Sunday Buisness Post
By Ashford Studios, Sep 23 2015 05:23PM
Behind the scenes: The film and TV industry
02:57, 25 August 2013 by Ian Kehoe
Ashford Film Studios's founder Joe O'Connell with Vikings producer Morgan O'Sullivan. Photo: Feargal Ward
Joe O'Connell skips out of Ballyhenry House, his beautifully-restored period mansion, and makes towards his Bentley. "Follow me," he says. "I want to show you something."
O'Connell revs off behind the back of the house, before driving off on a sudden adventure. Past the stables. Off the gravel road. Through his polo pitch. Coming to a halt at the edge of a lush field, in the shadows of the Wicklow Mountains. He summons me to join him.
"Take a look at that," he says, pointing to a full-scale Viking village wrapped around a man-made lake tucked neatly out of sight in the middle of the 250-acre Co Wicklow estate that O'Connell and his family call home. "Surprised?"
O'Connell has made several fortunes through several businesses: packaging, pre-decorated Christmas trees (big in Argentina, he says), manufacturing barbecues and gas heaters (his company, Universal Innovations, is the sole supplier of gas heaters to Home Depot in the US).
O'Connell is an unusually low-profile industrialist. Now, at the age of 63, he is getting into one of the world's most high-profile industries.
A few years ago, at the repeated promptings of Morgan O'Sullivan, the Irish producer who brought The Tudors TV series to nearby Ardmore Studios, he decided to build his very own film studio. No bank would finance his ambition; the project was not creditworthy, they told him.
Undeterred, he put his hand deep in his own pocket and funded it himself. The result is Ashford Studios, a state-of-the-art €22 million film and television studio located just 40 kilometres from Dublin, and less than 400 metres from his own home.
"I have spent seven years working on this," says O'Connell. "I have talked to hundreds of people all over the world, finding out what they want from a studio. That has always been my philosophy. Find out what people want, and then give it to them.
The philosophy has reaped immediate dividend. Vikings, the Irish-made but internationally-commissioned television drama, filmed its first series at Ashford, and is the second series is being shot there now. It is a $40 million production, occupying all three indoor stages at the studio, while also filming on location nearby (including in O'Connell's Viking village).
This is only the start. If O'Connell gets his way, he will create "the Silicon Valley" of film in Ballyhenry. His vision is a 21-stage campus comparable with the fabled Pinewood Studios in England - "only better," he says quickly.
Before he builds it, however, O'Connell wants to be sure that the investment is sound. He is seeking assurances from producers that they will rent out his space, and a commitment from the authorities that they will invest in the industry in general and infrastructure in particular.
"Maybe I am mad, but I think we can do it, I think we can be among the world leaders in the industry. Forty years ago, people would have thought you mad if you said that all the major pharmaceutical companies would be here. But they came. There is a huge potential for Ireland in this industry. We have the scenery and we have the talent. Now we need the right infrastructure."
O'Connell's grand plan to build an international film campus will be the litmus test for the industry itself. Indeed, the success or failure of his plan to bring Pinewood to Wicklow will rest upon the success or failure of the wider Irish film and television industry.
Can the industry match up?
I have spent the past month going behind the scenes in the world of Irish film and television, talking to the producers, the financiers and the studio bosses. I have visited the sets, and talked to crew members. It is patently clear that the industry has ambition to burn; it is also clear that those within it have grown weary of being regarded as a state subsidised, tax-break-propelled luxury.
By its own admission, the industry is shored up by tax incentives and state funding. But then, again, so is every film industry in the world. "There is a state dimension to it, but most industries have state dimensions to them," says Ed Guiney, a founder of Element Pictures, one of Ireland's most successful film and television production companies.
"The government is always talking about the smart economy and the digital economy. This is it."
In 2011 a government-appointed advisory group said Ireland's so-called "audio visual creative economy" had scope to double in size to more than €1 billion within five years. The Creative Capital Report also recommended a string of policies that could help double direct employment from 5,540 to more than 10,000 people.
Even at current levels, the industry is sizable. There are now more than 500 Irish-owned companies working on film, television, animation and audio-visual production. There were 22 feature film projects produced in Ireland last year, 12 of which were international co-productions.
"Economically and culturally, film is important," says James Hickey, chief executive of the Irish Film Board. "There are 5,000 jobs. More to come. It is an industry, a key part of the economy.
"And it goes way beyond the investment in a film. We are also selling an image of Ireland to the world, this is big for tourism. There is also a cultural and artistic outturn. That matters too."
The Irish Film Board has not been recession-proof - grant aid from the exchequer fell from €13.1 million in 2012 to €11.8 million this year. Much of this money is then flushed through the industry, with the board backing projects through loans and development funding.
It might grate with the fiscal hawks, but Hickey maintains that it is money well spent by government. "It generates a tangible return," he says. According to IFB data, it invested €10.8 million across 30 projects last year. Those 30 projects subsequently brought in €118 million in foreign direct investment.
Once upon a time, it seemed Ireland had already cracked the big time when John Bruton's rainbow coalition government made its pitch to Hollywood by reconstituting the Irish Film Board and offering deep tax breaks to productions.
Within a handful of years, Tom Hanks was Saving Private Ryan on Curracloe beach, while Mel Gibson' Braveheart fought and died to preserve Scottish independence in Kildare. For a period, it seemed that Ireland had become a colonial outpost of Hollywood.
In hindsight, the good old days were not that good at all. There is now a sense within the industry that the arrival of these mega-blockbusters merely papered over some yawning cracks. A fledgling industry was sprinting before it could even crawl. Crews started billing at Hollywood prices, pricing themselves out of the market. When the blockbuster moved on to the next pliable location, Ireland was literally back where it started. Save for a handful of productions, there was very little homespun films being developed and shot here.
"France, Europe and the US have been making films since the start of cinema. We have only been at it in any meaningful way since the 1990s," says Brendan McCarthy, a founder of film production company Fantastic Films, which co-produced the Academy Award winning short film Six Shooter.
"We have been playing catch up. The blockbusters came and then they left. Since then, we have been developing a real industry here based around Irish talent. The industry is growing, and growing in the right direction."
A walk though Ripper Street
Drive 400 yards past Heuston Station on the N4. Take a right turn onto the South Circular Road and then a sharp right. You've arrived in Victorian London. For more than four months now, the old Clancy Barracks in Islandbridge, with its cobbled stones and ramshackle storage rooms, has been turned into London's east end, circa 1890.
Just like series one, the second series of Ripper Street, the highly successful BBC crime drama, is being filmed on location in Ireland. The day before I visited the set, the production team cordoned off a road in Temple Bar. Today, they are back in the barracks, aiming to have all the filming wrapped up by the end of this week.
Between actors and crew, there are close to 100 people on set. Everyone, it seems, appears to be wearing three-quarter length cargo pants; most crew members have earpieces and clip boards. A virtual village has been constructed to mirror London's seedy Whitechapel, ranging from market stalls to hotel exteriors to Victorian public toilets.
The set is a warren of interconnected streets, facades and interiors. It is seriously impressive and impressively serious - a stern-voiced director shouts 'Action', setting off a chain of actions and counteractions among cast and crew. It's fiction, but you can feel the intensity.
This, a pretend London in a disused Dublin military barracks, is the new frontier of the Irish audio-visual industry: television.
Television is in vogue at the moment. Once, it was all about movies. Now, international networks and distributors are ploughing vast sums into television dramas. Increasingly, Ireland is landing a good deal of that spoils.
Ripper Street is being co-produced by Element Pictures, the same Dublin production company that is behind Quirke, a BBC television series based on John Banville's Benjamin Black novels. The Vikings are holed up in Wicklow, while the third series of Moone Boy is wrapping up in Ardmore Studios, with another major television production waiting in the wings to move in to the national studio.
In the past three years alone, Irish-made television drama had a combined spend of $493 million, including $139 million last year.
"I have always believed that television is where Ireland should be," says Morgan O'Sullivan, the Irish film and television producer. "Feature films are big and bold, but they come and go. Television is different. They have longevity. You might get three or four series, with an inward of investment of $40 or $50 million a year."
O'Sullivan is regarded as something of a rainmaker within the industry. He lured The Tudors to Ireland, a series which is regarded as the big breakthrough for the Irish television industry. Since then, he has been an executive producer on Camelot, another big budget TV series (although not one that was recommissioned) and helped develop The Vikings from scratch. In addition, his production credits stretch to more than 20 films, including Veronica Guerin and PS I Love You.
"The Tudors opened the door for us," he says. "I always felt we could make a series, but the networks took a lot of convincing, But The Tudors was phenomenal. Most of the heads of departments have Emmys on their mantelpieces. In India, it was watched by 100 million people. It showed we could make major TV drama and was a calling card for Ireland with US networks and cable companies."
The success of Vikings, he says, has proved that the Tudors was not a fluke. There is a difference between Vikings and The Tudors, however. With the Tudors, Ireland was implementing a foreign product, with the Vikings, the whole idea was developed in Ireland. In business parlance, Ireland owns the intellectual property. For O'Sullivan, a wily industry veteran, this is the central to the future.
"If you developed the show you are in control of it," he says. "With Vikings, we developed it and then we presold it. But it was our product. That is the next step in the development of the industry."
Changing tack on tax
Section 481 has been a pillar of the film and television industry; a key marketing and financial tool used to entice production to Ireland, while simultaneously financing indigenous productions.
All countries offer some form of tax incentive, ranging from creditors to support to straight-up write-offs. Ireland is no exception.
For investors, it was one of the last remaining reliefs on the statute books. For producers, it works a treat, allowing them to work with foreign producers, availing of generous tax reliefs in multiple jurisdictions.
As far as investors and the industry were concerned, the status quo was working well.
Too well, it seems. The Department of Finance reviewed the scheme last year; it was not to its liking.
The review found that 86 per cent of all section 481 investors earned more than €100,000. It also found that the relief was inefficient in achieving its main aim of aiding film producers, with one third of the tax benefit being "leaked" to investors and professionals.
In the current austere climate, the government decided that a tax break benefiting high rollers was unpalatable and economically unsustainable.
The relief is generous, allowing people to invest up to €50,000 in a film or television production, and to claim 100 per cent tax relief on their investment. Films can raise up to €50 million in total. In 2012, for example, Irish investors benefited from tax incentives worth €58 million through investments in Irish film and television productions. More than 3,000 individual investors benefited.
The government decided to change tack: by 2016, finance minister Michael Noonan plans to move to a tax credit model, where the tax breaks are enjoyed exclusively by the production company and not the investors.
The move has spooked the industry. "The new system and the old system are like apples and oranges, incomparable," says Paul Mee, a partner with accountants Mazars and a specialist in raising Section 481 finance. "The great thing about the current system is that the money is available up front. It is there on day one. It can be used to bankroll production. We don't know what the position will be with the new system.
"The legislation has been put in place, but we don't know the regulations yet. We don't know how it will work. As of now, we don't know if the Revenue will be able to provide the tax credit in advance of shooting, or if it will only come at the end. If it only comes at the end, it will cause major difficulties."
The departmental official who carried out the revies found that the system was too good to be true. While investors were technically exposed to risk, the report could not find one case where the investment had failed.
However, as far as John Gleeson is concerned, the report missed the point. A partner with Crow Howarth accountants, Gleeson raises some €80 million a year for film and television finance. "The report said there was no risk," he says.
"We apply strict criteria for each project we promote. The system has been carefully managed over the years by lawyers, bankers and accountants to try and make sure we are selling a good product. The industry is being penalised because we have managed the risk so well."
Gleeson says he rejects more than half of applications from producers for tax break funding - "We look at about 70 potential deals a year, before settling on 30," he says.
"This report did not scratch beneath the surface and I can't see how the Revenue will be able to provide a tax credit at the beginning of production. This will have major unforeseen consequences."
I put this point to James Morris in the Irish Film Board. He said the new system was "welcome" and another "sign of government support" for the industry.
I probed further, asking him if the lack of upfront finance, guaranteed under the current model, would impact on Irish production? He replied: "We are working with the Revenue in terms of the operation of the scheme and the timing of the payout. The actual relief available is higher under the scheme. Obviously some people have been in the business of raising money. It will impact upon them.
"But we still have a strong offering and that is the key point. We remain attractive."
The Ardmore Mystery
Something is going down in Ardmore Studios, but no one wants to tell me. Morgan O'Sullivan says a major production is coming, but that his lips are sealed. As she gives me a tour of the Bray facility, Siún Ní Raghallaig, the chief executive of Ardmore, is equally cautious. "I can't tell you," she says. "But it will take up all our three stages, so it is big."
Ní Raghallaig is in the job a year. By any standards, it has been an eventful one. The Donegal-born producer has taken a sledgehammer to the studio's cost base, knocking down overheads by a staggering 60 per cent. This year, she says, Ardmore will break even.
"The studio was in a bad way when I took over the job," she says. "There was no slate of productions. We restructured, we made redundancies. We are now investing in infrastructure and facilities."
The studio is part of the furniture of Irish film and television, established in 1958 and surviving financial turmoil and recessions and multiple industry crisis. It is now owned by accountant Ossie Kilkenny, U2 manager Paul McGuinness and the state, though a 33 per cent stake held by Enterprise Ireland.
On the day I arrive, there is no filming on set. Moone Boy, the television series starring Chris O'Dowd, was on location elsewhere in the county, but was due to return later in the week. Meanwhile, workmen were busy building sets and laying the groundwork for this mystery production.
Ardmore is like a little town. In addition to the three stages, a number of production companies have offices on site, as do several facility companies like camera providers, and costume companies.
Ní Raghallaig is unassuming and polite, but there is steel there too. "The industry has massive potential, but we need a coordinated vision," she says. "We need big-scale productions of course, but we also need to develop indigenous talent. For this to happen, everyone needs to be going in the one direction."
To illustrate her point, Ní Raghallaig rattles off the number of government departments that have some role in the film and television industry: "You have the Department of Arts, the Department of Communications, Finance, Enterprise, Public Expenditure. Then you have the Film Board, Enterprise Ireland, the IDA."
PS: A day later, I placed a call to Ardmore to see if I could get to the bottom of this mystery production. "Thank you for calling Ardmore Studios," said the prerecorded message. "Please choose from the following options. For reception, dial one. For Penny Dreadful, dial three . . ."
Penny Dreadful, according to industry reports, is a major horror production starring Eva Green and Josh Hartnett. It is also the show that will keep Ardmore busy for some time. Mystery solved.
Elementary, my dear industry
Located in a Georgian townhouse along Dublin's Grand Canal, Element Pictures is blazing quite a trail. Established in 2001, it has grown swiftly and diversified shrewdly. It is the closest Ireland has to an integrated production enterprise: it produces, co-produces, distributes and even shows films and dramas - via its recent purchase of Dublin's Light House Cinema. It also has a new video on demand online service.
"Business is good," says Ed Guiney, its co-founder. "In a strange way, the recession has helped. Production costs have come down. Exchange rates have been a little better. The cost of doing business in Ireland has fallen."
The company has produced films such as The Guard and Garage, and co-produced The Wind That Shakes the Barley. More recently, it released What Richard Did by director Lenny Abrahamson, and is wrapping up another Abrahamson film called Frank.
"In some cases, we developed content ourselves. In others, like Ripper Street, we are brought on board as a co-producer. We like the diversity of working in different areas," Guiney says. "But for both ourselves and the industry, real growth will come by developing our own content."
Can we do it? "Absolutely. We are natural communicators, natural storytellers. There is an awful lot of talent coming through."
Guiney has a point. Young Irish talent seem to be part and parcel of the festival circuit - the Last Days on Mars, produced by Fantastic Films was lauded at Cannes, while six Irish films are being screened in the upcoming Toronto Festival.
New technology has brought a new democracy to the industry. Productions are cheaper to make and easier to distribute. It has allowed more people to make more films.
"It's interesting to industry people to find out how much a movie costs," says Rachel Lysaght of Underground Films. "But the audience doesn't care, their decision to pay €10 is based on how good the story is and whether it has strong or interesting performances and not on the production budget. Film costs are a great red herring in judging a film's prospects."
Lysaght has just begun production on St Patrick's Day, an Irish movie following the story of a young man with mental health problems who falls for a suicidal air hostess. The turnaround time of the project has been impressive. Underground Films joined the development in October last year, the movie was filmed around March 17 itself and it's already in post-production before Autumn. Speedy delivery saves on costs, Lysaght says.
"A lot of us on this film, like cinematographer Michael Lavelle, come from a documentary background. This was a great opportunity for us looking for the next step up in the industry," she says.
Making a film is only the start, however. When it is done, you have to make sure that someone sees it. "This is the hard part," says David Collins of Samson Films, which recently finished filming an adaptation of John Banville's award-winning novel, The Sea.
"There is a lot of competition. You have to scream to be heard. You can have the best film in the world, but smaller companies still have to fight to make sure it gets seen.
"That is why the festival circuit is so important. You go to the festivals to get distribution agents and sales agents, to create a buzz around the film. It is not for the red carpet. It is business."
Windmills in Google-town
A couple of hundred metres from Element Pictures is the new incarnation of Windmill Lane, the post-production studio. At the height of the boom, the company sold its docklands premises to developer Bernard McNamara (an all-cash deal). The proceeds allowed the company to develop a state-of-the-art premises off Baggot Street. Post-production is lucrative, but ultra competitive. Many major feature films spend longer in post production than they do in actual production, according to Tim Morris, a shareholder in Windmill Lane, and the head of its feature film and television drama division.
Unlike the actual production, there is no tax incentive for doing the afterwork here. "This means we compete with the best internationally," says Morris.
The company has worked on a string of high-profile productions, such as Haywire and Albert Nobbs. On the day I visited, a team of young computer whizzkids were working on the new series of Love/Hate.
Morris is already thinking about the next big thing - for Windmill and for Ireland. He believes there is a massive market in the world of visual effects, and he is determined that his company be at the forefront. "This is the future," he says. "It is high end and it requires the right skills. But if you can do it, there are massive opportunities. You might not realise it but most television programmes have visual effects. You might extend a building or periodise it." He cites the example of Titanic: Blood and Steel, where his company helped transform Dublin City Hall into Belfast City Hall and the Guinness plant into Harland & Wolff.
Morgan O'Sullivan is also looking at both technology and the future. He sees synergies between the industry and product providers like Google. "We have an advantage here because these companies are in Ireland. In ten years time, it might not be as simple as a television station commissioning a show. Distribution is changing quickly. Netflix is commissioning shows. Online demand is growing. We need to be in that space," says O'Sullivan.
Joe O'Connell, Part II
Back down in Ashford, Joe O'Connell is giving me a tour of the indoor stages. They are truly impressive, boasting production offices, costume departments, high-spec make-up rooms and a restaurant designed by Patrick Guilbaud. All three stages are busy: workmen are polishing off sets for Vikings, with shooting scheduled for later in the week.
There is a range of bedrooms - (2, 3 and 4-star quality) for actors to rest in between shots. O'Connell has been involved in designing it all. He has tried to make the facility as energy independent as possible - water is sourced on site and most of the power comes from industrial gas generators. The car parks are staggered and kept out of public view by an army of newly-planted trees. You can't even see the facility from the road. "I wanted it that way," he says.
O'Connell's attention to detail is second to none. Like Steve Jobs, he is obsessed by detail and visual aesthetics. "See if can you find the screw or bolts on the staircase," he says. "I bet you can't find them."
But O'Connell is no financial maverick. For the next phase of Ashford Studios to go ahead, he wants to be sure that he is spending his money wisely. "I am really passionate about this, but it has to make sense," he says.
Later in the day, his daughter Shelley, a former television executive who manages the studio, shows me the proposed site for the next phase. It has already been marked out on the field. The views are splendid.
"I feel Ireland is on the brink of something. We can really do it here," she says. "But we need the infrastructure."
Joe O'Connell, the engineering tycoon who ventured into an unknown world, has written the script. Will the movie now be made?