Michael Kuhn, former head of PolyGram Filmed Entertainment, has slammedGovernment-backed support body the UK Film Council as 'helpless' and 'in needof reform'.
Giving the inaugural film lecture held by producer's agency Pact, Kuhnlaunched into one of the most stinging attacks on the Film Council since itsinception five years ago. The studio chief turned independent producer said theUK production sector was in a state of 'crisis' despite the Film Council'sNational Lottery investments and generous tax breaks from the Treasury.
"This talk was born out of rage," he said. "We face thebleakest prospect for indigenous UK production since I started in the filmbusiness in the mid 1980's."
Kuhn attacked the Film Council's failure to foresee the government's clampdown on tax funds on Feb 10. He called the council a 'Janus-like' body,'representing [the industry] to the Government but not representing us' and'representing Government to the industry but helpless in light of, andblindsided by, recent tax changes.'
The council, he added, did not listen to 'criticism because it is themost powerful dispenser of patronage' and 'is in need of reform itself.'
Seeking to build bridges with the industry, the council recently held awell-attended forum to discuss concerns. But Kuhn poured scorn on the symposiumand the council's emphasis on training.
"It is somewhat surprising to hear at the recent town hall meeting thatwas called by them, that the reason we are in the mess we are today is becausethe best and brightest are not to be found in today's industry!"
Ironically, the Film Council is chaired by Stewart Till, who waspresident of international under Kuhn at PolyGram and has spearheaded thebody's training initiatives.
Arguing that softer pre-sales and weaker UK tax support have helpedbring the indigenous production sector to its knees, Kuhn called for a levyinspired by the old Eady Levy, which returned a slice of the ticket price toexhibitors and producers. The new form of levy could be introduced imminently, Kuhnsuggested, as the government is replacing tax-based support under Sections 48and 42 but is yet to finalise a new system.
"The door is open for a brief moment (tax has not yetbeen finalised) to use a revision of tax laws to introduce such a system withoutattracting opposition from exhibition, USA studios, major or minordistributors," Kuhn said. "If one applied the rates of the last year in whichthere was an Eady Levy to box office today, it would generate £70-80m per yearfor production and other activities."
Kuhn added that Section 48 should also be retained and expanded, nowthat the government has closed many of the loopholes that allowed film funds toabuse it.
In the council's defence, it has fought hard to protect tax supportalong with such industry bodies as Pact and BSAC, and secured an extension ofSection 48 when some had feared the whole mechanism would be scrapped. It isalready committed to some of Kuhn's key proposals, which included boostingbroadcasters' support for the film industry and exploiting digital exhibition.The council is lobbying hard for the BBC to raise its investment fourfold, andhas launched a pioneering scheme to create a nationwide network of digitalcinemas. The council is also heavily involved in supporting low-budget films,another of Kuhn's suggestions.
Kuhn added that the Film Council should launch a gap fund to provide thefinal £1m in a budget, but that may be beyond even the council's budget. While,as Kuhn said, the body has had £323m to spend in the last five years, onlyabout £20m a year goes on production and development. Another of Kuhn'ssuggestions was that the council could pre-buy digital Video-On-Demand rights,but one of the fears raised when the powerful body launched was that it wouldbecome the industry rather than support it.
"As you would expect from Michael, his speech was brimful of ideas andchallenges," said John Woodward, chief executive of the Film Council. "Thereare an awful lot of proposals for the UK Film Council to invest money which itdoesn't have, and that is one issue. But also interestingly, a number ofMichael's policy proposals such as digital cinemas, low-budget film production,broadcaster's investment in British film and video-on-demand are all beingworked on by the Film Council as we speak."
In the longer term, Kuhn predicted the end of the US studios' financialmodel due to the advent of digital cinema, the fragmenting TV market ande-video replacing home video. "Only by harnessing [studios'] power could youget your films seen across the world and - as importantly - get your hands onthe profits of distribution that came with it. Subject to one condition, thatwill change so that those profits might accrue to benefit a small industry likeours in the UK. In turn, there is a chance that the financial profile of the UKfilm business would change in such a fundamental way as to attract seriouscapital."
The one condition, Kuhn said, is 'that one has to get a film noticed.'
"This means marketing. This means money. Now here's where a new andexciting challenge arises. Can government be excited enough to help acollective effort by Film UK to incentivise a massive international collectivemarketing push for our films. Can the City' Suddenly we are not an industryweighed down the corpses of failed business like British Lion, Rank, EMI Filmsand Goldcrest. We will be clothed in the bright raiment of the digitalrevolution and the prospect of becoming world-class players firmly founded onour world class and undisputed creative credentials."