Media Viewpoint: Why BSkyB is no friend to the British film industry

The headline 'BSkyB invests in British film industry' in last Thursday's Independent suggests a fundamental misunderstanding of the nature of investment. Channel 4 has no disagreement in principle with British Screen (of which it is the major 43 per cent shareholder and the major funder) doing a deal with BSkyB. But this deal is an insult to viewers and producers.

For a start, the money involved - pounds 2m a year for three years - is so derisory. The deal is a public relations exercise designed to distract attention from the fact that Sky is taking hundreds of millions from British viewers in its film channel subscriptions and putting very little back into British production. BSkyB is not contributing any risk or development money: there is no evidence that this deal will enable a single extra film to be made.

If talent were all it took, we would have a thriving film industry. But British cinema has consistently lacked hard cash, from investors committed to gambling on developing something truly original. Until Channel 4's arrival in 1982, British television did absolutely nothing to underpin the precarious British film industry; paying to license films for transmission after cinema release is not risk investment.

Film on Four launched British television's first project to make features for both cinema and television. This thriving strand now numbers more than 200 films, many of which simply would not have been made without the channel's efforts - whether co-financed (The Crying Game) or wholly financed (Raining Stones). The BBC produces only about five films a year for cinema release, and ITV's enthusiasm for financing movies has, sadly, diminished under the pressure for profits. So our continuing commitment to risk pounds 10m a year remains unmatched support for British film-making.

BSkyB will be able to exercise a droit de seigneur over any film that has British Screen funding, and, whatever the complex exclusion clauses, none of British Screen's co- financiers or its supplicant producers can be confident of being allowed to say no to it. If Channel 4 takes a big investment risk in a production for Film on Four, and is willing to buy out the pay-TV window - allowing it to be screened on television a year after cinema release - why should its own viewers be gazumped by the pay-TV subscribers of BSkyB?

Any producer who applies to the two government funds administered by British Screen (its own fund and the European Co-Production Fund) is required to accept BSkyB's rights to this pay-TV window. Why should one satellite broadcaster be given this favoured status over other satellite operators or terrestrial broadcasters?

The other flaw in this deal is the assumption that BBC, ITV and Channel 4 will continue to buy terrestrial broadcasting rights at the same level as before in films that have had a dozen screenings on BSkyB.

British Screen is not Channel 4's only co-production partner, and it has been of decreasing importance in the past year or so. We have an honourable record of providing the entire finance for certain films ourselves - most memorably My Beautiful Laundrette and Riff-Raff - but the more we invest in any individual film, the less there is available for others, so some co-production money is vital.

Our commitment to Film on Four remains undented, even though it is not essential to fulfil our remit or for our commercial success. We can gain substantial audiences with films that we merely license - a message BSkyB understands only too well - and we can more than adequately fulfil our remit for innovative and distinctive drama with our varied serials and single plays. But we still feel that, unlike BSkyB, it behoves broadcasters to do more than simply license a product; they should also take the risks to see that original and distinctive films are actually made.

British Screen could have struck a much better bargain for British cinema. If BSkyB really wants to boost the British film industry, rather than look as if it is, I invite it to match our pounds 10m a year in genuine investment, and to develop and produce projects together. Then jointly we could guarantee that more British films would indeed be made, and that the British film industry would have a real reason for rejoicing.

The author is chief executive of Channel 4.

(Photograph omitted)