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James Hickey's Presentation at 'Day of Debate'
14 Apr 2003 :
FILM PRODUCTION IN IRELAND

THE WAY FORWARD FOR A CULTURAL INDUSTRY

IRISH FILM BOARD 10TH ANNIVERSARY SEMINAR

1. COMMERCIAL VENTURE AND CULTURAL EXPRESSION

In an article in the March 21-27 2003 edition of Screen International the following report was published:-

Screen International

“The criteria for European public film support could shift to a more commercial footing after the continent’s leading film funding bodies unveiled an EU-wide accord this week. Public funding bodies including the UK’s Film Council, Germany’s Filmforderungsanstalt and France’s Centre National de la Cinematographie (CNC), are aiming to set the agenda in the run up to the European Commission’s review of state support for film after 2005. The bodies are calling for a clearer definition of the rationale for supporting films arguing that support cannot be confined only to so-called cultural films – as all films are both a commercial venture and a cultural expression…..Other signatories include Spain’s Instituto de la Cinematografia y de las Artes Audiovisuales, the Irish Film Board and the Nederlands Fonds v d Film.”

If ever there was a time when the rationale for public funding support for film in an Irish context needed to be elucidated the time is now. The fact that both the tax based film incentives and the continued existence of the Irish Film Board came under the microscope of critical examination at governmental level as disclosed in the media in one week last November puts an enormous onus on the film industry to respond with coherent and cogent arguments to justify continued governmental support for what the film funding bodies of Europe have now defined as “both a commercial venture and a cultural expression”.

2. IDA V IFB (1993)

In the context of the 10th Anniversary of the reconstitution of the Irish Film Board in 1993, it is interesting to note that the re-establishment in 1993 was the outcome of a vigorous dialogue in the early 1990’s about whether the appropriate governmental response to the Irish film industry should be through what was then called the IDA and would now be called the IDA Ireland / Enterprise Ireland or through a separate dedicated film funding agency.

In fact a government committee was established by the then Taoiseach Albert Reynolds in the Autumn of 1992 with a brief to implement two reports on the Irish film and television production industries which had been published in the then recent past. The first report was called the Coopers and Lybrand Report and in fact focussed on the IDA as the vehicle for the governmental response to the development of the Irish film industry. In the section in the conclusions on Role of State Agency Support two full pages were devoted in the IDA with one page for the other states organisations which were the Arts Council (for low budget films), the Irish Film Centre (one stop shop for information) and the Irish Trade Board and Fas. No mention was made of re-establishing the Irish Film Board.

3. TEN YEARS OF THE IDA?

One might speculate how the Irish film industry might have developed in the 1990’s and into the present century in the hands of the IDA and now IDA Ireland / Enterprise Ireland. Would there have been in addition to the multibillion dollar Intel factory facility in Leixlip a multibillion dollar Paramount Pictures Film Studio facilities at Ardmore? Would we now be looking at the successes or otherwise of locally established film production companies the equivalent of Iona Technologies, Baltimore Technologies and Riverdeep? Would the newspaper columns be full of discussions of the share values and profitability of companies headed up by the film industry equivalents of Chris Horn and Barry O’Callaghan.?

4. THE IDA VISION DOES NOT MATERIALISE: THE IFB IS REBORN

By the time the Coopers and Lybrand Report got to the Taoiseach’s committee for implementation in the Autumn of 1992 it was clear that any such vision of the future had not as yet been formulated by those on the Taoiseach’s committee from the IDA. In fact it was only because of the increasing frustration of the chairman of the Taoiseach’s committee Paddy Teahon at the unwillingness of the IDA representatives on the committee to step forward with a coherent plan for the future development of the Irish film industry, that the proposal from some members of the committee that the Irish Film Board be re-established was adopted. The flat contradiction that this represented in the committee’s brief to implement the Coopers and Lybrand Report was not adverted to in the Taoiseach’s Committee Report.

5. SECTION 35 AND INDEPENDENT TELEVISION PRODUCTION

The Taoiseach’s committee report also had two other key recommendations in 1992. The first of which was to extend the tax relief then only available to corporate investors under Section 35 of the Finance Act 1987 to individuals and the second of which related to the development of independent television production in Ireland. All of these recommendations were then handed to the then incoming Minister for Arts and Culture Michael D Higgins who promptly implemented a new policy regime for Ireland in the area of audiovisual production.

The result of the implementation of the Taoiseach’s report was in a sense three separate but related industries as follows:-

(i) The commercial film production sector focussed on attracting international productions to shoot in Ireland and supported by the film incentive comprising in what was then Section 35 and is now Section 481.

(ii) The indigenously originated film production sector primarily supported by the Irish Film Board but also with the benefit of the tax based incentives.

(iii) Independent television production primarily supported by a quota arrangement for a minimum level of outsourcing by RTE of its television production work.

(1) Commercial Film Production

In the early years of the extension of Section 35 film and television production) rose significantly in Ireland. The most obvious from the public point of view were feature films such as Braveheart and Saving Private Ryan but there were always also the Neil Jordan and Jim Sheridan exceptions including Michael Collins, The Butcher Boy and In the Name of the Father. There was also incoming television production such as Ballykissangel and the Ambassador. None of these received funding from the Irish Film Board but all of them availed of the film incentive and to a greater or lesser extent production in Ireland was generated by the availability of the incentive. This activity continues to the present day with notable recent productions including Reign of Fire, Veronica Guerin and Ella Enchanted. There also have been a host of not so large budget film productions. The largest part of the figures for audiovisual production activity in Ireland in the most recent IBEC Report for 2001 viz EUR259m budget expenditure and EUR141m Irish expenditure comprise of those kinds of productions. This is the industrial coal face of film and television production in Ireland and does not receive funding or support from the Irish Film Board.

(2) Irish Film Board Funded Production:

The Irish Film Board has over the last 10 years provided development and production funding for a host of films, the production budgets have been in the lower to mid-range of feature film production cost and range from Korea directed by Cathal Black to About Adam directed by Gerry Stembridge. The challenge and difficulty from the Irish Film Board’s point of view is to match up to the successes of films which have been made before it had been re-established such as My Left Foot, The Field and to a lesser extent Into the West and Hear my Song. However luck which can be a significant part of such commercial success has eluded this part of the film production sector in the last 10 years.

Mid-Range Budgets v Low Budget Production:

There has also been a perception of increasing difficulty in funding mid-range films. My own view however is that the much announced (particularly in the Irish Times over the last month) demise of the mid-budget film is premature. In fact last year the Irish Film Board funded at least 7 feature films made with budgets of between EUR2,500,000 and EUR10,000,000 being Mystics, The Magdalene Sisters, The Actors, Song for a Raggy Boy, Intermission, Watermelon and Blind Flight. In the same year 6/7 lower budget films were made of the EUR1,000,000 range of budget (including significant deferments).

Non IFB

The Roman Spring of Mrs Stone
Ella Enchanted
Chasing the Dragon
Fathers and Sons
In America
The Great Ceili War
Dark Eagle

Low Budget IFB

Goldfish Memory
Halo Effect
Headrush
Dead Bodies
The Honeymooners
The Real Thing
Ulysses

Mid Budget IFB

Song for a Raggy Boy
Blind Flight
The Magdalene Sisters
Mystics
The Actors
Watermelon
Intermission

The average investment by the Irish Film Board in the mid-range films was approximately 15% of the budget whereas the average investment in the lower budget films was 60% with most of the balance made up of deferments. The result is that mid-range films give a four times better return on IFB investment than lower budget films.

This is not to say that the Irish Film Board should not continue to invest in a small number of lower budget films each year. They provide a vital platform for young directors. They do not however provide a basis for developing producers who can raise finance and attract talent. Lower budget films cannot and should not however form a large part of production investment by the Irish Film Board in any one year if for no better reason than it is unsustainable in the long term. For directors like Robert Quinn and Lance Daly it represents a start but it cannot represent an ongoing future for them in film production in Ireland. What they need is producers who can attract significant finance and talent not a life of perpetual low budget hell.

(3) Independent Television Production:

Total expenditure by RTE on television production in Ireland is now heading for EUR200,000,000 a year. This comprises both in-house and independent production with independent production heading for EUR40,000,000 a year. Increased commitment by RTE to drama including independently produced dramas such as On Home Ground, Bachelors Walk and Ros na Run reflects a significant level of commercial activity in this cultural industry. Yet the Irish Film Board has set its face against this kind of production.

6. OVERVIEW

As one of the few people who probably works constantly in all three of the areas outlined above, what is initially hugely impressive in economic terms is the scale of commercial activity that this cultural industry represents. It is however frightening to behold the lack of an overview focus on the coherent development of all three parts of what is in effect the same industry going forward. When you add all three of them together even in purely monetary terms you get a sector which (using IBEC and RTE figures and adding in commercial and corporate video production) has a turnover of EUR500m a year and employs at least on an on and off basis at least 15,000 people a year with over three thousand full time jobs or their equivalent (1750 in film, 1250 in RTE). It is therefore by far the largest cultural activity in Ireland. In fact it is far closer to a significant industrial production sector of the Irish economy than the normal perception of a cultural industry.

7. THE SURVIVAL OF THE THREE INDUSTRIES

If tax based film incentives cease in Ireland after 31st December 2004 all of the first industry referred to above viz commercial incoming film production will relocate to the UK and elsewhere where tax and other incentives continue. If Irish scenery is needed the Isle of Man and Northern Ireland will be more than sufficient. All you have to look at is “Waking Ned Devine”, “Shergar” and “Puckoon” for this to be confirmed.

Also if there are no film tax incentives in Ireland producers in the second industry referred to above and funded by the IFB will come under significant pressure to locate production where there are such incentives particularly the UK. The drift of policy on film tax breaks in the UK is heading towards requiring more production activity for the films to qualify as “British films”. Even lower budget films will be tempted by the lure of tax incentives in the neighbouring jurisdiction and if the insistence there is on greater production activity there production activity will diminish in Ireland.

Only low budget films totally funded by the IFB where the IFB can insist (notwithstanding the tax benefits in the UK including Northern Ireland) that production takes place in the Republic of Ireland will those films continue to be made here. This would be low budget film hell indeed

As to the third industry television drama and other TV production commissioned by the public service broadcaster would still be made in Ireland but RTE would be unlikely to invest in films being made in the UK or elsewhere or to fully fund films themselves here. The IFB has already set its face against funding TV drama in the absence of film investment from RTE.

If the IFB were only funding low budget culturally (but not commercially) drive film production, it would be difficult to resist the argument (and in fact the recommendation of the Coopers and Lybrand Report in 1992) that such funding should be provided by the Arts Council. Ireland would certainly have fallen below the radar of developing EU policy of justifying incentives for film production on both a commercial and cultural basis.

If film tax incentives are removed in Ireland only with the abolition of all tax incentives throughout the European Union and Irish production costs being significantly (20% or more) lower than other EU countries (particularly the UK) would commercial film production in Ireland survive. Neither eventuality is particularly likely. The result is that in the absence of film tax incentives in Ireland continuing after 2004 the demise of the Irish Film Board would not be long in coming and Ireland would no longer be significantly involved in the greatest cultural industry of the 21st Century.

8. THE KILKENNY REPORT

The last major policy statement of government in the area of film and television production came through the Kilkenny Report published in August 1999. It is worth remembering again the first five key conclusions of the Report as follows:-

1. Film and television are the most powerful contemporary means of cultural expression.

2. A strong continuing partnership between the State and the industry is critical for the foreseeable future.

3. The main driving force of the strategic development of the industry must be a strengthened and restructured Bord Scannan na hEireann / The Irish Film Board.

4. The Section 481 tax incentive must continue to underpin the development of the Irish film and television industry and must be extended for a period of at least 7 years.

5. Growth of the film and television industry must become a central element of Irish industrial development policy.

9. IDA IRELAND / ENTERPRISE IRELAND

Notwithstanding the retirement of the IDA from the fray in 1992 they too have been unable to avoid the lure of the content creation industries. Not only does what was the IDA now comprise IDA Ireland and Enterprise Ireland but there is also a policy making body FORFAS overseeing the two. In November of 2002 FORFAS published a report entitled “A Strategy for the Digital Content Industry in Ireland”. One has to ask what industry are they talking about.

The Report itself says “that the digital content industry is enormously complex and varied, comprising a disparate range of services and products across a broad range of applications, platforms, tools and industry sectors; embracing education, information, entertainment and consumer and business orientated content”. It then goes on to mention computer games, digital libraries and e-learning. Apart from the almost throw-away reference to “entertainment” in the definition referred to above no mention is made anywhere in this long and extensive document about either film or television production.

10. DIGITAL MEDIA HUB

So curious was I to find out more about the future of the digital content industry in Ireland that I went to a net working seminar which was recently held in the Digital Media Hub. I was told the networking session involved persons from digital media companies, venture capitalists and other digital media professionals. Apart from myself and Eugene Murray from RTE I did not recognise anybody there who worked in either film or television production. There were three speakers, one from Forfas, one from PWC and one from Enterprise Ireland. In the questions and answers section afterwards one member of the audience rather tellingly asked whether there were any figures for return on investment in the digital content industry sector in any part of the world. The answer given by the person from PWC was that while of course there were figures from “the traditional media” there were no figures for return on investment in the digital content industry on a worldwide basis. I was somewhat surprised again at the tone of the reference to “the traditional media” as if it was something which would shortly die out. It became clear that what she was referring to was film and television production.

11. A SPADE A SPADE: DIGITAL MEDIA CONTENT IS FILM / TV

When the man from Enterprise Ireland spoke he explained where he believed the international markets for the sale of the products of the digital content industry in Ireland were. The list was surprisingly familiar to me in that it included the three main annual television sales markets viz NATPE, MIPTV and MIPCOM as well as the annual music industry market MIDEM. But surely I thought that is where the “traditional media” is sold? What was clear to me was that what they were talking about was the markets for film and television programme sales but there was a clear resolution not to call a spade a spade.

12. LEADERSHIP ROLES

Two of the recommendations from the Kilkenny Report come into play in this context as follows:-

1. “RTE must exercise its potential to assume a powerful leadership role in partnership with the indigenous industry in realising the broad strategic intent of this report particularly in the development of television drama for domestic and the international market.

2. Enterprise Ireland and the Film Board must encourage and actively assist the emergence of stronger key players in the indigenous film industry.”

13. FOUR INDUSTRIES?

Yet here we are in the Spring of 2003 10 years on from the birth of the Irish Film Board and almost 4 years on from the Kilkenny Report, we seem to have four separate industries as follows:-

1. Incoming commercial film production.

2. Indigenously generated commercial / cultural film production activity.

3. Television production activity

. 4. The digital content industry.

The fascinating thing is that all of these areas are constantly being supervised and reported on both through governmental reports, IBEC reports, industry reports etc. yet we still have a situation 10 years later where the Irish Film Board with other European film bodies is calling for “a clearer definition of the rationale for supporting films, arguing that support cannot be confined only to so-called cultural films – as all films are both a commercial venture and a cultural expression.”

14. THE WAY FORWARD

What is the way forward then? The answer must be a vigorous dialogue both within the industry itself and in the media which embraces all of these elements. The dialogue must be lead by the Irish Film Board and must comprise the following elements:

1. The Irish Film Board must go out and vigorously support the commercial film production sector in Ireland particularly those films which it does not otherwise provide funding for. At every opportunity the enormous value to the State in terms of the exchequer return of the tax based film incentive and the enormous value to Ireland as a tourism venue must be emphasised. The fact that film tax incentives in other jurisdictions particularly the United Kingdom but also France and Germany provide significantly better incentives for film production in those countries has to be constantly emphasised. While lobbying the corridor of power is vital a positive public image for the industry going forward promoted by the IFB is essential.

2. Film production funding from the Irish Film Board should be focussed on the development of the sustainable industry making both mid-range budget films and lower budget films but with the emphasis on supporting local producers in their financing efforts for mid-range budget films on the international stage. It is not the role of the Irish Film Board to develop talent but instead to support financially those producers who will themselves develop and encourage talent. The focus of the Irish Film Board must be on producers going forward.

3. Television production is an essential part of film or television production in Ireland. RTE in its licence fee proposal late last year offered to spend EUR3,000,000 on film production. While this was moderated in the light of the final licence fee arrangements made by the Minister it represents a significant potential contribution. This is over and above what RTE is willing to spend on television drama which has to represent as significant an area for the development of new directing and acting talent as lower budget films. The IFB must engage intensively with RTE on all forms of film and television production.

4. The Irish Film Board needs to play a leading role in steering what in my view is the misdirected focus of Forfas’ strategy for the digital content industry in Ireland into a more focussed industrial policy for audiovisual production in Ireland. To quote the November 2002 Report “Given that digital content is about the convergence of the creative traditional entertainment and media sectors with the information, communications and technology sectors there are a number of Government Departments and agencies involved in the development of the industry. This has not optimised the cohesion in which policy can be developed and implemented across the digital content industry”. Incidentally while government Departments and state agencies are referred to in the Report the Irish Film Board is not mentioned at all! Even more extraordinary the single largest creator of digital media content seen in over 300,000 houses in Ireland every night viz RTE is also not mentioned at all.

15. INTELLECTUAL PROPERTY

It is worth mentioning that in the Copyright and Related Rights Act 2000 which started Ireland’s new century of intellectual property ownership film is defined as meaning “a fixation on any medium from which a moving image may, by any means be produced, perceived or communicated through a device.” The Act goes on to provide for copyright in film and specifically confirms that copyright is a property right. The true wealth of Ireland in the 21st century will in my view not be through bricks and mortar property but through the ownership of intellectual property. The successful music industry in Ireland has already achieved enormous revenues on this basis towards the end of the last century in the same way that Ireland’s literary prowess achieved similar success at the beginning of the 20th century. Film is now the only form of cultural expression that most people see on a regular basis and must be promoted as the strategic cultural industry in Ireland for the 21st Century.

16. A VIABLE ECONOMIC FUTURE

Hopefully we will be able to create an audiovisual production industry in Ireland at the beginning of the 21st century which would provide a viable economic future for all those working in the area. The worst of all possible results would be governmental indifference and possibly for many of us “exile and cunning”. What I would like to see is the development of a cultural industry for the likes of Robert Quinn and Lance Daly so that unlike James Joyce they do not have to take the emigrant ship but instead can live and work in Ireland. Only by recognising film as a commercial venture and a cultural expression can this be achieved.

JAMES HICKEY
james.hickey@mop.ie
www.mop.ie





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