Exemplar Response

Media production is dominated by global institutions which sell their products and services to national audiences. Do you agree with this statement?

It is true to say that UK audiences have very little choice when it comes to the films available to them at their local multiplex. Global institutions such as 20th Century Fox, owned by NewsCorps, have the finance to produce high budget genre movies, franchises and 3D movies to entertain audiences all over the world. They have the money to attract glamorous stars and directors as well as being able to use special effects. Hollywood film companies are part of larger conglomerates which have a range of cross media convergence opportunities. This means not only can 20th Century Fox produce their own films without finance from outside sources, they can also distribute their movies around the world. NewsCorps owns Fox Film Music Group and various Internet sites such as MySpace: and this is only the tip of the iceberg. They are able to target global audiences through the vast range of media NewCorps has acquired. When X-Men 3 was released there were promotions on MySpace including, if you added movie Myspace page as a friend you would receive certain online privileges such as being able to customise your friends list. 20th Century Fox is based in Hollywood and owns its own studio lot which means that they can produce movies at a fixed cost as well as being able to re-use sets when needed. 20th Century Fox are also able to finance merchandise tie-ins with companies such as McDonalds which enables them to target younger audiences to see films such as X-Men or Avatar.

These global institutions produce movies almost on a production line. Large marketing and distribution budgets mean that they can release their movies worldwide within a week, known as a blanket release. At my local cinema this week 80% of the screens are showing Hollywood studio movies. In weeks where there are major releases such as Avatar, they may even be showing on more than one screen at a time. The physical distribution of a movie to theatres around the world is extremely costly when you consider that a print reel costs around $2000 for an 80 minute feature leading to overall costs of millions. Only these major Hollywood companies can finance this which makes them dominant. How can independent or indigenous cinema compete?

Film 4 is a British film production company with a current budget of $15 million per year since the success of Slumdog Millionaire (2008). Their indigenous movies are not intended for global audiences as their themes usually involve poverty, violence and family or storylines that are pertinent to the British way of life. They are not genre movies and so they are more difficult to market toward a wider audience: in addition they are usually 15 or 18 certificated movies with adult themes. The limited budgets of these films means that they cannot afford big stars to act as box office draws. Film 4 is part of Channel 4 which includes E4, More4, 4Music and Film4’s television channel as well as a website. This is the extent of the opportunities for synergy available to Film 4. Film4 relies on co-productions to make bigger budget movies that have the potential to be sold to distributors abroad including examples such as Slumdog Millionaire and the more recent 127 Hours starring Hollywood actor James Franco. Slumdog Millionaire’s budget was $15m and was a co-production with Pathe and Celador Films. Film4 has the capacity to market and distribute their movies in the UK, albeit on a small release rather than wide release, however they have to sell the rights of their movies to companies in foreign territories if they want to be distributed outside the UK. Slumdog Millionaire was distributed by Fox Searchlight in the US on theatrical release and by 20th Century Fox on home release. It is clear from this evidence that the market place really is dominated by global companies who have the means not only to produce and distribute their own movies but also to buy the rights to other movies. Their dominance is apparent.

The way 20th Century Fox markets their products is by investing heavily in above-the-line activity such as trailers and posters. Upon the release of Avatar the market was saturated with expensive advertising strategies. However, Film4 is not in a position to advertise their films to UK audiences in such a way. Instead they rely largely on word-of-mouth and reviews to build up a buzz around their films. Slumdog Millionair was a slow burner in the US and UK and received a limited release. It was only when the movie started picking up awards that the real buzz began and more prints of the film were made and a wider distribution strategy was employed. It is only at the point of receiving high level acclamation such as Oscars and BAFTAs that the movie really enjoyed major mainstream international success. This is a one off example for Film4 and is certainly not evidence that the UK can compete with global institutions.

Advancements in Web 2.0 and digital screens could be changing the landscape, though. Digital screens are becoming more widespread, particularly in the UK due to the UK Film Council’s Digital Distribution Network. This means that the cost of distributing copies of a movie is vastly reduced as film reels are no longer needed in these instances. This opens up the market more to smaller companies such as Film4 who will be able to finance wider release of their films. According to the Digital Distribution Network the average Hollywood blockbuster movie opens to 300 screen in the UK and independent films fail to reach even 10% of those screens (source: UK Film Council). Digital Screens could make companies like Film4 more competitive in gaining a wider audience share, in the future. However, the abolition of the UK Film Council could have a counter impact as UK films may struggle to find the investment they need.

Audiences now want to consume movies in different ways with different options. The impact of illegal downloading is taking its toll on the movie industry and so Hollywood is looking for ways to target audiences quickly. The recession and increasing ticket prices are also hitting the film industry hard. A recent development as reported by Media Guardian is that Hollywood is looking to distribute movies to the home within eight weeks of theatrical release as opposed to the current eighteen weeks, in the US. Analysts have suggested that the studios will keep as much as 80% of the revenue making movies more profitable. Could this mean that Hollywood studios become even more powerful and have more money to spend on future productions?

3D is also a major challenge to independent film companies who are trying to target national audiences. 3D has proved to be a huge success following titles such as Avatar which became the highest grossing movie of all time. With directors such as James Cameron stating that 3D could save digital cinema (source:studiodaily.com), it would seem that Film4 is being pushed out of this lucrative market that is aimed at UK national audiences. As well as producing new 3D movies, studios such as Fox are going to invest in past movies such as Terminator and Titanic using In-Three process to make them 3D thus igniting new interest in these movies. Currently there has only been one indigenous film that has been releasde in 3D and that was Street Dance made by BBC Films. Film 4 is yet to enter this market although Pete Buckingham at the UK Film Council says “the demand for 3D films will be huge in the future and the UK should be a big part of it” (source: UK Film Council). It is undeniable then, that global institutions dominate this area of the market as the UK is unable to compete. Would it really be appropriate for Film 4 to present their movies in 3D? Would their target UK audience really be interested?

In conclusion, the film industry is certainly dominant in the UK as Hollywood companies are able to respond to technological changes such as 3D and Web 2.0. Their high budgets mean that they can produce spectacular movies that appeal to wide audiences. Film 4 is benefitting from the rise in digital screens leading to cheaper distribution costs, although Hollywood benefits from this too. It seems that Film 4 will never be able to directly compete with global institutions like Fox and will have to settle for niche audiences for their low budget movies.