Independent film-makers have secured a boost in their perennial search for investment though last week’s changes in UK tax law. Under the newly-unveiled Corporate Venturing Scheme, corporations will receive 20% tax relief when investing in unquoted companies whose royalties and licence fees arise from intellectual property which they have created. The scheme, which formed part of last week’s budget, is seen as a corporate addition to the Enterprise Investment Scheme (EIS), a tax relief mechanism which a host of private investors have used to invest in film production. "This opens up more possibilities for film financing," said Harry Hicks, partner at accountancy firm Baker Tilly. "The new changes are welcome to an industry that is hampered by a lack of strong infrastructure and investment." The scheme is primarily aimed at encouraging software companies to invest in new technology start-ups but could be used by production companies and distribution companies involved in production. However, many distributors may be excluded as a large proportion of their royalties and licence fees come from films produced overseas. "There is still much scope for improvement especially in strengthening the UK’s film distribution industry," Hicks added. Other measures introduced in the budget that are expected to affect the film sector include new rates for the capital gains tax (CGT), which will be reduced from 40% to 10% after four years. UK-Canadian financier Grosvenor Park, which was considering creating an equity fund with support from the EIS scheme, is now looking at creating a more ambitious equity fund utilising the revamped CGT. The EIS scheme’s appeal to investors has been raised by allowing them to hold investments for three instead of five years to qualify for 20% relief. But unlike the CGT, the EIS scheme caps investment in one tax year at $238,000 (£150,000). "We are re-thinking our approach to the market," said Grosvenor managing director Andrew Somper.

US Box Office hit by Oscar Turnout

According to studio figures, more people stayed at home to watch the coverage of the ceremony than they had anticipated. Nearly all of the results were significantly lower than the studios' original estimates. Topping the list was Universal's Erin Brockovich (2000), which earned $18.5 million, followed by Warner's Romeo Must Die (2000) with $18 million. Final Destination, a teen horror movie released by New Line, performed according to expectations, earning $7.2 million and winding up in third place. Shame. The Oscars averaged a rating of 31.3 rating and a 49 share, according to Nielsen overnights. The figures compared with a 28.6/46 last year, a 34.9/55 in 1998 (Titanic year) and a 27.4/46 in 1997. (The all-time high for an Oscar telecast was a 46.7/82, recorded in 1956.) The figures continued to reflect the show's status as the second-most watched event of the year (behind the Super Bowl!)

Besson's 2nd Cab Ranks Highest Ever.

In Paris Luc Besson's, Taxi 2 has attracted 110,454 admissions from 55 screens, beating Star Wars: Episode One - The Phantom Menace's blockbuster opening of 91,222 admissions in the French capital earlier this year. Taxi 2 is the highly-anticipated follow-up to 1998 hit Taxi which became the fourth highest grossing hit in France in 1998 after attracting a total of 6.3 million cinema-goers. The sequel, produced on a budget of $10.3m (FFr70m), was expected to be successful but not to beat off previous domestic record-holders. Besson's latest flic through his own Leeloo Productions (distributed by Arp Selection) has also crushed the all-time opening day record in France, taking an enormous 759,152 admissions from 830 screens.

Lloyd Quits Pathé

Alexis Lloyd is to leave his job as MD of UK based Pathé Entertainment, the production and distribution side of the French company in a move that may prompt a close colaboration between them and Canal +. Through C+P, Canal Plus' joint acquisition venture with Pathe's parent company, it also has a deal with Mandalay Entertainment for rights in France and the UK to 12 films kicking off with Sleepy Hollow. While Pathe’s UK distribution operations are beginning to enjoy greater success - and through C+P have the highly anticipated Chicken Run for release in summer - the group has not been taken to the heart of the British film industry. It remains suspicious of Pathe Pictures, its Lottery franchise company which was awarded some £30m in May 1998 to develop a slate of pictures, but has yet to make much of a mark commercially or artistically.

Canal Plus Image, which this week committed to Nora Ephron’s John Travolta-starrer Numbers, has deals with producer-suppliers including Bel Air Entertainment, in which it has a 50% stake, Working Title Films, Phoenix Pictures and Spyglass Entertainment from which it bought five films for French-speaking Europe including The Sixth Sense.

Lloyd, who has been in the job since 1997 when Pathe took control of UK distributor Guild, is expected to leave after Cannes in May and will set up his own production outfit with Pathe backing. He will be replaced by Francois Ivernel, currently the Paris-based head of production and rights acquisition arm Pathe Image.
The move comes as Pathe looks ever more integral to Canal Plus’ ambitions to build a Europe-wide production and distribution network. It has already re-shaped its arrangement with Sogepaq in Spain, set up Bac Distribution in France and bought control of Tobis in Germany. Canal Plus is negotiating a distribution arrangement that will handle the big-budget pictures flowing from the web of one-off and longer-term production arrangements being spun by Canal Plus Image. Most likely is the acquisition by Canal Plus of a 50% stake in Pathe Distribution, although other options including joint ventures and output deals are understood to be under consideration.

German Export Funding Blow

The German Film Export Union's efforts to promote German cinema abroad have been dealt a blow by the decision of federal culture minister Michael Naumann to cut its financial support by $104,500 (DM215,000) this year.
The Munich-based promotion agency said in press release that the reduction in the culture ministry's contribution to its $2m (DM4m) budget could result in the cancellation of one its annual festivals of German cinema this year. The Export Union organises festivals in Madrid, Paris, London and Rome along with a film schools showcase "Next Generation" and the German reception in Cannes.
However Germany's six main film funds - Filmboard Berlin-Brandenburg, FilmFernsehFonds Bayern, FilmFoerderung Hamburg, Filmstiftung NRW, MFG Baden-Wuerttemberg and Mitteldeutsche Medienfoerderung - unanimously agreed to provide the Export Union with $223,700 (DM460,000), the same amount of last year, towards financing events.
The ministry’s decision was unexpected as Naumann has recently called for the agency to extend its brief to include TV and documentary productions. "More funds and not less are required for the realisation of this sensible demand," Export Union said in its statement.
The budget cut also seems misplaced as the Export Union festivals are seen by German exporters as an ideal opportunity to showcase their product to TV and theatrical buyers as well as reach a public audience. Last year’s Paris event resulted in sales to French distributors, and the London festival sowed the seeds for the sale of six German films – including Trains 'N Roses and Am I Beautiful? – to BBC digital channel BBC Knowledge. The BBC deal was brokered by the Export Union's UK representative Iris Kehr.

French turn Francs into Zloyts.

French pay-TV giant Canal + has earmarked almost $5m (20m Polish zloyts) to support Polish film production in 2000, making it Poland's second largest producer after local broadcaster TVP. Canal Plus has invested more than 61m zloyts in 35 Polish films as part its on-going financial support programme, launched when it entered the Polish pay-TV market in 1995. Last year the company invested 21m Polish zloyts in nine Polish films. The benefit from this French 'aid' can be seen in the figures: 12.5 million Polish bums on seats from Canal Plus co-productions, spread mostly over 3 films.

This year Canal + will co-produce a further 13 films this year after they produced the first Polish sitcom 13 Posterunek (13th Precinct) and its sequel 13 Posterunek 2.

1st Feature for Planeta

Planeta 2010, the multimedia arm of publishing company Grupo Planeta, has acquired all the rights to its first feature film, the Italian animation La Gabbianella E Il Gatto. Planeta 2010 was launched last year to house all of the publishing group's media interests, which include a 15% share in DTT platform Quiero Television (formerly Onda Digital), a 10% stake in free TV broadcaster Tele5, and a 14.8% share in thematic content provider Canales Tematicos. Aside from acquisitions, Planeta 2010 plans to produce and back feature films and TV productions. It already has two thematic channels in the works: special interest channel Beca, and travel channel GeoPlaneta. Both will likely launch on Quiero Television.

Planeta 2010 is headed by Aurora Cata. Adolfo Blanco, formerly of Barcelona mini-studio The Filmax Group, negotiated the pick-up of La Gabbianella and has picked up theatrical, video, pay-TV and free-TV rights to the film, which was produced by Italy's Cecchi Gori Group and successfully released in other European territories. Merchandising rights are still under negotiation.

Almodovar et al Fly The Indie Flag

According to Spain's Culture Ministry, Spanish productions lifted audience figures a huge 37% this year compared to last. Spain produced 82 features in 1999, 38 of which were international co-productions, the highest number since 1983, demonstrating the rising international profile of Spanish productions. Average budget costs also increased, from $1.7m (PTS270m) in 1998 to around $1.9m (PTS300m) in 1999.
However US films continue to dominate the Spanish box office taking at least a 65% share. Spanish films cornered 14% of Spain's total box office in 1999 which was worth about $516m (PTS80,000m) or 130 admissions, a 14.3% increase on the previous year when Spanish films took a 12% share. Continuing the exhibition trend of previous years, one new cinema screen was built on average nearly every day in Spain in 1999, rising in number from 2,997 in 1998 to 3,338 in 1999. The top Spanish films in 1999 included Pedro Almodovar's Academy Award-winning All About My Mother (Todo Sobre Mi Madre), Alex de la Iglesia's Dying Of Laughter (Muertos De Risa), civil war drama Butterfly's Tongue (La Lengua De Las Mariposas) and Penelope Cruz vehicle The Girl Of Your Dreams (La Nina De Tus Ojos).
All About My Mother remains in Spain's top 15 after a phenomenal 48 weeks on the charts, grossing $9.9m (PTS1,535m) as of March 16. Butterfly's Tongue is also hanging on to a spot in the top 20 after 25 weeks, earning a total gross of $4.7m (PTS732m) through March 16.

Captain Thunder to marry Filmax!

The Filmax Group, the Barcelona-based mini-studio, is finalising plans for its "most ambitious" project this year: a feature film and spin-off multimedia ventures based on popular Spanish cartoon character Capitan Trueno (Captain Thunder). is finalising plans for its "most ambitious" project this year: a feature film and spin-off multimedia ventures based on popular Spanish cartoon character Capitan Trueno (Captain Thunder).

The script for Thunder is currently in the final stages and casting is set to begin this spring. Shooting on the film should start before the end of the year in preparation for a 2001 release. Backed by Spanish digital satellite platform Via Digital, Fernandez says the project has already elicited international interest and has Director Juanma Bajo Ulloa - whose last feature film, 1997's Airbag, became the highest grossing Spanish film ever in its day - attached. The script for Thunder is currently in the final stages and casting is set to begin this spring. Shooting on the film should start before the end of the year in preparation for a 2001 release. Backed by Spanish digital satellite platform Via Digital, Fernandez says the project has already elicited international interest. With a budget "above PTS1,000m" ($6.5m), far exceeding the Spanish average, producer Julio Fernandez says he will launch a video game, an animated cartoon and a CD-Rom soundtrack to accompany the film and capitalise on the merchandising potential of the popular cartoon character, a medieval knight. An interactive web page is already up and running (www.capitantruenolapelicula.com). Thunder will involve Filmax's start-up animation producer Bren Entertainment, post-production laboratory Filmtel and a Galician capital risk fund.