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A couple of days ago on The Spinoff, South Pacific Pictures Managing Director Andrew Szusterman decried the loss of drama Head High from Discovery Three. Lead director and co-lead writer on the show is a DEGANZ member, Tim Worrall.

Szusterman pointed out the difficulty and cost of getting NZ drama funded and made. He said that without NZ On Air, there would be little drama produced at all because it provides the majority of the funding for such projects.

He went on to call for the Government to say, “It’s time” to streamers, such as Netflix, Amazon and the others, and to put money into New Zealand programme production. Szusterman quite rightly stated that New Zealand’s market is not big enough to warrant streamers voluntarily investing significantly in New Zealand content.

“None of these services have commissioned any New Zealand premium drama content directly for New Zealand audiences, and there is not a chance that they will unless change is forced upon them.”

I’m glad that Szusterman is adding his voice to SPADA’s recent activity in this space. SPADA has finally given up on saying, “We can’t levy the streamers because of GATT*”. I’ve been calling for levies on streamers in this column for years: Show Me the Money, Time for a Reset, An Answer to NZ’s Broadcasting Industry Dilemma? I point this out not because I want to say “I told you so.”, but to highlight that we have been mired in a time warp for too long while the Golden Age of TV drama sails on by.

I’m aware that there are a number of NZ producers who are pushing hard to crack the international door open for ‘high-end’ TV drama. But you need the budgets to do it. And you need the policies to make it easier. At the moment both are a barrier.

Good drama requires a lot of development funding. So does the production. When many of the shows appearing on the streamers are being made from an absolute low of US$2 million per episode to the stratospheric heights of The Crown or Ozark at US$13 – 14 million per episode, an NZ show at US$ 0.7 – 1.2 mil. per episode doesn’t cut it. As long as the Government keeps NZ On Air and NZFC funding at the levels it has for the last 10 years or so, we have to find money elsewhere to supplement the budgets. This is outlined in the Screen Sector Strategy 2030.

So where to get it from and what needs to change? It’s time to levy the streamers. They’re an obvious source. Even though our market isn’t big, it still provides incremental income for them, and they should pay to get it.

We also need to remove the block to going behind a paywall for NZ On Air funding, as is currently the case. And we need to allow, as I’ve said before, Drama and Factual to access both the New Zealand Screen Production Grant and NZ On Air funds, which is only allowed now for Children’s and Animation. The Premium Production Fund has been given a temporary reprieve concerning this. It’s time to make this permanent, and the Premium Fund too. If we had to, we could accept a 30% NZSPG for behind paywalls instead of the 40% available now for free-to-air.

In the meantime, we wish Szusterman luck in finding a new home for Head High. It has a place on NZ screens.

 

The Spinoff article here.

*General Agreement on Tariffs and Trade

 

Tui Ruwhiu
Executive Director

 

 

 

 

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If you do a search on the Interweb, one of the definitions of a disruptor in business reads:

To be a disruptor is to create a product, service, or way of doing things which displaces the existing market leaders and eventually replaces them at the helm of the sector. Disruptors are generally entrepreneurs, outsiders, and idealists rather than industry insiders or market specialists.

Netflix is a great example of a disruptor. It started as a DVD rental company posting DVDs to customers before becoming the first major streamer. It now dominates screen content creation, delivery and the Hollywood studios globally. How long it maintains that dominant position remains to be seen—it’s certainly the hare among the tortoises. But those tortoises are weighed down by money and muscle through their parent entities as much by hard and relatively inflexible exteriors and slow-moving parts.

I’d posit though that COVID-19 is the ultimate disruptor. It’s creating dramatic change in the way of doing things that even if we overcome it with a vaccine, it has wrought such rapid transformation to business that just a year ago we would have considered inconceivable. We can see that transformation occurring right now, in the screen industry, in New Zealand. Anyone who watched the NZFC/NZ On Air/TMP webinar this week on the Premium Production for International Audience Fund saw an example of it in action.

In the Screen Sector Strategy, one of the ten initiatives in the short-term plan is to work with the Government to modernise the regulation that shapes the sector. I can tell you after two and a half years of working on the Copyright Act Review with Government and at least another year of work ahead, my expectations of quickly modernising the regulation that shapes the sector was not great.

Like the studios, our screen bureaucracy and Government around it is a cumbersome beast, pretty resistant to significant change. Note how we’ve sat on the sidelines as the Golden Age of Television reshaped the global screen industry. Or Netflix changed the screen content business model for creation, distribution, revenue flows and ownership. Or a commercially driven public broadcaster became a loss-making entity with a still-beating commercial heart and a decidedly permanent-looking hand in the taxpayer pocket.

But then COVID.

Now our screen bureaucracy is moving it’s stumpy little legs so fast in COVID recovery mode we are seeing changes mooted for rapid implementation or in place that in the old normal would have taken forever to bring about.

Such as in the Premium Production Fund:

• allowing productions to access NZ On Air funding and the New Zealand Screen Production Grant for drama.
• permitting productions to have no minimum level of Aotearoa New Zealand content.
• Requiring only a minimum level of private international investment for eligibility set at 10% of a production’s total value for TV.
• Doing away with the need for an NZ Free-to-Air broadcaster to get across the line.

Or in the COVID 19 Policy for the NZFC Terms of Trade for films under $2.5 million:

• dispensing with the requirement to have a distributor AND sales agent
• doing away with the need for an NZ theatrical release
• allowing a VOD platform as a distribution partner

I’m not sure if we are ever going to catch the hare, but I can certainly feel my hair—now longer due to COVID—getting ruffled with the winds of change.

Bring on the NZ Broadcasting Act and NZ Film Commission Act reform.

Tui Ruwhiu
Executive Director