British film industry may at last see changes in a familiar plot

Nick Higham is BBC TV’s media correspondent

For news editors, as the Heritage Secretary Virginia Bottomley well knows, August is the cruellest month, breeding non-stories out of non-events, mixing the trivial and the absurd, spicing dull news days with silly season sauce.

Which is doubtless why she chose last week to make no fewer than three policy announcements – one on the arts in schools, one on museums and one on the film industry – knowing there was precious little but the Olympics and another beef crisis to fill the newspapers and the news programmes.

In all three cases, the policy documents combine statements of good intentions towards activities and institutions which everyone agrees are Good Things with suggestions as to how money from the National Lottery could be used to improve them.

But the Government can’t dictate how Lottery money should be spent (and indeed demand for Lottery cash outstrips supply) so we should not assume that what Mrs Bottomley and her department’s documents say should happen actually will.

The proposals for the film industry are of particular significance for the media. A year ago, the Department of National Heritage commissioned a committee chaired by Sir Peter Middleton, the former permanent secretary at the Treasury and now chairman of a City bank, BZW, to report on what can be done to improve the lot of Britain’s film makers.

Film production in Britain is healthier than for 20 years. More than 80 films were made last year, compared with a couple of dozen each year at the industry’s nadir during the Eighties. Several recent British pictures, like Four Weddings, Trainspotting, and Secrets and Lies, have been considerable commercial and/or critical successes. But the profits from the successful films mostly go to America, because it’s the big Hollywood studios, with their international distribution arms, who put up the cash. In the film industry it’s distribution, not production, which makes big money (and, since distribution is essentially a marketing activity, there’s a lesson there for us all).

With the cashflow from successful blockbusters the US majors can easily bankroll half a dozen small British movies on the off-chance that one will be a success.

In Britain, by contrast – and with the possible exception of Polygram – there are no major film distributors able to finance a slate of movies. Since City investors normally won’t touch one-off films (too risky), independent British producers often have no choice but to look abroad, or to television (notably Channel 4, but increasingly the BBC, Sky and ITV).

If Hollywood invests then Hollywood often calls the creative shots on a movie, as well as keeping the profits if it’s a success. If television invests (many people say) the result is too often a TV movie, not a proper feature film.

The solution advanced by Sir Peter and his committee (apart from some tinkering with the tax regime for investors in films) is to use Lottery money to pump prime the establishment of a British alternative to the Hollywood majors – a “studio” which wouldn’t own production facilities but would have some 300m to invest in a slate of films, would distribute them, and use the profits from the successful ones to offset losses on the flops. If it showed a profit overall, it would keep that profit in Britain to invest in future films.

Sir Peter believes the City would be happy to put up two-thirds of the money, because the risks would be spread across a dozen or 20 films.

It sounds splendid – though there may be a hitch. The Arts Council, through whom the Lottery cash would come, isn’t allowed to hand over the final decision as to which projects get Lottery money to another body.

Sir Peter suggests inviting tenders for the franchise to run the new studio (or three mini versions which might, in time, coalesce into one big one). But even if that happened, the Arts Council would almost certainly have to give the green light to every individual film the new studio proposed to back with Lottery cash, which makes the whole system rather cumbersome.

Nonetheless, the scheme might come off, and if it did would bring both cultural and commercial benefits to the country. In the UK we are very good at producing screen drama which pulls in huge audiences – but on television, not in the cinema.

The UK’s television production base always looks vulnerable to competition from the cheap, high-quality output of the giant Hollywood factories – particularly as the number of television channels continues to grow faster than the revenue to support them all.

Anything which helps to safeguard the future of film and television production in Britain has to be good not only for film and television producers but also for the terrestrial television channels – notably ITV – which depend on their skills to win audiences and make money.

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