Stewart Till CBE, former head of Polygram International and Britain’s Hollywood insider tried to set up the first major film studio outside the USA. The film studio’s finance didn’t hold and he now lives in Los Angeles. About a decade earlier he read a screenplay called The Usual Suspects in a car and made an offer for the rights the next day.
At Polygram in the Nineties, Till produced and distributed iconic British films from Trainspotting to Four Weddings and a Funeral as well as international pictures like Fargo. He has had his eyes on the books of British film for thirty years as well as its scripts.
During BAFTA week, he joined a panel at a So It Goes event, hosted by Burberry at Thomas’s on Regent Street to discuss British film; with producer Paul Webster (Atonement, Eastern Promises, Anna Karenina) and BAFTA CEO Amanda Berry.
Stewart Till is the first in a series of six interviews with So It Goes editor Joshua Bullock that feature a variety of high-profile British film technicians; in front of camera, behind it, off-set with a notepad and/or calculator. Here Till not only dissects what the box office appeal of British film actually comes to, but what being a British film actually entails.
Joshua Bullock: I wondered if you could give a very quick overview to our readers of what the tax credit incentive is for productions to be shot in Britain.
Stewart Till CBE: Yes, if a picture qualifies as British film, which is a deliberately generous criteria, in essence the government gives you a 20% subsidy on all expenditure in the UK. This goes for feature films and was recently extended to cover expensive television dramas as well.
JB: You’ve spoken about Polygram International as being the closest thing that the UK ever got to a major domestic studio in the 30 years that you've been in the film industry. Could you expand on that?
ST: Well, it wasn't perfect, we were originally owned by Phillips and they then sold us to Segrams who absolved us into Universal. W came to a kind of untimely end. Having said that, I'd argue the definition of a studio is the ability to finance and produce films and then distribute them oneself. Distribute i.e. release them in cinemas, then release on DVD, and sell to television. So it's a fully integrated organization that can produce, finance, and distribute films. Polygram was that.
JB: To extend that then, what would the UK have to do to produce, finance, and distribute, say the Harry Potter series which is staffed talent in front of and behind the camera, and also physically shot in studios like Pinewood.
ST: Well, what you'd need is an organization that had deep enough pockets to fund the development costs, to fund the production, and the final distribution costs – predominantly the marketing costs. So you'd need an organisation with a lot of cash flow and a real commitment to creating a film studio which we had with Phillips in the 90s in the creation of Polygram. Government can't and shouldn't fund that sort of organisation.
Polygram was the first European-financed studio to take on the major Hollywood six and enjoyed massive success with UK titles like Trainspotting but also international features like The Usual Suspects and Fargo. The beverage conglomerate Seagram bought the company and had sold its assets off piecemeal by the late 90s.
JB: Why not?
ST: Well, because I don't think the role of government is to own organisations. I absolutely believe and applaud/implore the government's subsidy of productions, as a former chairman of the UK Film Council, a body which lobbied the government and persuaded them to introduce the subsidies for film production. I'm happy for governments to intervene in the marketplace. But intervening and facilitating is very different to owning the organisations. I don't think the public sector could or should effectively own a film studio so you've got to look to the private sector to really create the next Polygram. And as yet, we haven't seen appetite. Whether it might come from a Netflix or an Amazon in the years to come, who knows. They're obviously not quintessentially British companies, and if they did, they'd probably grow out of LA but it's got to be a private sector intervention.
JB: In our Burberry panel discussion on film in Britain, you said that the Britishness of a film needn’t derive from its financing, much as a band doesn’t derive a nationality from its record label. Why then the preoccupation within the industry about the reluctance of British money to come forward and back homegrown talent and work on the big stage?
ST: I think there's a lack of ambition sometimes in the British culture of film. We're brilliant actors, brilliant directors, brilliant writers – but there’s probably not enough brilliant producers. There's also not the history apart from Polygram and therefore not the culture of creating these big, vibrant, very well-funded pictures totally in the UK. Polygram spent hundreds of millions of dollars in an attempt to create a film studio. Now, at the same time, it created assets probably worth a billion dollars say, 700 million pounds. So it wasn't lost money but you had to cash flow a lot of overhead, a lot of production and a lot of marketing spend behind the films. Historically there hasn't been the appetite to do that and there hasn't been the business plan in the UK to try and create that. As I said at your event with Burberry, the single best thing that could happen to the British film industry would be to create another Polygram.
JB: What then are the differing philosophies of putting together a distribution package for Trainspotting, which I know came under your oversight at Polygram compared to say, a Transformers movie? If you could just give us a rough overview of budgets…
ST: Yeah, well Trainspotting, the budget of the film was probably about two million pounds and then worldwide - this was obviously some time ago, mid-90s - we probably spent 15 million dollars marketing it. As for Transformers franchise films, only Paramount and Michael Bay would know but I suspect 200 or 250 million dollars. And they probably have a marketing spend, around the world, of 100 to 150 million dollars. I mean, Trainspotting numbers are mid-1990s and those Transformers numbers are current but that's these big Hollywood blockbusters are certainly costing anywhere between 180 to 300 million dollars and certainly having to spend north of 100 million dollars to sell themselves worldwide.
Shallow Grave: British producers needs to look further than the small money and have the ambition to make $300 million films for a world audience.
JB: And so where in the process does a decision about a picture's likely audience and the expectation of a likely return input into the decision of that allocation of funds for both production and marketing?
ST: Well, there's two big stages, really. One is when a film is green lit. As Paul Webster said at your event, when a film's green lit by a studio, an independent, a sales company, a financier, they will do rigorous revenue projections and they'll say, it'll cost x and unless the revenue projections are say, x plus 30% return, it won't get green lit. It shouldn't get green lit and it probably doesn’t get green lit. Now, that implies it's a science, because all the revenue projections are forecasts and are based on the quality of the script, the director, the brand, the franchise, the actors, maybe if it's a sequel. That's why Hollywood likes franchises so much because of the sense of track records. And of course it isn’t a science.
JB: And the second big moment?
ST: The second big moment is when the film's finished and the studio or the independent on a country by country basis will look at the film and then again work out what marketing spend they can book behind the film. So there's two big trigger points, really - the green lighting and then the release.
JB: What are the points for backers to parachute out of the distribution of a release? A director can work on a film for a year, it can be in post-production for a year, and then hit theatres on a Friday and its theatrical release can finish after three days, by the Sunday of a poor opening weekend. Do you have those exit strategies built in, as a distributor?
ST: Well, I mean, not even three days. You can know by the Friday afternoon. A film will open and by Friday afternoon you're getting the box office returns and you know when you've got a hit or a miss. And you've got a very good indication of how big a hit or how big a miss. Which is scary after all you can invest in it. If there's a trainwreck of a film then that studio by the weekend will be writing off tens of millions of dollars if not hundreds. ‘Trainwreck’ with a small ‘t’, not Trainwreck the film which was the opposite - it was a huge, huge hit! In terms of parachutes, or safety nets, in the 90s, even in the 80s going into the 90s, the home video market was a fantastic insurance. The film could crash and burn theatrically but if it was the right genre, it could do very good numbers on video.
British talent in front and behind of the camera is superlative. Locke, starring Tom Hardy was made for a paltry £650k and has grossed over £3 million to date.
JB: Like Shawshank Redemption?
ST: Well, Shawshank Redemption is a very strange film. It did no money at the box office – very little money. And became a huge, cult hit and sold and sold and sold on video. A better example is probably another film called Barbed Wire with Pamela Anderson. Did nothing at the box office, but on release did incredible numbers on video because it was the sort of film that people didn't want to go to the cinema to watch. They were very happy to rent on video when there was a vibrant rental marketplace. And Barbed Wire now would probably do well on VOD, which is obviously the contemporary version of the rental market.
JB: How have the new distribution and financing models introduced by video on demand and streaming services like Amazon and Netflix affected the decisions of a studio executive like yourself? Not only as competition to traditional ways of monetising a release but also as a form of secondary distribution?
ST: Well, that's it. When you're green lighting that film, we don't just put the box office in. You do all the windows in all the territories. Now, the value of those secondary windows - VOD, Netflix, Amazon, they are all tied to the box office, obviously. The more the theatrical box office, the consumer wants to see in other windows and the more your broadcasters like Netflix, Sky and Amazon will pay for it so there's a huge correlation. Film revenue is very lazily reported: the press will say the film cost 20 million and did 100 million in the box office as if somehow 20 produced a return of a 100. Now, that's incredibly naive because of the 100 million box office the distributor or the studio only get something between 25-45% of that, depending on the country. So that's the bad news.
JB: Now who gets the rest?
ST: Well, the exhibitor like Odeon or Netflix will get the rest. The studio usually retains 30-50% depending on the country. So the exhibitor will keep anything 50%-70% of the box office and the studio also carries the huge marketing spend that we've talked about before. Then you've got the secondary window that isn’t normally included in box office as its returns are longer term.
JB: I know this is film-specific but what would those secondary markets like Netflix and video on demand now represent roughly as a percentage of the total gross a feature will end up making across its lifecycle?
ST: Tough, the distributor's share of the box office is 30-50% and the share from the secondary exportation is similar - because obviously if someone downloads from Amazon or iTunes for $10, again the retailer will rightly keep their share of that. It's incredibly dynamic and it's changing by the year and obviously depends on the genre but across the board probably 60% of a film’s final total revenue comes from the box office and 40% from the secondary markets. And it used to be a lot more. When video was in its heyday, it could've been the other way around.
The entire budget of the UK Film Council, inclusive of lottery money, government grants and receipts from films it backs, came to around £50 million a year under Till’s charge in the mid 2000s. This national pot roughly matches the money put towards a single mid-budget Hollywood picture.
JB: So given the new avenues to bring a film to market, how do you feel the independent market compares to the your days at Polygram and Trainspotting and Four Weddings? I notice that in 2015, the production spend on UK domestic titles went down by something like 7% despite admissions being up by 9% which seems paradoxical.
ST: Well, studio vs. independent is perhaps a misrepresentation. The most successful British producer, Working Title, is owned by Universal. So it's not studio vs. independent, it's complicated. The box office is up 9% – worldwide 15% last year – impacted a lot by the growth of China. The problem within that figure is it represents fewer films taking a bigger share of the box office. Obviously the Jurassic Worlds and the Star Treks are taking an unhealthily bigger share of the marketplace. Partly because of China which is a very blockbuster-focused marketplace, particularly for domestic films. So I would sum up the good news: the box office is very healthy. The bad news: the British independent production sector is still a cottage industry - underfunded, under-resourced, lurching from short-term revenue to short-term revenue. I think a lot of British producers are intimidated by the worldwide stage and produce films that have a UK audience alone and aren't ambitious enough in terms of budgets and casts. I think a film body like the British Film Institute doesn't have enough of a commercial orientation. Their history is a cultural imperative and I hope that the incoming chair, Josh Berger will copy the UK Film Council's agenda, which is to have a commercial perspective rather than just that cultural perspective.
JB: Just as a comparison, how does the annual budget available for the UK Film Council to endow to British productions compare to the budget on the average American Hollywood film?
ST: Well, I was Chairman of the UK Film Council from 2004 to 2009 and its revenue; a mixture of government subsidy and lottery finance and returns from films it previously invested in; was nearer 50 million pounds, the returns being around 10 million pounds of that. The average film out of Hollywood will cost 50 million dollars and probably the average spend on films being released theatrically is 20. So every time you go to bat, it's 70 million dollars. So I think it intimidates the British film industry a little, understandably. The British film industry for the last 30 years, ignoring Indian and Chinese local industries, is by far the second most successful after the US - way ahead of France, Germany, Spain, Italy, in terms of making films that are watched around the world.
JB: To bring it back to a slightly more personal discussion of the art of film rather than the business, what's the British project that you're most proud of having worked on - either as a producer or as a distributor?
ST: I think Four Weddings and a Funeral and Trainspotting tie in first place. Two so different films yet so successful and so British. Being involved in those two films, both the green lighting of them and in the subsequent distribution is something I'm incredibly proud of.
Till bought the rights to The Usual Suspects a few minutes after first reading the script. To this date it remains the most superlative screenplay he has read.
JB: And what do you think the sort of legacy has been on the UK independent scene?
ST: Good question. It’s a huge legacy for Richard Curtis and Tim Bevan and Working Title. It's a huge legacy for them as individuals – it really kicked off their careers. And with Trainspotting you have Danny Boyle and the cast going onto great things. But I also think that the overall, in the 90s there was a sense of stigma in the British film industry that it was more about critical acclaim and cultural impact than it was about box office and I think Polygram said, look there is no value at all in making a fabulous film that no one goes to watch – morally, culturally, economically. All that matters is that it's a business and it's about getting a return and therefore getting an audience. And that doesn't necessarily mean dumbing down the production slate at all. I think Polygram in the UK made it very sexy to have hits. And I think that legacy remains, thank God.