Films and Finance
By GERARD FAY
NOWADAYS I seldom see those Secrets of Nature films which show a flower opening and closing, telescoping twenty-four hours of life into a few seconds. I am reminded of them, though, by The British Film Industry*, which shows in three hundred pages the flowering and withering, the re-flowering and the withering again of British film-production. A single volume now does the work which used to require a score of books, pamphlets, White Papers and reports. There is no quarrelling with the suggestion that " the main attraction of the cinema for the majority of people is, of course, the films which are shown there." Nor would I argue with what is said about the Eady Plan at last having put British production within reach of solvency; " although it must be remembered . . . that the validity of this view depends upon the number of films made, the average cost of production and the level and pattern of attendances."
The numbers of people employed and the amount of studio- space in use were already wrong before the book was published, for no statistician can be expected to keep up with the mad fluctuations which are normal in such matters. Employment in our studios is like a scenic railway. It slowly crawls upwards and then dives fast, climbs again and again falls; and, no matter how high it may reach, it alwaA finishes at ground- level. At the moment it is impossible to look on the bright side of British films unless one has no stake in them, does not have to earn a living in the studios, and is not a sufficiently sensitive taxpayer to worry about whether some of the biggest loans made by the Film Finance Corporation are ever going to be repaid. - How is it that the British film-industry arrived at its present state ? Here is one reason, but not the only one : Our 4,600 cinemas take in £100,000;000 a year at the box-office. The Treasury must have more than a third of this in Enter- tainment Duty. The cinema-owner gets forty-one per cent. to cover all his expenses and provide his profit. This leaves less than a quarter of the total to be divided between renters and producers. What remains in the end for all producers, except newsreel companies, is £14-1- million. But £101 million goes to foreign producers, mostly Americans, and in the end the British producers get a little more than Di million as their reward for making about a third of the films which brought in the £100,000,000. .Unlike the cinema-owner, the producer cannot make a useful profit out of popcorn or ice- cream, so he must be content with three per cent. of the takings of an industry which pays much more to its less creative departments. You can learn all this (except about the ice-cream) on a single page, and then turn back and relate it to the facts given about the " economics " of production, though economic analysis applied to the film-industry sometimes seems about as much use as a clinical thermometer would be in a steel- * The British Film Industry. A Report by Political and Economic Planning. 18s. works. When the economists first began to study films, they found that the ordinary rules did not seem to apply, and that a chartered accountant or a brilliant book-keeper was much more likely than an economist to master some of the problems —for example, how a film could take a million at the box- office, covering its cost of production several times, and still fail to make a profit for the producer.
The economists made one important discovery during the war, however, and it has been responsible for most of the Gbvernment intervention in the industry since. They dis- covered that while Rita Hayworth cost dollars, Margaret Lockwood put no strain on the sterling area. Like good scientists, they forebore to express any personal preferences between the two ladies—if indeed they had ever heard of either —but convinced themselves and many other people that this country could not afford to export the dollars earned by Hollywood's films. At the same time the Government formed the idea that films were not much less important for keeping up the spirits of the public than cigarettes or even beer. A flow of dollars had to continue, but some of the takings were frozen.
The film trade unions began to assert the industrial impor- tance of their work, and the intelligent citizen was presently amazed to find that he was expected to take an interest in film- production. A small clique in the Labour party was ke&n on nationalisation of films, and hoped there might be some chance of experimenting with both sides of the British industry, but when the Association of Cine-Technicians and others advocated a " fourth circuit " of State-owned cinemas and advised the Government to requisition idle studios the Govern. ment quickly recoiled. This political aspect cannot be explained without long quotations from speeches and careful analysis of the relative power of the different trade unions, not to mention the political leanings of their leaders and officials. .
As the danger of nationalised films faded, the period of State intervention left behind two useful and practical devices —the Film Finance Corporation and the Eady Plan. The Corporation acts as a film " bank," making loans of public money to help production. It made a serious mistake to begin with by putting too many of its eggs into one flimsy basket, but it is at last beginning to see some return on the rest of the money. The Eady Plan is a levy on cinemas to help producers, and since the decision to extend the levy for another three years it has really beguri to help the studios.
The Treasury has never favoured the idea of reduced enter- tainment tax as a method of helping producers, for it knows enough about the industry -to realise that the exhibitors would gain what the revenue lost. But the Eady Plan _ensures that British producers get a share out of the extra money drawn into the cinemas by adjustments in Entertainment Tax. The Treasury and the cinema-owners- and film-renters get the greater part, but the British Film Production Fund has had its share. These two devices have probably saved the British studios from an even worse slump than" they fell into when the Rank organisation began to contract after years of expan- sion. The British Film Industry gives concise -and accurate information about them, and about the third of the pillars which support British films—the quota -regulations under which British cinemas must give thirty per cent. of their screen-time to British films.
Since 1948 it has been learned, at great expense, that short of nationalisation the Government cannot successfully intervene in the problems of the film-industry. Intervention is now almost at an end, though a good deal of supervision remains, and the three pillars still stand. The odd thing is that the film-industry itself remains, too, and some of the studios still turn out pictures which on the average are no worse than those of-1945-48, though they cost much less. It may seem a pity that all the work done by P.E.P. In compiling its report can only indicate the problems and not the -solutions. But the brief chapter of " conclusions " shows that the ills of our production industry are part of a world- problem existing everywhere but in the United States. The size of the home-market is limited; there is no American market worth speaking of for foreign films. The American home-market is huge, but the world-market is big enough to make it worth Hollywood's while to fight for the lion's share of that too. In many countries (not all of them English-speaking) the Hollywood policy is so successful that 75 to 80 per cent. of the films shown are American. Our studios have to struggle hard against this competition, but the quota guarantees them a minimum demand.
Nothing can guarantee a good box-office, however, and a fall in takings has been steadily reported every year since 1947. What television will do to the cinema when it really gets going nobody knows, but neither does anybody know what the cinema with its big screen will do to television when —as foreshadowed in last week's White Paper on broadcasting —the Government decides that there is equipment to spare for what I fear will be called " telemovies." So it is wisdom rather than over-caution to point out questions instead of offering answers, for nothing is much more out of date than the solution to yesterday's problem.
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