The million-dollar question
SOURCE: http://www.guardian.co.uk/media/2009/feb/23/british-film-industry-funding-slumdog-millionaire The Guardian, Monday 23 February 2009
Homegrown movies are attracting audiences and accolades and yet the industry is under threat - with even Slumdog backer Film4 facing uncertainty. So is there a future for British film? Stephen Armstrong reports
On the face of it, times couldn't be better for British film - with Slumdog Millionaire's awards success so far adding to a huge growth in audiences. Cinema admissions are bucking the downturn trend, as figures released last week proved - the UK box office had the strongest January performance for five years with takings of £100m, according to Nielsen EDI, while total admissions rose 7.7% year on year.
At least three major Hollywood productions start shooting in the UK this year - Gulliver's Travels, Nottingham, and Harry Potter and the Deathly Hallows - as well as Film4's post-Slumdog projects such as Peter Jackson's and DreamWorks's film of The Lovely Bones and Sam Taylor Wood's Lennon biopic, Nowhere Boy.
Behind the scenes, however, there are problems - TV and DVD revenues have fallen, the credit crunch has stopped British banks lending to indie producers, and the consequent delays are threatening to wipe out indie productions before they've even started. There are those who fear a more fundamental threat in 2009 - that a possible merger between Channel 4 and BBC Worldwide could permanently damage both BBC Films and Film4. If it does, Slumdog, In Bruges and Revolutionary Road could be the last of their kind.
"I'm concerned we're at a tipping point for British film," says Andy Harries, chief executive of Left Bank and producer of 2006's Oscar-nominated movie The Queen as well as next month's The Damned Utd. "The future is very uncertain. C4 and the BBC are the only source of funds for anyone who isn't Working Title and when times are tough for broadcasters a film company can look like a bit of a luxury."
Reports last week suggested that merger talks had settled on a joint venture between C4 and BBCWW, combining E4, More4 and Film4 with various BBC digital channels. The move worries John Woodward, chief executive of the UK Film Council: "We only have a few sources of funding for riskier projects in the UK - us, BBC Films, Film4 and a couple of others," he explains. "Any suggestion that we reduce that would be very damaging."
Harries also fears a separation of Film4 and C4 could damage talent. "TV and film are so intertwined in the UK," he argues. "Channel 4 are arguing they should survive based on their PSB remit - well, if Channel 4 were to go, what would I miss most? The films.
"Inside the BBC, without [former fiction head] Jane Tranter there's no one leading the creative tub-thumping for film, while all the indicators were that Film4 had more than a whiff of endangered species about it until the huge success of Slumdog."
The woman behind Slumdog is Tessa Ross - C4's controller of film and drama. She famously bought the rights to the book after reaching chapter three of the unpublished manuscript. Then she quickly packed The Full Monty's Simon Beaufoy off to Mumbai to research the screenplay. She believes a proposed merger would bring significant change.
"I don't think change is bad if there's a wholehearted great vision that carries us through it," she says. "I have an overview of film and telly. I have a brilliant head of drama and she makes all her own decisions. I can help if necessary, but most importantly - and this is the point about telly making film - I say here is a single door. Inside we make telly and we make film. Drama, documentaries, arts - all our commissioning editors work with talent that has aspirations to make film."
Ross highlights Four Lions - Chris Morris's film about British jihadis, currently in pre-production - as an example of this relationship. TV companies rejected the script but it found funding through WarpX - a Film4/UK Film Council joint project with the Sheffield-based indie Warp - that can finance three low-budget films a year.
"The point of public money is to make stuff that the market doesn't want to make," she argues. "You need the freedom to take risks because that's always where the biggest British hits come from. I'm not making derivative films - that feels cynical and the studios do it better than us. So you can't work at market rate - and with Slumdog that meant working with [the production company] Celador to pay more than the market would."
After starting Slumdog, the producers approached Celador to secure the rights to the gameshow Who Wants to Be a Millionaire?. The makers of the TV quiz co-financed the film.
"At other times we develop films that no one else wants to pick up - which makes it harder to raise the money. But that's our job. If you knew what would make it you'd be a studio, wouldn't you?"
Ross has a relatively limited budget of £8-£10m a year for Film4's entire output. Typically, independent producers looking to make £4-5m movies will use public money to develop projects, then take the script and proposal to film festivals in the US, Cannes and Berlin to secure distribution agreements. Each distribution contract acts as collateral in securing bank loans to start production. Adam Kulick, a partner at Goldcrest, warns that the credit crunch means those loans have dried up.
"Producers are having real trouble starting productions and they survive on production fees - which means some may go out of business in the downturn," Kulick explains. "At the same time, those distribution agreements they can secure are worth less this year as overseas markets struggle with their own recessions. You can see the beginning of a vicious circle developing. Producers are having to go further and further afield to places such as the Middle East for cash."
The creative industries are notoriously conservative about new forms of funding, with most industry insiders supporting the publicly funded status quo. Only a few companies, with Working Title the biggest, operate like commercial studios. Kulick, however, does praise the film-financing tax break that the government launched two years ago.
Woodward agrees. "It's very simple, the downside is protected and HMRC is very quick in processing claims," he says. "It's got a very good reputation in the industry - here and abroad. What I think you will find is that what money we do have tends to end up in the best films. The independent slate for 2009 is very strong and we've got high hopes for the films that will get released."
The Labour governments of the past 12 years are seen as largely supportive of British film. The other plus for UK film is that, while the downturn is forcing C4 into merger talks and hitting producers' credit lines, the fall in the value of sterling is making the UK a very attractive place for Hollywood studios to film.
"The UK's talent and creative base is very strong," says David Kosse, president of Universal Pictures International, who is preparing to release Richard Curtis's new movie The Boat That Rocked, in April.
"Couple that with the weakness of the pound and that's attracting strong inward investment from the US. Some of last year's biggest pictures - such as The Dark Knight and Mamma Mia! - were shot in the UK so Pinewood and Shepperton [studios] are feeling pretty optimistic after a difficult few years. Having said that, this further underlines the need for a strong UK independent sector.
"You can't have actors, craftspeople and camera crews who only work on a couple of big pictures a year - they need to be working all the time to make sure the creative base remains strong."
Which brings the argument back to Film4. Sadly, Oscar recognition is unlikely to secure much more cash for the unit. Slumdog is highly profitable - having returned four times its initial costs - but only a small proportion of this profit will return to C4. For Ross, however, the profit isn't the main point.
"I'm very concerned that public money for film is protected and I've always thought that the fact that we're end users - that we have always had film in our DNA - has meant we know our purpose in film," she argues.
"Protecting public money for film and protecting Channel 4, well, I would like them to be the same thing but they don't have to be. Change, when it comes, and it will come, will hopefully be about a wholehearted vision for a sustainable public service."
Harries, however, is less sanguine. "For some reason we have an incredibly strong TV culture in this country and yet a very ambivalent relationship with cinema," he says. "I don't know why that is and it's a shame. If you had the scripts for The Full Monty, The Queen and Slumdog purely on the small screen, they'd still be great scripts but the simple fact of them beginning as movies means they have far more cultural impact and will still be talked about for years to come.
"We're facing a real battle and we've got to win it - because it's more important than ever. People have to realise that we can't afford to lose British film."