularly if a strengthening in the UK economy threatens the level of US productions support and encouragement for exports action against piracy the improvement of communications between the industry and the City increasing the industry’s understanding of audience preferences improving film education and cine-literacy 13 Source Screen International Oct 1997
  • 11. 057 .07 FILM SECTION
  • 12. 058 .07 FILM SECTION