The British film industry is seeking new opportunities for growth following the success of inward investment as a result of the Film Tax Credit introduced in 2007.
This comes as a new comprehensive study of the health of the UK indigenous independent feature film sector reveals that the values of the international sales market on which its financing depends has slumped by 50% since 2007. As a result, pressures on already modest budgets have increased, particularly for films in the £2-10 million range, where so many of the country’s most successful films from I, Daniel Blake to The King’s Speech, are generated.
Pact is proposing that the current Film Tax Credit be extended to 40% for films shot in this country with a budget of between £2-10 million, with a review of the cap on spend.
The State of the UK Independent Film Sector (download available below) by Olsberg.SPI was commissioned by Pact to provide a detailed evidence base of the changes that have occurred in the UK independent film sector since 2007.
The report found that the sector has been hit by unprecedented difficulties including permanent structural changes, such as digital disruption (the rise of new streaming platforms such as Amazon and Netflix) and increasing competition for audiences - including from High End TV, as well as cyclical difficulties such as the global financial crisis.
The collapse of the international sales market reflects the loss of strong local DVD and television markets for international buyers.
Films with budgets over £10 million appear to have been less affected, but only 90 films in this range were produced between 2007 and 2015, representing just 3.4% of total productions. By comparison, 1,612 films were produced with budgets under £0.5 million over the same time period.
The report also found that many production companies were being affected by these financial issues, with a large number of producers choosing to expand (either in part or in full) into television drama.
While the UK independent film sector has a proven ability to develop and nurture new British talent that can reach global prominence (think Keira Knightley in Bend It Like Beckham, John Boyega in Attack The Block or Gemma Arterton in St Trinians), the current financial situation means that its opportunity to continue to develop major talent could be severely limited in the future.
While the evidence in the report challenges the viability of the current independent financing model, Pact sees this as a unique opportunity to stimulate debate across the film industry about its future prospects and to improve the competitiveness of the UK’s film industry in international markets.
Pact’s Chief Executive, John McVay said: “Pact is concerned that there may be structural problems arising in the market that need to be understood and carefully considered by public agencies and Government, and where appropriate interventions to address potential market failure may be needed.
“Given the many strengths that the UK film industry has, and with ongoing support, Pact sees this as an opportunity to position the indigenous UK film industry to take fuller advantage of the opportunities that the global markets present.”
Rebecca O’Brien, Sixteen Films, producer of I, Daniel Blake, said: “The Olsberg.SPI report provides clear evidence that points to the reasons why the indigenous British film industry is struggling. Armed with this information producers can at last find ways to tackle the issues and make our industry strong again.”
Hakan Kousetta, See-Saw Films said: “The findings of the Report highlight how essential it is for the UK independent film industry to be afforded more opportunity to develop a sustainable and competitive presence in an increasingly competitive market. By increasing the tax credit to 40%, the British independent film production community will be able to properly capitalise on the wealth of talent this country produces and bring to the world films that really showcase the best this country has to offer.”
Download the report: