The King’s Speech might have triumphed at the Baftas, but behind the scenes the UK independent film industry is going through a period of major upheaval.
In years to come, film historians and students are likely to look back at the next few weeks as a pivotal moment in the evolution of the British film industry. The King’s Speech is flying the flag for British film, cleaning up at last night’s Baftas and tipped for success at the Oscars.
But in a few weeks, The King’s Speech’s principal funder, the UK Film Council, will start closing down, the victim of the government decision last year to axe the film agency and transfer many of its functions over to the BFI.
Some 50% of the UKFC’s staff are likely to lose their jobs, just as the agency celebrates the biggest success story in its 11 year history. The rest of the UKFC staff, including the Film Fund team responsible for backing The King’s Speech, are expected to move over to the BFI from April.
For many industry execs, the big question is whether the government’s intervention will prove to be a hideous mistake that will irreparably damage the fragile film industry. Or whether the changes, together with more public funding being pumped into film, will prove to be a springboard for future growth.
Strange timing - The closure of the UKFC
Head of the UKFC Film Fund, Tanya Seghatchian, is careful to be diplomatic when she‘s asked to comment on what she makes of the closure of the organisation just as The King’s Speech is riding high. Citing £13m of receipts in the films first 13 days, she says its success “is all the more ironic in the light of the abolition.”
She points out that the UKFC was the only public funder of The King’s Speech: “So it’s vital that there is a robust public funding alternative which enables all kinds of quality films to get made. The axing of the UKFC caused fury amongst its supporters, who accuse the government of undermining 11 years of work and deliberately targeting the high profile UKFC so it could soften up the public and other arts quangos for cost-cutting and culling.
Working Title boss and UKFC chairman Tim Bevan called it “a bad decision, imposed without any consultation or evaluation.” Critics say the decision was made in haste, without a plan for replacing the UKFC’s functions.
The politics of film funding
Culture Secretary Jeremy Hunt recently elaborated on his reasons for closing the UKFC, saying high salaries, such as former boss John Woodward’s £208k a year, were not the primary factor.
Rather, its fate was sealed by what he saw as the UKFC’s failure to arrest the relative decline of the independent filmmaking sector. “There ought to be a huge opportunity for British independent filmmakers to grow and grow to a significant size,” said Hunt, who argued that only a new organisational structure could help achieve this.
Certainly, there are those who applaud the government’s decision. Perhaps the most vocal is producers’ body Pact. “For ten years we were promised the UK Film Council would change the industry – it didn’t,” says Pact chief executive John McVay.
He argues that the UKFC saw itself as a kind of “public sector tycoon” that acted like a feature film studio and that liked to keep producers reliant on public subsidy. In doing so, the UKFC “aligned itself contrary to the interests of the private sector,” and failed to nurture an entrepreneurial film industry where producers could own their IP.
Pact has long been critical that investment terms from public bodies like the UKFC prioritised their recoupment over producer earnings – meaning that without their own funding, producers have little negotiating leverage with investors. For example, Ken Loach’s Palme d’Or winner The Wind that Shakes the Barley took $26m in worldwide box office revenues – yet its production company Sixteen Films earned just £12k in returns.
For McVay, the demise of the UKFC offers the chance “to reset the agenda”. The BFI “doesn’t have the philosophical and intellectual prejudices of the UKFC built into it. The UKFC didn’t root for producers – they thought they could do it better.”
Others say it’s time to accept the government’s decision and move on. It’s best summed up by Film4’s head of commercial development, Sue Bruce-Smith. “There are a lot of people who think it was a decision made in rather too much haste and without sufficient consultation. But we need to move forward very positively looking at what we can make of the new scenario. And we still have the money – in fact we have a promise that the money will go up.”
Optimism about the future
Given that the film industry’s main public funder has just been scrapped, there’s a curious degree of optimism about the future.
Of course, the film-funding climate remains challenging. Equity financing is tentative, banks remain risk averse and the pre-sales market continues to be difficult although it has picked up recently. DVD revenues are also falling, while the revenues from online are only beginning to emerge. In all, 72 British films were made last year, down 11% on 2009.
“Where films have key elements that the market can respond to, certain talent attached for instance, they will find finance but whenever the economic climate becomes tougher, it is the riskier projects that find it even more difficult to get funded,” says the UKFC’s Tanya Seghatchian.
These funding difficulties have led to big changes in the industry. Most notably, film budgets have come down considerably, as producers realise the market will not sustain the budgets that the production community was used to working with.
On the positive side, though, public funding is actually on the increase. The BFI has pledged to increase film-funding levels by 20% from the UKFC’s £15m to £18m, finding the money through overhead savings.
Meanwhile, one of the first decisions of Channel 4’s new chief exec David Abraham was to increase Film4’s budget from £10m to £15m. And the BBC has said it would continue to invest £12m a year in film despite the cutbacks it’s facing.
Film 4 and BBC films
Film4 recently backed 127 Hours and Peter Mullan’s Neds, and has Kazuo Ishiguro adaptation Never Let Me Go, Kevin MacDonald’s Eagle, Richard Ayoade’s Submarine, and Lone Scherfig’s adaptation of bestselling book One Day coming through.
Film4’s Sue Bruce Smith says the funding increase was a ‘huge shot in the arm’, and should allow the department to expand, backing more than the 10-12 films it currently co-produces every year, and the 60-70 films it develops. “It will allow us to take more risks and experiment more, and also engage with projects that might previously have been a bit out of our reach,” she says.
BBC Films recently backed Bafta nominee Made in Dagenham and StreetDance 3d, and has upcoming films including Brighton Rock, West is West and We Need to Talk about Kevin. A recent BBC Trust review underlined its importance to the UK industry, guaranteeing its £12m funding.
Transfer of power - UKFC to BFI
The transfer of powers from the UKFC to the BFI will start from the beginning of April, after the two organisations complete a period of due diligence. The BFI’s head of press and public affairs Nick Mason Pearson says “the intention is that the BFI will pick up most if not all of the responsibilities of the UKFC.”
These include the distribution of lottery funds, certification of tax credits and the UK Media Desk. Later this year, the BFI plans to consult with the industry as it develops its new strategy for how lottery funding should be spent on film.
Culture minister Ed Vaizey is also holding round table discussions with film industry figures in an attempt to map out a coherent film policy.
All this is taking place against a background of cuts at the BFI, which has its own reputation for being overly bureaucratic. It is dealing with a 15% reduction to its £14.5m government grant.
With so much up in the air, what should producers looking for funding do?
The UKFC’s Tanya Seghatchian says: “We are continuing to accept applications and make funding awards to film projects.” She adds: “The aim is to make the transition process as smooth as possible for filmmakers, so our advice would be to apply for funding at the time that is right for the project.” The BFI will honour all Lottery award commitments made by the UKFC through the Film Fund.
The UKFC is set to leave behind some highly anticipated films that will be released in coming months, including Terence Davies’s The Deep Blue Sea, Lynne Ramsay’s We Need to Talk about Kevin, Andrea Arnold’s Wuthering Heights, James Marsh’s Project Nim, Steve McQueen’s Shame and Phyllida Lloyd’s The Iron Lady.
This roll call of top level directors is testament to the fact that, while it might not have effected huge structural change in the industry, the UKFC leaves behind an industry rich in talent.
Film4’s Sue Bruce Smith remarks: “People have always said that making films is difficult – I don’t think it is ever going to be an easy option. But I think the lowering of budgets, exciting new talent, the increase in public funding and the success of films like The King’s Speech, means it’s a hugely exciting time. The important thing is to harness it, and make sure we build at both ends and don’t forget the new talent coming through.”
Interview: Pat Younge has to make big cuts at BBC inhouse production but still wants to grow the business
“Inhouse production is the heartbeat of the BBC,” proclaims Pat Younge, chief creative officer of BBC Vision Productions.
If that is so, then Younge is the man who will have to perform surgery on it this year, taking out 20% of costs as a result of the licence fee freeze. Inhouse drama recently cut 22 jobs, and 75 went last month from Vision’s multiplatform operation. In coming months, more jobs will go from inhouse’s factual, comedy and entertainment departments.
Open and direct, Younge doesn’t attempt to hide the fact that his empire is set to take a hit. Unusually, he chooses to be interviewed in full view and earshot of his staff on a sofa in the midst of a large open plan BBC office.
He oversees 3,500 employees in England (of whom only one third are permanent staff, he stresses) producing shows such as EastEnders, Watchdog, Human Planet, Dragon’s Den and Miranda. In addition, production teams working on network shows in Scotland (Weakest Link), Wales (Doctor Who) and Northern Ireland also report into Younge. It’s an operation with a turnover of £350m.
Younge re-joined the BBC just over a year ago, after a spell in the US as president of Travel Channel Media, and is regarded as a key contender for the vacancy left by Jana Bennett at the top of BBC Vision.
He took on a business, he says, that was suffering from “very low morale”. Inhouse had been hit by major restructuring and job losses, thanks to increased competition from indies after the WOCC and a major shift of production out of London and into the nations. He thinks morale has since improved, and has put an emphasis on performance, which has included “managing people out” of the business if they are not up to the job, and multiplatform training.
Certainly, inhouse has enjoyed success lately - notably in comedy, thanks to hits like Come Fly With Me and Miranda. And the entertainment department has just delivered the “best ever series of Strictly”, he says.
After years on the defensive, Younge believes inhouse is now turning a corner. Buoyed by the guarantee that 50% of all BBC shows will be produced inhouse, it currently delivers 57% of BBC shows, with indies making 40%. “I’d love to get to 65-35,” he says, bullishly. “I don’t do declining businesses – I go into businesses to grow them.”
He can also look to grow the business without fear of censure from indies. Last year an indie lobbying campaign was brewing to try to end the BBC’s inhouse guarantee amid claims that inhouse was inefficient and anti-competitive. That campaign is now on ice after last year’s sudden licence fee deal, delayed until Charter Renewal in 2016. He’s clearly relieved that he doesn’t have to “waste all of this current year” on lobbying. “It means we can really aggressively plan for the future.”
On the downside, of course, he has to drive through a big cost-cutting agenda. In all, he’s looking to take 20% of costs out.
Half of these savings will come from ‘salami-slicing’– production efficiencies to be found within Vision Productions. The other half will be driven by the channels simply commissioning fewer shows, which will affect inhouse and indies alike.
Younge is confident he can find the production efficiencies. After all, he says, “The drive of technology dictates that programmes should be getting cheaper year after year.”
He questions the sizes of crews needed to make programmes now. He thinks gains from new technology are often wasted – crews, for example, shooting longer than they need to, simply because they now can. “We need to capture some of that gain, as opposed to spending that gain,” he says.
Last year, he claims that £60m of costs were taken out of Vision Productions. He gives one example: “We do Carols from Kings College at Christmas. And we do Easter from Kings. So this year, we filmed them both back to back. Different costumes. Two shows. One OB. Done. We cut the cost in half.”
Looking ahead, staff will move out of TV Centre by the end of 2012, offering the chance for savings. He also hints at a big rethink of the way Vision is managed. He fully endorses the BBC strategy of moving production out to the Nations, but it “introduced inefficiency into our own system,” he says. “There must be a more efficient way to run this.”
Despite the cuts, Younge says inhouse is more important that ever to the BBC, particularly in an era of connected TV. “We can populate iPlayer with our own content for viewers to consume ad infinitum without having to pay anybody else. Having control of production gives you some control of your destiny,” he says.
It’s a sense of control, he believes, that other broadcasters eye jealously. “There was a period when people were rather embarrassed by inhouse – it didn’t seem very freemarket or competitive. Now everybody wants to be back in the inhouse production game.”