We will see the results of the UK-India Film Co-Production Treaty in 2009 when producers are finally able to claim the benefits of this much talked-about agreement. On a positive note, the treaty has started evoking interest from Indian film producers to shoot in the UK. Here's a guide to the treaty:
Ms Isabel Davis, Senior Executive, International Strategy and Co-production, UK Film Council stressed that the benefits were not for only films with British culture as the theme on her trip to India in December 2008. While there are certain conditions to be met for availing of the tax rebate and access to funds, the film could be on anything. It could, for example, be a Bollywood Hindi film shot in India, she said.
She added there are a number of funds that provide equity support to a producer.
The UK Film Incentives
Qualifying as a British film under one of the UK's official co-production treaties provides a number of advantages: productions are eligible to apply for UK Film Council funding and for the benefits of the UK's tax relief system. Films made as official co-productions are not required to pass the Cultural Test for British film.
The UK post-production industry has an annual turnover of $2.6 billion. The sector has about 1,000 companies and employs some 15,000 people.
There are a number of ‘screen agencies’ that provide assistance to a foreign film company. They get permissions, hire cameras and crews, help find locations and assist in post-production. These screen agencies could be of immense help to an Indian company that wants to shoot in the UK, many speakers at the meeting said.
Indian films being made to international standards could benefit from subsidies to the extent of at least Rs 1.6 crore (nearly £220,000) and the profits can even go up to Rs 100 crore (nearly £14 million) per film, under the new U.K.-India co-production agreement.
Recently, UK has signed another treaty with Morocco. The agreement gives film-makers access to sources of funding and support in both countries and provide UK films with distribution networks in Morocco and elsewhere in north Africa. It is the eighth bilateral co-production treaty signed by the UK. Previous agreements with Australia, Canada, India and Jamaica, among others, have led to the making of more than 400 co-production films in the last seven years, worth more than £1bn to the UK economy.
The bilateral co-production treaty will give producers access to tax breaks, fresh funding sources and practical support.
"While in rupee terms, the benefits through subsidies can arguably start from $320,000 (Rs 1.6 crore), with some networking, a properly budgeted, professionally made film may reap profits of $500,000 (Rs 2.5 crore, or £342,077) onwards per film through television premieres alone," Carey Fitzgerald, managing director of High Point Media Group, a company that helps networking sales of films, told IANS (December 2008).
"There is no cap on profits. Re-issues, remake rights, releases of dubbed versions the world over, earn profits for classic films with a timeless quality beyond the $20 million (Rs 100 crore) within a reasonable amount of time. And from then on, the initial draw of those companies' future productions can only go upwards," Fitzgerald added.
"There cannot be any sudden dramatic changes, of course. After the necessary detailed paperwork is vetted by auditors, the subsidies will be paid in the U.K. only after several other stringent parameters are met," Isabel Davis said.
"The immediate benefits will be pegged at 20 per cent production costs of films partly made in Britain by Indian entities. But the deal will be sweetened further by other subsidies that will include creative and technical inputs for collaborative efforts plus the availability of a global market," Davis added.
Public funding means stringent controls that may not satisfy egos of overpaid stars as their pay cheques may seem "over-lavish-expenses" to British auditors who follow stringent rules, opined Lee Stone, a lawyer who advises media entities in Britain.
"While none can curb creative instincts of filmmakers, controls of strict auditors who follow stringent rules will be discernible. On the flip side, most Indian films can pass the yardstick of 52 per cent marks for cultural acceptability in Britain and become eligible for the 20 per cent subsidy for realistic costs," Stone said.
"International markets of films have various other policy susceptibilities against depiction of suicides, violence, cruelty against women and comments against ethnic groups. But these are standards followed by major international films which pass these tests with flying colours," Stone added.
Said Fitzgerald: "A good film's success depends a lot on its delivery to audiences at their conveniences. Electronic delivery at homes at predetermined, uniform global prices through physical or soft copies of movies will be the future since the so-called small screens at home are becoming larger and cheaper."
Rising India
Yahshraj Films' 'Rab Ne Bana Di Jodi' 2008 was released globally to packed housesSupran Sen, the honourary secretary of the Film Federation of India, said the figures, if translated into reality, would mean huge profits on the basis of 1,146 movies released in India in 2007. Bollywood is the buzzword for its huge growth. Mumbai is the film city.
"The Indian films that can be termed 'timeless classics to appeal to the global market' could be five to eight per cent of the above number or some 80 films. Therefore, if the British claim fructifies into money, it can result in profits of round Rs 8,000 crore (£1.1 billion) from this business alone," Sen said.
"In other words, the annual spread of Rs 9,000 crore (£1.2 billion) in Indian showbiz can almost double. That said, the English claim has to be tested (on the yardstick of the) harsh realities of filmdom," Sen added.
FILM CO-PRODUCTION AGREEMENT BETWEEN THE GOVERNMENT OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND AND THE GOVERNMENT OF THE REPUBLIC OF INDIA
Co-production benefits in India
Ministry of Information and Broadcasting
UK: Who can apply?
(a) be a limited liability company within the charge of UK Corporation tax. Individuals, partnerships and limited liability partnerships are excluded. The requirement that the co-producer makes an effective creative, technical and artistic contribution means that ‘finance only’ coproducers
cannot access film tax relief;
(b) be an actual co-producer of the film; and
(c) make an effective creative, technical and artistic contribution to the film. HMRC requires that there can be only one Film Production Company per film. If there is more than one UK co-producer meeting this description, then the company most directly engaged in these activities is the Film Production company.