BECTU submission on CMS Committee inquiry into the British film industry

28 February 2003

BECTU submission on the UK CMS (Culture Media and Sport) Committee inquiry into the British film industry.

1. BECTU welcomes the Committee's Inquiry into the British film industry, particularly at a time when the Film Council report on 'Building a Sustainable UK Film Industry' has stimulated widespread debate. As a media trade union with 27,000 members, up to 10,000 of whom may work at some point in the film industry as freelances, we have a close interest in the debate - which is the first concerted examination of the industry since the Government's Film Policy Review, leading to the report 'A Bigger Picture' in 1998.
2. Our submission will be short and to the point. We focus on the measures we believe are essential to maintain and improve our film production and distribution sectors. We recognise that as an industry we act both as a provider of services and a production base for large budget Hollywood productions using UK facilities and labour; and also as a producer of indigenous UK films, usually with medium to low budgets. We wish both aspects of our industry to flourish but we believe decisive policy measures are necessary to ensure this - especially at a time of the increasingly internationalisation of the industry (with an ever growing number of countries offering film-making facilities) and of the particular recent problems in the wake of September 11th and other specific difficulties.

Production

3. We welcome the Government's introduction of tax relief in the form of the 100% first year write-off under Section 48; and we applaud its extension to 2005. We further recognise the value of Section 42 tax relief.
4. We believe continuing fiscal support for production is a necessary but not sufficient policy measure to sustain our film industry. Very many governments around the world now offer support mechanisms to attract and encourage film production. To retain our place against the increasingly intense global competition, we must continue to do the same. We therefore commend the extension of tax relief measures beyond 2005.
5. We recognise that a key element in production-support mechanisms is the notion of the EU/British 'qualifying film' as a condition of eligibility. We are strongly in favour of retaining the labour-content provisions as part of the definition of a qualifying film. In a labour-intensive industry with a high premium on creative and technical skills, our labour and skills base is perhaps the key defining asset of our industry. Our support mechanisms should continue to recognise this.

Industrial relations

6. A key component of such a labour intensive industry is industrial relations and labour practices. This has been recognised in the debate initiated by the Films Council through the publication of the Relph Report focussing on low budget production. We welcome this debate as an opportunity to express some of our own concerns in this area, and I attach, for information, BECTU's initial response (Annex A).

Distribution

7. The key theme in 'A Bigger Picture', reinforced in the recent Film Council Report, is that we need to encourage the emergence of a distribution-led industry. We agree with the thrust of this analysis.
8. We face a continuing structural problem of a fragmented, production-led industry seeking to compete in a world market dominated by the distribution-led, integrated US film industry. The distribution process is overwhelmingly led by the US majors, with a strong interest in the production and marketing of Hollywood productions. The results are well documented. US films predominate in British cinemas and many British productions fail to achieve distribution even in the UK. Distributors, with a spread of risks and great control of rights simply do not face the crippling financial uncertainties that bedevil our indigenous, production-led industry.
9. We would therefore support measures to encourage the development of UK-oriented distributors. In particular, we would support tax breaks for distributors conditional on the distribution and marketing of British films and possibly on a requirement for re-investment in UK production.

Other measures

10. We advocate detailed consideration of mechanisms to recycle a proportion of box office revenue into UK production. In the past, of course, we have had the Eady Levy, which in its day was a very successful film support mechanism. We should note that currently the UK and Denmark, are the only EU member states to levy VAT at the full rate on cinema tickets. It may be that the German model of reduced VAT together with a recycling of some of the extra exhibitors' revenue into production is applicable in the UK.
11. We note with disappointment that the current Communications Bill contains no encouragement for broadcasters to work more closely with the film industry. The recycling of a proportion of broadcasting revenue into domestic film production is an established mechanism in France, Spain and Germany. Given UK broadcasters' significant use of feature films to generate audiences and thereby revenue, we believe similar measures should now be given consideration here.
12. We note the gradual emergence of 'e-cinema' or 'd-cinema' ie the digital distribution and exhibition of films. We recognise that this may have medium to long term implications for the cinema exhibition sector (in terms of staffing) and even more so for the film processing laboratories (which may eventually have to shift from a focus on bulk prints to becoming digital laboratories). This has major retraining implications for our laboratories - especially those larger companies such as Deluxe and Technicolor engaged in bulk print work for UK and foreign cinemas. We therefore urge a well planned transition, with appropriate emphasise on retraining, for this essential but sometimes forgotten element of our film industry.
13. On rights, we urge greater attention to the position of individual creators, as opposed to the corporate control of intellectual property. Individual writers, directors, designers and animators routinely face contracts which compel them to assign all rights upfront. We believe a more measured and conditional licencing of rights for specific and time-limited uses is a fairer approach. The industry should seek to foster rather than exploit the creative talent on which it rests.
14. We recognise the Film Council as a strategic lead body for the industry. While not necessarily agreeing with or supporting all of its policies or activities, we nonetheless support the continuation of this body, which provides a useful funding and policy focus for the sector - as evidenced in the recent debate initiated by the Council.

Training

15. We recognise the key role of training in our labour intensive industry - especially in a context in which our skills base is one of our main advantages when facing global competition for work. We therefore commend the work undertaken so far by Skillset, the industry's Sector Skills Council. We furthermore support the joint Skillset/Films Council 'Film Skills Research Project', with its aim of developing a specific skills and training strategy for our film industry.
16. Training is necessary but expensive. It is especially difficult to provide in a fragmented sector with an overwhelmingly casualised labour force. We recognise the financial support provided on a voluntary basis through the Skills Investment Fund. We believe, that this needs supplementing by inserting a requirement to contribute to public training funds as a condition of benefiting from future tax breaks. If necessary, however, we advocate a compulsory training levy on all production companies.

Conclusion

17. We welcome the current strategic debate on the film industry and believe the policy measures set out above could contribute significantly to improving the industry's prospects. We look forward to the Committee's examination of these issues.

Annex A

Low budget feature film production - a view from BECTU

1. Introduction

To start on a positive note: congratulations to the Film Council for sparking off the current debate on the future of the British film industry.

This paper is an initial formal contribution from BECTU to that debate. It takes note of the "Relph Report" on low-budget films. But it is not intended simply as a line-by-line reply to Relph. Instead it uses his contribution as a point of departure for a summary of our view of the current state of UK film production - mainly, though not exclusively, focusing on the low-budget end.

BECTU's members include many thousands who work in the film industry, or across film and TV, in just about every grade from Producer to Runner. Union membership is not compulsory, but many film industry workers nevertheless choose to join and to remain in membership. The experience of these members gives us a unique perspective on many of the things that are right, and wrong, about the industry as a whole.

The starting point for the Relph Report is that there is no single model for making successful films, and that low-budget films will never succeed if their production practices simply mimic those of high-budget films.

We agree. We want to see a range of UK films produced, from high-budget productions aimed at the international market, to innovative lower-budget works exploring aspects of British life and culture, and aimed at British audiences. As a union we are proud of our record of supporting new structures and new ways of working - such as the Film Workshops cited approvingly by Relph.

But as a union, we also deal day-to-day with the reality that film production is casualised, its workforce almost entirely freelance, living an often precarious existence from one job to the next. And yet without the constant availability of these freelance workers - the ultimate flexible labour market - there can be no film industry.

Relph's priority is to make it possible for film Producers to survive and build their businesses. Our priority is to make it possible for freelance film workers to survive and build successful careers. Both are necessary if the industry is to prosper.

This paper focuses very much on production, as opposed to script development, or finance, or distribution. Of course film production without distribution is a nonsense: film is a cultural product, its purpose is to be seen, to engage with audiences. But within the overall cycle - from script to development to pre-production, through production and post-production, to marketing and distribution and exhibition - the moment of production is uniquely privileged. It represents a bottleneck, an intense period often lasting only a few weeks which can make or break the project as a whole.

This moment of production is where BECTU's expertise lies, and the present paper reflects this.

2. Low-budget film-making

"British producers tend to throw lots of people at a short schedule with bought out overtime" (Relph 2)

This is Relph's summary of the British approach to film-making. He argues that while it may work for big-budget productions, it does not work for low-budget films - films in the £2 to £4 million range. In effect he is saying that there is a deeply conservative culture infecting the British film industry, in which it is assumed that the only way to make a film is by hiring a big crew and lots of expensive kit and then working long hours over a short shooting schedule.

So far we agree. But where does this conservative culture come from?

Relph implies that it comes largely from the crew. He paints a picture of a sullen workforce, where individuals focus on their own narrow craft rather than on the film, where crews are large because of demarcation (especially in the Art Department and Construction), and where workers insist on receiving " ... guaranteed payment for overtime that will not necessarily be worked" (Relph 2).

At BECTU, we simply do not recognise this as an accurate picture of the industry.

Contracts are not written by the crew. Budgets and production schedules are not set by the crew. Decisions on crew-size and equipment hire are not made by the crew. These key parameters of a production are put in place not by the crew, but by the Producer.

A shallow reading of the Relph Report may therefore suggest that it is throwing down a challenge to crews, to film workers. In fact, it is a challenge to Producers, and to the model of film-making which they have put in place over the last 10 or more years.

We will explore this by taking in turn the three factors referred to by Relph in the quotation above: "lots of people", "short schedules" and "bought out overtime".

"Lots of people",

One of the main themes of Relph's analysis is that British films engage large crews. He highlights certain departments where he believes this is especially true - above all the Art Department.

The 25 UK low-budget films analysed by Relph had crew-sizes ranging from about 45 to about 55. This is within the range of what we recognise as a standard crew complement. The tendency to work with crews around this size has emerged from many years of experience. This doesn't mean that it can never change. But it does mean that given the technology, and given a typically intense shooting schedule, and given an average range of exposure to risk and unforeseen circumstance, a crew of this size normally allows a feature or TV drama production to deliver the goods.

Of course if any of the parameters are changed - by shooting on DV rather than 35 mm; or by going for a more relaxed and extended schedule; or by reducing exposure to risk by reducing the number of locations - then it may be possible to look again at the size of the crew. But simply to call for "smaller crews" in the abstract is to miss the point.

This is as true in the Art Department and Construction as anywhere else. Relph believes UK Art Departments are large because of demarcation. He advocates instead: "...two or three people ... trained to handle all the floor functions from standby art director to painter to carpenter to rigger to prop man ..." (24).

His aim is not just to reduce the size of the Art Department, but to introduce: "a wholly different philosophy and organisation" (49)

This is a classic case of calling for change in the abstract. Once again it needs to be stated: decisions on crew-size in any Department are made not by the crew itself, but by the Producer. In the case of the Art Department, its size and mix of skills should flow from the demands of the script, from strategic and aesthetic decisions about the look of the film, from the balance between studio and location work, and so on. Dogme chose to reduce or eliminate the use of design as part of its aesthetic. Fine, so long as the decision flows from the aesthetic, and not from an abstract drive to reduce crew size. (Incidentally, Dogme as a school of film-making was driven by Directors rather than Producers. Is this significant?)

Meanwhile the question of multi-skilled stand-bys is inseparable from wider crew dynamics. When a film crew grows beyond a certain point it becomes uneconomic not to have specialists available if their presence can avoid even minor delays. For instance, if it costs £20,000 to keep a crew plus their gear on the road for a 10-hour shooting day, then it makes sense to engage one extra crew member at £200 per day if his or her presence can avoid even a six-minute delay in the schedule. But this only makes sense if he or she is sufficiently knowledgeable to avoid the delay. It may not make sense if he or she is a multi-skilled standby with only shallow knowledge across a range of complex disciplines.

Quite separately, Relph's proposal is hair-raising in its implications for health and safety. Riggers in particular perform high-risk work. For this precise reason, BECTU and PACT jointly run a special grading scheme - SITAC - to provide the industry with a pool of experienced and qualified Riggers. The idea that film industry rigging should now be undertaken by multi-skilled operatives who also do art direction, painting, carpentry and props would be a massively retrograde step.

"Short schedules"

BECTU has been campaigning for civilised working hours and a better work-life balance in the film industry for many years. It is not exaggerating to say that this is the single issue which comes up most frequently from our freelance members working in film and TV. This is why we took the British Government to the European Court to challenge their implementation of the Working Time Directive. This is why we have run numerous Employment Tribunal cases on behalf of freelance members.

We unreservedly welcome the proposal for a new approach in the low-budget film sector, moving away from long working days packed into short schedules. We believe that thinking more creatively about scheduling will open up the possibility of creative thinking in other areas.

In particular, re-thinking the schedule allows a re-thinking of crew size and the size of particular departments. The UK "standard complement" of 45-55 crew members reflects the UK tradition of long working days packed into short schedules. In effect, the size of the crew is a form of insurance against risks which the schedule itself creates. Reduce the intensity of the schedule, and you reduce the risks.

"Bought out overtime"

It may be instructive to enter the vexed area of pay and financial rewards via Relph's discussion of the dilemma facing UK film Producers.

Most UK Producers - and certainly all Producers in the low-budget sector - move from one standalone project to the next. They are chronically under-capitalised, unable to spread their risks across a slate of projects. This is the heart of the problem which Relph wants to solve: he wants to create the conditions for Producers to survive and build their businesses rather than start each new project with no money and a clean sheet of paper.

Because they are under-capitalised, Producers are in a weak bargaining position with financiers, investors, sales agents and distributors. They are under pressure to give away rights as a precondition for getting the film made. So it makes sense for them to maximise their fee income at the front-end because the possibility of earning from the back-end is precarious or non-existent. Since Producers' fees are more or less linked to overall budget size, there is therefore an incentive for Producers to seek the maximum achievable budget. Sales agents also have an interest in colluding in this.

If production budgets end up being unrealistically inflated, it is therefore as a direct result of the under-capitalisation and fragmentation of UK production companies.

Relph shows great sympathy towards Producers facing this dilemma. He argues that they are, after all, simply trying to survive within a financial and distribution system which is beyond their control. And he believes that: "Driving producers fees down damages the industry ... " (Relph 12)

We believe that exactly the same logic applies to the crew.

Individual freelance technicians and other film workers are also trying to survive in an industry whose overall structure is beyond their control. When after three months without work a freelance is offered a job based on a 60-hour-week over 8 weeks, he or she will naturally want a guarantee that those 60 hours will be paid for. Freelances are in exactly the same position as Producers: faced with an uncertain future, they must seek to secure their income here and now.

There is also another sense in which individual freelances are in an equivalent position to Producers. Just as Producers seek security and control over their destinies by building their businesses, so freelances seek security and control over their destinies by building meaningful careers in the industry. They want to make progress, to achieve recognition for their accumulated experience and skills, and to improve their earning power. And to the extent that they succeed in this, the industry's stock of skills and experience increases and the industry benefits.

But right now, for many freelance workers, it simply isn't possible to build a career. The constant availability of large numbers of "fresh and hungry" newcomers attracted to a glamorous industry, willing to work for low - or no - wages, means that in some Departments there is relentless competition in the junior grades which undermines everyone's ability to make progress. Sadly, Relph seems to believe that this is a good thing. He actively encourages low-budget Producers to "look for fresh & hungry talent" (48) because it comes cheap and helps to keep budget down.

Encouraging the employment of inexperienced newcomers simply as a way of under-cutting the wages of more established freelances is the worst sort of short-termism. It is not part of the solution, but part of the problem. It contributes to the chronic insecurity, and inability to build coherent careers, which now threatens the industry's workforce.

There is in any case little need to "look for" new talent. It is spilling out of media courses in quantities which the industry cannot possibly absorb. The issue is not to "look for" it, but to provide a proper framework of work experience, training and career progression so that over time, raw enthusiasm becomes a real asset for the industry.

The individual freelance's ability to earn a decent living, and thus build a coherent career, is a crucial element of the film industry's survival plan. Right now we are losing talented, experienced people from the industry because of its chronic insecurity, and because the only sort of working life it seems to offer is one which see-saws between manic overwork and unemployment.

This takes us to the question of pay and financial reward. Part of the package proposed by Relph, to reduce the up-front costs of low-budget production, is partial deferment of crew wages. He is careful to spell out that his "meaningful deferrals" should not be confused with the rip-off deferrals which we have seen in the industry in recent years.

There are certain key principles here. Firstly film workers must receive at least the agreed basic rate of pay for their work at the time when that work is performed. This is non-negotiable. Freelance film-workers live (like the rest of us) in an expensive country, where rents or mortgages and food bills and clothing bills need to be paid every week or every month. These costs can't be "deferred".

However BECTU is prepared to consider proposals for film-workers to have additional entitlements arising from their work. For instance, IF an agreed rate is paid, and IF a project meets an agreed definition of a low-budget film, and IF a civilised schedule of working hours is in place, then we might consider some form of additional equity stake in the project. This might involve Relph's "revenue corridor" giving a claim on box-office take, pari passu with all other investors. It could not involve the "back-end" or "in-profit" arrangements which continue to plague the grubbier corners of the industry. Certified film industry accountants or other professionals may have a role to play here to audit and approve the financial details.

We are prepared to discuss these possibilities but only as part of a wider set of changes. We believe a win-win outcome is possible: an outcome where lower-budget films have a greater chance of commercial success leading to a greater overall volume of work; and film-workers benefit from more civilised hours and conditions leading to an enhancement of the industry's stock of skills and experience. But the devil, as always, will be in the detail.

3. Do film workers care about film?

On the culture of film-making in this country, Relph says: "Many UK technicians ... tend to be more focused on their jobs than they are on the end product" (Relph 2)

This is an interesting comment. It is expressed from a Producer's point of view and it presumably reflects Relph's experience. But what lies behind it? We believe that what lies behind it is the decline of a spirit of partnership, and of respect for the work of others, in the industry.

In recent years, apart from the invaluable efforts of a few organisations such as FT2, structured training and apprenticeships have largely disappeared from the film industry. The Production Department in particular - which as Relph points out has grown in size - has tended to fast-track young, bright, but inexperienced newcomers who have little working experience in the industry and little knowledge of what workers in other Departments do. Because of their strategic location, these individuals should be in a position to "set the tone" across the production. But their inexperience or ignorance means that they are ill equipped to do this.

The result is often a sullen stand-off between Production and other Departments. From the point of view of Production, it looks as if technicians and other workers don't care about the film. From the point of view of those technicians and other workers, it feels as if Production doesn't care about, understand or respect the work that they are doing.

Two possible answers suggest themselves. Firstly, recruits to the Production Department should be required to acquaint themselves with the work of other Departments, whether by placements or some other method. And secondly, individual film productions should take the time to show some appreciation of the work of their crews. Simple gestures like pre-production parties or wrap parties where everyone is invited could make a big difference.

4. Summary

• We share the aim of encouraging a range of production practices appropriate to different scripts, visions and aspirations.
• We see Relph's criticisms - many of which are valid - as a challenge first and foremost to Producers. Producers have created the current, failing production model.
• Questions of crew size and balance are inseparable from questions of scheduling and organisation. A new approach to scheduling is the best way to tackle this complex area.
• It follows that attempts to reduce crew size as an end in itself will fail.
• If other appropriate conditions are in place - including, crucially, payment of an agreed basic rate for work done - we would consider proposals for film-workers to participate in other financial arrangements, such as some form of equity stake with a claim on box-office take pari passu with all other investors.
• Producers are entitled to seek the security necessary to build their businesses. And by the same token, freelance film-workers are entitled to seek the security necessary to build their careers. Both are necessary if the industry as a whole is to prosper.