The British Film Institute, in collaboration with UK industry, is set to launch two new funds in a bid to boost the UK independent film sector.
The plans for indie growth are laid out in a new report drawn up by an independent Commission chaired by Lionsgate UK CEO, Zygi Kamasa and made up of leading executives from across the UK film business.
The Commission makes four industry-led proposals to help stimulate growth alongside five recommendations for the BFI and UK government. Firstly, the four proposals:
• Maximizing the value of rights – calling for industry-wide cooperation and collaboration to maximize the value of the rights at every stage for the benefit of all those with a stake in boosting a film’s revenues (including producers, distributors, sales agents, exhibitors and broadcasters). The proposal recommends the BFI commission a detailed independent study in cooperation with key stakeholders across the value chain.
• Projects to engage and grow younger audiences – two pilot projects, one delivered by ‘ourscreen’ in partnership with a major UK broadcaster, and the other by BIFA (the British Independent Film Awards). These aim to convert younger audiences towards British independent films, the film type with which they currently have the lowest engagement. The BFI is to present the data and findings of both pilots for the benefit of the industry.
• A new EIS fund to channel equity into UK independent film companies – the Commission recommends a new EIS Fund, affiliated with but independent of the BFI, be created to raise private investment to help strengthen and grow a diversified group of dynamic and ambitious UK film production companies. It would exist as a commercial investment model and aim to maximize benefit to the investor and the investee (the production company).
• More commercial development funding – acknowledging that outside the BFI Film Fund, BBC Films and Film4, development funding is scarce, particularly for the optioning and packaging of high value, commercially-focused properties, the Commission proposes a new £5+ million commercial development fund over five years backed by investor partners who are seeking to engage with leading UK talent. Target investors for the fund could include SVOD platforms alongside Pay TV and telecoms companies (Sky, Virgin, BT), broadcast TV channels and private individuals, with a portfolio approach to maximize returns to investors.
In a sit down with the BFI and Kamasa, I was told that the development fund is in part about growing UK industry “engagement” with SVOD giants like Netflix and Amazon as well as online titans like Apple and Facebook.
On this subject, the report states, “We were doubtful that a ‘levy’ scenario on VOD platforms would be feasible in the UK given the long-standing political commitment to a regulatory environment for the audiovisual sector that is ‘light-touch’. The Commission recognized that a better business solution would be to seize the commercial opportunities of the digital world and the growing demand for content, by seeking a commercial solution instead of a legislative one.”
“We have already undertaken high-level conversations with some of these potential investors with Amazon already signaling an eagerness to be involved,” it continues. “The DCMS has also given its initial indication of support for such a fund.”
Both the EIS and development fund could be operational within six months, the BFI told us.
The report also highlights blockchain as another potential improvement for the indie business when it comes to maximizing rights ownership.
The Commission’s five recommendations for the BFI and UK Government are:
• Encouraging Government to explore whether the current film tax relief could be maximized by stimulating the production of internationally successful films.
• That the BFI works with Government nationally and locally to consider how additional financial incentives could boost production in the nations and regions, and enhance the export value of UK films internationally. This could be through production incentives, which create jobs and growth, as a potential use for its proposed Prosperity Fund, and a boost to UK films in the international market could be consistent with, and contribute to, the Government’s industrial strategy priority of targeting a 50% increase in creative industries exports by 2023.
• Ensure the UK Film Tax Relief does not penalize official UK co-productions by enabling the UK co-producer to claim 100% – rather than 80% as is currently the case – of qualifying UK spend (up to a maximum of 80% of the total budget), thereby making the UK a more attractive co-producing partner for international collaborators.
• Securing the UK’s continued participation in the successor program to Creative Europe after Brexit, in return for appropriate funding, to ensure the UK continues to access the substantial benefits membership of the program brings; and that the BFI to conducts a full analysis of the benefits and costs of rejoining Eurimages with recommendations to Government to be made by the end of 2018.
• That the BFI seeks funding for permanent representatives to be based in key international territories, particularly where co-production treaties are now in place (notably China) to enhance the UK’s opportunities to build long-lasting and fruitful new partnerships post-Brexit.
The BFI told us that it would be recommending to the UK Government minor tweaks to the the structure of the current tax credit as part of its efforts to further boost the UK sector. It also said it had modeled for life outside the Creative Europe program, which could become a post-Brexit reality, but that it was hopeful the UK would remain within the scheme.
Chair of the commission and CEO of Lionsgate UK, Zygi Kamasa said: “We are very aware that this is a time of revolutionary change across our industry and although we are realistic about what this report can achieve, I believe we have identified several targeted opportunities to address some of the challenges posed to UK independent film by global forces. The entire UK film industry has been very receptive to collaborating and working together with the aims of this commission, and it’s crucial we all to continue to do so, in order to help our sector flourish and grow as it so richly deserves.”
The report was well-received by Margot James, the UK’s Minister for Digital and the Creative Industries, “From Paddington to God’s Own Country, the UK independent film sector is a creative powerhouse, producing films that are enjoyed by millions globally and that reflect the rich diversity of modern Britain,” she said. “With our world-class facilities, talented workforce and highly competitive tax reliefs, we are committed to supporting the UK film sector to grow and flourish for years to come.”
Among those who sat on the Commission board were Chris Bird, Worldwide Head of Film Licensing, Amazon; Peter Czernin, producer and co-founder of Blueprint Pictures; Ben Roberts, Director of the BFI Film Fund; Alison Thompson, co-founder of sales company Cornerstone; Kevin Styles, Managing Director, UK & Ireland for Vue Entertainment; and Lisbeth (Libby) Savill, partner in the London office of law firm Latham & Watkins.
The report was drawn up in part due to the significant challenges faced by UK independent companies. The UK is an impressive talent and infrastructure hub but the highly polarized box office is dominated by Hollywood blockbusters and independent companies often struggle to get a foothold. Indeed, a handful of UK distributors have gone out of business in the last 12 months. Meanwhile, production spend in the territory is supercharged by significant inward investment from U.S. studios which is helpful to many but also brings with it challenges. Unlike some European markets like France, the UK Government has adopted a “light touch” approach to regulation which has boosted the territory as a service provider but has arguably stunted indigenous growth in other areas.
The full report can be found here.