WIDER ISSUES FACING THE SOUTH AFRICAN AUDIOVISUAL AND CINEMA INDUSTRY Presented by: Adwoa Ankoma Legal, Policy and Compliance Officer National Film &
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1 WIDER ISSUES FACING THE SOUTH AFRICAN AUDIOVISUAL AND CINEMA INDUSTRY Presented by: Adwoa Ankoma Legal, Policy and Compliance Officer National Film & Video Foundation
2 CONTENTS 1. Background 1.1 South Africa 1.2 National Film & Video Foundation 2. Defining the Film/Audiovisual Industry 3. Snapshot of film industry 3.1 Structural Challenges Finance 3.2 Structural Challenges Distribution and Exhibition 3.3 Structural Challenge Ownership and Development 4. Co-productions 5. Lessons learnt 6. Conclusion
3 1.1 SOUTH AFRICA - FACTS SUMMARY Population is at 54 million audiences. 9 provinces with diverse languages. Gauteng is the economic hub of South Africa. Johannesburg & Tshwane metros. Gauteng & Western Cape provinces are film & TV hubs driven by: infrastructure (ICTs, cinemas, studios, production companies, TV stations etc.) 8 film co-production treaties; Various government film/tv support/incentive programmes; Increasing demand for local content on various platforms & in indigenous languages with being TV most accessible platform; Decentralisation/creation of filming activity in other provinces is a priority; BUT Lags behind Bollywood & Nollywood in terms of film production volumes. 3
4 1.2 ABOUT THE NFVF: Set up in 1997 by legislation - National Film & Video Foundation Act 73 of 1997 but came into operation in An agency of the Department of Arts & Culture. Budget R122 million with a 25% cap of administrative costs. Mandate Developmental mandate includes transformation & equitable growth. Main offering is funding for development, production, marketing & distribution and training. Promotion of South African films locally & internationally. Conduct research in any area of the film & video industry. Advice the Minister of Arts & Culture on any matter in the film & video industry. 4
5 2. DEFINING THE INDUSTRY 5
6 2. DEFINING THE INDUSTRY Some General Observations Definition of film/audio- visual industry is evolving due to technological developments. Policy & legislation lag behind technological developments. Inconsistent/outdated use of definition negatively impacts on statistics resulting either in underreporting or double counting. Setting of key performance indicators is important to allow comparison; Frequency of collection of data & reporting must be appropriate; and Lack of comparable research in the industry. 6
7 3. SNAPSHOT OF THE INDUSTY NFVF/Deloitte South African Film Industry (SAFI) Economic Baseline Study (2013) findings in terms of indicators highlighted: Contributed R3.5 billion to South Africa s Gross Domestic Product (GDP); Created over Full Time Equivalent jobs Earned over R670 million for the South African Revenue Services (taxes); Encompassed over direct service providers; Delivered an economic multiplier of 2.89, i.e. for every R1 spent in the industry, another R1.89 was generated within the South African economy; Study for underway. 7
8 3. SNAPSHOT OF THE INDUSTY cont. Strengths Infrastructure Technical skills Locations Stories Climate Time zones Institutional frameworks Opportunities Untapped audiences New platforms / increased demand for content New technology Co-production strategy Government support in unfunded areas Weaknesess Creative & business skill gaps Intergovernmental sector co-ordination Low production volumes Finance across the value chain Market access Distribution Threats Fluctuating Exchange rates Competing international incentives Piracy Competition from Foreign content negative International perceptions 8
9 3.1. STRUCTURAL CHALLENGES - FINANCE Capital investment in the industry remains concentrated in a small minority. Local titles remain financed by the public sector equity funding Private sector has remained largely reluctant to invest due to the high risk. Majority of titles may take several years to break even if at all = high risk investment. Some of the reasons for poor commercial returns were: Poorly developed projects and screenplays Projects catering for a genre and audience that was so narrow that it would never allow recoupment of costs; Overinflated production budgets; Co-production treaties soft funding 9
10 3.2. STRUCTURAL CHALLENGES DISTRIBUTION AND EXHIBITION Lack of local distribution market; and Poor international distribution Limited exhibition platforms. Traditional exhibitors still view cinema as the primary medium for distribution. Cinemas are located in urban areas, rendering the medium inaccessible to the majority. Local films are consistently given less screens then international, particularly Hollywood titles. Audience Development remains an issue. Audience development programmes remain few and far between. A consistent approach is needed. 10
11 3.3. STRUCTURAL CHALLENGES OWNERSHIP & DEVELOPMENT Broadcasters increasingly license more local titles, however the investment amounts are nominal in comparison into what is spent on international titles. The license conditions are also onerous and tend towards long-term deals and repeats. Television commissioning structure often results in a complete cession of rights IP retention remains an issue. Outside of government funding, producers struggle to retain rights. Lobbying towards a commissioning structure in which rights are retained. Lack of development funding for concept development outside the public sector: allows for accurate budgeting, attraction of good cast and crew, quality of the film aimed at the right audience and in the most optimal genre will assist in a commercially viable SAFI in the long term. 11
12 4. CO-PRODUCTIONS South Africa has co-production treaties with the following countries: 1. Germany (Tourism core market) 2. France (Tourism core market) 3. United Kingdom (Tourism core market) 4. Canada 5. Italy (Tourism investment market) 6. Ireland 7. New Zealand 8. Australia 9. Netherlands Main target market countries: BRICS USA (Tourism core market) 12
13 5. WAY FORWARD Align research with the UNESCO Framework for cultural statistics (2009). Resources to fund research programmes (experts & allocations). Collaboration amongst institutions locally & regionally. Research role of the proposed African Audio-visual & Cinema Commission encouraging. Co-operation between sectors and departments Update the SIC codes to better capture the cultural/creative industries. Increase investment into development Explore exhibition platforms outside of cinema 13
14 Thank you!
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