Coining the Right Phrase: Reflections on Last Autumn’s CBI/BFT Conference

By Holly Aylett

How can you sell the survival of a thriving national cinema to this Conservative Government? The British Film Institute’s conference last autumn was one strategic initiative. Held jointly with the Confederation of British Industry, it was another public exhibition by Wilf Stevenson, Director of the BFI, to develop the concept of film as both culture and industry. The last time the CBI presided over the crisis of the British film industry was in 1925: ‘So here we are again’, Maurice Hunt, the CBI’s deputy director remarked cheerily, ‘and not much has changed.’ He had been to the cinema not once but twice that weekend, ‘And it was fun’. An on-the-edge-of-your-seat-chewing-gum-stuck-to-your-shoes experience: and that was in Sussex.

The CBI is a business organisation, the conference was informed. As such, it could not be expected to take a stand on cultural principles, but it was prepared to mount a strategy for the British film industry on economic grounds. It was clear that it could be a ‘real winner’, especially given the advantage that Britain is now a relatively low-wage economy, that it offers an English-speaking market and boasts much under-used talent. Moreover, to mount a defence of the industry would not involve transgressing the laws of the free market, given the amounts of money currently being exported back to the US without restriction, as a result of what was euphemistically termed the ‘tilt’ in the present state of the market. When the statistics are marshalled, the ‘tilt’ would seem more of a sheer incline, given the vertical integration of the major US companies and their subsidiaries through the retailing, wholesaling and manufacturing aspects of the industry, more commonly known as exhibition, distribution and production.

Perhaps the initiative of another Monopolies and Mergers Commission report indicates that the government shares something of the CBI’s concern. It would be imprudent, however, to be over-optimistic. Ten years after the last one (1983), which set out to investigate the dominance of the US major companies in the distribution sector, not only do the US majors still have a 90% market share, but foreign-owned companies now also control a 77.5% share in the exhibition sector, and the US majors, contrary to undertakings given at the time, have failed to make any significant investment in British film production.

What is more, in 1984, one year after the first Monopolies and Mergers Commission report, the Conservative government, relieved to have ironed out the imperfections in a freely competitive market-place, proceeded to abolish all tax incentives for would-be financiers and cancelled the Eady levy on box-office admissions, the most significant basis for subsidy. Unsurprisingly, there has been a total collapse in investment for film production ­ from £425.7m in 1984 to £185m in 1992.[1] But for TV’s new commitment to film production (thanks to Channel 4) and the minimum budgets available to the BFI and British Screen, there would be virtually no British-produced films at all.

The problem for the CBI was how to deal with this crisis without seeming to be acting against the US majors. Borrowing from a practice used to control profits from North Sea oil, the CBI came up with an ingenious solution: levies imposed on economic rents. ‘Economic rent’, it was explained, is the amount by which a company’s revenue exceeds the minimum necessary for it to carry out its business. The term sounded oddly resonant of the Marxist concept of surplus value, but what mattered here was the ingenuity of conjuring up a protectionist measure in non-nationalist guise. Stepping clear of the ‘economic rent’ euphemism, what was being proposed was a box-office tax on blockbusters which could produce as much as £63m per year without affecting the companies’ operation. It was further suggested that the production and distribution sectors could be linked through a system whereby the tax would be reinvested directly in the industry rather than going through the Treasury.

At the end of John Kay’s (Chairman of London School of Economics) presentation, a voice spoke from somewhere beyond the centre aisle. ‘Was it considered important,’ asked Ben Gibson, head of BFI production and responsible in his opinion for some rather weird and wonderful products, ‘was it important to have a local theatrical revenue for an industry conceived for local audiences and not produced for a global cinema industry?’

From the platform, John Kay was immediately transported to France. Without hesitation he declared himself against any policies which emulated the French model, where the film industry was heavily subsidised in the interests of a national audience.

He might have approached the question in another way. Assuming that the £63m additional revenue was recycled into the British industry, what type of production would it go towards promoting? There is a type of homespun product in quality packaging which, like Kenneth Branagh’s Much Ado About Nothing, has proved very good for export. But the majority of European-produced films cannot bank on the global Shakespearean Club and have exceedingly low budgets ­ on average between £1m and £2m. This invariably dictates aesthetic and production values which in general are attractive to much smaller, more select audiences. It is extremely rare for so-called art-house films to cross over and become a commercial success, and British-produced films are no exception. It is much more likely that they will fail even to recoup their investment. According to Mark Shivas, of the 20 films made since the BBC began to produce as well as acquire feature films, only three or four have made any financial return. So without comprehensive changes in film policy, this type of production would be excluded, unless of course the CBI were recommending direct subsidy.

Returning to France, the bête noire of the free marketeers, how have the French nurtured their domestic production? Contrary to prevailing mythology, a well-planned structure of film subsidy has not resulted in a feebly dependent, welfare cinema. Instead, the support given for production has created an audience for national cinema and a culture of film-goers which is incomparable in any other European country. In 1992 there were 4,402 screens in France. In this country there were 1,757, of which 96 are part-time. The population of Britain is greater than France by approximately 1.5m. In 1991, the last year comparative statistics were available, the market share of national films in France was 34.9%, whilst in Britain it was 13.8%. What is even more revealing is that a thriving cinema culture is good business and the system of film support becomes almost self-financing through a special 11% levy on the gross theatrical receipts of all films, including imports. What the policy amounts to, then, is a compulsory savings scheme imposed on the industry by an organisation – Centre National de la Cinématographie (CNC) – with a mission to regulate the market to ensure adequate reinvestment in home-grown products.[2] In the context of the GATT talks the French have been accused of protectionism, but the US majors still control almost 60% of the domestic theatrical market and, in the end, the Motion Picture Export Association of America stands to make better profits from a ‘smaller slice of a money-spinning market than a larger slice of a derelict one.’[3]

At the conference, it was suggested that the motive behind France’s cinema policy was to prop up the French language – a view based on the assumption of France’s cultural insecurity confronting a larger, English-speaking world. But as someone pointed out, sharing a language with the US majors is not equivalent to sharing a culture, and those indifferent to the plight of British film should ask themselves whether they care if the fish-and-chip shops on the High Street are all replaced by Burger Kings. In fact, historically, the French support for cinema is the legacy of Charles de Gaulle’s integrationist approach, where culture was not considered separate or inferior to economic, social or foreign policy. In such a different context institutions such as the BFI would not be forced into the contortions implicit in forging new linguistic weapons, such as ‘a cultural industry’ or ‘Hollywood in Europe?’ in their defence of British cinema.

Hollywood in Europe? is the title given to a publication launched at the CBI/BFI conference, the last in the BFI series on UK film initiatives. Where the CBI kept strictly to their interpretation of a non-interventionist solution, the tax on economic rentals, the BFI added a thoroughly researched series of fiscal schemes based on a clear understanding of ‘political reality’: that for the last 15 years government policy has been to let the market decide and that ‘lobbyists seeking special treatment have been successful where they have removed rather than created market distortions’. The BFI proposals, which include a production premium, a blank-tape levy and four different proposals to redistribute TV resources into film production, are not all new, but they are strategically packaged, keeping within the well-established contention that the audiovisual sector is ‘distorted by monopolistic and oligopolistic structures’. The arguments could not be translated more correctly into Conservative Government-speak. However, since the plot leads inevitably towards confrontation with the US majors, it is doubtful whether the Ministry for Cultural Heritage, let alone the Department of Trade, could be expected to last until the final denouement.

In anticipation of the real battle to come, and spoiling the visionaries’ sense of achievement at the day’s end, voices from the material world began to rumble threateningly across the conference floor. Mr Gifford, chief executive of Rank Organisation Plc, stood up. He did not wish to say anything, he warned, but his silence should not be taken as tacit acceptance. Mr Wilkinson, chief executive of the Cinema Exhibitors Association, was more spectacular. He was incensed at being subjected to a BFI lecture and above all at being dictated to by the production sector. His colleagues had been denied representation, but the BFI proposals would decimate the interests of the exhibitors and distributors in this country.

Beyond the game of rhetoric and posturing, however, what is finally at stake in this argument remains the right to explore our identities in one of the most expressive and persuasive media of the 20th century – cinema. What is at risk is the possibility of producing and viewing the enormous variety of films necessary to begin to articulate the cultural diversity of global experience. Put bluntly, and in government-speak, audiences are being denied the right to choose, and not just from the products of the domestic industry. Without a cultural strategy to shape the British film industry, cinema screens will not communicate or entertain through different characters, expressive forms, diverse languages and cultures – but reinforce a severely limited set of expectations.

"The fanatics, the madmen, the disinterested pioneers, capable as was Bernard Palissy, of burning their furniture for a few seconds of shaky images, are neither industrialists or savants, just men obsessed by their own imaginings. The cinema was born from the converging of these various obsessions, that is to say, out of a myth, the myth of total cinema." – André Bazin, What is Cinema?


[1] See Geoff Mulgan and Richard Paterson, Hollywood of Europe? (London, BFI, 1993).
[2] Bertrand Moullier, ‘The French Recipe for success?, Impact Oct 1991.
[3] UIP executive interviewed by Bertrand Moullier (ibid).

Holly Aylett is an independent producer and documentary filmmaker.