The business of film
The business of film

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The business of film

4 Better business, better films

Throughout this course you have started to develop your understanding of the film business and gained tools to enable you to plan and manage your own production and project. The value chain has been a central theme throughout.

Every organisation, or project, needs to deliver value to their customers in order to achieve competitive advantage. When you are managing your organisation or project you need to understand which activities you undertake are especially important in creating that value and which are not.

The value chain can help you analyse the strategic position of your project or organisation both as a generic description of activities and to analyse the cost and value of activities. Getting the distribution model and intellectual property right at the start will lead to making the best decisions along the way. It will enable you to have a clearer pitch to present to financiers and distributors and to secure key talent.

The film business model is changing. The emergence of new technology is opening up different production and distribution models, generating more competition from emerging talent. Their work will appeal to a new generation of audiences. Distribution is no longer just about the cinema or DVD release and the traditional distributor. VoD and online distributors are a proven option and for some will be the distributor of choice.

That is the future, but even today the economic value of the film industry to the UK should not be underestimated. It is a multi-million pound industry and significant employer that operates on a worldwide scale, as shown in Figure 5.

Described image
Figure 5 Overall economic contribution of the core UK film sector (Olsberg SPI and Nordicity, 2015). The BFI website also contains detailed annual industry reports, if you want to investigate further.

To put this into context:

  • In 2013 the core UK film sector supported 39,800 full-time equivalents (FTEs) of direct employment and contributed £1.4 billion in direct gross value added (GVA).
  • The UK film sector generated nearly £1.4 billion in exports in 2013, yielding a trade surplus of £916 million.
  • The UK film sector displayed the highest export intensity of any UK service sector in 2013.
  • The UK film sector has made private sector capital investments in the UK of more than £425 million since 2007.
  • Of the £21 billion of tourism spend by overseas visitors to the UK in 2013, an estimated £840 million can be attributed to film-induced tourism.

A successful film is not just about the quality of the film on screen, but about managing the production, securing the right funding, IP, the distribution agreement, and attracting the right talent for each part of the value chain.

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