BFI chief executive Amanda Nevill and Film Fund head Ben Roberts talk about why the controversial 7% profitability statistic doesn’t reflect the full picture of UK film success.

Amanda Nevill, the BFI’s chief executive, said that the 7% statistic (original story here) that has been recently bandied about is “pretty misleading if you understand how a film is funded”.

She also noted that the statistic shouldn’t scare away potential film investors as “before a film even goes into profits, the financiers have gotten their money back”.

Even if a film doesn’t go into net profits, it’s still “a beneficial economic activity,” she reminds the industry. “Cast and crew have been paid, VFX houses have been paid, exhibitors have made their cut.”

“The starkness of only 7% profits completely eclipses the fact that many, many films - before they even wash their face - have put in profits and salaries for people in that chain,” she added.

“If it goes into net profits, that really is thrilling.”

Low-budget filmmaking as incubator

The statistics were meant to highlight how a film’s chances of profitability rise with budget level. It’s not really surprising that some very low budget films aren’t box office successes, nor were they intended to be.

Ben Roberts, director of the BFI Film Fund, said: “The point of this statistic at the conference was to demonstrate the kind of indexing between budget and profitability, it rose as budgets went up.

“The vast majority of those films in that lower bracket are probably not near half a million budget. Where people are self financing, they probably aren’t submitting profit and loss statements, they are just putting them out there in the marketplace.

“If you look at [low-budget filmmaking initiatives] Microwave and iFeatures, those support filmmakers who are still trying to get on the ladder. I don’t think anyone has expectations those are generating a huge amount of money.”

Nevill adds: “[Films with tiny budgets] are made because they are incubators for filmmakers going forward.”

Another issue raised about the statistics is that they concentrate on box office success. However, a film’s long tail of profitability can come years later with DVD/Blu-ray, VOD and TV deals.

Of course, there is no disputing that most films aren’t profitable, but that is not unique to the UK.

“If you talk to the studios, of any 10 films released theatrically, six or seven won’t go into net profits, one might not be profitable, one will break even and one will do some serious business. That’s an economic fact about film,” said Nevill.

“No two finance plans are the same,” added Roberts. “That snapshot doesn’t really do justice to the complexity of finance plans.”

Also, films aren’t just about production budget vs box office. There is also P&A spend to consider, for instance.

Roberts said that the BFI was looking at ways to offer the industry more meaningful research and statistics.

“There is a far more deep dive that needs to be done, and we’re talking about doing it, a health check across the practitioners to get a true sense of its vital signs,” he said.

He also points out that not every film is made with the top goal of becoming profitable. Sometimes there is a cultural imperative for making films that are commercial risks.

“Does it matter if Clio Barnard’s The Selfish Giant makes a profit? No,” said Roberts. “You can’t expect filmmakers at the nascent end of their career to be turning out wildly profitable films.”

With someone like Stephen Frears, his early films may not have made huge numbers at the box office, but now he has made Oscar-winning films and had a career-high box-office with Philomena, which has made nearly $32m in the UK.

Roberts also points to a filmmaker like Ben Wheatley who got support for riskier early films and is now heading towards making more commercial work like the forthcoming Freakshift.

“Ben and Clio will be making films for years to come. They will grow in repute, they will generate bigger audiences, investors will have confidence in them, budgets will grow.”

A vibrant year

The figures have been discussed at a time when the UK film industry does appear to be in rude health. There were more than 20 British films at this year’s Toronto International Film Festival and features like Philomena or Rush are stirring awards buzz.

“Last year, UK films took over $5bn at the global box office,” said Nevill. “Economically and in terms of global visibility, British film is doing really well and is really vibrant.”

The UK boasts a stable (and increasingly attractive) tax relief as well as EIS and other investment schemes that can be used for film investment.

The BFI is helping matters with something like its Locked Box scheme, which allows to producers reinvest their recouped monies. For instance, Damian Jones recently received £100,000 following the success of The Iron Lady to fully finance the low-budget film Powder Room.

Roberts added: “The general impression this year is that we’re in a really good place. And seeing what we have coming through next year, I think that’s going to continue. It’s unfortunate to look at a cold hard number to determine the success of the UK film culture.”

To read producer Ken Marshall’s comment on the statistics, click here.