TeleMedia Strategy
The Bleeding Edge of Disruption

According to a report published by the UK film council last summer entitled, “Low and Micro Film Production in the UK,” the UK produces about 100 micro-budget films per year at a cost of £18.5 Million ($27.75 Million).  That's about $275K each.  Most fail to secure a conventional theatrical release, but the number of films produced has doubled since 2002.  So why do it?

In the words of the great Bob Dylan, “The times, they are a-changin’.”  The advent of digital production techniques and digital distribution technologies are allowing filmmakers to get their content ‘out there’ through non-traditional routes.  Is a theatrical release important if you can sell your film digitally?  Content-makers (Film and TV) have seen what has happened in the music industry, where individuals have used digital development and distribution to challenge the corporate stranglehold on the provisions of content through traditional distribution models, and are succeeding online.  Film and TV pose a more difficult challenge, given the streaming limitations, bandwidth constraints and audience capture, but as the ‘technological gates’ are opened, these industries will come running through.  

In the UK, we are seeing inventive models around the production of such media content.  This is being aided by the introduction of new production technologies such as the RED digital camera (http://forums.creativecow.net/forum/redcamera and  www.youtube.com/watch?v=QciO6QWBbW8 ), tools like Final Cut Pro, online services, and hosted support models like CreativeLicensing Limited (www.creativelicencing.co.uk), which provides specialized film accounting software on a SaaS basis.  The move to digital content provisions in the UK is also being supported by Large Capital projects such as the Media City project in Manchester. These technological advances are being supported by government initiatives to provide tax advantages to UK filmmakers in the  form of tax credits under which filmmakers can get back 20% of their production and distribution costs (though certain guidelines apply).

We are now seeing private individuals participating in collective film production ‘slates,’ such as Cost Inventive Films (www. Costinventivefilms.com), where members invest in a specific vehicle under a UK tax scheme called an “Enterprise Investment Scheme” (EIS).  The slate typically consists of four films, so the risk of a single film failure is spread over multiple investors.  It is easy to see the potentially  tremendous returns this affords, given the EIS tax advantages.

So the old model where the average UK film costs £2M–£3M ($3M–$4.5M) to make, and generates profits averaging £800K ($1.2M), is about to change.  Digital films are being made for £150K ($300K), and are gaining an equal share of the online and DVD distribution rights. This is possibly the biggest change to hit the movie industry since talkies, so hold on for the ride….  That’s entertainment!

This column will be following these innovations and more over the coming issues.  If you enjoy the journey you are welcome to participate.  Subscribe, blog, join the Forum, make a comment, or just sit back and be entertained.  See you in the next issue...

By Paul Morrissey,

Paul Morrissey is highly seasoned telecommunications business technology professional with over 26 years of senior experience in the international telecommunications environment. Mr. Morrissey has funded and sold numerous companies over the past fifteen years in the Data/Telecommunications environment including but not limited to Data Centres, and Technology Managed Services businesses. Over past five years has worked closely with many of the new carries both in the wireless and wire-line environments and with the UK MOD in developing a data centre centric hosted secure systems approach for operations within the MOD UK estates. Mr Morrissey also conducts high level strategy engineering/business consulting engagements for client on private basis.

 Mr. Morrissey is also Chairman for Tubedale Films Ltd an independent film production company base in the UK which he runs with his brother David Morrissey as well as Stagereel Limited a Digital TV Production company based in the UK. In these roles he is instrumental to the development, delivery and storage of Media content in the Hosted Service environment. Mr Morrissey was a founder and CEO of the Data Centre business Digital Haven plc, a European second tier Data Centre company between 1999 and 2002. Awarded a Fellowship of the Institution of Engineering and Technology in 1998 he is a member of the Project Management Institute and a Microsoft Certified Professional.