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ARDMORE STUDIOS Herbert Road Bray Co ARDMORE STUDIOS Herbert Road Bray Co. Wicklow Film Tax Relief Consultation Department of Finance Government Buildings Upper Merrion Street Dublin 2. 26/7/12 Review of Section 481 Film Relief – submission by Ardmore Studios Limited Dear Sir or Madam: Ardmore Studios has been making movies for more than fifty years. Well over 100 feature films have shot at the studios since the complex opened its doors in 1958, featuring many famous names from cinema present and past. Top filmmakers working in Ardmore have included John Boorman, Jim Sheridan, Neil Jordan, Jerry Bruckheimer, Francis Ford Cappola, Mel Gibson, John Huston and many more. Ardmore understands the changes that have happened over the years in the film and television industry and has felt the competitive impact of the studios of Eastern Europe and the changes in the financing structures and distribution models for the industry. The film and television industry is an important part of the cultural and creative infrastructure of any democracy. For the industry to survive it must encourage and nurture its indigenous creative talent and also operate in an international environment, attracting large scale productions to the country, giving the industry a structure and long term sustainability, outputting film and television content that is distributed worldwide. A mixture of international and local content creation is what will ensure a vibrant and competitive skillset, from the development, writing and directing side to the varying skills and crafts that bring the scripts to our screens. Ireland’s Section 481 Film Relief plays an important part in the on-going survival and competitiveness of the Irish film industry. It enables Producers to compete for international projects by bringing funding to the production budget to cover the Irish spend and also to get indigenously developed film and television projects funded and made, ensuring that Irish producers are developing their own project development and writing skills. Ardmore Studios attracts both indigenous and international productions and in order to compete internationally, Section 481 tax relief enables us to compete on an equal footing with other European and American schemes and enables us to competitively pitch for projects. As an important part of the infrastructure for Irish and international filmmakers, Ardmore wishes to submit its contribution to the current Section 481 Film Relief review. The attached pages focus on the specific questions posed in the review document. Yours sincerely Siún Ní Raghallaigh CEO, Ardmore Studios Limited. 1. Is the exchequer’s support to the film and TV sector in Ireland through Section 481 relief an efficient use of scarce resources and if so why? Section 481 relief benefits the film and TV industry in Ireland. It enables independent film and television producers to compete in the global industry and attract significant inward investment which in turn enables companies to become stable and build up resources to become more active in the value chain and invest in new project development. Ardmore Studios attracts a lot of major productions to Ireland and competes with other studios in territories all around the world where other tax relief schemes exist. Without Section 481 Film Relief, our ability to compete would be severely hampered. 2. Is the current scheme maximizing the potential economic benefits to Ireland in terms of stimulating activity in the film and TV sector? If not, why not? The economic benefit to Ireland should be measured in terms of industry activity, IP created, jobs created, returns from exploitation of films and TV shows and on-going cultural and economic contribution to the country. In this respect, the scheme certainly contributes to the building of a sustainable content creation industry. The question also should be asked is whether the film and content industry is one worth being involved in and the answer to that has to be a resounding yes. The demand for film and television content is growing at a phenomenal rate. Not only are the traditional outlets of broadcasting and cinema demanding content but also non- traditional platforms such as internet TV, Video On Demand channels, YouTube and other similar channels. The global market for creative audiovisual content is growing and is estimated to reach $1.7 trillion by 2013 and is projected to grow at a rate of 30% over the next five years (source: PWC, Global Entertainment and Media Outlook 2010). This is without doubt a sector in which Ireland Inc. should be involved. As with any industry sector, building strong companies that will form the backbone of the industry and that are centrally involved in the creation of IP is what will make for an internationally competitive sector. In that respect, the scheme should be supplemented to encourage the development of content. This is currently supported by the Irish Film Board and by broadcasters, who award development funding to companies to develop new concepts and projects. However, the nature of content is also changing and the consumer is demanding more and more interactivity and added value from films and TV shows. For example, apps and games are now being created as part of the overall requirements for television drama shows, giving the viewer a more active and enhanced experience. We are only at the beginning of this type of development. By extending the Research and Development Tax Credit to encourage more film and TV companies to collaborate with software and gaming companies would give Ireland a distinct competitive advantage. 3. What are the economic arguments for restricting or terminating the scheme? There may be short term economic arguments for such an approach but any restriction or termination will seriously impact on the growth of the industry and damage our international competitive advantage. We have to be able to compete in the global marketplace against other countries with similar tax credits and schemes. 4. What possible changes to the existing scheme, if any, should be considered and why? The current growth area is the production of high end long running TV series. Ireland has attracted successful series such as The Tudors, Camelot, The Vikings. This is a growth area and major projects such as these help to build a vibrant industry. To further enhance the competitive advantage for attracting such projects here, the scheme could look at rewarding returning series i.e. where a series comes in for a first season in Ireland, and returns for subsequent series, that there is an additional bonus, part of which would be invested in new project development between the Irish and international producers. 5. Do interested parties agree that there is merit in extending Section 481 Film Relief Tax incentive scheme beyond 2015? If yes, why? If no, why not? Yes, there is merit in extending the relief to 2020 and beyond. We are only part way through the growth of an industry here. It is an industry that is booming internationally and Ireland has already punched above its weight. We must recognise the need for the long term building of this industry and that can only happen with the support of Section 481. We have to compete with tax reliefs in other countries including the UK TV tax relief which will comes into effect in 2013. 6. How does the scheme interact with other enterprise tax incentives such as the BES/EII? The BES/EII should be expanded to include audiovisual content production companies. This would certainly contribute to building strong indigenous companies with a capability to invest in the creation of IP. .
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