22/01/2008

Production spending in the UK decreased by 15% in 2007, falling to £722.9m compared to 2006’s £855m, according to figures released by the UK Film Council. Inward investment in the UK from international productions fell by 13.9% to £508m, compared to £590m in 2006.

Physical production also fell, with the UK being involved in the production of 112 feature films (down from 135 in 2006), including 58 UK feature films (up from 54 in 2006), 26 inward investment films (28 in 2006) and 28 UK co-productions (53 in 2006). Spending on the 58 indigenous UK films fell to £141m, down from 2006’s £153.1m. The dismal showing continued in co-productions as well with the UK down to £73.8m – a full third down from 2006’s £112 m.

This alarming decline is attributed to the weak dollar against international currencies, the writers’ strike in the US, and the effect of the structure of the new tax credit on co-productions.

The only bright spark in 2007 was the robust box office with box office earnings up 8% at £904m for the UK and Ireland compared with £840m for 2006. British films’ share of ticket sales was 28%, up from 19% in 2006, and the third highest in twelve years.

The highest grossing film of 2007 was Harry Potter and the Order of the Phoenix [+see also:
trailer
film profile], taking £49m, followed by Pirates of the Caribbean: At World’s End with £40m.

Film fans also saw a wider range of films with several non-mainstream films proving popular, including The Lives of Others [+see also:
film review
trailer
interview: Florian Henckel von Donners…
interview: Ulrich Muehe
film profile] (£2.68m), La Vie en Rose [+see also:
trailer
film profile] (£1.58m) and Tell No One [+see also:
trailer
film profile] (£1.19m).

UKFC CEO John Woodward said, “Inevitably, we have been affected by the weak dollar against stronger international currencies and the bedding down of the structure of the new tax credit for the different types of film being produced in the UK. As a result, 2007 saw a significant drop in co-production activity. Some of this was expected given that the tax break is geared towards encouraging only shooting and post-production in the UK. However, we will be looking at this in much more detail as part of a wider study the Government has asked us to undertake with regard to the state of the industry following the introduction of the new tax credits.

"On the production front, 2008 is set to be a tougher year with the US writers’ strike continuing to have an impact and a possible US actors’ strike but thanks to the skills and creativity of our filmmaking talent we are in a good place to ride it out,” he added.

The figures cover the UK spend of indigenous UK film production, inward investment productions (films with finance from overseas but made mainly or significantly in the UK), inward co-productions, and UK co-productions filmed both in the UK and abroad using UK crew and expertise for the calendar year 2007.