RESEARCH: Business of Film

What is the Cultural value of Film?

When it comes to public expenditure or assistance in the arena of arts and culture, including film, policy-makers need to be able to measure and articulate the ‘value’ of their intervention. David Throsby is an economist with specialist interests in the economics of the arts and culture. The diagram to the left reflects his attempt to make sense of this debate. He bases his point of view on a definition of value that encompasses cultural value. In the UK, the BFI (British Film Institute), and its predecessor the UK Film Council, have published a number of reports on the economic and cultural value of film. The most recent report on economic impact found that film contributed £3.67 billion to the UK economy. Studies on the cultural impact of film have shown how films, apart from being popular leisure activities, carry powerful personal and political messages for viewers, give new insights into other cultures, and help reflect our own cultural identity back to ourselves. 

Why film is important to the economy?

This graph shows the amount of money spent in the UK on feature films over the last 20 years. You can see that the UK spent on domestic UK films (the green line) has been reasonably constant over this period of time. The UK makes many independent films that are identifiably British, such as Paddington, The Inbetweeners, The Imitation Game, Mr. Turner, Pride and Philomena. Many of these films perform well at awards time obtaining BAFTAs and even US Academy awards. This is, naturally, a source of pride for the UK, and is one of reasons that there are so many Hollywood stars that are British. Another increasingly important aspect of film and screen production is tourism. Film tourism which means visiting a place that features in a film or television programme is becoming more and more popular. Approximately £840 million of tourism spending by overseas visitors can be due to film-induced tourism. Film is often regarded as a driver of the other creative industries, in that it is high profile and often makes use of the highest design and creative skills. In the UK, film was the first creative industry to be supported by film incentives in recognition of its importance. Now fiscal incentives are available for high-value television, animation, games and for certain theatre productions.

The benefits of inward investment

Some organisations like the BFI (British Film Institute) are funding for development and production of British independant film making. There are two other public service organisations like the BFI that are BBC Films which is the independant film arm of BBC and then Film 4 which is another film arm of Channel 4.

Thinking about the Value Chain

The term 'value chain' is used to describe the series of steps that run from the first creative idea that starts a film-makers project all the way to the end of the commercial life of the completed feature film.

The picture on the left is an illustration of the seven main stages of the value chain when creating a feature film. 

The film producer is the one filmaker that stays with the film on the entire way of the value chain until the feature film is in the hands of the distributors.

Distribution:

Distribution is the first time people come together to think of ideas when thinking of starting a film project, this is the first step of the value chain.

Finance:

If one of the big six production companie like disney were to start thinking about making a feature film, they would need to fund the movis, they have lots of money from previous films to fund the creation of their new film. However for smaller, more independant companies to start a film, they would'nt have as much money to fund their movie. But independant movie studios would probably reach out to companies such as the BFI where they may give the independant film studio a grant to create their movie, usually not much compared to what the big sixes budget might be.

Pre-Production:

This part is before the film is being made, so the preperation of the movie where the directors and producers gather actors and actresses as well as costume designers, set designers and a camera team and equipment. This is where most of the money is being spent on actors and props and tools and materials for the designers and makeup artists. This may be the time with the highest risk due to the uncertainty of how much of their budget they should spend on certain things.

Production:

This is the part of the value chain where everything is happening, the filming, this is also where there are the most people working on the project. This produciton part also includes post-produciton where all the editing is done as well as bringing certain parts of the movie to life with CGI and VFX. But this only happens if the production company can afford it, so this may only be done with one of the big six produciton companies and not with small independant films.

Distribution:

This is the process of distributing the film to cinema chains, broadcasters, maybe online and in the end creating hard copies of the film and distibuting those to DVD stores, supermarkets and other retail stores.

Exploitation:

This is the part where the customers experience the film, this means the customers viewing the film either in the cinema or from buying a hard copy. Part of this exploitation process is getting reviews from the film and getting feedback.