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I’ve had occasion to review the New Zealand Film Commission Act, more so recently. To understand the New Zealand Film Commission’s (NZFC) role, it’s really the source document to read. And from it, we can then see how they interpret it.

Taking a look at it here, the first thing you will notice is that there are more clauses that are repealed than there are clauses that comprise it. In comparison to the Broadcasting Act that governs New Zealand On Air, the NZFC gets off awfully lightly.

From a New Zealand screen creative’s perspective, in my view, there are only three areas that are of real relevance in the NZFC Act.

The first is in Section 2, Interpretation; the meaning of the word ‘film’:

film includes a photographic film, or a recording on magnetic tape or on any other material, from which a series of images, with or without associated sounds, may be produced

You can see that this interpretation applies, but is not limited to the meaning of film as we in the screen industry use it. In fact, it’s more akin to the interpretation of ‘film’ in the NZ Copyright Act:

film means a recording on any medium from which a moving image may by any means be produced

In other words, ‘film’ in the NZFC Act actually can be interpreted to mean audio-visual content.

The second pertinent part is, I believe, (1A) in Section 17, Functions of Commission:

to encourage and also to participate and assist in the making, promotion, distribution, and exhibition of films

The key word for me here is ‘exhibition’, but more appropriately the active verb ‘to exhibit’:

exhibit – to show something publicly

exhibition – an event at which objects such as paintings are shown to the public, a situation in which someone shows a particular skill or quality to the public, or the act of showing these things

We all think exhibition means theatrical exhibition in film, but the Cambridge Dictionary definition, which I think can be applied here, just means showing to the public. Again, how this is applied is open to interpretation.

The final area of real interest is Section 18, Content Of Films. There are a significant number of stipulations for this, but they essentially tell us that the film should have significant New Zealand content, and be made by New Zealanders in New Zealand, unless it’s an official co-production, which confers New Zealand status on the film.

That’s pretty much it. So, what does it all mean?

Well it pretty much means that the NZFC role is very open to interpretation. And the New Zealand Film Commission’s guidelines for everything it does are their interpretation as they see it, guided by the Ministry of Culture and Heritage, who they report directly to, although the Ministry of Business, Innovation and Employment (MBIE) has oversight for the International NZ Screen Production Grant and makes a contribution to international promotion of the NZ screen industry; both elements of economic development.

More than anything else, MCH want films to be seen by audiences—NZ first and then the world. Theatrical release is generally considered the most important way of delivering an audience. Watching a film on the big screen with other people delivers the cinematic experience that is meant to separate ‘film’ from TV.

Theatrical exhibition also delivers box office, which is an indicator of the commercial success—or not—of a film. Commercial success can provide funds for future investment into films. In reality, we all know that nine out of ten NZ films fail to deliver real Return On Investment (ROI), so whatever revenues come in are really only reducing the size of the loss of investment. But nowhere in the Film Commission Act does it say that films have to return investment. The International NZ Screen Production Grant overseen by MBIE is the only film-related investment where ROI is expected.

Let’s take a closer look at the interpretation of ‘film’.

Obviously, NZFC has gone for the wriggle room in the Act to take on premium TV drama as well as film: both audiovisual content. It’s clearly strayed into the domain of NZ On Air here, but by targeting internationally-focused NZ drama content, it’s not stepping on NZ On Air’s toes, which are firmly anchored in domestic terra filma.

How about the guidelines for NZ Content?

The Act is very prescriptive and NZFC adheres to them for local films. Official co-productions, though, allow for interpretation. More than one NZ film with a completely American setting has passed as New Zealand content, Slow West being a good example as a NZ – UK co-production.

What about exhibition?

The film commish has theatrical exhibition as a key requirement. And exhibition, for me, is where my main interest lies, because it’s at the heart of NZFC investment. In fact, like the meaning of ‘film’, it could be broadly interpreted but it’s not at this point, although COVID has thrown a spanner in the works with cinemas shut down during lockdown, and now suffering under renewed COVID outbreak. NZFC has made some temporary changes to adjust for this.

We can take traditional theatrical exhibition as a given for now, although COVID is certainly trying to push it into oblivion. But I think we could be looking at other interpretations as well.

A true public broadcaster in TVNZ could become a channel for exhibition of all New Zealand films. TVNZ OnDemand is an Advertising Video On Demand (AVOD) service. They may not get to be the first window for screening, but they could certainly be made to carry all NZFC-funded New Zealand films that wanted to sit there, with TVNZ making an in-kind contribution for promotion—trailer/promo and airtime—in return for getting the film for free. A Boosted campaign could generate funds for the filmmakers to use on marketing and promotion. Viewing statistics could be shared with NZFC so that they could gauge the film’s and the platform’s ability to deliver.

Of course, there’s no ROI here for NZFC, but does that really matter? Not if they fund these films 100% so there was no need to seek private investment. A budget cap for films of this type could make it feasible. This approach is probably suited to films that struggle to find commercial partners in distributors and sales agents or those who don’t want to go down the traditional path to market. But this doesn’t mean they don’t have an audience. It could well be niche, and there’s nothing wrong with that. OnDemand would find out.

Another approach to exhibition could be Transactional Video on Demand (TVOD). The New Zealand International Film Festival could provide its Online platform for NZ film TVOD, as it did for delivering films in the 2020 festival. This would essentially offer the same revenue generating experience as cinemas. The added advantages would be that NZIFF could clip the ticket, while distributors could be removed from the picture, increasing revenue flow back to the NZFC, investors and filmmakers.

Filmmakers who chose this path as their primary distribution channel should be able to access the NZFC Distribution and Marketing Fund to drive audiences to their film, with NZIFF opening its considerable database to them and providing additional marketing and promotion as theatres now do. Again, viewing statistics and other data could be made available so that marketing plans are adjusted and audience size and revenues determined.

A spin on the TVOD approach would be NZIFF Online becomes the Premium Video On Demand (PVOD) channel, in a Day and Date with New Zealand theatrical exhibition. Online revenue would likely have to be shared with the theatres, and a distributor would also be involved to get the film into cinemas (self-distribution an option, though), adding to the layers of revenue extraction on the way back to NZFC, investors and the filmmakers.

This approach is a revenue generating one and would likely have a sales agent already attached so international sales could help deliver an ROI. With NZ films struggling at the NZ Box Office, this I feel is a viable alternative to getting NZ audiences to watch NZ films. After the film has done it’s run using this approach, it could be put on TVNZ OnDemand so that it had an ongoing opportunity to get additional viewing.

What about the promotion of NZ culture you might well ask?

Well that doesn’t seem to be in the NZFC Act. It’s obviously a concern of MCH, though, and Section 18, Content of Films could be seen to cover it. But does significant New Zealand content equal New Zealand culture?

You’d hope so.

 

Tui Ruwhiu
Executive Director

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As Minister of Broadcasting Kris Faafoi gets set to decide the New Zealand broadcasting industry’s future with hopefully sound advice that includes a note that the industry is more than just News and Current Affairs, I postulate further on possible answers to our dilemma to stimulate further debate and discussion.

Countries with strong public broadcasters are those with compulsory broadcast licence fees. In Denmark, with a population of just over five million, the licence fee of €332 (NZ$579) generates €4.4 billion (NZ$7,671,308,423). Danish public broadcaster DR operates six TV channels and eight radio channels with this revenue. Norway, which has a similar population to Denmark, has a licence fee of €315. Its public broadaster NRK runs three national TV channels and three national radio channels. Countries that still have licence fees include the U.K., Germany, France, Spain, Ireland, Switzerland, Japan, Italy, the Netherlands and South Korea.

A licence fee in New Zealand of just NZ$125 applied to the estimated 1,765,100 households in the country would generate nearly $220 million dollars annually. This would cover the costs to fund Radio NZ ($35 million) and Māori Television ($45 million), administer the licence fee (est. $20 million) and leave $120 million.

If the $120 million were combined with Radio NZ’s $35 mil., a newly created public broadcaster would have $155 million of muscle. This entity could deliver quality News and Current Affairs (est. $50 mil.) and would have $105 million—almost the same level of funding NZ On Air has after the ring-fenced Radio NZ funding is deducted—to create a Public Broadcaster Fund to make great factual and scripted programming for both domestic use and international sales. To help secure the independent production sector’s future, this broadcaster could be required to outsource for factual and scripted ideas and their production. Sales revenue could go back to the broadcaster and the independents to contribute towards their sustainability.

In an added approach, the Government could continue to fund NZ On Air the annual $115 million it now receives. This NZ On Air Fund could be contestable and exclusively for the commercial channels and platforms, both Free-to-Air and those with paywalls. Once again, independent producers could pitch on this contestable fund with a percentage, say 75%, being ring-fenced for the independent sector.

The commercial channels and platforms could be required to pay a commercially appropriate licence fee for this content that acknowledges the real value that local NZ content would bring to them. After all, they are commercial with the Free-to-Airs able to scoop up any advertising revenue going, while the SVODs would get the subscription revenues. Funding levels would be determined by the quality of the idea, the scale of the proposed production and the audience size.

A means to extract revenues from streamers and international serviced productions coming here would need to be found to decrease and hopefully eventually eliminate Government funding in the NZ On Air Fund.

The Public Broadcaster Fund and the NZ On Air Fund should allow for access to the New Zealand Screen Production Grant (NZSPG) so that producers can more easily pitch and finance shows that have truly global potential. The NZ On Air Fund should retain the current NZSPG requirements of 25% or more of non-NZ production funding and a minimum of 10% market money to ensure the shows have real international appeal. And while we are at it, the NZSPG’s Qualifying New Zealand Production Expenditure (QNZPE) minimum should be reduced from $2.5 million to $500k so that films with lower budgets can access NZSPG. Some thought may well have to be given to the QNZPE for TV as well.

The above could potentially solve a number of issues:

  1. Give us a well funded public broadcaster.
  2. Ensure that the independent production community would still exist and be able to make the most of opportunities both domestically and internationally.
  3. Allow the commercial broadcasters and platforms to live to fight another day with all the advertising revenue available while giving them valuable local content.
  4. Make the streamers and international productions contribute to the growth of local IP and production.

All that’s needed for this to occur would be for the NZ public to buy into the need to pay a licence fee.

I would.

Would you and everyone else?

Tui Ruwhiu
Executive Director

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Like most everyone else, I’ve been walking around with a smile on my face since Winston Peters decided which side of the seesaw to get on.

I’m not as rabidly dogmatic as many left of centre seem to be in the screen industry, but I do know that the social fabric of New Zealand society has been torn under National, the Arts have suffered, and it deeply disturbs me that we can’t swim in many of our waterways anymore.

I’ve read numerous articles online about what the change of government means for education, transport, trade, the economy, the environment and other sectors, but I haven’t seen anything yet on what it means for the Arts, and more particularly for the screen industry. So like everybody else, I’m going to postulate about some things.

Firstly, the minister for Arts, Culture and Heritage will be Grant Robertson, moving it far up the ladder from where it sat with Maggie Barry. Jacinda is passionate about the Arts and has been Labour’s Arts spokesperson, but won’t have the time this term to deal with it. I believe she’ll give the portfolio to Robertson, another strong Arts supporter, who himself will be busy with Finance. I’ll happily eat my words if Jacinda keeps it, though.

Second: the Hobbit Law. It’s goneburger. Labour outlined in its Fair Pay Agreements (FPAs) the ability for employers or employees/unions to be able to begin negotiations on FPAs once a sufficient percentage within an industry call for one. Under The Hobbit Law, all workers in the screen industry are classified as contractors, cannot collectively bargain and are not subject to the minimum working wage requirement—all the antithesis of what Labour stands for. The Hobbit Law will go and it’s up to the guilds to make sure that happens and that we unify to seek sustainable careers in the screen industry.

Next, copyright for directors. The Copyright Act Review is underway. I put considerable effort into lobbying Jacinda directly about director copyright when she was the Opposition spokesperson for Arts, Culture and Heritage. Director copyright is about sustainable careers, a touchpoint for Labour. Our chances on changing the copyright law are now slightly improved but will still need significant effort on our part. It’s not a big ticket item for government, but hopefully with Robertson we’ll have a more sympathetic ear and will be able to get to the other ministers who will count.

The other aspect of copyright is Google’s desire to see relaxed US Fair Use and Safe Harbours legislation enacted here, replacing our Fair Dealing regime that is more stringent and protects the intellectual property of creators better. They must have choked when Winston Peters said he was going with the Labour Party. Years of upfront and behind-the-scenes lobbying to swing National to their view just hit a major speed bump. But they had moved many beaureaucrats toward their line of thinking as well so we’re not off the hook yet. We still need to fight hard to keep Fair Dealing in the face of Google’s enormous financial muscle.

Then there’s public service TV. Radio New Zealand will be transformed into Radio NZ + as promised, giving us a digital platform that will deliver more quality reporting and investigative journalism, Maori, Pasifika and other diverse community content, as well as education and entertainment for children. How the additional $38 million will be spread between the proposed independent Public Media Funding Commissioner and NZ On Air funding is unclear, but it would seem that anything that falls under the remit of the new commissioner that currently is being funded by NZ On Air will move to the new fund, thereby not increasing NZ On Air’s funding but giving it more money to play with in the commercially contestable realm, which will continue to be its responsibility.

Labour understands that the Arts can also generate revenue, and that the screen industry is a significant employer as well as a hotbed for commercial innovation, particularly at the higher end. Steven Joyce never liked the screen incentives although he was smart enough to know we needed them. They will stay, and everyone will await the outcome of the full Ministry of Business, Innovation and Employment assessment of the screen incentives currently underway. We might see more production funding for the NZFC for NZ films, which didn’t increase under National although they did top up the Screen Production Grant for both NZ and international films. This funding increase would come out of the Ministry of Economic Development portolio, who is supported by MBIE, who essentially controls the Ministry for Culture and Heritage, at least for the moment. David Parker will be the new Minister for Economic Development.

What about a Minister of Broadcasting? I’m sure Amy Adams helped do away with this as the last minister because she viewed broadcasting as a sunset industry. Labour won’t reintroduce one because Broadcasting, which essentially means Free-to-air these days, no longer holds the sway it once did.

We have to give thought to our public broadcaster TVNZ. This is a vexing question. It’s not the public broadcaster it’s meant to be. Labour would probably flog it off if there were a buyer for it, but who would want it? Perhaps a US network like CBS who has just won its battle to acquire Australia’s Network 10 for US$167 million? Or Fox, who lost out to CBS? Or a private equity fund like Ironbridge who stepped in to save Mediaworks? I don’t think there will be a knight in shining armour for TVNZ, though, with Mediaworks sitting there as an abject lesson, essentially held up by its radio business.

I’m guessing that Labour will leave TVNZ to its own commercial devices after stripping it of its public service mandate, and using whatever dividend it generates to help fund public broadcasting. A more interesting question is what will happen to the public broadcasting and current affairs shows funded by NZ On Air currently on the commercial channels, including the Māori programming? I think they’ll be looking for a new partner to + with.

Will Māori get more money to play with in the screen sector? Yes, because of the work that’s been done by NZFC around their Māori strategy, but that was coming anyway. No for Te Māngai Pāho who already received a boost last year, although not for content. I’d personally prefer that Labour made te reo mandatory in schools through their education policy rather than funding TMP to revitalise the language via Māori Television, although Whakaata Māori would need to keep producing Māori language content until we all caught up.

I don’t believe NZFC and NZ On Air will be merged. We have a new NZFC CEO who will be on a three-year contract. And with other changes to come and those that have recently occurred in and around the funding bodies, it doesn’t make sense to pursue such an idea now.

Creative New Zealand is going to get some attention. Grant Robertson as Associate Spokesperson for Arts Culture & Heritage in a Radio NZ interview prior to the election outlined thoughts that will require some restructuring at CNZ to achieve Labour’s ideas around regional Arts development, more practioners at the top table, and how to ensure young and emerging artists get a fair crack at the funding pie.

In the same interview Robertson gave Labour’s perspective on the Arts:

“Arts are the window to the soul of our people and our country.”

Labour is supportive of the Arts. It wants to see more funding go to the Arts. But it will take time for this to happen and their main focus will be elsewhere for awhile. I don’t think any of us will complain too much if they give first attention to homelessness, mental health, the minimum wage and the housing crisis.

Tui Ruwhiu
Executive Director