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 You are in:  Special Report: 1998: 03/98: film
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Tuesday, 24 March, 1998, 18:50 GMT
Money makes the reel go round
Gandhi
Richard Attenborough's Gandhi stormed the box office but soon after British cinema slumped
Always a strong source of creative talent, British film makers have long struggled to match their ambitions with money up front.

Funding is a crucial issue in the UK industry. Making movies is a business littered with pitfalls, something that is usually enough to scare off domestic investors.

The status quo has started to change but for years the British film business was the epitome of a cottage industry.

Independent producers struggled to secure funding on an ad hoc basis, the price for which was often selling on the video or international distribution rights. So when the royalties did start coming in, they filled someone else's pocket.

Hollywood
In Hollywood studios can ride out commercial flops
Once in a while Britain would turn out a blockbuster or two, such as Gandhi or Chariots of Fire in the early 1980s. But then it took just one flop to threaten to sink the company.

In Hollywood it is a very different story. The major studios add structure and stability to the business. They spread the risk over several films, knowing not every film will be a box office triumph.

In Britain, the Government claims to have woken up to the industry's problems. Last year Culture Secretary Chris Smith announced three new consortia that would share in 92m of Lottery cash. The "mini studios" will be expected to turn out about 30 films each by 2003.

Chris Smith
Chris Smith announced funding for three `mini studios'
Lottery money awarded in 1996 resulted in a huge increase in British-made films, from 78 the year before to 128. Ten years before, in 1986, just 41 British pictures were completed.

It has also granted tax breaks to film makers - from Britain or overseas - working in the UK. Chancellor Gordon Brown said these are expected to increase annual investment by 240m a year.

The incentives allow producers to write off tax production costs against films with budgets of up to 15m. Industry insiders would like to see this raised to attract more American blockbusters.

Cash has also been forthcoming from television's Channel 4, which is committed to ploughing 32m into the business in 1999, 5m more than this year.

See also:

29 Nov 97 | Business
Full Monty goes all the way
31 Dec 97 | Events of the year
British entertainment goes all the way
24 Mar 98 | Oscars
Titanic triumphs
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