The Future of Indie Film in UK & Ireland.

The last month has seen the UK’s bfi and Ireland’s Dept of Culture, Heritage and Gaeltacht (DCHG) both publish plans for the film industry’s future. The bfi’s Commission on UK Independent Film focuses exclusively on this sector, while the DCHG Audio Visual Action Plan looks at the wider creative sector. However, what is striking is the similarities of both reports views of the challenges faced by independent film, and in many respects the same conclusions as to action which needs to be undertaken.

This blog will focus on the key conclusions and, in particular, the actions both see as essential to improving the situation for independent films going forward.  Actions which address key challenges facing film-makers across Europe, but have particular resonances in the UK & Ireland.

NOTE: Most of the key challenges identified in both reports reflects the conclusions drawn by the the BCre8ive Investment Forum in March 2018 about the creative industries as a whole, and will be referenced where appropriate.

First a Definition

A quick definition of what is an independent film –

Film made by “independent companies – under the control of shareholders resident in the UK(Ireland) – where significant intellectual property rights in the films, with meaningful and continuing asset value, remain with those companies.” –  Commission on UK Independent film.

The Key Challenges Identified

  • The lack of risk taking with investment after the global financial crisis and the impact of digital disruption.
  • A sharp decline(50% in some cases) in traditional sources of finance and revenues, including some tax incentives.
  • An increase in theatrical films being screened – over 800 in 2017 in the UK.  These are often only for tax or financial reasons on limited releases, but they crowd the scene for audiences and make success for independent films more difficult.
  • The inability of production companies to retain rights, and thus being forced to focus merely on overheads and fees as their means of income.
  • The lack of development funding which leads to films being taken to market before they are ready.
  • The lack of marketing support and finance to promote films.

These issues are part of an overall set of similar challenges affecting games, and animation, as reflected in the DCHG Action Plan, but they also affect other sectors of the creative industries e.g. graphic novels.

The Solutions Suggested

  • Increase Funding for the Film Industry

Screen Ireland will see its funding increased, amounting to over €200m over the next ten years. bfi funding was set in in 2016 at nearly £500m for 2017- 2022.

Tax initiatives to funnel equity investment into film companies has always been part of governments’ policy. In Ireland this is section 481, which will see an increase in its upper ceiling to €100m.

In  the UK PACT’s recommendation for changes to the current Tax scheme were reviewed but not taken up  by the Commission. However, the bfi Commission identified a new approach to EIS investment, which could overcome the recent interpretations that effectively closed this avenue to independent film makers.  This new approach would involve the creation of an EIS based fund , supported but independent of the bfi, where “risk would be mitigated by supporting a diversified group of perhaps ten or more production companies.” – Commission on UK Independent Film

This portfolio/studio approach to investment was identified at BCre8ive’s March Investment Forum.

  • Improving the situation for co-productions

Both reports highlighted the need to improve the need for more co-productions to enhance the financing and distribution of independent films.

The Bfi Commission focused on two major elements to improve the climate for co-productions . First, changing the rule in the film tax relief so that the UK
co-producer can claim 100% of qualifying UK spend (up to a maximum of 80% of the total budget), rather than the current maximum of 80%. Secondly, rejoining Eurimage as part of an increased cooperation with European progammes, which includes staying as part of the Creative Europe programme as it goes forward.

Ireland already has these advantages and therefore it aims to increase the funds available to co-productions by €3m per annum.

  • Undertaking new marketing initiatives

This has two distinct foci. On the one hand reaching out to new audiences – part of the Commission’s approach to younger audiences, and improving the marketing activities of the film companies. The latter is the dominant approach of Screen Ireland going forward with “limited” support for attendance at trade events., while the bfi recommends supporting up to 6 UK Indie films a year in a new marketing strategy.

The interesting point here is that neither approach rcognises the potential for social media and global web marketing/distribution, while recognising that digital disruption is part of the challenge going forward. As one contributor said having a P&A i.e. marketing spend available improves a films marketability enormously.

  • Creating new Development Funds

Both plans aim to create new development funds. In Ireland this is a specific commitment of an additional €2m a year. While in the UK the aim is to create a new £5m+ Commercial Development Fund working on a portfolio basis  for investors. The objective of the fund would be “to provide financial support to producers to develop high value IP with the potential to reach a wide audience, have the potential to become franchises, or to deliver an outsized value to the UK independent film sector through its production/distribution impact.”(ConUKIF).

These ambitions however do not address the elephant in the room. This is that large development funds have been available in the past e.g. UK Film Council, without any increase in the success of indie films.

This arose from two distinct reasons. One, large parts of the funds were spent in bidding wars for rights to existing works, and so money was lost from actual film development. Something which appears to be encouraged in the UK Commission’s report. Two, the production culture has created little incentive for understanding how a screen narrative works for audiences. It has focused instead on attracting actors, who can attract the finance. The result being that few producers, or writers, have the skills or knowledge to improve screenplays even if the money for development is there.

  • Creating new business support structures.

Though both action plans identified the need to improve support for film companies from identifying routes to finance to cheaper premises and skills development little is planned.. The bfi plan recommended no significant actions, while Screen Ireland has committed to an approach similar to the UK’s Creative Skillset in the coming years.

The lack of specific business support was highlighted as part of BCre8ive’s investment forums and as such is seen to be crucial to the success of any new investment/funding strategies, and the exploitation/retention of IP rights.

  • Maximising Rights

The impact of online platforms Facebook,Amazon,Apple, Netflix and Google (FAANG) is seen by both reports to have made revenue issues very difficult for independent films.  There is no ‘magic bullet’ suggested by either plan but both call for a coming together of the various players especially the Public Broadcasters and exhibitors to address how new models of revenue and IP rights exploitation can be developed for independent films.

The failure to really engage with this issue beyond the renewed call to fight piracy and to avoid inadvertently inhibiting producers/production companies from retaining rights is a clear weakness within both strategies.

Conclusions

There is clearly a crisis within independent film-making in the UK/Ireland. Lack of funding at various stages of the film production process, and the new distribution landscape pose major barriers to improving this. Both action plans suggest some new, and old, ways forward.

However, the failure to address how IP rights can be retained by production companies: how small micro companies and freelance operations can be supported in an increasingly monopolistic environment; and how returns can be created for investors, will unfortunately limit the impact of any actions undertaken.

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