Archive for October, 2010

Kiwi film-makers capture more than just Hobbits

The New Zealand Government’s determination to alter its labour laws and pour additional incentives into The Hobbit to ensure Middle-earth doesn’t relocate to Ireland or any other alternate location shows just how important to the Kiwi economy as a whole, never mind just its film industry, Peter Jackson and his furry friends have become.

There’s no doubt that since The Lord of the Rings franchise first set up camp down under in 1999 the economic impact on both the film and tourism industries has been immense.  Crews, production and post-production facilities have been the principal beneficiaries of the movie’s spend while tourism has seen an impressive 40% increase since the late 1990s.  Doubtless James Cameron’s Avatar would very likely not have spent the $218m in NZ it did had Peter Jackson not led the way.

But how has the indigenous film industry fared amidst this massive injection of Hollywood dollars and the global attention that has ensued?  Perhaps not surprisingly it has indeed seen its fortunes rise, with a doubling in both average production output and domestic box-office comparing the pre- and post-Ring decades.  However this can’t simply be attributed to the ‘Jackson effect’.  New Zealand film-making and its box office were already on a steadily rising trend before Gandalf arrived and have achieved similar levels for short periods in the mid 1980s and 1990s.  What does seem to have happened post-Rings is that a higher level of production  (around six films a year at an average combined box office of just over €7m) is now being sustained. 

With a not dissimilar population (4.3m) to Scotland, New Zealand’s film output is about the same but, crucially, generates around ten times as much revenue in its home territory (if you consider Scotland to be Scottish films’ home territory that is.) achieving an average (2005-9) domestic box office share of around 3% compared to around 0.6% here in Scotland.  Indeed over the period 2000-8 New Zealand films easily out-perform all of the small countries’ output we have examined in terms of average box office per film.

Somewhat contrary to the evidence we have collected from other small countries New Zealand’s film-makers seem to have managed to boost audiences for their films with only a modest increase (from 3.5 to around 6) in annual production.  On the other hand the share of the total box office has actually fallen by half over thisperiod which reminds us once again how, at such low volumes, individual titles can distort averages to the point where they are in danger of becoming dangerously misleading.  Nonetheless there is no doubt that New Zealand film-makers really are punching above their weight – a claim often, but sadly inaccurately made for our own output. (See previous posts including here.)

As ever the explanations that lie behind any small country’s greater taste for its own cinematic output are complex and cover the gamut from talent-support, production and distribution conditions to language, national identity and public policy.  The relationship between inward investment and indigenous growth is clearly not straightforward either., whether in New Zealand or Scotland.  The direct boost given to New Zealand’s (film) economy by the Ring cycle has stimulated greater attention to and investment in local production and helped local filmmakers garner international investment and profile.  Equally the variability of films’ and filmmakers’ performance remains as true in New Zealand as anywhere else and the need to achieve a level of production that escapes the ‘chaotic’ behaviour of small production volumes is no less evident down under than it is here in the Northern hemisphere.

Peter Mullan joins the three-feature premiere league but can Neds repeat the Magdelene double?

Peter Mullan’s third feature, NEDS, having picked up the best film award at the A-list San Sebastian Film Festival in September following its world premiere in Toronto is now garnering glowing reviews following its UK premiere at the London Film Festival on Wednesday.

Should Neds repeat or better the success of The Magdalene Sisters (coincidentally or rather in a neat bit of complementary scheduling, screening on Film 4 this week) it will confirm Mullan as both critically and commercially Scotland’s most successful director working out of Scotland.  This might surprise people but the most successful ‘Scottish’ films have in fact been directed by non-Scots like Danny Boyle and Ken Loach and Scots directors’ most successful films have, arguably, not been ‘Scottish’ (See footnote). 

One of an elite group of just twelve Scottish directors in the past thirty years to make three or more theatrical features, Mullan (and Lynne Ramsay whose much anticipated adaptation of We Need to Talk about Kevin is released in the new year) joins the ‘hat trick’ ranks alongside Bill Douglas, Bill Forsyth, Mike Radford, Ian Sellar, David Hayman, Gilles Mackinnon, Danny Boyle, Paul McGuigan, David MacKenzie and Richard Jobson. To date a first time feature director in Scotland has a 50% chance of making a second feature and an 18% chance of making a third – such is natural selection in the movie game.  (Actually the 50% second feature rate is comparatively high).

Mullan’s second feature, The Magdalene Sisters (2002) presents a case study in the elasticity if not the elusive utility of the distinction between critical and commercial success, not something acknowledged in the generally sneering tone adopted by press commentators whenever a public funder takes a risk in what is an inherently extremely risky business.  Back in 2001 when the film’s producers (Frances & Paddy Higson and Ed Guiney) were struggling to complete the film’s financing in the UK and were contemplating moving production to Ireland, Scottish Screen stepped in with an additional injection of £170k on top of the £500k it had already committed to the project.  In a classic of the film-agency bashing genre and under the headline WHY ARE WE PLOUGHING SO MUCH CASH INTO MOVIE FLOPS? the Scotsman’s resident Jeremiah George Kerevan quoted (then) Scottish Screen Chairman James Lee defending the agency’s top-up investment : “Peter Mullan is a very special Scottish talent and we want to back his second feature film. His first, Orphans, was an outstanding critical success.” Kerevan commented that “The words “critical success” are code for not making any money” adding:

The exact rationale for funding Magdalene – hardly a commercial bet, given its content – is unclear and sums up the present policy muddle over what films to support and why. Mullan’s talents both as a director and actor are proven, so the “bringing on talent” benchmark hardly applies.

Well in this case Mr Kerevan should have placed that bet – over 2.5 million people in Europe bought tickets to see it in cinemas with another 811,000 in the US where it grossed nearly $5m in cinemas bringing its estimated world box office gross to over $20m (against a production budget of £2m).  Add DVD and TV sales to that and it becomes one of the most profitable Scottish films of all time, not to mention its critical success in winning the Golden Lion at Venice, the Discovery Award at Toronto, the San Diego Critics’ Award, the European MEDIA prize and a host of other wins and nominations.

The film is notable in other respects too.  Although it did well in the UK (over 443, 305 admissions) and Ireland (191,420) it did even better in France (562, 782) and Italy (760, 845). Given the storyline the figures for the latter two are, in hindsight, perhaps not so surprising given those countries’ Catholic populations but that can hardly accounts for the 131,946 in Denmark (which has a Catholic population of less than 1%) who bought a ticket, almost certainly more than did so in Scotland.  This pattern of international success is by no means unique.  Ken Loach’s films for example (Scottish or otherwise)  routinely  perform much better in France than here but other Scottish Director’s films have also resonated more abroad than at home: David MacKenzie’s Asylum was more popular in Italy than here as was Paul McQuigan’s Acid House Trilogy.

So the critical and commercial success of Magdelene Sisters is proof, once again, of William Goldman’s adage that ‘nobody knows anything’ and those who attempt to prove that adage wrong are likely, sooner or later, to end up with egg on their face.

 Footnote: One film ‘Last King of Scotland’ is rather contentious in this category. If you count it as Scottish then Kevin MacDonald tops the chart, if you don’t Peter Mullan does.  In my view Last King.. is a British film, albeit directed by a Scot, produced by  London based company DNA with a (London-based) Scottish co-producer, Andrea Calderwood’s Slate Films.  Its Scottish credentials are boosted by a small amount of filming in Scotland and a small investment by Scottish Screen, but realistically it’s a minority Scottish co-production.

Scotland’s missing MEDIA millions

First the good news – the EU MEDIA fund invested nearly €8m in UK film, television and interactive media companies last year, supporting everything from documentary film project development and training programmes such as our very own ENGAGE project to UK distribution companies like Artificial Eye and Soda Pictures and Scottish cinemas such as Glasgow Film Theatre, DCA and Filmhouse.

Now the bad news. Scotland’s share of MEDIA funds to support film and television production has slumped to its second lowest level ever while Welsh and Irish producers continue to access much higher levels of development cash.  The Welsh, for example, between 2001 and 2009 secured over twice as much (€4m) development cash as Scotland’s €1.9m.

The EU MEDIA programme, which in various guises has been running since 1990, is designed to help build a stronger European industry and promote wider circulation of film and TV across national boundaries.  The UK has historically done well out of MEDIA’s various interventions in training, project development, distribution and exhibition and in the past Scottish production companies have been quite successful at tapping this investment source. So while its great to see two Scottish based companies (Synchronicity Films and True TV & Film) sharing in the €1.1m of funds awarded to the UK in the latest round of single project funding its rather worrying that there are only two.  It’s even more worrying to see that none of our production companies have secured slate development funds since 2006. It would be comforting to think that these figures are just a blip rather than symptomatic of a trend but looking back over the past decade our analysis shows that from a high in the early 2000’s, Scotland’s share of MEDIA investment in production companies has dropped steadily since 2004 while England, Wales and Ireland’s shares have held up well, especially given enlargement of the EU in 2005.  Looking at MEDIA project, slate and TV broadcasting funds combined Scottish companies’ take has declined from an average of over €300K in the first half of the decade to around €60K on average over the past four years.

Of particular concern is the fact that no Scottish-based company has secured MEDIA slate funding since 2006. (London based Ecosse films secured slate funding in 2008 and have just announced they are opening a Glasgow office headed up by former Scottish Screen Head of Talent Carole Sheridan but it would be misleading to count them in the 2008 figures on that basis). Slate funding gives production companies vital working capital with some discretion over which particular project it is invested in, depending on timing and market conditions.  Given that one might reasonably expect that over the last few years more companies would be in a position to put forward a slate of projects the figures suggest that the companies that have previously received slate funding are not yet in a position to secure a second tranche and that newer companies that have previously received single project funding still haven’t reached the point where they can present a credible basket of projects.  (The most optimistic interpretation is that they don’t need MEDIA’s help at all because they are able to access sufficient development funds elsewhere but this is rather unlikely.)  Alternatively it may be that Scottish companies simply aren’t developing projects with appeal outside the UK which for some television genres is quite likely but for feature film, documentary and animation, co-production is practically obligatory so the fact that so few have succeeded to secure that most precious of risk money, development funding, is a significant indicator of international weakness in the Scottish production sector.

There are, it has to be said, some bigger issues at stake here.  Scotland, because it is a part of the UK, doesn’t benefit from designation as a country ‘with low audiovisual production capacityunlike every other EU country other than France, Germany, Italy and Spain.  Ireland, on the other hand does, and designation as such earns more points in the competitive evaluation of funding bids.  That said Wales doesn’t benefit from the designation yet its producers are doing a lot better than the Scots.

As ever in the screen industry Ireland presents a useful comparator and there the story is once again rather different.  Over the past decade Irish producers have typically accessed three times as much MEDIA funding as Scots and, tellingly, have in the past three years secured over a million Euros of slate development funding compared to a princely €80,000 in Scotland.

At the other end of the journey from idea to screen is distribution and once again the MEDIA programme offers support to hard pressed independent production companies trying to get their programmes seen beyond the UK.  In the early 2000’s Scottish producers regularly accessed the TV Broadcasting fund, averaging over €120,000 a year investment from 2001 to 2004.  Since then no Scottish company has been awarded support while Welsh producers have on average received over half a million euros a year.  The existence of a well resourced Welsh (and English) language broadcaster –S4C – may be the key here as it plays a pivotal role in co-financing and broadcasting deals with its opposite numbers in other European countries.  Scotland, by contrast, can bring very little to the table in terms of domestic broadcaster investment.

It isn’t pleasant drawing attention to these comparisons but without considering the facts, however unpalatable they are, we won’t get very far in identifying what is needed to improve Scottish film and television’s international presence and revenues.

In the film sector in particular co-production is a practical necessity even if opinion is divided about whether it’s always desirable.  The combination of limited domestic markets and the fact that distributor/financiers need to find partners to share the risk of what are relatively small slates of projects, mean few European films of any scale are made without at least one partner from another territory.  Indeed Hollywood studios apply exactly the same risk spreading principle to the financing of studio slates so the economic logic of co-financing is pretty much universal.  The extent to which the pull of co-production may distort the creative integrity or unnecessarily complicate the production process and add costs is a much debated topic.  It featured for example in the most recent cycle of ENGAGE co-production workshops for new filmmakers led by Screen Academy Scotland.  But even if many producers view co-production as a mixed blessing, for the foreseeable future it can only continue to grow in importance and in that context support systems such as the MEDIA programme remain a vital aid to developing and distributing across borders. Scotland’s production community is clearly missing out on that support and needs to address why that is. Equally Blair Jenkins and the rest of the expert panel hatching plans for a Scottish Digital Network ought to consider carefully how to engage with international audiences and finance if Scottish screen talent, product and producers are to reach beyond these borders.

Taking Edinburgh’s trams to the pictures – the Angel’s nightmare

There’s no obvious connection between Edinburgh’s tram debacle and the movie business other than the now defunct possibility of hopping on a tram at Edinburgh Airport and getting off a stone’s throw from the multiplex at Ocean Terminal but beneath the surface (cobbles even?) there is an intriguing similarity in the dilemma facing the good burghers of this city and the denizens of Hollywood – it’s called the ‘Angel’s Nightmare’.

Put simply the Angel’s Nightmare is that on a complex, iterative project like a big budget movie (think of Heaven’s Gate for example)  or a complex investment project predicated on projected future profits (or cost savings)  like Edinburgh’s trams, as each major milestone and the original budget estimate is exceeded, a decision must be made on whether to continue investing further funds or to cut one’s losses and close it down.  However as it unfolds this decision is faced by the investors at successive points where increasing sums of money have already been sunk into the project and can’t be recovered, so cost/benefit of continuing is really a question of what the additional investment from this point on will bring in sufficient future returns to recoup the investment from this point on.

In the movie business the problem of when to call it a day or face potentially ever-escalating costs was addressed by the introduction of the completion guarantee or ‘bond’.  In effect this is a form of insurance for the films’ financiers which, amongst other possible triggers, kicks in when a film goes a certain % over budget.  The completion guarantors then finance the difference between the agreed maximum budget and the true eventual costs, protecting the film’s investors from having to dig even deeper into their pockets and ensuring they will have eventually have something to sell to at least mitigate their losses if not actually make a profit.  Completion bonds are expensive and require the film’s producers to comply with a range of conditions such as hiring acceptable i.e. tried and tested production personnel (and if things go wrong, firing anyone up to and including the director).  As a form of insurance completion, bonds are predicated on sufficient films proceeding without calling them in to  provide the bond company with the funds to cover the occasional movies mishaps that do, and thus to turn a profit on the operation overall.

Back on the rails (or rather off them) the predicted final cost of Edinburgh’s tram project continues its inexorable rise (see figure below) but, like public works generally, isn’t covered by such a convenient arrangement as a completion bond.

So is there any way of predicting what the eventual cost of an escalating project will be?  Arguably not, because there is almost infinite variation in the outcomes that can be expected and average or mean figures are, as in film box office, of no value whatsoever in trying to predict the performance of an individual instance.  That said, as a project like the trams (or a movie) progresses there is more information on that particular project on which to base predictions of the final outcome.  Each week’s box office results make predictions of the eventual box office more reliable and by analogy the same can be said of a major building or Government IT project (notorious cost -over-runners).

So applying some crude arithmetic to Edinburgh’s trams here, for what its worth, is my (current) prediction of the eventual cost assuming the first (and last?!) line is open in October 2014: between £806m and £854m i.e. between 3.3 and 3.5 times the original cost estimate.   [SEE FOOTNOTE].

trams as instance of angel’s dilemma

NOTE ON METHODOLOGY: This range is arrived at by projecting forward to October 2014 an average monthly increase in the estimated final cost on the basis of either £4.7m/month derived from the 76 months between the first (£243M in Dec ’03) and latest estimates (£600m Apr ’10 and current) or the 23 months between the penultimate estimate (£512 in May ’08) and now, which projecting forward either gives a historic monthly increase between £4.7m and £3.8m.  NB as the figure shows, the rate of increase in the predicted final cost has been almost linear although there has been a slight reduction in the rate of increase between May 2008 and April 2010.  It may be that the rate of increase of the predicted final cost will fall – in which case the ultimate cost might be less than £800m.  We shall see…

Edinburgh Film Festival needs alchemist and illusionist

In its current search for a new director the Edinburgh International Film Festival, like all festivals, once again needs to find someone who possesses the illusionist’s knack of conjuring up, from modest ingredients, the magic moments that keep it in the public, professional and indeed political eye.  However EIFF is in that most difficult of middle grounds, being neither part of the comfortably off global A list nor able to survive on the modest pickings open to a niche national/specialist festival.  Somehow it has to maintain its position on the international stage with, like the Talented Mr Ripley, less in the wallet than its demeanour suggests.

Film Festivals are both an end in themselves and a means to an end.  For audiences they provide access to the untried, the niche, the obscure, the forgotten as well as the canonical.  For filmmakers, sales agents, distributors, other film festival programmers, critics, scholars and aspiring talent they provide a means to showcase their work, spot product to sell or programme, grab face-time with industry powerbrokers or build networks with people on the rise.  Temporary cathedrals to celluloid and encrypted digital cinema hard-drives, festivals are quintessentially human affairs where proximity in space and time can trigger that precious and virtually impossible to fake information cascade that called buzz.  Academics call it ‘increasing returns to information’ but all that really means is that the more people talk about something…the more people talk about it.  The cyber equivalent is a trending topic on twitter. Indeed the movie business has been quick to spot the value of twitter in tracking what’s hot and what’s not at the box office or, more importantly, what will be hot at the box office, if only a few days ahead of its release.

In the traditionally hierarchical world of festivals there are three ‘official’ classes designated by FIAPF, the cinematic equivalent of football’s FIFA. The twelve ‘A list’ competitive international festivals around which industry, critics and audiences cluster because they are seen by industry, critics and audiences as key markers of a film’s quality and potential business.  The circular nature of that last sentence is deliberate – Venice, Cannes, Toronto, Berlin etc. have earned their A-list status over the years through a virtuous circle in which astute programming of subsequently widely applauded movies generates a ‘quality’ ranking which in turn attracts major studios and neophyte auteurs alike to pursue a coveted gala opening, directors fortnight slot or similar.  The more a festival is associated with successful films and filmmakers, the more competition to get into it there is and the more likely it is to maintain its position as an A list festival.   In a parallel motion national Governments are more easily persuaded to support their key festivals financially the more media and industry plaudits they earn.  Bigger budgets mean, in turn, that the festival can spend more on flying in industry and press and mounting more elaborate marketing and PR which increases their chances of attracting the big films, the big talent and, therefore, the key industry press and personnel.  Any particular A-list festival’s position in the premier league – its perceived success at discovering new talent and/or generating the maximum buzz for studio star vehicles – is a continuing topic for industry and press gossip but membership of the premiere league itself remains pretty constant.  From time to time there are upstarts and upsets and there are longer term structural changes as new continents and countries vie for promotion.

Outside the A-List are the so called ‘specialist competitive’ festivals like Pusan in South Korea, AFI Los Angeles or the Tallinn Black Nights Festival in Estonia and beyond these are the non-competitive (e.g. Toronto and the BFI London Film Festival), documentary and short film festivals such as Tampere.

Reality strains at the official hierarchy however as, for example, most  (western) industry figures consider Toronto to be more important than Tokyo or Shanghai and the influential Sundance festival, for instance, doesn’t feature in FIAPF.  It may be global but the movie business still has hemispheric cultural concentrations and differences.

But the 51 or so FIAPF recognised festivals are just the tip of an ever- growing iceberg of festivals of every possible hue.  Some estimates put the total number at over 3,000 but the truth is that no-one really knows.  New festivals appear seemingly every week.  Here in Edinburgh, home to the world’s oldest continuously running festival, a newcomer, Edindocs, popped up only last month to celebrate the art of the documentary while next month Bristol plays host to newcomer Unchosen, set up to raise awareness of human trafficking.

Festivals like these fulfil a different if no less important function to the industry opinion-forming A and B list festivals.  The latter have to address a complex of interests in which their strategic positioning in the festivals marketplace plays an ever-more influential part.  In contrast micro-festivals concentrate on offering niche audiences films they would otherwise have little chance of seeing on a big screen and which will probably garner most if not all of their big screen exposure on the specialised festival circuit, be that for shorts, documentaries, science fiction or animation.  Red carpets, glamorous parties and phalanxes of acquisitions executives are less important here than building audience loyalty, though the ability to attract bigger films and names is a need shared by all sizes and scale of festival.

Occupying the middle ground between the high-stakes, Government-backed A-list festivals and these localised, specialised and often entirely volunteer-run labours of love are festivals such as our dearly beloved EIFF.  Truly punching above its weight on a (now significantly reduced) budget that would make an A-list festival director weep, it nonetheless has to find a way to maintain an international profile in an increasingly crowded festival marketplace where marketing and PR budgets for middle market films (studio specialised divisions, European movies and so on) are under severe pressure and festival directors have to work harder (and more expensively) to convince distributors to pick their fortnight in the spotlight as the global launch pad for the movie’s audience-building campaign.  Building on its core strengths to tap into new audiences online or diversify into other parts of the film ‘value chain’, as we have previously noted, is a strategy being adopted by more and more festivals. 

But all of that continues to rely on the almost magical quality that successful festivals generate – the ability to ‘anoint’ films and filmmakers with a seal of approval that emerges, not simply from the programmers’ expertise at picking what they believe will be hailed as ‘discoveries’ but from the collective endorsement of that proposition by crowds of people sitting in a darkened room amidst the heightened atmosphere of a festival.  From when the credits roll (and sadly increasingly before, as the less than fully engrossed tweet their mid second-act opinions to the world) buzz either builds positively or negatively and alert industry ears (re)form their provisional pre-screening opinions accordingly.  Presiding over both the alchemy and the haggling that engineers those moments is the irreducible skill of a film festival director and in its search for a worthy successor to Hannah McGill to combine the roles of alchemist and illusionist we wish the EIFF well.


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