Britain’s FilmFour Closing

LONDON —  A long, rich era of British filmmaking abruptly came to a close Tuesday when Channel 4 television closed down its movie production arm, FilmFour.

As part of a restructuring following heavy financial losses, FilmFour will cease to operate as a distributor and an international sales company, while its production function will be re-integrated into Channel 4 at a sharply reduced level. Most of its 59 employees are expected to be let go.

A wave of sadness swept the British film industry at the news of FilmFour’s demise, even at rival production companies. For much of the last two decades, Channel 4 simply was the British film industry, often soldiering on alone and investing in local filmmakers’ projects when no one else was willing. Under former chief executive Michael Jackson, who left last year to run what is now Universal Television in the U.S., the parent network launched FilmFour as a stand-alone subsidiary in 1998.

It will be remembered as a company with a knack for making small, cutting-edge, distinctively British films, some of which went on to achieve huge international success.

These included “My Beautiful Laundrette” (1985), which was originally made just for television. It gave Daniel Day-Lewis his first starring role, broke new ground in portraying an interracial gay romance and secured an Oscar nomination for screenwriter Hanif Kureishi. “The Crying Game” (1992), a thriller-love story with an astonishing plot twist, bombed in Britain, but was so energetically marketed by Miramax in the U.S. that it became a box-office hit, and director Neil Jordan won a screenwriting Oscar. In 1996 came “Trainspotting,” a visceral roller coaster of a movie about young drug addicts in Edinburgh, Scotland. Its production cost was $3.5 million, but it grossed more than 20 times that at the international box office, a ratio almost unheard of in film financing circles.

In the 1980s, Channel 4 invested heavily in the films of such social-realist directors as Mike Leigh and Ken Loach, and scored internationally in the following decade with hits like “Four Weddings and a Funeral” and “The Madness of King George” (both 1994). More modest successes included “East Is East” (1999) and “Croupier” (2000). But FilmFour lost its way in the last year or two, and “East Is East” was its last genuine hit.

Respected by Competitors

“Any reduction of funding for British films is a sad thing,” said Tim Bevan, co-chairman of Working Title, Britain’s most successful production company (a subsidiary of Vivendi Universal). “I feel bad for Channel 4. They’ve been judged on their first five years, and I wonder if Working Title would have lasted had we been judged on our first five years. They gave us our first hit with ‘My Beautiful Laundrette,’ and that was their first hit too.” (The two companies co-produced the film.)

The closure of FilmFour comes at a particularly tough time for the British film industry. The company was plowing some 31 million pounds ($46 million) annually into film production, but under the new restructuring, Channel 4 will invest only a third of this amount, mostly into low-budget films. Production in Britain is currently stagnant, and potential investors are extremely cautious. It is hard to raise money to make films.

So what went wrong? In part, FilmFour was the victim of attempts to transform it into a global player. Paul Webster, who joined the division as chief executive in 1999, revised the formula of spreading its budget thinly over several low-budget films, and opted for a “portfolio” approach, including more expensive, international films into the mix.

To this end, FilmFour entered into a co-production deal with Warner Bros., but the first two films under this arrangement were hugely disappointing. The hotly anticipated “Charlotte Gray” (2001), starring Cate Blanchett, failed to find favor with critics or audiences, while the Robin Williams-Danny DeVito comedy vehicle “Death to Smoochy” bombed in the U.S. earlier this year, and its prospects in other territories look gloomy.

But even on its traditional turf--lower-budget movies--FilmFour seemed to be losing its touch. Last summer, it released the jailhouse comedy “Lucky Break” with a substantial marketing budget. But the British public stayed away in droves.

And this year, FilmFour has exhibited classic symptoms of a company lacking morale and a loss of nerve. It abruptly pulled the Andie MacDowell comedy “Crush” from the schedule three weeks before its British opening, rationalizing that it would be better for the film to open in the U.S. first. This move marked the film as damaged goods in Britain; it bombed in both territories.

Only two weeks ago, FilmFour’s “Birthday Girl,” starring Nicole Kidman, opened to ho-hum business in the U.K., where Kidman has enjoyed extraordinary success with her last two films, “Moulin Rouge” and “The Others.” The publicity campaign for “Birthday Girl” seemed halfhearted--as if FilmFour itself no longer believed in the movie.

This constituted a terrible run, financially and creatively, and it was played out against a background of rising losses. Last year FilmFour reported an operating loss of 5.4 million pounds ($8.1 million) on revenue of 43.1 million pounds ($64.6 million) against a loss of 3 million pounds ($4.5 million) in 2000. Clearly, the writing was on the wall. Now Webster has made it clear he will not be considered to head the new, small film unit, which significantly will be housed in Channel 4’s main building in central London, and not at FilmFour’s separate premises.

Another problem for FilmFour was that it became cast adrift culturally. Channel 4’s film division always flourished when its aims and ambitions reflected that of its parent company. Channel 4 launched itself as Britain’s fourth terrestrial TV channel in 1982, with a mandate to serve minority audiences and include voices and viewpoints seldom heard on, say, the BBC. Its earlier films--”My Beautiful Laundrette,” as well as Leigh’s and Loach’s work--were left-of-center and anti-Thatcherite, thus complementing those aims.

In the 1990s, Channel 4 became more youthful, hip and irreverent, and so were many of its films: the influential “Trainspotting” and its predecessor, “Shallow Grave” (1994), made a star of actor Ewan McGregor and their creative team: producer Andrew MacDonald, director Danny Boyle and screenwriter John Hodge.

Yet in recent years Channel 4 has sought to establish itself as a mainstream, commercial (if youthful) entertainment channel; in Britain, it is now known primarily as the channel that broadcasts “Friends” and “Big Brother.” FilmFour has tried to follow its lead; at one point Webster wanted it to concentrate on low-budget comedies, but first-rate comedy writers are scarce in Britain. “It was a lot easier for FilmFour when Channel 4 had a strong, decisive [mandate],” said Working Title’s Bevan.

Not everyone thinks FilmFour’s closure was inevitable.

Miramax’s Harvey Weinstein, who has distributed several of the company’s films in the U.S., thinks pulling the plug is “a huge mistake.”

“FilmFour is the best thing that ever happened to the British film industry,” he said. “It has built up a great library of movies. Films I made 10 years ago that didn’t make much money are now making good profits because of video and DVD sales. Movie companies are built on the strength of their libraries. Stay the course and you will win.”

But a telling comment on the company’s demise came Tuesday from its managing director, Rob Woodward. “Over the last four years,” he said, “significant investment and hard work has gone into FilmFour to develop it as a meaningful player internationally. However this has not proved possible, given the sheer scale of the major studios.” FilmFour shifted its ground, tried to take on Hollywood--and paid the price.