Phil Clapp, Andy Leyshon, John McVay

A perceived lack of quality UK independent cinema to feed the content pipeline was a key concern for UK Cinema Association (UKCA) head Phil Clapp and Andy Leyshon, chief executive of the Film Distributors’ Association (FDA) and Pact’s chief exec John McVay, as they gave evidence at the UK Parliament’s cross-party Culture, Media and Sport (CMS) Committee on Tuesday (January 23).

Clapp acknowledged while ’Barbenheimer’’s 2023 boost to the cinema sector was welcomed, “It’s the performance of everything else” that was his concern.

He said of the members of the UKCA, that represents a broad church of independent exhibitors as well as larger chains: “All of them will say to you what we want is more, better and better supported British independent films and we will put them in front of audiences. We will do what we can to market them, but they can only do so much. To use a very reductionist phrase, it’s about the quality of the supply line which is the issue, to be perfectly honest.”

In 2015, 33 UK films made more than £1m at the box office. In 2023, just 11 crossed this threshold.  

“We need to supply better films,” said McVay.

As exhibitors face stiff financial pressures, there is no time for cinemas to wait for slow-burn, word-of-mouth titles to take off, said Clapp. “At the moment, the imperative is to make money,” he affirmed. 

Clapp acknowledged 82% of the pre-Covid cinema-attending public have returned, however the level of frequency of their attendance is down 40%.

“There are, of course, cost of living issues within that. [But the reason for attendance downturn] seems to be primarily when we do surveys – ‘There is nothing on at my local cinema I wanted to go and see’.”

He wasn’t in favour of following in the footsteps of France’s system, which sees a tax on box office receipts used to feed back into the indigenous film industry. “Anything that takes further money out of the pocket of cinema operators at a time when that’s at a premium would be bad.”

He was also not keen on the British Film Institute’s (BFI) plan to introduce free cinema tickets for UK independent films, titled Escapes. “There is a sizable body of opinion from cinema operators of all shapes and sizes on my side, the moment you offer for free, you send a very clear signal about its relative value. This isn’t something we think you’ll want to pay for it, so here, have it.”

He reflected: “Allowing the ’small m market’ to hold sway, allowing cinema operators of all shapes and sizes to take a view on the quality of the film and attractiveness to its audience, is the way to go rather than dictates around screens or levies.”

While in 2023 cinema attendance was up 25% in Germany, 31% in Spain and 60% in Italy, it only increased 8% in the UK, year on year. “That is almost entirely due to their domestic films. That has been the engine room of their recovery,” suggested Clapp of the European outlook. 

As cinemas facing soaring costs, Clapp would like to see additional support at a governmental level. “We would strongly push on a short-term basis for a relief on VAT for cinema tickets,” he said, adding that out of European cinema trade body UNIC’s membership of 39 countries, 26 of these offer lower rates of VAT on tickets.

“Last year the average cinema ticket price was £8, it only went up 3% since 2022,” said Clapp. “I know from energy and staffing costs a large number of cinema operators felt they had to absorb that cost, they didn’t think it was appropriate to pass it onto customers. I don’t know how long that can exist.”

Tax relief propsals 

In its written submission, Pact proposed an increased credit of 30-40% for films with a production budget of £1m-£15m. McVay argued this increased support “would de-risk investment” and help create greater range in the content pipeline. “It would change the zeitgeist, it would change people’s approach. Will it lead to more diversity? I hope so. Will it lead to new talent? Absolutely. I think that’s where Parliament and governments can’t dictate what happens in reality, but can create environments. That’s how you make the world change.”

When later challenged on the need for greater diversity across the board in the industry, the trio agreed  there is much more work to be done, particularly at the highest level, acknowledging they are all white middle-aged men. “I think the phrase is pale, male and stale,” said McVay.

Leyshon centred his evidence on an argument for a print and advertising (P&A) specific relief for lower budget films. “It should work in simpatico with John’s ask for a higher relief as well,” he said. “Distribution is an inherently risky business. Distributors are entrepreneurs. Every new release is a new start-up – they generally break even, if they make a profit, great. A lot of them fail. They would be encouraged to spend more, to go wider to risk more, to get better awareness, to get those films seen much wider.”

Just over 5% releases play at over 600 venues in the UK, with most at under 50 screens, out of a possible 850 cinemas in the UK.

Leyshon suggested the P&A relief would cost the tax payer £9.3m, but the return on investment would be £2.54 for every pound spent.

US dependency

McVay believes studios and streamers want the UK to bolster is native industry, as they “recognise it is the R&D [research and development] lab for talent”.

He does not agree the UK industry has become too dependent on US inward investment, as suggested by the drying up of production activity in the UK after the Hollywood strikes took hold last summer. “Being a freelancer is always an up and down career, whether you’re a journalist or an artist or a dancer, that’s the nature of the beast. I don’t think we’re dependent on inward investment – I think we should celebrate the fact that we attract so much inward investment. It’s led to studio development across the country.”

However, he also acknowledged: “If America sneezes, we catch a cold when it comes to things like strike.”

Exploration of calls for a streamer levy on UK production was notably absent from today’s proceedings. 

McVay was confident similar strikes were not likely to break out in the UK. “We have a very different process in the UK. Pact negotiates all the collective agreements, we have constant dialogues, we have a much more ongoing discussion,” he said.

The trio gave evidence after UK director Gurinder Chadha opened proceedings, who revealed the struggles she has faced setting up independent films with diverse cast, even after the success of her titles such as Bend It Like Beckham, Angus Thongs And Perfect Snogging and Blinded By The Light.

Further sessions are yet to be scheduled, however the second instalment is likely to take place in early March. 





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