The future of co-production between European and American film companies was the talk of Cannes this year. So was the question of whether people who make films should also sell them. The strategy of FilmFour, British filmmaker and seller, to produce bigger films with US partners had not paid off and the share price of the Franco-American Vivendi Universal was in free fall. FilmFour's experiment as a British mini-studio was based on the Hollywood model. But now both the model and its imitator are in trouble.
The very idea of making and selling movies evolved in a Euro-American pas de deux. The first film company to do both-to be vertically integrated-was Charles Path?'s in France at the beginning of the 20th century. In a very French way, verticality became a moral issue: it would be wrong for local films to be handled by foreign distributors.
Then Hollywood stole France's thunder. With the establishment of Universal in 1915, Hollywood's Wall Street backers came to own sound studios, distribution companies and cinemas alike. So began the film industry.
It couldn't last. Not even in protectionist France were things so sewn up. In 1948, the US Supreme Court instructed Hollywood to divest itself of its theatres. It was the beginning of the end of vertical integration. Until the 1980s, that is. A left-field British television station called Channel 4 made My Beautiful Laundrette with television money and it was a hit in the cinemas. In 1995, the same thing happened with Trainspotting. As the channel distributed neither film, it lost out on the profits. The solution? Scale up production to make bigger, even more successful Trainspottings, cut out the middle men and distribute the films itself.
Thus in 1995, FilmFour moved into distribution and in a modern twist on Hollywood's own-your-own-screens idea, a dedicated digital channel also, confusingly, called FilmFour, was established, not only to screen its parent company's films but to extend the cultural context in which those films were understood.
FilmFour grew in prestige. It acquired a new poster boy, chief executive Paul Webster. It had a hit with Little Voice, another with East is East. It moved into US production and did a deal with Warner Brothers. In the same year, 2000, it completed Late Night Shopping, Crush, Lucky Break, The Warrior, Charlotte Gray and Monsoon Wedding.
Meanwhile, France's sewage company, Vivendi, which owned Canal+, had gone to Hollywood and, in an act of amazing cultural hubris, bought that 1915 studio, Universal. Vivendi Universal's boss, Jean-Marie Messier, took an apartment on Central Park, declared that l'exception francaise was dead and insisted that the French filmmaking wing of his company got more involved with US filmmaking.
Which is what FilmFour had done. Both were banking on mainstream hits (meaning ?10m-plus in Britain). None came. Late Night Shopping was good but underperformed. Crush was awful. ?2m was spent selling Lucky Break, Peter Cattaneo's follow-up to The Full Monty, but people stayed away. Charlotte Gray was the biggest movie FilmFour had made but it failed to corner the market.
FilmFour production made a profit of ?0.5m in 1999, but lost ?3m in 2000, and ?5.4m in 2001 on a turnover of ?43.1m. In July this year, Channel 4 closed the company down, folding production back into the television commissioning process, ending the make-and-sell strategy and severing ties with Hollywood. Production expenditure was slashed from ?31m to ?10m (less than the BBC's film spend). Webster is not re-applying for his scaled-down job.
Across the channel, things were moving in eerie parallel. Vivendi Universal's share price was down 70 per cent. Just before Cannes, it slashed its StudioCanal productions to 15 per year, the bulk of the cuts applying to its high-profile US films. Then Jean-Marie Messier was forced out.
On the historical scale, what FilmFour and Vivendi Universal are going through is another movement in the making and selling of films pas de deux. Europe and America are here, as elsewhere, dancing away from each other. Yet perhaps C4 has overreacted. The company made a ?21.5m profit in 2000 and a ?20.6m loss last year. FilmFour's ?5.4m deficit for 2001 seems sizeable. But C4's holding company, 4 Ventures, incurred an overall operating loss last year of ?65m. FilmFour's proportion of this is only 8 per cent. Bigger drains on the C4 group, apart from the downturn in advertising, are entertainment channel E4 and the FilmFour channel. But there's less talk of reviewing them. The latter is valuable and should be ring-fenced, but now that the BBC and BSkyB have beaten C4 and its partners to the digital terrestrial licences, it may need to watch out.
C4's contribution to film production is a requirement of its licence. How can it do so on just ?10m per year? If FilmFour scales down production budgets by two thirds, it might be able to make as many films as it used to by making them more cheaply, but it seems unlikely. Miramax's Harvey Weinstein and British producer Steve Woolley are among many to have voiced deep concern. They point to what British filmmaking was like before C4-Derek Jarman, Terence Davies, Bill Forsyth and not much else. There is still the lottery, plus the Film Council and BBC films. But when C4's cuts take effect, will anyone still be able to say, as the director of the Cannes film festival said this year, that "British cinema is on a roll?" Of course, we can try making different films. Maybe they should be smaller, less literary, more original. But, please, don't let there be fewer.
