Feasibility Study of a Digital Platform for the delivery of UK ... - BFI

UK FILM COUNCIL
Politically this approach may meet with disapproval from existing distributors and possibly financiers, especially if the UKFC is seen to be
exploiting its privileged position in order to tie up rights through pre-purchase. The approach of a pre-sale in some ways is similar to that
taken by other funding sources such as the BBC on conventional platforms—such as the practice of taking Free TV rights in return for
production investment—and may yet create a response from the broadcaster. Indeed, the broadcaster’s public strategy of acquiring the
UK licence for Pay TV and Free-to-Air rights as part and parcel of its funding in some cases is well documented, and saves the
Corporation millions of pounds than if it were to acquire content post-release in the open market (one key example is ‘Billy Elliot’).
However, as much as this is a favourable position for the BBC, it is arguable that this may not be in the best interest of producers of
independent and specialised films who, beyond the BBC and Channel 4, have scarcely few buyers.
Similarly, post-purchase of rights might bring the UKFC into conflict with existing buyers and potentially draw fire from the commercial
sector (unless post-purchase is provided as conditional on no other buyer being found in the market first). Nevertheless, an important
argument for adopting such a stance would be to provide not only a safety net for producers, but also leverage in negotiations in all
stages of financing and rights selling where on-demand and Internet rights are concerned, to ensure that a fair market price is reached
with both financiers and buyers that serves the long-term interest of the UK independent and specialised film sector as a whole rather
than purely the commercial interests of broadcasters.
Strategic options in relation to distribution
As indicated above, the options discussed here on distribution must be considered in conjunction with those on rights.
Promotion of standards and interoperability
A pro-active way in which the UKFC could seek to promote the development of the digital distribution and consumption of specialised film
would be to promote digital platform technical standards and an interoperability framework (especially with regards to DRM). This could
greatly encourage wider distribution of film across manifold platforms, reducing the costs and barriers to entry associated with preparing
content for multiple delivery systems. It may also ease consumption from the consumer end by encouraging standardisation of the
software needed to view and pay for the content. The issue of interoperability of DRM technology and related systems has particularly
important public policy significance in relation to both consumer access to content (e.g. ensuring access on fair and non-discriminatory
terms) and competition (e.g. ensuring dominant players in the DRM sector do not distort operation of the digital film market).
Any intervention in this field might conceivably bring the UKFC into conflict with market forces currently shaping the direction of
technology in this area. In addition, the current status of standards within digital space is something of a political minefield, not least
because of the dominant positions already held in the media DRM sector by Microsoft and Apple. While an intervention in this field may
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