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Quantum of Solace, Mamma Mia! and The Dark Knight push UK Box Office to record high, but 2008 figures show a downturn in film production

New UK Film Council analysis shows indigenous British films hold strong in 2008 with a 20% increase in production spend, while foreign investment drops due to a number of exceptional factors. Market share for British films second highest in a decade at 31%

The latest statistics from the UK Film Council paint a mixed picture for film in the UK in 2008.  While UK box office receipts reached a record high, film production spend in the UK was down compared with the previous year.

Cinema-going continues to be one of the nation's favourite activities with box office takings for the UK and Republic of Ireland hitting £949.5 million, up 5% on 2007's £904 million, and the highest since records began in 1989.

British films also accounted for 31% of cinema takings, the second highest in a decade.

The top films of the year at the UK box office were all made with significant UK involvement.  These included Mamma Mia! earning £69 million to become the most successful film in the UK ever and Quantum of Solace taking more than £50 million and achieving the highest opening weekend for any film in the UK with £15.4 million.

Film production spending in the UK: 2008 round-up and 2009 predictions

Film production statistics paint a more complex picture with spend totalling over £0.5 billion in 2008 – but still down 23% on 2007.

For films with production budgets of £500,000 and above in the calendar year 2008, production spending in the UK totalled £578.2 million with the UK involved in the making of 111 feature films (126 in 2007).  Production spend in the UK for the year was 23% lower than 2007's total of £753 million. 

The UK Film Council further breaks the data into three distinct types of production category:

• Indigenous British - films made by a UK production company that are shot wholly or partly in the UK.
• Inward investment films – big budget films that are financed from overseas but made in whole or part in the UK.
• Co-production films - made both in the UK and abroad using UK crew, expertise and services.

Spend on indigenous British films was strong with a 21.5% increase compared to 2007.  66 UK indigenous feature films were produced in 2008 (68 in 2007) with the total UK spend reaching £192 million, 21% higher than 2007's £158 million. UK indigenous films included The Boat that Rocked, Green Zone, Dorian Gray, Me and Orson Welles and 1939.

However, the outlook for independent British films in 2009 is expected to be tough with the economic downturn starting to take effect. This impact had not materialised in 2008 as finance and credit deals are done well in advance of film production and release.  The immediate prospects for these British independent films suggest it will become even harder for them to raise credit especially through bank loans. 

Inward investment films   decreased by 35% compared to 2007's £523 million with 25 films (30 in 2007), but still brought £338 million into the British economy.  This drop was due to a number of exceptional factors including films being lost or postponed due to the US writers' strike, the exchange rate ($1.97-£1 in June 2008 compared to $1.53-£1 in November 2008), US productions being encouraged to spend closer to home because of US tax incentives, and the effects of the actors' dispute.  Inward investment films included Prince of Persia: The Sands of Time, Quantum of Solace, The Wolfman, Nine and The Fantastic Mr Fox.

In 2009, the environment for inward investment looks much more favourable due largely to an upturn in the exchange rate which is further enhancing the UK's competitiveness and encouraging the US studios to bring more work  to the UK.

The UK was involved in 20 co-productions, compared to 28 in 2007.  The total UK spend of £48 million was a 34% decrease on 2007's figure of £72 million with 28 films.  These included Solomon Kane, Cheri and Bright Star.

Co-production activity is not expected to rise in 2009 given that the tax break incentivises spend inside the UK and therefore not production outside the UK.

John Woodward, Chief Executive Officer of the UK Film Council commented:  "It has undoubtedly been a tougher year for inward investment because of the exchange rate, the effects of the US writers' strike and actors' dispute plus increased fiscal incentives now offered in more than 30 US states.  While these effects were felt the world over, the UK tax credit has remained absolutely vital in keeping us competitive and helping to bring more than £330 million in foreign investment into our economy.

"This year has got off to a great start for British films and talent at the awards ceremonies.  The major Fox production Gulliver's Travels is due to start shooting in April, plus Harry Potter and the Deathly Hallows and Nottingham will also be filmed in the UK this year.

"But we will also begin to see the full effects of the economic situation take their toll on independent British movies. It's going to be even harder for these types of films to raise credit especially through bank loans. Therefore the Lottery funding that the UK Film Council provides will become even more important as will the tax credit and support from broadcasters such as Channel 4 and the BBC."

For further information please contact:
Caroline Nagle/Rachel Grant
UK Film Council Press Office
T: 44 (0)20 7861 7508/7505
E: press@ukfilmcouncil.org.uk

UK films share of box office gross:

• 1996  16%
• 1997  26%
• 1998  13%
• 1999  24%
• 2000  15%
• 2001  30%
• 2002  24%
• 2003  16%
• 2004  23%
• 2005  33%
• 2006  19%
• 2007  29%
• 2008  31%

UK Production 2007-2008

The table includes all identified titles with shoot dates in 2008 and with budgets >=£500k
1. An inward feature is defined as a feature film which is substantially financed and controlled from outside the UK and where the production is attracted to the UK because of script requirements, the UK's infrastructure or UK tax incentives.
2. An inward feature co-production is an official co-production that originates from outside the co-production treaty countries (usually from the USA) and which is attracted to the UK because of script requirements, the UK's infrastructure or UK tax incentives.
3. An indigenous UK feature is a feature made by a UK production company that is shot wholly or partly in the UK.
4. A UK co-production is a co-production (other than an inward co-production) involving the UK and other country partners under the terms of a bilateral co-production agreement or the European Co-production Convention.
Measurement
5. The above numbers include only the UK spend associated with productions shooting or posting in whole or part in the UK.
6. Spend is allocated to the year in which principal photography started.
Exclusions
7. Spending on films with budgets under £500,000 is not included.

Top 20 films of 2008 at the UK Box Office

Top 20 UK films at the UK Box Office

Notes to Editors

1) Figures may be subject to revision as more data becomes available.

2) A British film is one which is certified as such by the Secretary of State for Culture, Media and Sport under Schedule 1 to the Films Act 1985, either via the Cultural Test or one of the UK's official co-production treaties.

3) The UK Film Council is the Government-backed strategic agency for film in the UK. We aim to stimulate a successful, vibrant film industry and to promote the widest possible enjoyment and understanding of cinema throughout the UK.

We invest Government grant-in-aid and Lottery money in developing new filmmakers, in funding exciting new British films and in getting a wider choice of films to audiences throughout the UK. We also invest in training, promoting Britain as an international filmmaking location and in raising the profile of British films abroad. We aim to deliver lasting benefits to the industry and the public through:

· creativity - encouraging the development of new talent, skills, and creative and technological innovation in UK film and assisting new and established filmmakers to produce successful and distinctive British films;

· enterprise – supporting the creation and growth of sustainable businesses in the film sector, providing access to finance and helping the UK film industry compete successfully in the domestic and global marketplace;

· imagination - promoting education and an appreciation and enjoyment of cinema by giving UK audiences access to the widest range of UK and international cinema, and by supporting film culture and heritage.

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