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Old 30th Mar 2009, 07:22 AM   #1
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Wink Key developments affecting filmmakers in financing, producing and distribution - March 2009

FDMX are delighted to be teaming up with Malcolm Moore of Planispheres to bring you a monthly round up news relevant to Filmmakers


The UK Film Council’s (UKFC) outlook for independent British films remains “tough with the economic downturn starting to take effect… it will become even harder… to raise credit especially through bank loans.” It takes time for the effects of the current climate to be realized when finance deals are made well in advance of production and release. As we approach the second quarter of 2009, UK box office receipts seem resilient, but distributors are buying less, sales agents aren’t advancing minimum guarantees, presales are becoming harder to get and, with the advertising drop-off, broadcasters are cutting back on acquisitions. Eventually, video on demand (VOD) might make up the difference, but digital distribution isn’t making up the loss of DVD revenue yet. The biggest challenges remain cash-flowing production, rethinking release strategies and persuading consumers to pay for online content.

But the film finance paradigm is being rethought for the digital era. An inquiry by the House of Lords Communication Committee is focusing on the role of the Film Council, a review of the UK’s film producers’ tax credit and improving the British film and TV industry’s contribution to the economy.

Call for Public Service Broadcasters to invest in film
Film4 Controller Tessa Ross told the inquiry that including Film4 as part of the Public Service Broadcast (PBS) remit could protect it. Film4 previously backed six projects a year, but with budget cuts of 15% (down to £8.5m) there's a danger that parent Channel 4 will completely reabsorb it. Tessa was a key player in Slumdog Millionaire, optioning the source novel and bringing in Celador, who own the format rights to Who Wants To Be a Millionaire.

BBC Online budget rises 27%
A BBC Trust review has backed new investment of £30.7m over the next three years. Stressing the importance of independent production companies to the UK creative economy, the Trust Chair described them as key to helping the BBC deliver its public purposes. Culture Secretary Andy Burham has also acknowledged that one fundamental behind PBS must be supporting independent producers.

Online advertising accelerates due to broadcast product placement ban
Many hoped it would provide a new revenue stream of £70m in difficult market conditions, but the government wants to maintain the rules preventing product placement in broadcast TV. The rule doesn’t apply to online broadcasts, VOD, catch-up services or feature films. Broadcasters are caught - they can’t include product placement for broadcast and need to repurpose if they include it in VOD.

Steps to increase audiovisual lending within the EU
The European Commission is considering steps to encourage lending to support audiovisual work. Currently only the UK, France and Germany make substantial funds available (Spain only regionally). The Commission is also reviving a guarantee fund based on pre-sales agreements with foreign distributors to support bank lending to production companies. Closer to home, Film London is hosting roundtable discussions in late April with bankers to consider recommendations.

Emerging alternatives to bank financing
The Bank of Ireland film department closed in March, the credit lines of Alliance & Leicester and Natixis have vanished. There’s continued uncertainty over other financiers who have traditionally provided gap finance based on Minimum Guarantees (MG), but alternative funding mechanisms are starting to appear. Future Films are raising £20m through two production investment funds, and Bankside Films, the London based international sales agent, are building a substantial equity fund with a view to being involved with 6 -10 projects at script stage.

Enterprise Investment Schemes (EIS) still working with producers tax credit
Formosa Films are raising £1.7m through their second EIS. For their first feature Clubbed they combined private equity and regional funding from Screen West Midlands with the producers tax credit. Slingshot have a three-way arrangement with BBC Films & Pathe to make teen genre films and are raising £1m through an EIS to finance up to 30% of the budget for 5-7 films which qualify for the credit.

Short Film Funding
The Short Films Completion Fund provides finance and support for shorts that show outstanding potential, but lack funds to finish. Applications close 17.04.09 www.ukfilmcouncil.org.uk/shortfilmcompletion
MEDIA Desk France have published a guide on funding short films in Europe. See: www.mediadeskuk.eu


Current exchange rates are enhancing competitiveness and encouraging US studios to work in the UK. US independent productions are facing a dramatic slowdown, as the Screen Actors Guild is no longer exempting projects from a possible strike. Without a waiver, productions have to pay an extra 5% for a completion bond. The knock-on effect on UK production remains to be seen, but the last US writers' strike (11.07 to 02.08) resulted in scheduled UK productions being lost or postponed.

Film Agency for Wales development and production spend falls 60% for 2009
With £750,000 to spend on film development and production, CEO Pauline Burt announced, "while we have limited funds… we have a lot of talent – and that, combined with a hands-on approach to facilitating projects, enables us to punch above our weight."

Scottish Screen – no additional production funding to current £2m p.a.
Scottish Culture Minister Michael Russell has acknowledged there is unlikely to be any additional funding when SS merges with the Scottish Arts Council to create Creative Scotland. Veteran producer Iain Smith, (Chariots of Fire, Local Hero, Cold Mountain), resigned from the joint board due to the haste of the merger and the feeling that film policy was in danger of "backsliding into the past".
Recently supported features include Kenny Glenaan's Summer and Richard Jobson's New Town Killers.

Encouraging productions post-Oscars
Cloud Nine Films, the new UK production company set up by Slumdog Millionaire producer Christian Colson, has announced a five-year deal with Pathe UK to develop, produce and distribute projects.


Each week 10 new films are released theatrically in the UK, competing for a proportion of the market. Despite swamping release schedules there are 26% more distributors in the UK, 92 in 2008 (72 in 2008).

Recent stats show that more than ever profitability depends on DVD, video, Pay TV and other ancillary windows after theatrical release. Only two British films recouped their budgets from UK cinema release in 2008 (cf 5 in 2007) Noel Clarke’s Adulthood made 5 x its £750,000 budget and grossed £3.35 and Shane Meadow’s Sommers Town £500,000 budget grossed £576,845. 25% of UK produced films theatrically released in 2008 failed to make any dents in their budgets at all.

“Digital Britain” The Government’s interim report on building a digital market-place is available at: www.culture.gov.uk Creators, rights-holders and consumer groups can say what role a ‘digital rights agency’ should play combating unlawful online file-sharing and piracy. www.digitalbritainforum.org.uk

One of the leading UK distributors, Pathé UK, is scaling down its theatrical operation and teaming with Warner Bros Entertainment UK to distribute Pathé productions in the UK and Ireland.

Designed by the UKFC, www.FindAnyFilm.com covers 20 genres legally available in the UK across all formats and platforms, for sale or rental, download and streaming.

Notable Releases
The Age of Stupid, Franny Armstrong’s eco-friendly documentary debuted on 22.03.09 and made a world record for biggest ever premiere, being simultaneously released in 62 cinemas. “Crowd funding” by individuals and groups investing £500 - £35,000 raised the £450,000 budget. www.ageofstupid.net

Shifty, Eran Creevy’s directorial debut and Film London's second green-lit feature under the Microwave scheme is released 24.04.09.www.shiftyfilm.com/ www.microwave.filmlondon.org.uk

Hush, Mark Tonderai’s debut as writer/director was released in March by Warp X. One of a slate of low budget feature films set up by UK Film Council’s New Cinema Fund and Film4. Other key financial backers were EM Media and Screen Yorkshire. www.warpx.co.uk

The Boat That Rocked arrived on 03.04.09. Written and directed by Richard Curtis, the comedy follows his series of top-grossing UK films (Four Weddings, Notting Hill, Love Actually, Mr Bean, Bridget Jones), www.theboatthatrocked.com

DISCLAIMER This report has been prepared for FDMX for general information only. No liability arising from the interpretation or use of any opinions offered is accepted. Planispheres cannot be held responsible for any losses or claims howsoever arising from its use or reproduction

Last edited by Martina; 2nd Apr 2009 at 02:17 PM.
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Old 15th Jan 2010, 10:14 AM   #2
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Well the post was very informative.Thanks
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