At the top end, channel 4 films typically cost £500k-£600k. A big difference to a typical £3-4 million for conventionally funded feature films of the time. (Walker 2004). Until 1985 there was a generous system of tax write offs against production costs in which costs could be written off against profits straight away whilst films not initially targeted at TV had their cost written off over several years, therefore C4 films probed attractive to filmmakers and producers. In terms of risks and returns for investors funding C4 films was much lower risk in a high risk business.
Film-makers wanted to have their cake and eat it too, whilst they enjoyed the tax write offs they wanted to first of all have the films given a theatrical release in the cinemas. Many wanted an 18 month to two year window for cinema release, however the commissioning editor for fiction at Channel 4, David Rose, correctly felt that this wouldn't allow C4 to build up its audiences. The reality was that these films didn't enter into the mainstream anyway usually being released in a small number of cinemas which were identified with the Art House circuit, even when they did get theatrical release. In the opinion of many of the audience, this acted as an artificial choke on the market and represented greed from the investors by tryng to squeeze every last penny out of audiences. The problem for C4 was also that the freshness and sense of the contemporary would inevitably be watered down if audiences had to wait. They might even lose interest in the film. As a result few films had theatrical release and those that did had very limited ones. At this time there was still considerable friction between the film and TV industries. Cinema was very defensive about its major circuits of distribution and exhibition which is where the real money has been made in cinema. The distributors wanted to keeep films off TV for three years and only in the case of commercial flops were they prepared to allow them onto TV inunder three years.
Channel 4 was badly effected by this industry restriction on trade practices.
Channel Four had been established with the aim of getting many programmes either by commisioning or buying in programmes from other companies rather than producing its programmes in house which was what both ITV and the BBC did. By 1987 24% of C4 programming was externally produced and films were a large part of this 24%. C4 had an ambitious target of co-producing 20 films per year which was beyond the resources of any other film making companies in the UK. According to Walker (2004) it had a budget of £6 million to spend on fully or part financing films. It typically invested between £250k - £300k per film buyijng in the TV rights. C4 also invested £750k per year in British Screen Finance and another £500k per year in the BFI Production Board. One of C4 first films The Draughtsman's Contract (1982) was a co-production with the BFI Production Board. In the case of the last two investments funds were matched by the government which provided extra stimulus to the industry.
By the end of 1987 C4 was producing 17/28 films per year on a £9.5 million budget. Very few of the films directly recovered their costs and to all intents and ourposes C4 remained an 'art-house' producer as the films weren't reaching mass popular audiences they had on the other hand established a good rapport with more specific audiences and can be used as an example of how audiences were beginning to fragment as more media products became available. The breakthrough films for C4 were My Beautiful Laundrette (1985), Letter to Brehznev (1985) Mona Lisa (1986). A useful boost was that these films also found an alternative audience in the United States.
The head of film at Channel Four, David Rose had had a considerable influence on the success of C4 Film with about £50 million spent on around 160 films up until this point. Many in the British film industry were critical of the C4 approach arguing that the small scale cutting edge film that C4 had built its reputation around was dead. They further argued that C4 had not acted as the launchpad for British cinema which they had expected instead film makers still had to find a considerable amount of finance for themselves. Eager to break into the Hollywood market and get themselves fame and fortune?
