Industry Report: Distribution and Exhibition
Film distribution: focus on the United Kingdom
- Europa Distribution puts the spotlight on the independent distribution companies in Great Britain in order to discuss the national market and its specificities
After having lately rediscovered Portugal (read here), the Scandinavian countries (here) and Italy (here), Europa Distribution continues its tour of Film Distribution’s landscapes and lands today on top of another of the Big Five: the United Kingdom. What are the challenges facing UK distributors today and how are they different from those engaging their European colleagues? While Theresa May and Donald Tusk are busy negotiating the terms of Brexit, we interviewed some UK Independent Distributors to discuss with them the current situation of their market and it seems that, Brexit or not, a revolution is already in progress.
In Europe all distribution markets are different but we might say that “some are more different than others”. With Hollywood productions occupying prime spots everywhere, it’s not hard to imagine what the situation of an English speaking country could be like. “We share a language with the US so we tend to identify with them vs. the rest of Europe”, simply states Edward Fletcher, Managing Director of Soda Pictures.
This distinction affects film watching habits tremendously. According to a study published by Huw Jones for MeCETES project in 2014, Britain has Europe’s lowest market share for foreign-language films and the figures from the last BFI’s report confirm that in 2015 the 277 foreign language films released accounted for 37% of all releases, but shared just 2% of the box office. The perception of foreign language film as “difficult” has probably much to do with the fact that they are automatically perceived as “arthouse”, so even films that might be considered “commercial” elsewhere, such as some of the French Asterix and Obelix, don’t find distribution in the UK.
Digital Revolution: When the game gets tough
Similar to what happened in most European countries, the digitalization of cinemas represented the milestone that shaped the new path of film distribution in the UK over the past decade. A path that led to an increase in speed for the whole business: “Now everything is quicker” summarizes James King, Head of Theatrical Sales from Curzon Artificial Eye, a company that celebrated this year its 83 years of activities and who has been in distribution for the past 40 years. “There’s an increasing number of independent distributors who are fighting over fewer and fewer screens, in a situation where arthouse cinemas in London are screening Star Wars and James Bond to pay the rent.”
Truly enough, competition today is fiercer than ever, with up to 22 new films released in 1 day. “The reduction of costs brought by DCPs leads to a wider flexibility that touches both distributors and exhibitors and that often translates into a diminished commitment to a film on the exhibition side,” affirms Fletcher. Following the American model, UK distributors were soon asked to participate to the cost of digitalization by paying a Virtual Print Fee (VPF), set around £500 for each cinema, therefore discouraging a wider circulation of the DCPs. While in most European countries this cost would paid only for a certain amount of time (going from 4 to 6-8 weeks), in the UK distributors pay for it during the whole exploitation of the film.
More and more films get distributed, but has this fragmented market led to a real democratization of the accessibility to the cinemas for “smaller” films? Not according to Tom Abell, CEO of Peccadillo Pictures, who states: “Digital revolution has helped mostly the bigger films to be screened in even more cinemas.” Films that back in the analogical days could benefit from small initial releases and grow bigger thanks to word of mouth, today don’t have that time luxury anymore.
The ability to adapt to an ever evolving market is key for independent distributors everywhere. In the UK this applies more than elsewhere to the capacity of juggling windows, as there’s no legal constraint that regulates them. The market dictates the law. For theatrical, the four major chains of multiplexes request 17 weeks of theatrical exclusivity, while with independent arthouse theatres the situation is different so strategies can vary widely from company to company and from title to title. “In my experience it is more interesting to release theatrically first, as good figures can attract the attention of TV channels and VoD platform, leading to better deals” comments Justine Atkinson, founder of Aya Distribution, a company specializing in African film. Cinéfile, an arthouse distribution company historically specializing in French cinema and based in Scotland, normally allows a three month window before letting the films on other platforms. Interestingly enough though, “occasionally titles will continue to circulate in cinemas even after the DVD, VoD etc release”, according to Richard Mowe.
While the traditional approach to “theatrical first” works for some companies, others are taking a different direction. Curzon is known for its “straight to VoD” strategy which has been paying off in many cases. 45 Years [+see also:
Q&A: Andrew Haigh
film profile] was released Day & Date on Premium VOD, which meant of course bypassing the multiplexes, and still made £1,833,511. According to Edward Fletcher, the overlapping of windows doesn’t represent a problem simply because they don’t reach the same audience: “We released Rams on D&D and premium VoD because we wanted to make it accessible: we counted on word of mouth to promote the film”. The strategy was rewarded with a £300.000 box office. For Oli Harbottle, Head of Distribution at Dogwoof, the shortening of windows represents an exciting chance to enlarge the audience. The theatrical release remains crucial to give visibility to films, but otherwise the audience doesn’t want to be told when and where to watch a film. In the UK the penetration of VoD is especially high, with Netflix holding 80% of the market. A survey by Ofcom in 2016 found that just over a quarter (26%) of UK adults had used a paid-for VoD service in the past week, up 8% since 2014 – with particularly high levels of usage (57%) amongst the 16-24 age group.
Within the VoD ecosystem exclusivity is not the general rule: unlike other countries, in the UK Premium VoD doesn’t stop a film to get on ITunes, for example. Peccadillo Pictures is one of the few distributors who can boast its own “SuperRoom” on ITunes and they also work with other major platforms such as Netflix and Amazon, who play different strategies in the UK. “While Netflix always refers to the US, Amazon has an independent UK office, they seem to be more aware of the local market and move accordingly”. Despite the fact that VoD figures are growing every year, Tom Abell remarks that they still can’t make up for the decrease in DVD sales. Indeed the DVD market has been and to a certain level continues to be central in the distribution economy, much more than in most other European countries. “The UK is a country of collectors where DVDs still make good Christmas gifts. The market is decreasing but compared to other countries we are coming down from a higher mountain” (Fletcher).
Lined up for a Label
Compared to what happens in other countries, UK independent distributors seem to put more emphasis on their own label. Exemplary in this sense is the profile of Peccadillo Pictures, whose line-up has been consistently building up with a focus on gay and lesbian films, and has now an established fan base in that community. Aya Distribution, whose focus is on features and documentaries from Africa, conceives its work partly as a mission, regarding films as more than entertainment and striving to acquire films with a moral or political conscious. For Dogwoof the identification as documentary distribution came a few years after their foundation: “We realized that documentaries had a niche with strong growth potential and no one else was doing it. So we chose to be the big fish in the small pond rather than the other way around”. (Harbottle) Distributors swimming in the bigger pond of general arthouse try to make themselves recognisable by other means. “At Curzon we don’t spend much money on advertising. We prefer working with leading reviews and with editorial content”. Curzon can also count on a network of 13 cinemas spread across the country as well as a VoD platform, Curzon Home Cinema.
It seems now certain that by March 2019 the UK will no longer be part of the European Union. In this scenario, unimaginable a year ago, where do independent distributors see themselves? The first and most common concern is financial. Both Abell and Fletcher worry over a basic currency issue: “We work in an international industry and pay our films in US dollars or in Euros, so if the British Pound goes down we’ll be financially disadvantaged”. For Richard Mowe the impact might be more drastic: “Brexit may mean establishing a company base in Ireland to be able to continue to access European funding. At the moment the company buys all rights for the UK and Ireland.”
Fletcher remains confident that the UK will remain in the MEDIA programme alongside other non-European countries as Norway and Iceland because of its necessity to export films. Looking more closely at distribution, Fletcher is not inclined to think that Brexit will affect the day-to-day business: “We are a very market driven territory and the funds we receive from MEDIA to distribute European films are relatively small. I don’t think we’ll get to a point where UK distribution looks at films like Toni Erdmann [+see also:
Q&A: Maren Ade
film profile] and chooses to pass because of the lack of MEDIA funding, although the price we’ll be able to pay to sales agents will be reduced. The real problem lies in the decrease of the audience for smaller traditional and solid arthouse films such as The Here After [+see also:
interview: Magnus von Horn
film profile]. Such a small market share makes these titles un-buyable in the UK market, with or without MEDIA.”
The distribution’s side of hope
Looking at the big picture, the figures talk about a healthy market: thanks also to the great success of Star Wars: The Force Awakens and Spectre [+see also:
film profile], the box office in 2015 registered a growth of 15.26% compared to 2014’s. With £1.32 bn, 2016’s box office went even further beating the previous year by 1.45%.
While keeping well in mind that these figures are largely made by Hollywood big productions, some distributors still find them encouraging. “We are not in a better or worse market. it’s just a new and different one. We still can have films like Force Majeurethat can make £600,000 with a very small budget for P&A (about £70,000), so basically find their audience thanks to word-of-mouth” (King). Some releases are also helped by specific schemes of the BFI, such as the New Models Award or the Audience Fund, that aim at supporting the circulation of films that put “diversity” on the screen.
To imagine what the picture might look like in a few years, one interesting thing to do is to look at young audiences today. Although cinema audience is aging in the UK as elsewhere, in 2015, 15-24 year olds made up the largest portion of the UK cinema audience, at 29%. What are they watching? Looking at the titles with a significant above-average audience in this age group, it’s safe to say that foreign language and arthouse cinema is conspicuous by its absence. This unsurprising data won’t make a British distributor lose his spirit. Edward Fletcher proposes another angle to look at the issue: “Just because people in their early 20s are not watching (arthouse) cinema it doesn’t mean they won’t do it in their 40s… maybe it’s just a taste that needs to be developed. Like for avocado!”
The idea that developing an audience with a taste for a more diverse cinema is core to the business seems to be generally shared by the UK members of Europa Distribution, as their line-ups can prove. “We need to be forward-thinking to recreate a “cinephile spirit”, working with institutions like the BFI and cooperating with exhibitors, as well as film clubs and collectives, creating events and bringing talent to meet the audience” (King). While well aware of being part of an industry, independents don’t forget the reason why they are in this business: bringing good cinema to a new audience because, as Atkinson says, “films can bring down prejudices and create new perspectives”.
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