Film business boosts U.K. economy

Industry contributes $8.8 billion

LONDON — 2006 was a bumper year for the U.K. film biz, contributing £4.3 billion ($8.8 billion) to the country’s economy — a 39% increase on 2004, according to a report by research org Oxford Economics.

The boom was led by big budget Brit co-productions such as “Casino Royale” and “The Da Vinci Code,” as well as small to medium budget features such as “The Queen,” “The Wind That Shakes the Barley” and “Red Road.”

The study, “The Economic Impact of the U.K. Film Industry,” took into account the direct and indirect contribution made by the U.K. film industry to the economy through employment, production, servicing as well as “multiplier” effects on the export, merchandizing and tourist industries in Blighty.

Every job directly supported by the U.K. film industry was indirectly supporting another job in the supply chain, the report said.

It gave a determined thumbs up to the U.K. government’s new tax credit, projecting that the U.K. would be attracting around 11% of global film production by 2010, with inward investment rising to $1.6 billion by 2010.

“The British film industry is firing on all cylinders,” said the U.K. Film Council chief exec John Woodward at a press confab Monday, along with Pinewood Shepperton’s chief exec Ivan Dunleavy and Oxford Economics Adrian Cooper. “The new tax credit works. It’s clearer, simpler and a good deal for investors in film.”

According to the report, the U.K. film industry has enjoyed a near 300% rise in production levels from an average of 43 features made a year in the 1980s to an average of 120 since 2000. Some 33,500 people are directly employed in the U.K. film biz, with a total of 95,000 jobs supported by the industry.

U.K. tourism was also receiving a boost thanks to filmmaking, with an estimated one in 10 of all visitors attracted by films depicting Blighty, as well as claims by the report that the film industry was one of the U.K.’s most environment friendly. Its emissions were estimated at half of other economic sectors as a whole for every $2,000 contributed to the country’s GDP, although Cooper admitted these figures were “based on some important assumptions,” drawn from comparative research conducted in America.

For all the good news on offer, however, significant challenges lie in waiting for the U.K. film biz. The new tax relief system has already had a negative effect on minority co-productions, predominantly with Europe, where the majority of coin and the film’s subject matter emanated from outside the country.

“It’s early days but there has been a drop-off of these types of projects,” said Woodward.

The problems of piracy, dubbed “the single biggest threat that is facing our industry” by Woodward, would only increase as multi-platform convergence, digital technology, increased broadband penetration and on-demand services became more accessible.

One attendee also bemoaned the increasing competitiveness of East Europe as a location and service provider to Hollywood productions, stating he was “sick and tired of making films in sheds and derelict buildings in East Europe.”

This was challenged by both Woodward and Dunleavy, who said U.K. studios were reaching full capacity with a clutch of big-budget Hollywood productions, such as the “Harry Potter” series, the upcoming Bond film, as well as “Hellboy” and big-screen adaptation of “Mamma Mia” all lensing in the U.K.

“There are a broader range of films being made, of large, small and medium scales, and we value that,” said Dunleavy, who also pointed to fact that Pinewood recently opened a new soundstage that purports to be Europe’s largest.

The loss of the much-vaunted “Harry Potter effect” as witnessed by publisher Bloomsbury after the publication of the final book in the blockbuster series, should also be something the U.K. film biz can withstand, according to Woodward.

“The fundamental thing is there is a strong tradition of literary works here being made into films. Look at ‘Narnia,’ the Philip Pullman books. There are several properties which have been bought by major studios,” said the U.K. Film Council topper.

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