Saturday, 23 February 2013

Funding and Ownership of the Film Industry

For my article on funding and ownership of the TV industry, please click here.


I'm starting a new unit with my media students on Monday that I have never taught before. It's called Understanding the Film and Televsion Industries and their first assignment will be to look into the funding and ownership of these two media industries. In order to get a few things straight in my head and ensure that I know what I'm talking about before trying to teach them, I thought I'd give the first assignment a go myself. So here is part one on the funding and ownership of the film industry and I will try to keep ahead of the students by producing part two on the television industry asap!


The film and television industries in the UK and the US are made up of many companies that are all owned and funded in many different ways. I will first discuss the film industry and then move on to the television industry, focussing on the ways these two similar but different media industries are funded and owned in the UK and the US, referring to a range of contemporary and historical examples.

FILM INDUSTRY

The film industry in the UK is made up of a number of different parts. There are companies that are involved in Development, Production, Facilities, Distribution, Exhibition and Export. Skillset’s most recent research shows that there are ‘around 400 'permanent' (i.e. registered) companies in the film industry’ but this number can vary depending on how many film productions are being worked on in the UK at any time. Their research also shows that of these companies, ‘43% are production, 13% are distribution and the remaining 44% are exhibition companies’, meaning that much of the distribution side of the film industry is likely funded by foreign companies, often Hollywood studios that help to sell British films to US and international audiences.
               
The British film industry does not have quite the same power and wealth as the big Hollywood studios and therefore depends much more on public funding and financial aid from government intervention. In 2012 it was announced that ‘some £285 million of National Lottery money is to be put into the British film industry over the next five years’.  The British Film Institute (BFI) will determine how this money is spent after taking over funding responsibilities from the UK Film Council which no longer exists. Though there will be spending in other areas, much of the funding will be put into the production and development of future British films.



The producers of The King’s Speech for example had to scrape together the approximately £10 million budget from the following companies:

UK Film Council (presents)
Momentum Pictures (in association with)
Aegis Film Fund (in association with)
Molinare Investment (as Molinare, London) (in association with)
FilmNation Entertainment (in association with)
See-Saw Films (as See Saw Films)
Bedlam Productions (as Bedlam)


Some of these companies, for example the American The Weinstein Company, would invest in production in order to gain the distribution rights and therefore a larger share of the profits when it is released. ‘The Weinstein Company (TWC) is a multimedia production and distribution company’, independently funded by its own profits, and ‘also active in television production’ showing it is both vertically and horizontally integrated. Vertical integration is where ‘a company expands its business into areas that are at different points on the same production path’ so when a film company owns the means to produce films and then also the means to distribute them, it is said to be vertically integrated. TWC is also horizontally integrated because it has acquired ‘additional business activities that are at the same level of the value chain in similar or different industries’. Not only can it produce films but it has also expanded into producing television shows as well.


Concerns were raised in the past about the major Hollywood studios’ oligopoly over the film industry. The so called ‘big 5’ studios were vertically integrated to the point where they owned the means to produce, distribute and exhibit their own films which meant that other films did not have a chance against the poser of these big studios. The Paramount Decree passed in 1948 meant that the studios had to sell their cinema chains as this much vertical integration was seen as anti-competitive and therefore made illegal, diminishing the power of the old Hollywood studios.


However despite these moves to stop excessive levels of vertical integration, the film industry is still dominated in the US and UK by global companies such as Time Warner. Warner Bros. Pictures is a subsidiary of the global conglomerate Time Warner and produce films such as the Harry Potter franchise. But Time Warner also owns HBO, ‘the world's most successful pay-tv service’, the Turner Broadcasting System that ‘operates worldwide news, entertainment, animation, young adult & kids media networks and related businesses’ and Time Inc who are ‘one of the largest branded media companies in the world, with a portfolio of 96 titles’ which means they are horizontally integrated over television, film and print media. Warner Bros operates internationally all over Europe, Latin America, Japan and Australia leading to some concerns over huge companies like this and their potential influence over a global audience.

Bibliography so far:

 


 Part two on the television industry coming soon!