Speakers include Stephen Garrett [pictured], Ben Roberts, Mark Herbert and Josh Berger.

There were chastening remarks from Stephen Garrett (Chairman, Kudos Film & Television) as he introduced this year British Screen Advisory Council (BSAC) Annual Film Conference. In spite of the mood of optimism engendered by such successes as Harry Potter, The King’s Speech and The Inbetweeners Movie and by yesterday’s Budget, Garrett warned that “every silver lining has a cloud in which to sit.”

Garrett cited the delay in the implementation of the digital economy act, the tailing off in the appetite for DVD, the decline in UK production and the lack of  involvement in coproduction as causes for concern.

“While this has made up for in revenue terms by a boost in inward investment, over-dependence on a favourable exchange rate leaves the UK industry perpetually vulnerable,” the Kudos boss said.

Garrett’s speech prefaced a day-long series of panel discussions in which many of the themes he identified were addressed in depth. Although Culture Minister Ed Vaizey (originally invited to speak) was a no show, many senior industry figures were in attendance.

One subject assessed by several delegates was the changing nature of the Pay TV and video-on-demand market.

During a session on “Embracing Change,” Josh Berger, President and MD, Warner Bros Entertainment UK, welcomed the growing strength of LoveFilm and newcomer Netflix in the UK market.

“The advent of Netflix and LoveFilm on the independent British film scene has been the single biggest event in as long as I can remember. It has thrown an enormous amount of liquidity into the market. Companies that (for) before those Pay TV rights were shrivelling up, it has re-energised that sector,” Berger said. “It is important that that is a vibrant market for producers.”

Berger also praised BSkyB, calling it “the most impressive pay TV company probably in the world…they are incredibly talented in building that business and it has benefitted certainly parts of the film industry enormously.”

He spoke of Warner Bros’ deal to rent movies like The Dark Knight on Facebook. “If Facebook is a way to get hundreds of millions of people to value film…that is very exciting to us and everybody.”

On the same panel, Protagonist CEO Ben Roberts was warmly applauded by the audience following the announcement earlier this week that he is to be the new Director of the BFI Film Fund. Roberts acknowledged that outside the UK and US, the VOD market for challenging, festival-type films was still “feeling pretty flat.”

Addressing the debate over VOD and shrinking theatrical windows, Roberts said that it was up to the exhibitors in the UK “to support the films with sufficient screen space and seats.” If this wasn’t possible, it was inevitable that independent films would explore different ways of reaching their audiences.

Roberts also noted some of the quirks of the VOD market . “It (VOD) throws up all kinds of other issues. (US distributor) IFC have said to us with a straight face ‘the title of your film can make a huge difference.’” He cited the example of British drama Dogging, which was re-named Public Sex by IFC.

Mark Herbert, CEO of Warp Films (celebrating its 10th anniversary this year), highlighted the challenges in establishing brand awareness for the company. Herbert said that Warp (whose credits include This Is England and Four Lions) has a strong identity as a music label but hasn’t yet managed to achieve similar recognition for its films.

Blinkbox CEO Michael Comish noted that there was £2 billion “moving from physical (distribution) to digital.” If the industry adopts a subscription based model (SVoD), Comish suggested that “most of the money…ends up with the distributor, not the rights holder or the studio.”

Peter Naish, Senior VP, Distribution of Exclusive Media, spoke of Exclusive’s plans to launch a global “Hammer” channel. “It took a lot of soul searching because you do lose, to a great extent, control of your content…the idea is to curate it (the Hammer Channel) and to tie it with Blu-ray releases.”