FILM POLICY IN THE UK CHALLENGES FOR POLICY-MAKERS AND INVESTORS

Transcription

1 FILM POLICY IN THE UK CHALLENGES FOR POLICY-MAKERS AND INVESTORS Dr Martin Smith, special adviser, Ingenious Ho Chi Minh City, Vietnam 3 December 2015 Page 1

2 STRUCTURE OF PRESENTATION The state and the film industry: three different forms of policy intervention Three film financing traditions: the USA, Europe and the UK The UK: history and policy context Main features of UK film policy The Ingenious approach Studio films and independent films Thoughts on industry futures Page 2

3 THE STATE AND THE FILM INDUSTRY Three Different Forms Of Policy Intervention Direct subsidy National and regional film funds International co-productions Mandated contributions (levies) Broadcasters Pay-TV platforms Incentives to investors Indirect financial support provided through fiscal incentives (a) tax shelters; (b) tax rebates; (c) tax credits Page 3

4 THREE FILM FINANCING TRADITIONS The USA Trade follows the film The studio system and media conglomerates Financing overwhelmingly through the private sector Europe Dominant role of state broadcasters and film agencies Quotas and l exception culturelle, e.g. Greece, Spain Financing predominantly through the public sector The UK Sits uneasily between Europe and the USA. Page 4

5 THE UK: HISTORY AND POLICY CONTEXT Hollywood and the UK: competition and collaboration Has deployed most forms of economic intervention since 1927 Quotas, levies, tax credits and incentives J Arthur Rank and the 1940s Goldcrest and the 1980s 2015: world s third largest film market Permanent state of crisis or great national triumph? High level technical and creative skills but weak business capacity Double-edged sword of the English Language US dollar/pound sterling exchange rate Page 5

6 NUMBER OF FEATURE FILMS PRODUCED IN THE UK Page 6

7 MAIN FEATURES OF UK FILM POLICY State support of film, especially production, through direct subsidy: British Film Institute (BFI) State support though fiscal incentives Film Production Tax Credit/promotion of inward investment Animation, high-end TV and other new tax credits Enterprise Investment Scheme (not sector specific) State support through official co-production treaties Public sector development support though BBC Films, Film 4, BFI and Creative England State support of skills development and training through Creative Skillset, National Film & Television School and other film schools Export promotion through UK Trade and Investment (UKTI) Future audiences: Into Film, schools and young people International promotion through the British Council Page 7

8 THE INGENIOUS APPROACH Ten billion dollars raised and deployed through 130+ films Approximately 5000 investors Professional fund management operation Identify best commercial opportunities and mitigate investor risk as much as possible, by Growing our own expertise Cultivating our own networks Working with the most experienced producers/partners Negotiating favourable deal terms Investing in development Using available tax incentives Page 8

9 STUDIO FILMS AND INDEPENDENT FILMS Completely different businesses from an investor perspective Studio films are fully financed (with partners) in Hollywood from where distribution is controlled Ingenious participation mainly through relationship with Fox/Fox Searchlight Independent films require multiple sources of finance, including public money and foreign territory pre-sales Some inconsistency in the application of the label independent, e.g. Best Exotic Marigold Hotel Working Title, British owned and managed but owned by Universal Page 9

10 THOUGHTS ON INDUSTRY FUTURES Living with the digital shift Piracy Copyright reform, collapsing windows and revenue challenges The blockbuster network effect (Prof. Anita Elberse) European business models under serious threat from the EU Digital Market Agenda (territorial licensing) Competition for consumer attention: innovation in exhibition Social media and audience relationships Crowd-funding and business models Multi-platform and multi-discipline! Page 10