2. Films on the Big Screen
According to the BFI the ‘industry investment
and popular films have been responsible for the
recent success of the UK exhibition sector.’
Cinemas offer a communal space, enjoyed by a
wide cross-section of local residents, particularly
in deprived and rural communities. Local
cinemas also provide an oppurtunity for the
public to play a more active role in their
communities.
The British Federation of Film Societies
estimates that there are 550 community cinemas
in the UK.
3. The Digital Funding Partnership has ensured
that smaller operators have been able to convert
to digital.
At this rate of conversion it is estimated that by
the end of 2012, as many as 90% of the UK
screens will be digital.
The Cinema Exhibitors’ Association data
forecasts that by mid-2013 the entire UK
commercial cinema estate will convert.
This conversion has helped to drive the rapid
digitisation of the independent distribution sector
at a pace far greater than in many other
countries.
4. Increasingly sophisticated technology allows
cinemas to build events around screenings and
gives audiences an even richer experience.
Audiences are demanding access to films in
different ways and exhibitors are still coming to
terms with the challenges posed by the digital
revolution and the associated changes to
consumer habits.
The cinema experience continues to be of great
significances in the life of film and audiences
attach a special value to the collective
experience.
5. Audiences have moved their attention to
online so the need to maintain and
strengthen the big screen experience is
increasing.
Encouraging new business models is
fundamental to the future health of the
industry.
Industrial logic still dictates that a
successful box office run will lead to the
maximisation of revenue streams in other
media.
6. Digital exhibition in the UK has grown rapidly in
the last four years. In 2010, nearly 40% of the
UK’s screens were digital.
Also 80% of cinema releases in the UK were in
digital format.
The proportion of films releases digitally was
more than twice that of France.
7. Conclusion
24% of all respondents identified that the
most important issue relating to the
exhibition sector ‘is the need to increase
access a wide range of British and
specialised films across the whole of the
UK.’
A programme to provide support to local
societies in village and community halls
was recommended.
8. Virtual Print Fee
This has enabled the industry to finance
digitisation across a large part of the UK’s
cinema estate.
The panel recognises that the VPF will have a
continuing and detrimental impact on
independent distributors and smaller exhibition
venues.
It is already having a negative impact on their
capacity to make available British and
specialised films to audiences across the UK.
The introduction of the VPF system has
increased costs for many independent British
films in particular, as print bookings can attract a
virtual print fee. This is often higher than the cost
of producing a 35mm print.
9. • The release of a UK or specialised film on 50-100 prints,
where over 40% of the total bookings are follow-on
bookings (where the print is transferred to a new cinema)
can add 25-35% to costs of providing prints, as each
additional booking will attract a VPF payment.
• Theatrical release costs for independent British and
specialised films in the UK have always been higher than
the likely theatrical income.
• In a market where the willingness of broadcasters to buy
rights to finished films has declined and falling income from
the DVD market has not yet been replaced by significant
revenues from online exploitation, increased theatrical
costs will inevitably reduce the number of British and
specialised films on which distributors are willing to take
the required risks.
• This could leave exhibitors will a narrower choice of films to
offer audiences. One independent distributor noted that ‘we
now have to keep 50% of our prints in London, depriving
regional audiences of an opportunity to see the film and
ourselves of much needed revenue.
10. The Five Most Important
Recommendations.
1. The Panel recommends the BFI and other key public organisations engaged with film across
the UK explicitly recognise that a key goal of public policy for film should be to connect the widest
possible range of audiences throughout the UK with the broadest and richest range of British
films and films from around the world. This will help to increase the overall demand for and
engagement with film in the UK and benefit both audiences and every part of the UK film sector.
11. The Panel recommends that Government continues to facilitate the partnership work of
content creators, ISPs and others to tackle websites which permit or promote copyright
infringement.
17. The Panel recommends that BFI funding for film should be broadly balanced between
filmmaking and distribution activities (development, production, P&A) and activities related to film
culture (audience development, film education and training, film export, lifelong learning, archive
and heritage, activity in the Nations and Regions, economic cultural and policy research); and
further recommends that within the two broad categories as much flexibility should be available to
the BFI as possible to respond to the needs of audiences, the film industry, and film culture.
23. In order to encourage producers and distributors to work together from the initial stages of
financing of a film, the Panel recommends the BFI creates Joint Venture Lottery funding to be
accessed by partnerships between producers and distributors.
36. The Panel recommends that Government continue to support and prioritise a successful
inward investment strategy through an effectively funded British Film Commission, and
recognises the importance of such a strategy in bringing structural benefits to the independent
UK industry.
