U.K. Entertainment Industry Debates Piracy Measures, Production Incentives

LONDON -- A range of British entertainment industry organizations and companies have expressed their approval of government support for the creative industries amid global competition in the digital age, particularly via anti-piracy measures and a continuation of film production tax incentives and their expansion into TV and other fields.

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The comments came in response to a request by a committee of the U.K. Parliament. In October, the Culture, Media and Sport Committee launched a probe into the topic of "support for the creative economy," asking the industry to comment on barriers to growth, piracy issues and the impact of taxation, including "whether it would be desirable to extend the tax reliefs targeted at certain sectors in the 2012 budget." The British government has been looking at launching in 2013 tax incentives for high-end TV fare like Downton Abbey, animation projects and video games.

In written evidence, the likes of the British Film Institute, studio space operator Pinewood Shepperton, music trade group the British Phonographic Industry, the British Screen Advisory Council, Directors UK, the Independent Film and Television Alliance and BSkyB -- which compared to others was vocal about its feeling that no major regulatory changes are needed -- have made their voices heard, latest filings on the committee's website show.

"The reality of convergence is upon us, and the resultant challenges and opportunities are creating a great deal of flux in the market," the BFI said in its submission. "Emerging business models are disrupting the traditional supply chain, and while companies experiment with different models to exploit technological developments and consumer trends, the future is unclear. … Access to finance remains a significant issue for the film industry."

The group highlighted that the Netherlands has identified key industries, including the creative sector, as deserving support to help drive the country's economic growth. "A similar approach, with specific prominence given to the creative industries, would be welcome in the U.K.," the BFI said. "For every person employed in the core U.K. film industry a further job is supported through indirect and induced multiplier impacts, so the jobs created in the film industry also support people employed in companies supplying the film industry."

But this success is not guaranteed, it emphasized. "Film is an increasingly globally competitive industry, and in the U.K. we punch well above our weight creatively, culturally and economically. But in a competitive marketplace where money and talent are in high demand, we will have to fight to maintain this position," the BFI said. For example, emerging markets such as China and India are beginning to compete with the U.K. in such areas as postproduction and visual effects, it explained.

"We need to ensure that we remain competitive whilst also looking at how we can seize new global opportunities for film funding, co-production and distribution of British content," the BFI concluded. "The regulatory environment is essential in creating a place where people can do business." It called for an increase or steadiness in TV networks’ contribution to film in terms of production and distribution.

Pinewood Shepperton in its submission said that "the growth potential for the U.K. film, television and screen-based industries is substantial and can play a significant part in driving growth in the wider creative economy."

Saying that barriers for creative sector growth fall into three main categories -- infrastructure, skills and finance -- the company particularly pushed for an expansion of tax incentives beyond film as the government has been considering.

"The film tax relief has played a key role in attracting large, internationally mobile film productions to the U.K.," Pinewood said. "We therefore strongly support its continuation, as well as the proposed extension of tax relief to other creative sectors, such as animation, high-end television and video games, which would increase the level of production and therefore grow the creative economy in the U.K."

Meanwhile, IFTA called on the government to implement a delayed measure contained in a recent legislative bill that calls for notices to infringers.

"We believe that notice-sending will be effective in raising public awareness of piracy and encourage consumers to make use of the ever-increasing array of legitimate online audiovisual content services," the group said. "IFTA believes online piracy will not yield to a single legislative measure. Specific action continues to be required to take down websites in the business of offering content obtained illegally, a fast-growing and especially elusive source of film piracy."

But BSkyB, in which Rupert Murdoch's News Corp. owns a 39 percent stake, argued that "the overwhelming policy imperative at this moment, when commercial incentives are delivering the growth that the government seeks, is for stability and certainty in the regulatory frameworks. … We have seen no evidence to suggest that the unsubstantiated benefits of regulatory change would provide a better outcome than the demonstrated growth in content investment by the commercial sector. Indeed the risk must be that changes would undermine that growth, without necessarily providing any counterbalancing benefits."

The company has been increasing its spending on content production.

On the issue of piracy, BSkyB said: "Until there is significant evidence that the intellectual property framework is failing to provide the necessary incentives for continued investment in high-quality content, we see no case for large-scale regulatory or legislative changes. We call on government to ensure that IP continues to protect creators and existing legislation is properly enforced."

Email: Georg.Szalai@thr.com
Twitter: @georgszalai