10/10/2003

However, according to the report, the sector is still an 'under-capitalised cottage industry based around entrepreneurial individuals driving single-project vehicles'. The production-led industry has meant that insufficient emphasis has been put on distribution, both domestically and internationally. The UK distribution market is particularly difficult with lower film rental revenue for the distributor than elsewhere (between 25-40% depending on the film and the exhibitor), amongst the highest advertising costs in the world and US majors vertically-integrated companies dominating the market.

The lack of support from UK broadcasters (BBC, ITV, Channel 4 and Granada) is another major drawback for UK filmmakers compared to other European countries such as France, Germany or Spain where broadcasters are legally bound to invest in local films. In the report, the UK Film Council heavily criticised UK TV's current support for the film industry as being 'lamentable' in financial terms, a view shared by many in the industry including Stewart Till (UIP) and Anthony Minghella as Head of the British Film Institute. Indeed the BBC and Channel 4 each invest around £10m per annum (around 1% of the BBC's annual budget) and ITV openly told the Committee its reluctance to invest in a sector regarded as being 'too risky'.