For an informed view on connected entertainment in the UK & Ireland, visit Cue Entertainment
Voices
from all round the audio-visual sector ask the government to recognise the
contribution that video entertainment makes to the health and wealth of UK plc.
Perhaps it’s time to have a little more regard for their appeal for a little
more tender loving care in the face of foreign competition.
The UK
animation industry, for example, generates no more than £300 million each year
but it seeds downstream revenues of around £3 billion in the form of visual
effects and content for the gaming, post-production and video home
entertainment industries.
Despite
international success, the subsidy that UK animation companies receive is
significantly lower than in countries such as Canada and South Korea. Film
production can benefit from between 16%-20% rebate in the form of a tax credit,
whereas animated TV series produced in the UK receive nothing in the way of tax
breaks or incentives.
Aardman
Animation is the biggest animation producer in Britain, known best for “Wallace
and Gromit” but with many other properties including the first feature film in
a new deal with Sony Pictures, “Arthur Christmas 3D” (pictured), released in
the UK today.
Aardman
TV Head Miles Bullough spoke recently to BBC Radio 4 about the challenges that
face a successful UK entertainment industry business. He said that “Shaun The
Sheep” is a hugely successful British-made animation product with 5 million
DVDs sold in180 countries around the world. Germany is the biggest market, and
the title has just launched in China. Yet despite a firm commitment to its
hometown of Bristol, Aardman has to place some production work offshore in
order to take advantage of foreign government support enjoyed by the company’s
competitors.
Bullough
spoke to the BBC in the wake of a study that makes the case for the British
government to support a sector confronted with a crisis that threatens even the
most successful companies. Titled “Securing the future of UK animation”, the
report was funded by Animation
UK, an organisation set up in 2010 to represent the interests of the animation
industry.
The study
says that subsidies and government support for the animation industries of
Ireland, Canada, France, Benelux, much of South-East Europe, Australia, Germany
and Singapore have distorted the market, “which puts the UK at a huge
disadvantage”.
Although
British animation has been a consistent source of revenue over many years, this
would be no more than special pleading were it not for the fact that the market
share of UK companies has declined in the face of the artificial competitive
pressure arising from substantial subsidies and government support elsewhere in
the world.
There is
also the matter of the national cultural identity. Bullough described how
difficult it is to explain the subtleties of school cricket to Ukrainian
animators. “We sent them a video of a test match for reference and they
animated the little kids bowling like Bob Willis and John Snow,” he said.
Other
entertainment sectors face similar problems, both cultural and financial. Risk
Capital Partners Chairman Luke Johnson reminded the BVA AGM in early November
that the video industry is an important part of the economics of film and
television production and a key part of the economic infrastructure of the UK.
“But it is not just about money, it is about the UK’s impact on the world.
Culturally, the strength and vibrancy of our creative and media industries
punch well above our weight and add to our influence in the world. To just give
all that away would be a tragedy,” the former Borders UK owner and Channel 4
Chairman said.
Eidos
Interactive President Ian Livingstone, sometimes referred to as the father of
video game character “Lara Croft”, also makes the case for the games industry
in the UK. He told BBC Radio 4 that the UK has slipped from third to sixth
place in the international league in an industry that is worth $50 billion a
year in software sales alone and expected to rise to $90 billion by 2015.
“With the
economy flat and financial services in disarray; surely we should support the
creative industries. Montréal offers 37.5% tax credits to lure talent to Canada
and they have established an ecosystem of highly skilled labour, matched with
the incentives to set up shop. They have achieved in 10 years what took the UK
25,” Livingstone said.
“ The UK
has to support itself without any help whatsoever. The film industry gets a 20%
production tax credit but the games industry has never had any anything.”
Montréal’s
success as a centre of excellence in audio-visual services is based not simply
on tax credits and government subsidies. It dates back over 10 years to the
creation of Multimedia City from the semi-derelict post-industrial area of
Faubourg des Récollets, not far from the city centre. The government of Québec
offered tax credits of 40% to encourage entrepreneurial businesses to move to
the area in 1999 and despite the economic and political difficulties of the
past decade, the city continues to benefit from the vision of former Deputy
Prime Minister Bernard Landry.
Crucially,
investment in education and training went hand-in-hand with redevelopment. The
National Animation and Design Centre (Centre NAD) is one of the world’s
best-equipped colleges of digital imaging and 3D animation with more than 1,200
graduates who work in film, television and computer games companies around the
world.
A UK
government-sponsored report on Multimedia in Canada in 1999 recommended closer
industry links with Centre NAD and other universities in Canada in order to
share best practice in multimedia training and education but the resources to
make that possible did not materialise. Since then, Montréal has prospered and
the equivalent higher educational establishments in Britain have struggled to
find adequate funding.
British
animation and computer game companies seemed to be heading for international
success in the first years of this century but the early promise has not
produced the success that should have followed. A degree of arrogance hindered
their progress fostered by short-term financiers who assumed the good times
could continue without re-investment in the people and ideas on which creative
industries thrive.
Since
then, there has been a retrenchment in the UK multimedia landscape, which has
seen the closure of once-great animation companies such as the ITV-owned
Cosgrove Hall. Perhaps best known for “The Wind in the Willows” and
“Dangermouse”, it was formed at the same time as Aardman but closed in 2009
after a scandalous lack of TLC from its backers.
“Raise
the game”, a 2008 study from the National Endowment for Science, Technology and
the Arts (Nesta), reported, “The UK suffers from a severe skills shortage in
the computer games sector coupled with a poor development record and a funding
crisis.” Livingstone responded then, “Despite the creative and technical talent
that exists in the UK, half of the independent development studios have closed
or been sold to foreign companies that see greater value in our studios and
intellectual property than we do ourselves.”
Now
the situation has worsened, he calls for what he called the “Five P” solution
to the industry’s problems. “First, there is ‘Perception’ – the need to raise the profile of computer
games so that they are seen as wonderful things: socially, culturally and
economically. Then there are the ‘People’ – we need a skilled workforce that can
create content and distribute it internationally,” he says.
“We
need ‘Pounds’ – access not only
to production tax credits but also to financial institutions, venture
capitalists and banks that realise the value of digital content and will invest
in the talent to take it forward. We need the ‘Pipes’ – high-speed broadband connections in order
to upload and download content and finally, we need to create and retain the
Intellectual ‘Property’ in the UK.”
Livingstone
says the educational system must put the right tools into the hands of people
with the talent to create content, make sure it’s copyrighted and then create
wealth, “You can only do that through computer science that enables people to
create rather than simply use computer technology. Computers touch everything
we do and we can’t build a digital economy in a nation of digital illiterates,”
he says.
Aardman
says it has no plans to move any of the current TV production overseas restated
that it is always the firm’s very last preference and one that would be
rendered unnecessary if it had help similar to that received by international
rivals.
“What we
want is to make British shows here in Bristol. We just need a tax credit to
level the playing field with our overseas competitors to help us to do so. We
are a British, Bristol-based company and proud to be so.”
Cracking
views, Gromit!
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