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I Am An Island

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During the increasing furore that preceded the Brexit vote, the media’s spotlight shone heavily upon immigration. With the vote now cast, people are waking up to the shifting climates closer to home – and closer to their industry. Though negotiations haven’t formally begun, and the triggering of Article 50 is more of a question than a sure bet, some of the immediate repercussions have started to materialise. One of the more apparent consequences was the fall in the value of the pound which, on one hand, poses a threat to the British film industry with a stark price hike for foreign title imports. But on the other hand, this fact might ultimately make Britain more attractive to US co-production with the fall in value of Sterling going in the US’s favour. Though it’s difficult to make a clear cut assumption about the overall impact of Brexit on the UK film industry, it’s likely that we’ll see a varied and expansive array of outcomes.

The biggest potential fallout posed by the referendum result is Britain’s future involvement in the co-funded audio-visual funding platform Creative Europe, formerly known as MEDIA. MEDIA financially supports training, distribution, film exports, co-productions, development and festivals. From 2007-2013, they funded over €100 million in British projects, 45% of which went on film exports. Although Brexit is yet to be determined, Britain’s agreement with MEDIA and partnership will last for another two years. As stated on the Creative Europe website, they are not showing any bias against British projects that can still be currently made. Creative Europe isn’t restricted to EU member states, so involvement can still be achieved despite the Brexit decision.

Still, there is a concern about the relationship continuing beyond the next two years despite Create Europe’s statement; the future for the UK is very much unknown, and it’s impossible to predict how industry relationships might change due to the broader impacts of Brexit. Because of this lack of certainty, industry leaders are thinking ahead about how exports to Europe might fare without their vital funding. Film Export UK Chief Executive Charlie Bloye spoke to Festival Formula about the likely ramifications for British independent filmmakers exporting their films to EU territories, and he offered the following commentary:

“Although the precise deal that will be struck will probably be unique to the UK, it will have some similarities to relationships that already exist between the EU and individual non-EU countries. There are a range of options. At what is characterised as the “soft” end it would involve the same sort of access to the European Economic Area that Norway enjoys, or like Switzerland with membership of the European Free Trade Association. At the other, “hard” end we are looking at WTO rules to be applied either without tweaks or with perhaps with a form of free trade agreement applying to individual industries such as our Screen Sector. None of these options would allow the UK to remain at the table to influence the evolution of the Digital Single Market regulations that already threaten the existing model of independent film licensing territory-by-territory in Europe. Cross-cultural collaboration is at the heart of most independent filmmaking, so even if the ability for UK films to be considered European works or the formal rules for co-productions are unaffected (which seems fairly plausible) there would inevitably be a chilling effect. Most specifically, any change in the freedom of movement of labour would have a very negative effect on independent filmmaking. There is also an intangible impact on the UK as a brand in general.

“If the Brexit referendum is seen as the forerunner of a series of nationalist election outcomes across Europe in the coming months, the UK will get the blame.

“I have no research to hand, but I feel sure that audiences for foreign language and independent films are more likely to be liberal-minded and so our films could share in that reputational damage”.

A further consequence of a potential divorce from Creative Europe is that British Independent films are no longer considered European content, a vital classification in territories with European film content quotas such as France. Bloye stated that Creative Europe “is essential to the circulation of independent feature films around the EU and EEA, giving support to specialist exhibitors and distributors to handle films from fellow member countries. British sales companies (aka “sales agents”) are members of Film Export UK and they are, in most cases, the hands-on exporters selling the distribution rights on behalf of the filmmakers. They occasionally qualify for some direct support from the scheme, but mainly they benefit because they are selling to distributors in EU countries who rely on the P&A grants and might easily buy a UK film instead of a similar Australian film because the support exists. In some of the soft Brexit scenarios, the UK could retain membership of Creative Europe. We would have to agree to continue to pay in, but we have done very well out of the scheme. So, if the decision were considered pragmatically rather than politically, and the other Creative Europe partner countries were happy to have us, it would be a very easy case to make. If we were no longer in Creative Europe, there would be a case for the UK Government to mitigate the effects, however it might not be without political fallout. One could imagine a tabloid attack on subsidy being given to help European films be released here or about UK taxpayers’ cash being given to private companies in Europe – even if it were to induce them to release UK films”.

During the campaign, Brexiteers argued that Britain puts more into the EU than it gives back. In the case of Creative Europe, Britain has gained more than what it was putting in. “During its first two years (2014 and 2015), Creative Europe supported 230 UK cultural and creative organisations and audiovisual companies, as well as the cinema distribution of 84 UK films in other European countries. With grants totalling €40 million, this meant it received 13% of the entire €319 million Creative Europe budget in this period. This compares favourably with the UK’s contribution to the programme over that period, estimated at €30 million, which is 10.7%” (Source: Francesca Walker, England MEDIA Desk).

But while this fund is a vital lifeline, as it currently stands, one advantage with the fall in the value of Sterling is that British export films are now more competitive abroad, according to Bloye. “There is a benefit across the board, including to the independent sector. Providing Sterling remains at current levels or falls further against the US Dollar and Euro for a prolonged period, more than three years, the prices of minimum guarantees to buy distribution rights for a UK film in overseas territories whether they are EU or non-EU can fall and make our films more competitive to acquire for release. The flip-side of this is that it is more expensive for UK distributors to acquire rights in foreign films. There is some talk that if the UK is free to negotiate bilateral free trade agreements there could be benefits, but demand for independent films is about the appeal of their actual content and is unlikely to respond to mechanistic price-point advantages coming from removing tariffs etc.

“Much of the hypotheses before and immediately after Brexit are consistent in their fear of exiting Creative Europe and several months later those in the industry are still in a midst of uncertainty, something the wider film industry is not keen upon. Creative Europe is by no means the only fund with which British filmmakers can receive arts funding from, but prior to the vote there was no response from the Department of Culture, Media and Sport with regards to how they would continue to support the film industry to fill the gap that leaving Creative Europe will leave. Although the British film industry is considered to be in a healthy state at the moment, the Conservative Party have a history of cutting vital lifelines that supported the British film industry, such as the levy on cinema ticket sales in the 80’s that flipped a thriving industry into disarray, with the modern Government effectively abolishing the UK Film Council back in 2010 and re-directing its funding to the BFI.’’

There is also a discussion to be had about which films Creative Europe has been funding and whether it is developing newer talent making feature films. Just like when the UK Film Council was abolished, there were criticisms made about how it mostly funded the works of established filmmakers like Mike Leigh and routinely overlooked less seasoned filmmakers. Titles like High Rise, Carol, Mr Turner and Jimmy’s Hall all received development funding, all of which were made by established producers, directors and production outfits.

Big names almost guarantee audiences, though that appeal might be relatively niche –  but they stand a greater chance of securing private sector funding than emerging talents. Theoretically, these funds – like those awarded by the BFI – are sustaining these filmmakers and production companies who have a history of success but also a long history of arts funding. By no means does Creative Europe solely fund these already successful directors and production companies, and the fund even expands to TV and gaming industries as well as education. But when you look at who it has been funding, it seems like the bulk of resources are helping to sustain established names more than anything. Creative Europe plays a vital role in the UK film industry, but it perhaps isn’t shining as much of a light on new talent as it could.

Despite this, there are strong cases to be made for nurturing Britain’s involvement with Creative Europe. Many of them centre on the financial health of the film production industry and British titles succeeding in Europe with assistance from Creative Europe. Yet, there is a question of whether the British film industry beyond its production elements is in a strong enough condition. British films that don’t feature big name talent still find it hard to reach British theatres, which are consistently dominated by US titles. If left to the demand of market forces, it might be the case that a lot of British titles with Creative Europe funding and domestic funding are unable to compete, particularly those geared towards arthouse audiences. The Creative Europe Desk UK have submitted evidence to the Department of Culture, Media and Sport of the impact of Creative Europe’s benefits, along with scenarios and options with support or non-support of the programme. But it is hard to envision a Tory Government in favour of supporting a funding body that has frequently funded films with strong anti-Government rhetoric such as I, Daniel Blake.

An interesting juxtaposition to the issue of funding for new talent post-Brexit is the matter of entry for European film titles into British theatres. Though reaching theatres might be more difficult, European films are still likely to find their way to British viewers, with streaming platforms like Netflix, Amazon Prime, Curzon Home Cinema and MUBI increasing their libraries to fill a potential void. This outcome might mean that more senior audiences will miss out, particularly those who do not have or know how to operate these streaming services. An increase in the cost of European titles is more likely to affect independent theatres with an arthouse bent to their programming who offer an alternative to chain cinemas with mainstream blockbusters.

In terms of evaluating who and what might suffer, the odds seem to be stacked primarily against European film imports, but the good health of British film production in recent years could help to preserve it in turbulent times. In 2015, the BFI recorded the value of British film production industry at an estimated £1.5 billion, with 80% from overseas inward investment, the second highest recording since records been taken since 1994. Furthermore, the Creative Industry Federation reports that the creative sector is the fastest growing part of the economy since 2008’s financial crash. Britain is still an attractive hotspot for filming locations and offers a plethora of filmmaking and acting talent as well as tax incentives encouraging film production.

However, one of the assumed consequences of Brexit is the likely restriction of freedom of movement and freedom to work across the continent, something that will even frustrate British Hollywood-based productions. But strangely, this could have an unexpected upside; something that attracts filmmakers to co-produced projects is the easier access it grants to restricted markets, which might mean that the number of co-produced films increase in the future.

We are still in the unknown of what Brexit could entail for the British film industry, and it will likely take a few years before we see the full extent of the impact. Perhaps the most striking thing about the post-Brexit period is that there are so many potential outcomes for the film industry, good and bad, and all of them are contingent on the broader economic, legal and social impacts of the vote. One thing’s for sure – there are infinite potential outcomes, and there doesn’t appear to be an obvious path of logic to follow. Brexit proposes questions for the future that calls for reflection of the industry as it currently stands; we’re currently in an era of strong British-based film production, but on an output scale of non-Hollywood titles, familiar and established names are still receiving scarce funding while new names struggle to put themselves on the map. Perhaps the British film model needs to be put under the spotlight – and Brexit might very well help with that.

 Material and information sourced from:

Baughan, N. What Will Brexit Mean For British The Film and TV Industry? Movie Scope. 28.07.16

Connelly, B. Brexit: what impact will it have on the UK film industry? Den Of Geek. 28.06.16

Farrell, S. Pinewood Studios set to profit from Brexit vote. The Guardian. 11.07.16

Follows, S. How will Brexit affect the UK film industry? Stephen Follows. 26.06.16

Follows, S. What does a post-Brexit UK film industry look like? Stephen Follows. 03.07.16

Pulver, A. Less cash, fewer movies, meltdown: how Brexit may affect British film. The Guardian. 24.06.16

Sweney, M. Tax breaks and talent fuel UK’s creative industry boom. The Guardian. 29.10.16

With thanks to Charlie Bloye from Film Export UK and Francesca Walker at London MEDIA

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