Why are fewer films being made in the UK?
With Avengers: Endgame topping the box office charts recently and setting the record for the highest-grossing film of all time (as well as many others), one question comes to mind: what’s happening with the British independent film market?
The number of films which were produced in the UK has dropped by around 36% from 2017. Whilst 315 films were produced in 2017, provisional figures show that only 202 films were produced in 2018. When compared to footfall figures, the number of people going to watch a movie at the cinema has risen by 3.75%. Contrast this with the situation in countries such as Germany and France who maintained the number of films starting principle photography at a steady pace in their respective countries despite a decline in admissions to cinemas of 13.8% in Germany and nearly 4% in France.
Furthermore, film production in UK has steadily declined between 1% to 10% since 2014. So why is there such a massive decline in 2018? Has the talent in Britain depleted or have they all moved out due to fears of Brexit? Has the charm of British films gone down?
The answer is not that simple and there are several factors affecting British independent film makers now more than ever. Firstly, it is a very competitive market and attracting investment for the next major blockbuster (such as ‘The Favourite’ which won ten awards at BIFA 2018) is very difficult to do. Individual investors are interested in what returns the film will make for them and with distribution agents giving priority to the big studio films, smaller independent films are getting squeezed out of the market.
I don’t believe that there has been a reduction of talent in the UK as many Hollywood/Bollywood films come to film in the UK and carry out their post-production with companies like Double Negative (who worked on Avengers: Endgame, Bohemian Rhapsody and Fantastic Beasts amongst others).
Could it be due to a reduction in investment for micro to mini budget films from investors wanting to take advantage of Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS)? You only need to read the article written by Arthur Bitter on Is there really ‘Free Beer Tomorrow’ or has Sir Humphrey got the hump with the Creative Industries? to realise that the lack of SEIS/EIS approvals by HMRC is pushing away the much-needed investment to make these films. By reducing the approvals for the SEIS/EIS schemes, has the government taken a step too far by not approving the inward investments by tax paying individuals to UK films. Only time will tell the full impact of this move by HMRC and the Government, but the ripple effects of this are already being felt by the UK film industry and investment into films may not improve until this is resolved.
One could argue that the uncertainty surrounding Brexit has not helped matters and has made investors in film nervous. However, the BFI has tirelessly worked to get the UK signed up for the updated version of the European Convention on Cinematographic Co-production in early 2019 to show the UK’s determination to continue working with Europe. I believe that with BFI’s blessing we will see far more co-productions under the European convention than we have had in the past. Even though producers may find it hard to relinquish creative control, they will most likely have little other choice but to go with the co-production route in order to get the film made.
All in all, with Brexit and the SEIS/EIS position taken by HMRC, we may be looking at some bleak times for the independent film industry but hope that the policymakers will see the impact on the market and come up with a sensible solution!
Source: Marche du Film 2019 Focus – world film market trends and the British Film Institute (BFI)
The views expressed are the author’s and not ICAEW’s.