Coming soon to a cinema near EU

Date: 02/04/1998

By Peter Chapman

THE producers of Mojo - a tale set in London's sleazy Soho district at the start of the rock 'n' roll years - were delighted when it won rave reviews from critics at film show screenings two years ago.

But enthusiasm soon turned to frustration when the UK's Portobello Films, producers of the 1.4-million-ecu movie, failed to get the finance together to distribute it in key cinemas.

Steve Butterworth, in charge of finding finance for Mojo, says this sad story is retold repeatedly across the EU, where films costing millions of ecu remain unseen because of the lack of distribution opportunities.

"In the UK alone there are 70 undistributed British films. It's a pity because there is now more production finance available," he says, adding that Mojo secured production finance from the British Broadcasting Corporation (BBC), British Screen and BSkyB without too many headaches.

In order to get their films on to the screens, he explains, producers need to penetrate the stranglehold of cinema chains mostly owned by the US majors.

In a vicious circle, cinemas are reluctant to take on risky small-budget films when they can fill their seats with multi-million-ecu US blockbusters. This results in a scarcity of available venues, which raises the cost of getting a film into cinemas.

"The problem is made worse by the increasing availability of production finance. That has made it even more difficult to get films out into the theatres," explains Butterworth.

For Mojo, there is a happy ending. Butterworth finally managed to win the 44,800-ecu funding he needed for a cut-price run in London's prestigious West End cinemas this July.

"We have managed to raise the money from the same financiers to get a four-screen release in London and six screens in the regions.

"The cash will allow Mojo to get what is known in the film industry as a good 'prints and advertising spin'," he explains. "Part of the reason we managed to get July is because no one else wants to show their films during the World Cup. I suppose the down side is that fewer people will want to go to the cinema then."

Despite such problems, no one can argue that the difficulties facing Europe's film producers are being ignored.

For years, individual member states and the EU as a whole have been running programmes such as the current 310-million-ecu Media II effort which encourages the audio-visual sector with grants for production, training and distribution.

However, critics argue that the relatively paltry Media II funding is just too little and too complicated to obtain to make it worthwhile.

"It is quite a pain in the neck trying to get funds from Media II and then you might not succeed," says Butterworth. "You need to devote a department to applying for these grants and that is difficult to justify just to get a grant for 6,400 ecu."

But at a time when the British-made but US-funded film The Full Monty has broken box-office records across the world, policy-makers are beginning to stand up and take notice of the potential of a flourishing EU film industry.

Audio-visual Commissioner Marcelino Oreja has launched a think-tank filled with top Union industry names to ponder new ways to boost an EU industry that is forever in the shadow of Hollywood. The UK government is adding its weight to a conference on the future of the Union's audio-visual industry to be held in Birmingham next week (6-8 April).

Oreja says distribution policy is likely to play a key role in the think-tank's report, expected in September, which will form part of preparations for the successor to Media II, which runs its course at the end of 2000.

Other ideas include establishing a European Film and Television School, and EU versions of the Oscar and Emmy awards which Oreja says would emulate "the vital, catalytic role" played by their US counterparts.

Other priorities in the audio-visual debate remain marketing, training, script development and production of content to fill the hundreds of new channels which digital technology will offer.

Meanwhile, Oreja is looking to industry to propose new mechanisms to "leverage more private sector investment into audio-visual production in Europe".

This follows the collapse of a 100-million-ecu guarantee fund scheme which was finally blocked last year by a coalition of tight-fisted member states led by Germany.

One such idea has come from PolyGram Filmed Entertainment president Michael Kuhn, who has called for the setting up of a bank 'securitisation scheme' which would provide up to 500 million ecu of film cash, mostly from the private sector, but with a 20-million-ecu contribution from the EU budget.

Under the PolyGram scheme, the cash would finance four or five production company 'slates', or packages of ten English language films.

The industry admits that film production will not grind to a halt if its latest plea for more public sector support goes unheeded.

Successes such as 20th Century Fox-funded The Full Monty, which has grossed 40 million ecu in the US alone, have already alerted the financial sector to the potential rewards to be reaped at the box office.

Anxious to take advantage of this, leading French bank Société Générale has just opened a finance unit in the City of London to channel funds to promising films from both inside and outside the EU.

Premila Hoon, who is in charge of the new unit, says the bank has not placed any specific ceiling on the amount of funding that can go to film projects.

"There is no limit to the business we can do, although it is a small part of what is a large bank and we will have to compete with other sectors," she says,

Hoon adds that Société Générale will attach great importance to distribution when it puts together financing packages for non-US film companies which struggle to compete against the much more integrated Hollywood industry.

This means that the bank will fund individual films on a one-off basis, or give its backing to a whole slate, covering production and vital distribution and marketing costs if needed.

"The US industry is very integrated. The big studios have a machinery from development to distribution and broadcasting. That gives them a large advantage from economies of scale. That's a problem for Europe," says Hoon. "In contrast, European industry is fragmented by language, and by and large there are national structures in place."

While PolyGram Filmed Entertainment is calling for a partly EU-funded film support scheme targeted at likely box-office successes in English, Hoon sees scope for extending finance to films from all parts of the Union.

She stresses that the decision of a French bank to set up a film finance unit in London does not mean that French or other non-English speaking sectors of the industry will be ignored. "There is no significance in us setting up the unit in London, except that an opportunity came up. It might equally have been set up in Paris," she insists.

Major feature on the challenges facing the EU film industry.