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The crisis facing the independent film sector in the UK, Martin Smith

Judy, Ingenious / Pathe / BBC

Independent film-making and distribution in the UK faces a serious crisis, in large part as a consequence of the double hit delivered by the Covid pandemic and Brexit, which is exacerbating an already parlous ‘indie’ financing predicament. A summary acknowledgment of this painful reality was quietly published by the British Film Institute (BFI) on 20th January as part of the documentation issued in a new research tender headed “Economic Review of the Revenue Model for UK Independent Film” (BFI tender ref: 2021/237).

The recent and much trumpeted boom in inward investment into the UK’s wider film industry has effectively disguised the chronic underlying weakness of the independent (ie non-Hollywood and non-streamer financed) sub-sector throughout its value chain – from development through to production, distribution and exhibition. This weakness was brutally diagnosed in 2003 in a report from the House of Commons Culture Select Committee:

The scattered and fragmentary nature of the (British) financing model contrasts sharply with the integrated model which forms the basis of US studio financing. The ‘cottage industry’ approach of the UK production sector, comprising scores of film companies, is remarkably successful at delivering excellent, culturally significant but ultimately unprofitable British films. This industrial structure (also) fails to deliver a consistent flow of films such that risk can be spread across a slate of projects. This inability to run a portfolio of films to mitigate financial risk acts as a very strong disincentive to private investment into the production sector. Obviously, this approach (also) does nothing to build the significant corporate structures which are essential to achieve a sustainable industry.” 

(House of Commons, Culture, Media and Sport Select Committee, The British Film Industry, HC 667-1, p.19).

Of course, the global commercial operating environment has changed dramatically over the last two decades or so, driven by the ‘digital shift’ in production and distribution, but the core weaknesses identified by the Select Committee in 2003 are still all too recognisable.

Several more recent reports have further anatomised these weaknesses. We have learned, for example, that the international value of independent film has been falling since 2007; that the corporate finances of most players in the indie film value chain (FVC) have not improved in spite of the introduction of generous fiscal support (the Film Production Tax Credit) in 2008; that the ‘digital dividend’ in film is considerable but has not been widely enjoyed within the UK FVC (producers/sales agents/distributors); and that very little is understood about the inefficiencies of the business of independent film.

Some of the most important insights into the problems faced by indies have emerged from research conducted by Dr Michael Franklin here at ICCE in Goldsmiths. His work has shown that risk-aversion throughout the FVC is exacerbated by chronic information/data gaps. He argues that the application of new technologies, including differential privacy and especially blockchain technology, has the potential to rectify some of these failings.

Sadly no party in the UK – public or private – has so far stepped forward to fund the necessary R&D to the point of delivering a ‘demonstrator’ which might encourage the adoption of data-driven techniques within our domestic industry, as Dr Franklin has proposed. In this respect the UK compares unfavourably with the USA, China, France and Germany, amongst other countries.

The complete collapse of the independent sector in the UK has been prevented by the introduction last summer of the government’s £500m Film Production Restart Scheme following intense coalition-building and frantic lobbying led by the BFI. Independent cinemas are also benefiting from grants and loans provided under the rubric of the government’s £1.57bn Cultural Recovery Programme. These essential measures of sector support will not, however, have the effect of addressing the underlying weaknesses itemised above, and especially not the fundamental problem of under-capitalisation.

The UK government’s decision in 2020 not to seek continued membership, at any level, of the EU’s Creative Europe programme, and especially its MEDIA strand, has come as a further hammer blow to UK independents. For many years the MEDIA programme, administered in the UK by the BFI and the British Council, has provided critical support to production companies, sales agents and distributors in what is one of the biggest markets for British film-makers. The government’s decision to substitute a £7m pilot Global Screen Fund is, though better than nothing, not going to move any dials.

Which brings us back to the new BFI tender.  It has been less than three years since its last report on this subject (BFI Commission on UK Independent Film, the ‘Kamasa report’, July 2018), which may be taken as an implicit recognition that the proposals outlined there have not cut the mustard. All eyes on the BFI again, therefore. Watch this space!

Dr Martin Smith, Visiting Fellow, ICCE.

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