Film insurance news: the growth of virtual production

The 67th British Film Institute’s London Film Festival (LFF) runs from the 4-15th October, 2023. The annual festival is the UK’s premier celebration of creative cinematic storytelling, showcasing a diverse range of new films.

Recent high-profile film productions are using new technologies such as virtual production with impressive results. Batman, The Mandalorian and Dune are amongst the most recent success stories. However, LED virtual production is changing the film and TV production process and inevitably bringing new risks to those working in the film and tv industries.

What is virtual production, and how does it work?  

The virtual production process is more closely aligned with gaming technologies than traditional filming. The Visual Effects Society has introduced an online virtual production glossary to help film and tv producers optimise the benefits of this new production process. The glossary describes virtual production as using technology to combine the digital world and the physical work in real-time.  

It combines two technologies:

• Motion capture is not a new concept, but it has evolved to enable producers to use software and technology to capture human motion into 3D graphics in real-time.  
• LED screens – Studios now use massive screens set up in a crescent shape along the back of a stage. These huge high-definition screens provide a virtual backdrop and can transport the studio to any location. This process offers complete creative control to production teams and removes a lot of logistical costs on things such as location shooting and management.

Virtual production studios can reduce film budgets, the need for additional resources, and time. However, as with any new process, this is new territory, and many filmmakers are still getting to grips with this new technology. Training will help crews manage unexpected risks arising from this new technology but insurance bonds will ensure the film is completed regardless.

Film Completion Bonds: Protecting film production through to distribution

A film bond guarantees delivery of a film on budget and on time and offers protection against problems arising during production. The completion and payment guarantee protects the project through to completion. It also covers the film if it goes over budget or runs behind schedule. The insurance company provides security for film investors.

Like most film festivals, the London Film Festival is where producers and filmmakers bring their movies to secure funding and distribution. A film completion bond is essential to getting an independent film on the festival circuit and sold to distributors because it’s a financial guarantee for investor’s money.

Kerry London’s film experts have worked in partnership with completion bond risk management specialists Guaranteed Completions. They work across the spectrum of productions ranging from large studio projects to smaller independent films. Risk Management Services are provided throughout the production lifecycle through to delivery. They insure markets in Europe, USA, Canada, Australia and New Zealand, as well as emerging markets.

Ansley Williams, Client Service Director, Kerry London, said:

“Having this expertise means we can help guide and offer advice to our clients and producers to ensure a production is on time and within budget. Our team can guarantee completion of the production, even in the event of an unexpected crisis.”

Preparation for virtual production risks  

There’s a lot of technology supporting the LED backdrop, including computers, cameras, camera tracking sensors and rigging infrastructure. The quality of these items, particularly LED panels, is crucially important to the quality of the film production process.

TV and media loss adjuster Spotlite Claims recently highlighted some unforeseen risks that may occur on set including motion sickness with actors and crew. Standing beside very fast-moving images affects everyone differently and could result in some cast members having to take a break. Fires and pixel damage were also highlighted as other potential issues.

Government funding for virtual production research labs  

The government has acknowledged the value of this technology by funding virtual production research labs to boost the creative industries. The UK Research and Innovation (UKRI)’s Convergent Screen Technologies and Performance in Real-time (CoSTAR) programme launched labs across the UK. Royal Holloway, University of London, will lead the national lab alongside core partners, including Pinewood Studios and the National Film and Television School (NFTS). Other labs will be based in Yorkshire, Dundee, and Belfast. The CoSTAR programme will also include an Insight and Foresight Unit led by Goldsmiths with partners including the British Film Institute and Olsberg SPI.  

Increased tax relief filmmakers  

The government’s Creative Industries Sector Vision is to grow the sector by £50bn by 2030 and create one million extra jobs. The government says the creative industries are a priority sector to support economic growth and are incentivising the industry with increased tax breaks.

They have reformed the film and TV tax reliefs, now called the Audio-Visual Expenditure Credit and increased the current film and TV relief rebate from 25% to 34%. This increase will be introduced in January 2024. The qualifying tax threshold for high-end TV shows will remain at £1M. 

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