London has long been a byword for creativity in music and fashion but few knew until recently it has become synonymous for specialised film technology.
It took the success of the Oscar-winning movie Gravityto make a wider audience realise that the city has a vibrant, special visual effects (VFX) sector that combines technological advances with artistic innovation.
“Only now are people getting that this is as big as the financial services sector,” says Sir William Sargent, chief executive and co-founder of Framestore, the post-production company that worked on Gravity’s special effects. “The UK is recognised as world-class and there aren’t many places in our economy we can say that.”
He and other industry figures call the catalyst for London’s success over the last decade the “Harry Potter effect” – the decision by Warner Brothers to use UK-based companies to create the VFX that helped to make the movie franchise a worldwide blockbuster.
The Harry Potter films helped to generate a steady stream of work for a sector that had been quietly boosted over several years by a regime of tax credits supported by successive UK governments.
Overall spending on feature films in the UK reached more than £1bn in 2013, with more than £868m generated from 37 inward investment features, making up 81 per cent of all feature film spend, according to the British Film Commission (BFC).
According to a report from Oxford Economics, an independent consultancy, production would be about 71 per cent smaller without the government’s film tax relief.
Recently, the government reduced the proportion of a film’s budget that must be invested in the UK for a production to qualify for tax relief to 10 per cent from 25 per cent. This means that if a studio had a $100m budget, they would only have to spend $10m and not $25m to qualify for tax relief.
Tax incentives are also being extended to video games, animation and high-end television productions.
“London and the UK is experiencing an extraordinary amount of film, TV and animation activity as a result of tax credits,” says Adrian Wootton, chief executive of Film London and the BFC. “There’s been a huge amount of R&D and expansion. We now have the biggest concentration of VFX in the world with six of the eight top companies in this sector in London.”
These companies include Framestore, Industrial Light & Magic, MPC, Double Negative, Cinesite, and Prime Focus World.
“We had well-established film production companies, not just in Soho but in the studios that ring around London, but then Harry Potter came along and that boosted films heavy on VFX,” says Matthew Bristowe, a senior vice-president for production at Prime Focus World. “London is now one of the biggest centres, with about 3,000 people working in post-production special effects.”
Gravity, which starred George Clooney and Sandra Bullock, won seven Oscars, including one for VFX that were created by experts in London, including those at Framestore.
“Some 80 per cent of the film is digital. In most scenes, only the faces are real,” says Sargent.
Framestore animated 3D digital storyboards of the entire film, a technique called pre-visualisation, before live-action shooting with the actors began, he says. As a result, the live action had to perfectly match the pre-existing digital choreography.
But the company, which has grown to 900 employees and expects last year’s revenues of £60m to rise 20 per cent, is far from complacent or resting in a post-Oscar glow.
“Sadly, an Oscar doesn’t get you a premium on your next film. It does reinforce your membership of the Champions League, to use a football analogy. It keeps you in the global handful of companies that the studios go to,” he says. “But the client base, the studios, remains very small.”
Sargent worries most about the quality of education and a flow of talent from around the world. Framestore employs between 60 and 80 new graduates a year.
“Our sector feels reasonably well-loved by the government in this country and the only negative is that the education system is not perfect,” he says. “But our industry and cluster is world-class so we take the best of the best from around the world so it’s not necessarily down to British colleges having to provide everyone.”
When it came to choosing graduates, a candidate with a magic mix of arts and science subjects at A-level or post-16 education would make Sargent “excited”.
Skills shortages were “always a concern” and the industry was in constant dialogue with the government, says Wootton of the BFC. “There’s a lot of talk about skills but we need to get all these efforts joined up,” he says.
In the meantime, London’s comparative advantages included the use of English, its timezone and scores high as a desirable place to live. “People like living and working in London so that’s part of the package,” he says.
Nipping at the UK’s heels to vie for VFX work were Australia, Canada, Singapore and South Africa but they had yet to achieve any critical mass that could overtake the British capital.
Montreal and Vancouver posed the most serious risk because the Canadian government was offering competitive tax credits, says Bristowe of Prime Focus World, an Indian company that expanded into London in 2007. If London were to lose its tax incentives, the city could face problems, he says.
“Work rapidly drained out of Los Angeles after the mayor couldn’t offer any incentives and facilities moved to London and Vancouver. The same thing could happen to London but hopefully too many people realise it’s too good a thing to let go,” he says.
In London’s favour was the fact that it was next to impossible to replicate its creative environment that is combined with the city’s financial services sector.
Also, London’s VFX sector took off after Warner Brothers bought the Harry Potter films to the city. “No other city can guarantee work for 10 years so it would be hard for Montreal or anywhere else to get the time to develop as large a capacity as London now has,” says Bristowe.