Friday, February 25, 2011


Subsidised Quasi-Industrial Dependency

This is a reflection on the Film Board’s letter to some folks in the Irish production sector.

I believe the new CEO will take on most of the wider policy issues and relationships formerly undertaken by IFB Chairs. The new CEO will not take an ‘editorial’ role – a response, perhaps, to the perception that the Board had, in effect, been acting as a producer itself. To the extent, some believe, of sourcing and divvying out co-production work on non-indigenous projects, with agreements in principle to fund being brought back to Irish producers from festivals abroad. If that did happen, should it have happened?

The Board intends to engage an additional person with a record of proven achievement in filmmaking to work as part of our Production and Development team. Will this address the script problems identified by many critics, or will it continue a co-production agenda for non-indigenous projects?

The Board anticipates a substantial increase in the focus on sectoral and industry development. What does this mean, and what are the expected outcomes? Sustainable businesses? Further indirect subsidy to facility and service providers?

We believe that Irish filmmaking and the broader production industry will continue to be at the heart of Government policies for growth and job creation for as long as the case is successfully made and measurable results can demonstrate the success of such policies. This gives fluffy, wish-fulfilling statistics more importance than cultural value.

We will encourage open discussion among filmmakers about what constitutes Irish film and the creative direction it should be taking, and we will seek to work with Irish filmmakers to ensure that their films increasingly appeal to cinema-going audiences. Does this mean – talk among yourselves and decide what Irish film is and the Irish Film Board will tell you what audiences like?

For over a year the IFB has been putting together the Strategic Film Review aka the ‘Tuohy Report’ (aka The Kilkenny Report MkII), without any public consultation or discourse. The reach of the group conducting the ‘strategic review’ is the sustainable growth of the whole Audio Visual Production Sector over the next five years.

It will propose a substantial increase in the number of direct responsibilities of the IFB to the new Government. Surely this will result in a dilution of the IFB’s current resources and responsibilities?

It is nearly twenty years since the reconstitution of the Board and the expansion of the tax break. Hundreds of millions in public funding has been expended through the Board and the tax break since that time and yet there is hardly any ‘industry’ to speak of that would survive in the absence of the State’s (and additional EC) support.

A measure of any industry or sector is its sustainability. Sustainability is built on successful sales by companies of products or services that have a realisable market value where competitive pricing is not underwritten by subsidy. If our audiovisual companies are businesses, therefore, in the absence of subsidies, they should earn a profit over and above their overhead and costs of production.

The reality of Irish audiovisual production, however, is that the cost of the product is, in effect, its sale price. Or, to look at it the other way, the buyer purchases the product by paying for its production.

That is also often the extent of the demand for the product. Rarely do products earn more than their initial production cost and when they do (by making further sales, for example) the producer has to share the additional income with co-owners (co-developers, commissioners, co-producers, co-financiers) of the product, as well as sales agents, distributors and exhibitors.

Only broadcasters in Ireland have the resources with which to produce product, in-house, because they own the outlet, are subsidised to a greater or lesser extent, and have a captured share of the market.

The consequence of this is that independent producers compensate for their companies’ dearth of sales income with substantial fee income on each product. Individuals may become wealthy from film production while their businesses stay poor and dependent on ongoing subsidy. We should ask ourselves – How much corporation tax did Irish film production companies pay last year? Or the audiovisual sector as a whole? And subsidising this activity, whether through the IFB or the tax break, could be viewed as an indirect transfer of wealth to the few and an incentivised employment scheme for the many.

Added to this is the practice, usual in film, whereby each production is a separate subsidiary corporate undertaking – a business in its own right with discretely structured ownership. It is a one-off, temporary enterprise and therefore not required to be sustainable or sustaining. It is orphaned almost as soon as it is authored and all involved move on or wait for the next project.

In the absence of a near impossible combination of significant risk capital, scale of output, extraordinary talent and strong market demand, the production of films is neither an industry nor is it a sustainable business model. So why continue to pretend that it is? Its importance is cultural, not industrial, with some variable economic spin-off in services and employment.

There is no such thing as ‘creative industries’. It is as useful a political buzz-phrase as the ‘smart economy’. Certainly there is creative endeavour that is occasionally profitable for talent, its producers and its distributors. But most creative endeavour is not profitable, it is valuable in ways less amenable to measurement.

Most creative activity is not rewarded in ways that are economically calculable. And, lastly, profitable creative endeavour is not replicable. Lest this brings on a ‘whatabout’ response let it be said, for instance, that the gaming industry is not analogous to the film industry. Production costs and hiring patterns may be somewhat similar but the product is very different, consumer pricing is very different, and the retail model (or the online subscription model) generates a much higher and more direct return to the producer, usually a single company.

Who will insist that we make films that speak to us rather than films that have measurable economic indicators?

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