UK distributors are moving into local production. But, on the eve of the Toronto International Film Festival (Sept 10-19), will it be at the expense of their acquisition of third-party and international titles?

It reached boiling point in Cannes 2008. The leading British independent distributors were operating in a market in which silly prices were being asked for UK rights. The old rule of thumb was that UK rights would becalculated at around 8%-10% of the film’s budget but sales agents were often asking for far more than that

“There was too much competition. You end up overpaying.”

Zygi Kamasa, Lionsgate

Optimum had been acquired by French major StudioCanal in 2006, thereby increasing its buying power. Lionsgate UK (formed after Lionsgate acquired Redbus in late 2005) was in a position to bid more aggressively for UK rights. Other well-capitalised players such as Momentum Pictures, Icon Film Distribution, E1 Films (formerly Contender), Pathé and Entertainment Film Distributors (which no longer had the New Line output deal to provide it with big titles) found themselves competing head to head.

“There was too much competition. You end up overpaying,” recalls Zygi Kamasa, CEO of Lionsgate UK.
One result has been the increasing focus of many of these UK distributors on local production. Lionsgate UK is fully financing the Jason Statham crime thriller, Blitz, which is now shooting in London, while Optimum is backing Rowan Joffe’s $6m Brighton Rock, which is gearing up for an autumn shoot.

A move into production seems an expensive way to resolve the problem. Pre-buying in itself is risky but developing and financing is a big step beyond that. But what producing offers is a chance to create the bespoke movie. By owning a project at source, the distributors have the copyright as well as greater control and greater upside. They believe there is a better chance of turning up the next Bend It Like Beckham,Slumdog Millionaire or St Trinian’s — home­grown films that can make $16.3m (£10m) or more in the UK market — if they make the films themselves.

Kamasa, one of the producers on Blitz which is budgeted at “under $20m”, says Lionsgate UK has some inbuilt advantages when it comes to making its own films. Through its parent company, it has a direct relationship with top international sales agency Mandate, which Lionsgate bought in 2007.

Meanwhile, Lionsgate’s US distribution arm is always on the lookout for product and did well with The Bank Job, another Statham thriller which Lionsgate UK released successfully in the British market to the tune of $8.1m. It also made $30m in the US.

“We’re happy to consider being more than just a pre-buyer of movies. We’ll help the movie happen.”

Xavier Marchand, Momentum

“We’re much better placed as distributors to understand our marketplace,” says Kamasa, who adds that Lionsgate UK plans to fully finance or co-finance one or two projects a year. “We’re the domestic territory for these movies. Domestic is normally North America, but in this case the UK is the domestic territory.”

Optimum Releasing’s CEO Will Clarke echoes this sentiment. “We’re at the coal face. We know exactly what a ­particular film will do through its various ancillaries.”

Revolver Distribution is expected to establish its own production arm soon. “So many films are made in isolation without proper input from a distributor that when they come to market it’s too late to make the changes necessary to fully capitalise on the film’s strengths,” says Revolver’s managing director Justin Marciano.

Even companies without a ­production arm are keen to become involved at an early stage. Momentum Pictures, for example, has an output deal with Iain Canning’s Australia-UK production outfit See-Saw Films. “We’re happy to consider being more than just a pre-buyer of movies,” says Momentum’s managing director Xavier Marchand. “We’ll help the movie happen.”

“So many films are made in isolation without proper input from a distributor that when they come to market it’s too late to make the changes necessary to fully capitalise on the film’s strengths.”

Justin Marciano, Revolver

Optimum, whose production slate also includes low-budget youth film Here Comes The Summer, romance Where Rainbows End and a remake of Great Expectations, will not focus solely on UK films. It is also hatching some international projects, among them the Johannesburg-set Ponte Tower.

But as the 2009 autumn market season begins, international sales agents are wondering whether the UK market is now going to cool. Are UK distributors’ appetites for third-party titles diminishing?
The distributors deny this. But some argue there is not enough desirable product out there to sustain their businesses.

“Going into a market like Toronto, there’s not that much to buy,” says Clarke. “People aren’t bringing that much to the marketplace because the hedge-fund money has disappeared, private investment has disappeared. We have to feed the distribution arm. We’re not just going to stand idle.”



Film Total UK (distributor) gross

1 Slumdog Millionaire (Pathé) $52.2m
2 The Duchess (Pathé) $11.9m
3 Angus, Thongs… (PPI) $10.6m
4 In Bruges (UPI) $9.7m
5 RockNRolla (Warner Bros) $8.9m
Source: Screen International