As the Cannes film festival rolled up the red carpet for another year, having garlanded a clutch of arthouse critical smashes, spare a thought for the small film-makers struggling to reach the big screen.
A combination of an increasingly risk-averse Hollywood movie system addicted to blockbuster franchises and the global explosion in mega-budget TV drama is putting the squeeze on smaller films. Cannes prize-winners are among the few lower-cost productions that are guaranteed a berth in the modern cinema market.
The UK is a sombre case study for the mid-to-low-budget film industry. The number of domestic UK films costing from £500,000 to about £30m to make, such as T2: Trainspotting and Florence Foster Jenkins, fell from 77 to 60 between 2014 and 2015. This is the lowest number made since 2006, according to annual figures published by the British Film Institute (BFI). The number of small to mid-sized budget co-productions, funded by mostly European producers, such as the Oscar-winning The Lobster, and I, Daniel Blake, fell from 37 to 30 – a level not seen since 2008.
At the other end of the scale Hollywood blockbusters made in the UK, such as Star Wars: The Last Jedi, and Alien: Covenant, which account for the lion’s share of the £1.6bn feature film market, remain rocksteady, with just under 20 films produced in 2015. “After the last financial crisis money dried up and the major Hollywood studios ended up cutting loads of their production slates and increased budgets pretty much for franchises and superhero stuff,” says David Hancock, a film analyst at IHS Markit. “The Theory of Everything, films with budgets of that sort of range, are quite often the first to get the squeeze.”
He cites the mechanics of the $11bn (£8.5bn) US box office as a perfect example of the difficulties facing film-makers who lack big budgets. “Films from the major studios take more than 90% of that,” he says. “That leaves about 650 films in the US chasing 9% of the box office.”
As well as the changing focus of the film industry, pressure is being ramped up by the boom in big-budget drama flooding TV, typified by shows such as Netflix’s £100m co-production The Crown.
In the US the number of scripted shows being made annually has more than doubled since 2010 to more than 500 this year; Netflix recently revealed it has 90 original productions under way in Europe alone – Sky has 80 – and traditional broadcasters such as ITV and the BBC have upped their game with huge hits such as Broadchurch and Line of Duty.
“There is not a lot of difference between high-end TV and many films these days,” says Richard Johnston, chief executive of Endemol Shine UK, maker of forthcoming dramas including the BBC’s Troy and Sky’s Tin Star. “Most drama now is a minimum of £1m an episode and the quality and the experience is very high. And the way the market has changed means that is where a lot of the money and funding now is.”
The BFI says the figure for inward production investment in TV, mostly from US companies such as Amazon, Netflix and HBO, nearly doubled from £252m in 2013 to a record of almost £500m last year. This boost has been in part fuelled by a film industry style tax break for glossy shows costing at least £1m an episode to make which was introduced in 2013. By contrast, the spend on UK domestic films dropped to £198m in 2015, the lowest level since 2007.
The lure of pots of money, and the overlap of skills, related to glossy drama has drawn many of the UK’s well-known film production companies to expand into the sector. Working Title, arguably Britain’s best-known film producer, Ridley Scott’s Scott Free and Heyday – producer of the Harry Potter films, the Paddington films and Gravity – have all launched TV divisions in the last few years. TV shows from these film companies include Sky’s You, Me and the Apocalypse, BBC2’s London Spy, Out of Africa, the BBC1 drama Taboo and an upcoming Navy Seal drama.
“There has always been pressure on smaller films, it is a tough end of the market where there aren’t that many breakout successes,” says a top executive at one of the main Hollywood studios. “It is always challenging but it seems to be particularly accentuated now with big budget films doing so well and pressure from the other side with high-end TV.”
The BFI insists that the small to mid-budget film appears to be in decent health. It says that initial reporting shows that the number of domestic UK features being made in the first quarter this year (17) is the same as in 2016 and that there has been a 30% jump in spend to nearly £32m. “Early indications from the industry are that film production has got off to a cracking start in 2017,” said a BFI spokeswoman.
However, last week Entertainment One, distributor of films including La La Land, Arrival and Luc Besson’s forthcoming $180m Valerian and the City of a Thousand Planets, said it was getting out of small-budget films. Following a similar model to the Hollywood majors, the Canadian media group said that its film strategy will now focus on “producing and sourcing a reduced slate of premium films”.
Kate Little, managing director of Lime Pictures, says that the big budgets, creative freedom and longer story arcs offered by high-end TV have become a bona fide draw for talent. “From scriptwriter to artist to director there has been an increasing attraction to telling a story over, say, 10 or more hours rather than two. It can be much more creatively fulfilling,” she says. “There is undoubtedly a bit of a gap appearing in the mid-budget feature market. Funding issues mean it is a lot harder to get those films away and we are in a golden age of TV production.
“Remember that old anecdote that every aspiring writer has a feature film in their top drawer? Well now they have a TV series. It is where a lot of the hot talent are looking.”
