Author:  Michael Kuhn Chairman, Qwerty Films  

A Brief Historical Perspective

In essence, the British film industry is - and always has been - a "cottage industry", struggling to make ends meet making generally low budget, low ambition productions, far removed from the real heart of the global film industry in Hollywood. Over the years there have been various attempts to break out of this mindset but the only one that met with any real success was Polygram Filmed Entertainment which operated on an international scale, supporting independent production within an effective global sales and distribution operation.

In the early to mid-eighties, there was very little financing around for British production. The arrival of Film Four and British Screen changed the landscape and made funds available for interesting low budget films which had some commercial potential. During the nineties, other broadcasters became more involved in financing production - including BBC and Granada. Towards the end of the decade, National Lottery funding became available, first through the Arts Councils and then the Film Council and franchises. But now, at the start of the twenty-first century, the only broadcaster with any significant involvement in production is the BBC - and even that is relatively low by European standards.

Polygram developed a new model for film production developed from their experience in the music industry. This was based around the creation of a series of labels (eg. Working Title) each of which had creative autonomy within a rigorous structure of financial control. All functions that could be best done centrally - such as finance, legal and business affairs, marketing etc. - were centralised, while each label had control over what projects it could develop. Using the huge free cash flow of the parent company, Polygram Filmed Entertainment was able to grow organically, starting with a sales company and a couple of production labels and ending with direct distribution in fourteen key territories.

What Producers Need to Know

The most annoying thing about the British industry is that producers do not want to hear the key fact that they need to know if they are to be successful:

Producers need to have solid marketing information to feed into the development process so that they understand the likely audience for their film as it is being developed and made. It is too late to try to discover your market after the film has been made if this has not been factored in during the production process. Too often in the UK this feedback loop is missing, meaning that good, clever people come up with weak ideas for which there is no real market.

Producers must also understand how their budget relates to sales and distribution forecasts and base production decisions on whether the budget makes sense given the likely distribution margins that the film will generate. Polygram developed a detailed model for determining whether productions would work at different budget levels on the basis of their best estimates of revenues.

Armed with this additional information, producers must then be willing to reduce budgets to fit the potential revenues that will be generated by the likely audience for the film. Budgets for British films have been rising inexorably over the last few years, despite the fact that revenues have been static or falling. All budding producers should read the recent report written by Simon Relph for the Film Council examining the costs of lower budget UK films and their value in the world market. This report concluded that "the increasing costs of lower budget British films too often exceed their earning potential in domestic and international market places" and made recommendations for ways in which producers could reduce the costs of their productions.

Unless producers understand all three of these aspects of the business - the production process, marketing and distribution margins - they have little chance of being successful. The Inside Pictures programme focuses on marketing and understanding the "numbers" because these are the areas where British producers tend to be weakest.

Packaging Projects

Another area where British producers need to improve their knowledge and work practices is in how they put projects together. Often there is too much reliance on agents to bring talent to the table, but they are not always the best people to whom to take your draft script or treatment. The role of the agent is to lever up power on behalf of their clients. They won't necessarily be sending their best scripts out to directors on spec because they will be looking to package an appropriate deal for their major stars.

Often it will be easier for the producer to go straight to their preferred choice of Director with their script rather than going through the agent. Having the right Director on board can be more effective in bringing in the top acting talent than dealing with their agents. In other words you need to get the talent to tell the agent what they want to do rather than the other way around.

Top Tips

• The most important part of the business is developing decent scripts. No film has ever suffered for taking too long in development.
• The first rule of producing: don't panic.
• Understand marketing - who is the audience for your film?; how will you reach them?
• Understand the "numbers": what are the likely revenues/distribution margins for this film? What impact does this have on your budget?
• Develop relationships with Directors - they can be the key to getting your film made.
• Volenti non fit injuria - don't blame others for injuries you have brought on yourself.
• Stretch Yourself!