TUESDAY 20 MAY 2003

MR JASON WOOD, MR DICK PENNY, MR IAN CHRISTIE FBA, MR JOHN WILKINSON AND MR BARRY JENKINS

  Q300  Mr Flook: I get the impression that you are different parts of the same industry in the sense that you guys are not asking for any subsidy and you guys are asking for a bigger subsidy.

  Mr Penny: Again, there are shades of grey within it. The largest operator in the specialised sector is City Screen. In the main they operate totally commercially, but of course what that means—and you have heard the example of Aberdeen—is that the degree of specialism is not as great. What we have is shades right across the spectrum. Where City Screen have benefited from having support is in being able to develop new sites, so capital assistance which had previously come from the Arts Council. If I could ask Jason to come in for a minute, there has been quite a bit on education as well.

  Mr Wood: Yes. Not only have we developed new sites, but what we have tried to do is significantly contribute to film culture through education, touring packages, as well as taking many of the bfi touring packages on great film makers, such as Visconti, who is doing very well at the moment with The Leopard, Bergman, Ozu. We have also put together our own touring packages, retrospectives and seasons throughout City Screen sites. We recently brought over a series of films from Kazakhstan. We are doing a new European season of ten films from countries about to enter the European Union in 2004. We do very much try and implement our own culturally varied programmes of films and, as I say, we tour those throughout the City Screen sites and make them available to our colleagues in the AIFE. We also try and support film makers that would not ordinarily get screened. We recently distributed a film ourselves called AKA by a film maker called Duncan Roy. The reason we were able to do this was that we only released it on 35 ml print. We actually released it on digi-beta and beta tapes, which is the very low end; it is very cheap to do. We are trying to provide screens and screening spaces for people that otherwise would not have a voice and also to serve the community.

  Mr Penny: It is not so much that we are asking for more subsidy. What we are suggesting is that if we do want to promote amore diverse cinema culture we need investment and that needs to be targeted and sustained investment.

  Q301  Mr Flook: But is that not a local authority issue rather than a parliamentary one?

  Mr Penny: As I say, if you look at any other art form you will find that it is about partnership between national bodies and local bodies, and certainly that is what happens with specialised exhibitors. It is just a much smaller network than it is for, say, theatre or for visual arts.

  Q302  Mr Flook: In Taunton the local authority, which is now no longer controlled by the party that did control it, kept Odeon from expanding because they wanted a cinema in the centre of the town rather than one on the edge of the town. The fact is that the one on the edge of the town was very successful; their hopes for one in the centre of town are not going to come to fruition for several years, and I am sure that the people of Taunton would want an expanded Odeon before they would want an art house, by a long shot.

  Mr Penny: I suspect that the majority would. We represent a very specialist part of the market. We are probably 3% of the market.

  Mr Wilkinson: It is 1.85%.

  Mr Penny: However, what we would argue is that that is an absolutely vital part of the market for the future. Yes, we are specialist but does everybody eat at McDonalds? They do not. What we need is a diversity of culture and a diversity of offer.

  Q303  Mr Flook: We are here to look at whether there is a British film industry. If we were to subsidise you we would be subsidising not just the British film industry, so technically it does not come within the remit of what we are looking at, whereas if we subsidised film makers, film producers, film distributors, we could as a country much more direct it at the British film industry rather than what you choose to see as culturally relevant, which could come from anywhere in the world.

  Mr Penny: Anywhere in the world, absolutely. I would argue that cinema is a world industry now, that if British films are going to make a profit they need to make a profit on the world stage. Our film makers need to understand what is coming from other cultures in the world so that they can really express in the most exciting, innovative, diverse way the messages that they want to put out. If we see ourselves as an isolated territory then we are guaranteed to fade.

  Q304  Mr Flook: But you do not need to go to the cinema to do it. You can watch it on TV.

  Mr Penny: You can watch it on the TV. The cinema is the shop window for film. There is no doubt that a film will play better on all other media if it has done well in the cinema. Also, what cinema offers is social collective experiences. It offers the opportunity for people to debate a product, to debate the ideas, to share cultural experiences. Just go back to the statement I made from the Film Council's own policy, that film and moving images are the single most important source of education, information and culture in the world today, what goes out from the British film producers that works goes across the world. TV programmes do not necessarily do so.

  Q305  Ms Shipley: You said that you aimed to bring culture to everyone. How do you define "culture" in that context because obviously blockbuster is a culture.

  Mr Jenkins: Specialised culture, I suppose.

  Q306  Ms Shipley: Do you think it is important by your definition that that is supported?

  Mr Jenkins: Supported, as I said earlier, meaning really supporting the distribution companies.

  Q307  Ms Shipley: Do you think this cultural aspect by your definition of culture is an important part of the industry?

  Mr Jenkins: Yes, I do.

  Q308  Ms Shipley: Why?

  Mr Jenkins: Because it gives a much broader outlook for the public.

  Q309  Ms Shipley: Having established that, you told me that you cannot get hold of prints and so on, so what could you do that you are not doing that would help support this need for cultural diversity, that would enrich the industry? What could you specifically do?

  Mr Jenkins: We cannot do anything. Without the actual product there is nothing we can do.

  Q310  Ms Shipley: So the only way to get the product would be to pay, obviously?

  Mr Jenkins: Yes.

  Q311  Ms Shipley: So you think that the taxpayer should pay?

  Mr Jenkins: No.

  Q312  Ms Shipley: Who should pay then?

  Mr Jenkins: The producers, the distributors, they should take as much of a gamble as we take in putting that film out hoping that it is going to make a profit.

  Q313  Ms Shipley: At the moment you do not think they are paying enough?

  Mr Jenkins: There is a reluctance on their part.

  Q314  Ms Shipley: With a percentage of profit from the various segments of the industry specifically hypothecated to feed back in, would that be a useful loop?

  Mr Jenkins: No.

  Q315  Ms Shipley: Why not? You have just said the producers and distributors should pay. I only added you in as exhibitors and you could negotiate different percentages. Why could you not all pay a small percentage of your profit?

  Mr Wilkinson: We would not be paying, would we, the public would be paying. When there was the Eady Levy it was passed on and it was 11%. In the same way in France currently the VAT is approximately 6% and the balance is paid on the levy, approximately 11% which makes it up to the standard rate of VAT of 17%, so they do not notice the difference. So if you wanted to suggest—

  Q316  Ms Shipley: I am not suggesting that actually. I am quite interested then that you really do think the producers and distributors are taking too much profit out of the industry and really they should be required somehow to put it back in. You did say when I asked should it be the taxpayer, no, it should be the distributors and producers, so what mechanism would you use?

  Mr Wilkinson: Retained profit. One of the problems of the British film industry, as you noted at your last inquiry, was that films in the United Kingdom were made in one-off episodes and that there were no companies. The Lottery through the Arts Council did put funding into six organisations to try and create embryonic British studios.

  Q317  Ms Shipley: I am sorry, that is not what we were just discussing. I was interested in the idea that producers and distributors should pay more of their profit, I understood to support the industry, because it is vital for cultural diversity and everything, that was the argument, so I do not understand what the mechanism is for them to do it. I am interested in knowing because I think it would be useful.

  Mr Jenkins: I do not think they should put more of their profit in. What I am saying is the exhibition industry, be it independents or majors, has invested over the last few years an awful lot of money in bringing to the UK 3,800—

  Q318  Ms Shipley: But you have only done that to make yourself profit, it is not philanthropic.

  Mr Jenkins: So distributors and producers should look at it in the same way. They should invest in the product that is put into the cinema.

  Q319  Ms Shipley: You have not invested and you just said you would not invest a percentage of your profit to enrich the industry. You are only doing it to make profit for your investors, presumably, nothing wrong with that, but you are not ploughing it back into the industry.

  Mr Jenkins: We are ploughing it back in by giving people the luxury and comfort they want to go and see these films.

  Ms Shipley: No, you are not, no.

  Chairman: I am going to have to move on. We are 13 minutes late for the next group of witnesses. Gentlemen, I would like to thank you very much for your different and variegated experience. You have been extremely helpful.