The Future of (NZ) Film

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When Bob Iger of Disney speaks about the future of film, it’s worth listening.

Why?

Because amongst the hundreds of companies that sit under the Disney umbrella are 20th Century Fox, Lucas Film, Marvel, and Pixar. Brands number in the thousands and include through whole or partial ownership indie darling Fox Searchlight, streamer Hulu, and networks ABC, ESPN, FX, National Geographic and A & E.

Of course Disney doesn’t own everything. There are other conglomerates out there, the likes of Amazon, Apple, Comcast, and TimeWarner who are shaping the screen content world we are in now. But Iger demands everyone’s attention.

So this month at Disney’s third quarter earnings announcement when Iger essentially declared that big movies belong in theatres, and everything else will go to its streamers Hulu and the soon-to-launch-globally Disney+, everyone sat up.

Reporting on this, Journalists Dana Harris and Chris Lindahl in Indiewire wrote that “The very, very top films with awards potential will see generous theatrical offers and bidding wars that price out all but the deepest pockets. The highest-quality films with no clear awards play will also see strong offers and bidding wars, but from streamers, and considerably less generous offers from independent theatrical distributors. For everyone else, it looks like a struggle — although they could also benefit from the streamers’ ongoing arms race to acquire the content mass necessary to achieve market dominance.”

So where does that leave us in New Zealand with our 10 or so narrative and documentary features a year? Blissfully unaware some say.

A recent article in The Hollywood Reporter gives some indication that even the top names in film can see the writing on the wall. Directors including Martin Scorsese and Christopher Nolan amongst others were behind the Ultra High Definition Alliance’s announced introduction of a “Filmmaker Mode” TV setting. Director Ryan Coogler essentially admitted the fate of film by saying, “I care deeply about how cinema is experienced at home because that’s where it lives the longest. That’s where cinema is watched and re-watched and experienced by families. By allowing the artists in the tent to help consult and give feedback to the electronics companies on Filmmaker Mode, we can collectively help make the consumer’s experience even more like it is in the cinema.”

Of course the name directors will still get their films into theatres—witness the Netflix launch of Scorsese’s The Irishman, Alfonso Cuaron’s Roma, and Amazon’s commitment to theatrical release for the auteur directors it backs. But for the rest of us? We might have to get used to premieres in Filmmaker Mode unless you can get your films into festivals.

Once streamers Netflix, Disney+, Apple TV+, Amazon Prime and WarnerMedia are in full swing here, perhaps NZFC might even relax its demand that you have to have NZ theatrical release to get production funding.

 

Tui Ruwhiu
Executive Director

Is It Time for TVNZ to Revert to Public Broadcasting?

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My op-ed this week is devoted to personal musings in the lead up to the NZ Screen Sector Strategy hui, and the changing nature of the screen industry as we know it.

Colin Peacock on the Radio New Zealand website wrote on the weekend about ‘Convergence’: what it is and what it has led to—telecommunications and broadcasting merging due to digital technology and the Internet.

One outcome of the convergence that’s happened here, which I wrote about last newsletter, was the TVNZ board reporting to Government that it will not be paying a dividend for the foreseeable future.

In the same RNZ convergence article, TVNZ CEO Kevin Kenrick is quoted as saying that TVNZ will refine the data from TVNZ OnDemand users to allow advertisers to tightly target ads to online viewers.

Following last year’s revamp of TVNZ OnDemand, RNZ also reported Kendrick as saying, “Consumers of online video are pretty clear they pay with their wallet, their data or their time. We’re in an ad-funded world.”

With no profits in sight and the Government forgiving TVNZ its requirement as a state-owned company to deliver a dividend, is it time to turn TVNZ back into a public broadcaster and forget about advertising as the main revenue stream?

If convergence is the reality, how about converging ONE, TVNZ 2, DUKE, TVNZ OnDemand and Radio NZ into a new media powerhouse for public broadcasting? Let’s call it Aotearoa Media Powerhouse – Digital (AMP-D) for ease.

The commitment by Kendrick to a significant increase in local content, the mix between local and international shifting markedly towards local, and investment in an online future while making that content available across more devices would make absolute sense for AMP-D. This would parallel the efforts the BBC and the Australian Broadcasting Corporation (ABC) are making to survive.

Granted, TVNZ would be moving from a business that cost close to $300 million to run in 2018—essentially what they earn from advertising—to a public broadcaster that has to find other ways to earn revenue.

How about an AMP-D Studios along the lines of BBC Studios, whose remit is to produce and market programmes not only for the BBC, but for other broadcasters on the open market at home and internationally, returning profits back to the BBC. AMP-D Studios would give the commercially inclined at TVNZ a new playground to play in.

Perhaps the greatest benefit to AMP-D is we’d get away from this navel-gazing that differentiates New Zealand content for local audiences, which is fragmenting away before our eyes. AMP-D Studios and independents could produce programming that is—to steal something else from the BBC—distinctive (in our case NZ), world-class content. Why couldn’t AMP-D Studios generate shows like The Killing, The Bridge and Borgen, produced by Danish public broadcaster DR, which sold all around the world? There’d have to be a cap to how much of the public purse AMP-D Studios could get, though.

AMP-D could also generate news and current affairs nationally in a revenue generating service to commercial media companies, much as the NZ Press Association and the worldwide video news service Visnews did previously. This would allow the commercials to put their own spin on the content without the major cost of resourcing.

AMP-D OnDemand could have two operational tiers: Subscriber Video On Demand (SVOD) that’s ad-free and costs a monthly fee, and Ad-Supported Video On Demand (AVOD) that carries advertising in a free-to-air service. Hulu already operates this hybrid system.

In such a new environment, it would make sense for NZ On Air and the NZ Film Commission to ‘converge’. Let’s call this the Aotearoa Media Fund (AMF). AMF could manage the discretionary funding allotted to it to spend between broadcast, digital audio-visual content for the Internet, film and radio.

To really power AMP-D up, AMF could be required to stop funding content on the commercial platforms, dedicate its funding to AMP-D and meet its requirement to deliver great New Zealand content that is valued and enjoyed by many New Zealand audiences on multiple public broadcasting platforms. A cap in funding for internal production for both screen and radio content could be levelled to ensure independent production companies could operate in the new environment.

AMP-D could benefit local feature films by being required to carry all films funded by AMF, guaranteeing free-to air play to New Zealand audiences for every NZ film, which doesn’t happen now. The best films would get significant marketing and promotion. The not-so-good would get buried in AMP-D OnDemand—the same for not-so-great content on Netflix—where they’d sit for those still interested enough to search them out. (Smart Kiwi producers could take a page out of Norwegian producer Anders Tange’s book on how to build an audience independently of a streamer as he did for his Viking comedy Norsemen on Netflix.)

It’s almost certain that there would be an increased cost to establishing and running AMP-D that would take a long time to mitigate if ever, even with the efficiencies of a combined entity. That would be the cost of continued existence.

But perhaps it might be useful to compare New Zealand content and its industry to the kakapo — an endangered species that’s potentially headed towards extinction if we don’t do something paradigm-shifting to save it.

“What about us?”, the commercial platforms here would scream?

Frankly, it’s a fight for survival and we have to ensure first and foremost that our content and our platforms survive and flourish in the brave new world that’s upon us. Sorry, you commercial guys, you’re going to have to sort it for yourselves. Or maybe ‘converge’.  And if they withered and died, maybe it would all be for the better for AMP-D. After all, it would still have to face Netflix, Amazon Prime, Disney +, HBO +, Hulu and others. Heck, AMP-D might even have to team up with the public broadcasters in Australia, Canada, the UK, the U.S. and elsewhere to live to fight another day. Such collaborations are already happening in Europe.

I’m happy for anyone to shoot holes in my postulations above. I’ve only spent a couple of hours daydreaming, not weeks and months devising a strategy. The intent is to get you to do more thinking about our industry with the screen sector strategy upon us. We can now imagine our own futures and let Government know.

We are going to be sending out the list of questions I wrote about in the last blog to everyone on our database. We want your thoughts about the direction the New Zealand’s screen industry should go. So please take the time to ponder, write to and or tell the Screen Sector Strategy NZ and DEGNZ your opinions. We’ll make sure we collate them and submit them from the Guild along with our thinking, so that we all have a say.

Tui Ruwhiu
Executive Director

NZFC Gender, Diversity & Inclusion in the Screen Industry Survey

Please follow this link to take part in the Gender, Diversity and Inclusion in the Screen Industry Survey:
https://survey.au1.qualtrics.com/jfe/form/SV_0fbQkfJwZOiboI5

Thanks for participating! This invitation comes from Te Tumu Whakaata Taonga New Zealand Film Commission (NZFC). The link will be distributed by guilds and industry organisations as well as NZFC so it might come to you more than once.

By completing the questionnaire, you are automatically in a prize draw for one of five Wickedly Indulgent Grazing boxes! *Terms and conditions apply (Prize is limited to NZ residents only).

The survey is aiming to get a snapshot of people’s experiences in the screen industry to assist NZFC to identify people’s needs and create a benchmark against which to measure progress in future years.

It’ll take about 15 minutes to complete. You can jump out and jump back in if you are interrupted, just remember to press submit when you’ve completed the entire questionnaire. The survey is live from 9th of August and closes 30th of August.

The research is being undertaken by Kudos Organisational Dynamics Limited, an independent research organisation governed by the Research Association New Zealand’s Code of Practice and adhering to New Zealand’s Privacy Act 1993. NZFC may use third party partners to carry out NZFC’s functions such as managing this survey.

  • Please note that if any personal information collected by Kudos in relation to this survey is passed onto the NZFC, this information will only be used in accordance with NZFC’s Privacy Policy and New Zealand’s Privacy Act 1993. No third-party organisation will contact you as a result of your taking part in the survey.
  • Results are aggregated by Kudos and reported in a manner that doesn’t identify the respondent. So, feel free to share your story.

If you have any concerns or queries, feel free to contact Emma Xu who is managing the survey, at emma@kudos-dynamics.com.

Where to From Here?

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The Screen Sector Strategy has announced the dates of its intended hui in 3 locales to gather industry input into a strategy document for the New Zealand Screen Industry. This will be taken to Government in the first half of 2020.

This is an important opportunity for every individual to give their ten cents worth on how they would like to see the direction of the screen industry go.

The DEGNZ board has put together a list of questions for members to help stimulate your ideas. You can find the Guild questionnaire available here to download. Please do send your responses back to us at admin@degnz.co.nz with ‘Questionnaire’ in the subject line.

Below are some recent developments that could contribute to your thinking.

The Spinoff reported in an article on Saturday that for the foreseeable future, TVNZ will not report a dividend to government—essentially, TVNZ’s profitability is way down and is likely to remain so. The impact of Google and Facebook on onscreen advertising revenues is a major factor in this, as well as the advent of Subscription Video on Demand (SVOD) services such as Netflix and the fragmentation of the media market.

In the same article, The Spinoff reported an unprecedented call-out by NZ On Air to all the major news providers to attend a meeting to discuss the long term sustainability of journalism.

Across the ditch in Australia, the Australian Competition and Consumer Commission’s Final Report into Digital Platforms addresses this topic amongst others. Key findings include:

  • The availability of a wide range of high-quality news and journalism provides significant benefits to Australian society and is important for the healthy functioning of democracy.
  • News and journalism risk under-provision for a number of reasons, including the general inability of commercial news media businesses to capture the broader social benefits of journalism.
  • Media businesses, particularly traditional print (now print/online) publishers, have experienced a significant fall in advertising revenue as advertisers follow audiences who have migrated online to access news and other content. This has coincided with strong growth in online advertising, which now accounts for half of all advertising expenditure. Google and Facebook together account for nearly two-thirds of online advertising expenditure.

These aren’t earth-shattering revelations, but clearly highlight the fundamentals of what we all are wrestling with and that are driving TVNZ, Mediaworks, Fairfax, and NZME amongst others to the wall.

The Australians have also called for a levy on streamers to fund local content, the need to maintain broadcast TV quotas, and an end to cuts for screen funding bodies and public broadcasters as previously written about in the Guild blog here.

Funding cuts have impacted heavily on Screen Australia and the Australian Broadcasting Corporation. In New Zealand in comparison, our funding bodies (NZFC, NZ On Air) have had relatively static funding for years, with more and more calls upon it.

As many of you will now be aware, there is international production work to be shot in New Zealand coming out of our ears. We are already seeing a shortage of experienced personnel and crew rates and other production costs are rising while New Zealand budgets stay the same. The question of how local production can survive and thrive in the face of the onslaught of offshore work arriving is vexing a number of us.

We are at a crucial time for both the local and international screen industries. There are seismic shifts still to come as Disney, WarnerMedia, Apple and other streaming services come online and continue to shake broadcast and theatrical to their foundations.

The Screen Sector Strategy work now underway needs to be completed quickly and effectively if we are to have a sustainable industry in New Zealand that benefits from international production and contributes to the development of local screen content and Kiwi screen IP.

Please share your thoughts on where to from here with us at the Guild, at the Screen Sector Strategy hui and with submissions, so that a well thought out strategy is distilled that will work for us all.

Tui Ruwhiu
Executive Director