Interactive Investor

UK film industry riding high

17th March 2015 13:50

Ben Roberts from ii contributor

The UK film industry is riding high. Actors Eddie Redmayne and Benedict Cumberbatch are household names worldwide, Star Wars is being made here and now London is the second home to the George Lucas visual effects powerhouse, Industrial Light and Magic, and a bear called Paddington has just made his big screen debut in China.

The UK film business is breaking records. In January, the BFI's Research and Statistics Unit showed 2014 to be the most successful year on record for British film, with almost £1.5 billion spent on production in the UK during the year - smashing all previous records - and audiences voting through their wallets for UK independent films which accounted for a 16% share of the total box office (also the highest recorded).

This success sits in the context of a thriving sector backed up by government support. Last month an independent report produced by analysts Olsberg•SPI and Nordicity and commissioned by the BFI, Pinewood Group plc, the British Film Commission, UK Interactive Entertainment (Ukie) and Pact, showed that government support for the UK’s screen industries in the form of the creative sector tax reliefs is playing a major part in stimulating business growth - and a return of more than £6 billion a year for the UK economy. Those screen industries are powered by film and also include rapid growth across high end television, animation and video games.

Here at the BFI we're often asked to comment on what is happening and why. Why is the UK now undoubtedly one of the very best places on earth to make films, television and games? What’s going on?

I think we've developed something of a magic formula here in the UK. It's been around 20 years in the making and as growth in business is showing, it’s now bearing considerable fruit.

We have created an environment that has been "working for tomorrow" for some time, by nurturing new talent, training and developing our highly skilled workforce, championing creative risk-taking, and shouting loudly for the UK on the world stage.

None of where we are today would have been possible without Lottery funding, which over the last 20 years has helped to make films such as 45 Years, a double award winner at the prestigious Berlin Film Festival, Philomena, Mr. Turner and Pride and helped build a talent base across the UK that is rightly held in high acclaim around the world. It has also helped to digitise our cinemas and given audiences the chance to see British and what we in the business call specialised films, aside from the latest blockbuster, as wonderful as they might be.

We also credit the UK film tax relief which has been a game-changer by ensuring the benefit goes directly to filmmakers and in doing so helps producers to make British films which sell around the world as well as attracting inward investment from around the world. The level of confidence it has brought to the film sector has helped to enable large scale capital development which will ensure our studio infrastructure remains amongst the best on the planet. The proven effectiveness of the film tax relief has also paved the way for similar incentives for high end television, TV animation and video games.

And let's not forget that the tax relief benefits the UK's independent sector, just as much as incoming productions from abroad. In fact, it accounts for around 20% of the budget for most indies, and can often be the means through which a British producer ensures an earlier share of revenues from the exploitation of the film to help build their business and develop future projects.

So what are the challenges? How to we keep riding the wave of success?

As the way we consume "content" keeps shifting, so too does the business model for film. Even whilst basking in the glow of current success and despite the well-documented rewards when a film hits big, it can still be tough to raise the finance needed for a British independent film - especially when budgeted at £4 million -5 million and above.

In my view what British film lacks is a Megan Ellison or two. Film enthusiast, investment angel, canny businesswoman, with considerable financial resources at her disposal, Ellison is a highly visible financier and producer of outstanding independent films - including Spike Jonze's Her, Kathryn Bigelow's Zero Dark Thirty, David O. Russell's American Hustle and Bennett Miller's Foxcatcher to name a few. She bets on risky projects from the auteurs she loves - though she can offset much of that risk by working with filmmakers who attract bankable talent and by tapping into the Hollywood studios' global distribution networks.

We need to attract the kind of smart, passionate investor exemplified by Ellison. And to do that the British film industry must retain our substantial creative talent and homegrown IP, rather than handing it over to the studios or international distribution networks for upfront fees and elusive royalties in order to make budgets work. The imbalance between the time a producer spends producing and the time they spend raising money will otherwise remain.

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