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American on demand service Hulu has picked up the US rights to Kiwi drama Rūrangi, directed by Max Currie (DEGNZ). Currie expressed his joy saying, “Holy cow, we are streaming on Hulu! This is proof the sky’s the limit for New Zealand’s burgeoning trans talent.” The platform will release Rūrangi in June of this year for its American audiences.

UK company Peccadillo Pictures previously acquired the UK rights to the series and plans to release it later this year. For New Zealand audiences, Rūrangi will be available on NEON in May.

Season two of the series is currently in development and the film adaption is on theatrical release in Aotearoa. Rūrangi was closing night film for Sydney’s Mardi Gras Film Festival (Feb 18-March 4) and is currently screening at BFI Flare: London LGBTIQ+ Film Festival in the ‘Hearts’ programme (March 17-28).

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The standoff between the Australian Government and the global digital platforms has been a fascinating insight into the power the platforms, particularly Facebook, now hold.

Australia’s News Media and Digital Platforms Mandatory Bargaining Code, just passed by the Australian Senate in the last 24 hours, allows the Australian Treasurer to designate global platforms who then must start negotiating with news businesses about how much to pay them for content through mediation, or if that fails, arbitration.

None of the platforms were happy with the thought of having to pay for something they have been getting for free up until now. And nor did they care that the advantage they had was driving news publishers out of business. However, the big stick of proposed legislation forced Google to reach deals with some major Australian news media outlets. It’s highly likely though that this would never have come about if Bill Gates and Microsoft hadn’t stepped into the breach with the threat of its search engine Bing replacing Google—sufficient enough a concern for Google to cave in.

Facebook however is a different matter. It’s such an all-pervasive platform with no real competition that Mark Zuckerberg felt emboldened enough to cut Australian news feeds from Facebook rather than pay up. An unintended consequence of this was to remove from Facebook Australian-originated information that was considered vital, such as that from health services providing Covid information, charities, food banks, and other important sources. Additionally, the removal of trusted news sources also reignited criticism of Facebook as a promoter of conspiracy theories and fake news.

Facebook’s bullying tactics were lambasted by UK and European Governments, but they did in fact force the Australian Treasurer, Josh Frydenberg, to amend the proposed bill. Rather than all platforms being designated from Day 1, the Treasurer is required to give 30-day’s notice before a platform goes on the list. And Facebook gets to avoid going on the list at this point.

There has been considerable criticism of the Australian Government’s bill from a variety of sources, ranging from that it’s an incredibly blunt instrument to it being favourable towards the major Australian media players while doing nothing for small publishers. There’s more to come on this David vs Goliath battle but Round One seems to have gone to Facebook.

Meanwhile, at the Australian screen producers conference Screen Forever, Australian producers decried the Australian Government’s deregulation of Australia’s commercial networks while failing to regulate Subscription Video On Demand providers like Netflix. Deregulation means the screen industry there has lost the stringent quotas for local content that used to be required of the networks. At the same time, the Producer Offset—the Australian equivalent of the New Zealand Production Grant–for feature film was also lowered from 40% to 30%. These two hits created significant uncertainty about the ability of many Australian production companies to survive. Although there is a mooted requirement from the Aussie Government that SVODs and AVODs invest a percentage of their revenue on Australian content in the form of commissions, co-productions and acquisitions, it’s only in its early consultation phase with nothing concrete expected should it come to pass for some time. While a figure of five percent of revenue has been flagged by Government there as a level streamers would be required to invest in Australian content, amongst the production community 20 per cent is being touted as much more realistic.

This side of the Tasman it’s far too easy to say that the New Zealand Government is being gutless by avoiding to talk about any kind of regulation of global platforms or SVODs. I’m hoping that doesn’t prove to be true.

 

Tui Ruwhiu
Executive Director

 

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Well it’s happening. The SVOD wars have really kicked off.

Apple TV+ debuted in New Zealand on 1 November with 14 original shows. Very much a tortoise approach from Apple, and you don’t have to pay for it for a year if you’ve bought an Apple product recently. Otherwise you’re up for $8.99/month.

Disney+ meanwhile will be off like a hare at the starting gates, launching more than 600 movies and shows from Day 1, being 12 November (19 Nov. in NZ). Expect every household in the country with kids to at least consider adding a subscription at $9.99/month.

NBCUniversal’s Peacock will soft launch in April 2020 with 15,000 hours of programming, while HBO Max comes online in May with more than 10,000 hours of programming.

Netflix is already feeling the heat.

FilmTake reports that Netflix lost subscribers for the first time in the U.S. since they started in 2011. It has likely reached saturation in the market, and we can expect to see the massive international growth of Netflix to slow or halt, or worse for them, decline.

We all thought Netflix was shaking the screen industry to its core, and it has. But it was primarily Google and Facebook that was impacting on New Zealand’s Free-to-Air market, taking advertising dollars away from TV screens.

The initial streaming entities in NZ did contribute to a decline in Free-to-Air viewership, but our Free-to-Air market was still holding up with significant numbers of New Zealanders continuing to watch mainstream TV. But is that going to be the case now with Disney+ and Apple+ in the market, together with Netflix, Amazon Prime, Neon, and Lightbox and with others to come?

You have to imagine that Neon and Lightbox are fretting about their continued existence, unless Neon has done a deal to retain HBO content and possibly keep HBO Max out of the NZ market. Spark-owned Lightbox will most likely be the first casualty unless their strategy has sport and other offerings in the wings. Spark has the All Blacks and cricket afterall. Unlike Peacock, who is mooted to pursue sport, news and live programming, Spark doesn’t have the programming and financial resources of NBC and Unversal to draw upon. It’s rumoured though that Lightbox is for sale. You’d need big cojones to step into that space , or cash+ and programming+. Streamers who don’t have studio majors and/or their parents as backers are really at a disadvantage. With Netflix now paying a premium to license shows because they are losing the content owned by their competitors, you can’t imagine our locally-owned streamers having deep enough pockets to play in the big leagues. And how much longer will our broadcasters be able to access the best of international product?

At TVNZ, Kevin Kendrick is focusing on more NZ content to differentiate its Free-to-Air and OnDemand brands and help to avoid the price wars on the international scene for programming. This is an area they are likely to be able to call their own, as we can’t expect the international SVODs to commission much here unless they are forced to as the Australians are seriously contemplating making them do. With reality TV to undoubtedly feature highly in the offering, is TVNZ really going to be able to keep NZ viewers in good numbers?

What about Three? Only the woman upstairs knows what’s going to happen there. The gossip: it’s going to be bought by… someone.

Kris Faafoi’s decision about what to do with the soon-to-be loss-making TVNZ and with public broadcasting becomes even more critical now.

And just as this is all happening, NZ On Air CEO Jane Wrightson resigns to become the new Retirement Commissioner.

Jane has done a fantastic job navigating NZ On Air through the tumultuous changes that have impacted on broadcasting in the 12 years she’s been at the helm. But has she been prescient?

In this now constantly changing screen industry world, we’ll undoubtedly find out if NZ On Air gets retired before Jane runs her course in her new job. We’ll certainly learn whether or not Netflix will survive. If you are a producer on a multi-year pay down schedule for the content you sold them, you are going to be hoping somebody will buy Netflix out rather than it going under. As of 30 September, Netflix reported US$12.43 billion in debt and they are adding to it to keep the originals and higher-priced acquisitions coming. That US$292 Netflix share price is definitely going to take a hit sooner rather than later.

In the meantime, hunker down and get binge watching. There’s going to be more than enough for everyone with one, two or three SVOD subscriptions… for a very long time.

Tui Ruwhiu
Executive Director

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I had the good fortune to attend the Busan International Film Festival (BIFF) for the official launch of the Alliance of Asia-Pacific Audiovisual Writers and Directors (AAPA) last week. Guild president Howard Taylor signed the MOU for DEGNZ’s participation in this alliance in Tokyo in May.

AAPA is dedicated to serving as an independent and impartial advocate on behalf of the audiovisual creators community in the Asia-Pacific region and seeking to strengthen copyright protection.

Already we are benefitting from belonging to this Alliance with considerable support coming from Writers & Directors Worldwide (W & DW) and the International Federation of Societies of Authors and Composers (CISAC), under whose umbrellas the Alliance sits.

Present at BIFF were two guild members with their films: David Stubbs with his feature Daffodils, and Sam Kelly with Savage, which had its world premiere in Busan. It has been a while since a New Zealand feature was selected for BIFF, so it’s quite a coup to have two here. Congratulations to David and Sam for their achievements in getting their features into what is arguably still the most prestigious film festival in Asia.

While there, I took the opportunity to look at the feature film projects being pitched from around the Asian region, both by young emerging filmmakers and those more established. It was interesting to note the similarities and differences between what is happening across Asia and in New Zealand.

One of the first things that struck me was that like many aspiring New Zealand writer/directors, many Asian writer/directors expect to write a script from their treatment and have it move into production within one year. The average time for a film to move from initial idea to completion (if it does get made) in New Zealand and Australia is five to seven years. Case in point is Sam Kelly’s film Savage, which spent over six years in development. I asked Professor Darcy Parquet, who lectures in Korean film at the Busan Asian Film School, if in Asia it was unrealistic to expect such rapid progression. He agreed that it was.

Budgets also vary considerably. In speaking to one Japanese producer, I was told that indie film budgets in Japan typically sit in the range of US$30,000 – 300,000. Korea is a highly commercial market where indie films struggle as they do in Japan. Korean independent films have slightly higher indie budgets than Japan, but nowhere near the typical US$5 million budget a Korean commercial film gets. Elsewhere in Asia, indie film budgets seem to range from US$200,000 to US$600,000 – 750,000. An important consideration to remember is that there is not a lot of government support for film around Asia, unlike in New Zealand and Australia.

We are certainly not alone in wanting to tell dark dramas. In a number of pitches I heard, cancer and suicide featured frequently and there were quite a few tough films wanting to be told. This was balanced by genre or genre hybrid projects—a reflection I believe of the lower budgets, lack of government funding and a need to get returns for investors, as well as a desire to tell more genre stories.

Highly obvious at the Asian Film Market that sits alongside BIFF is the European presence. Many European organisations and producers are seeking to strengthen ties with Asia for co-production, which is the mainstay of the European film industry. There is also a fascination with Asia and its stories. Europeans, who are masters of co-production and have access to a variety of soft-funding sources, are searching out talented Asian filmmakers with strong stories to support. It’s such a pity that co-production in New Zealand and Australia is so limited by both attitudes and resources, as well as isolated by geographic distance. New Zealand has co-production agreements with South Korea, Singapore, China and Taiwan, but these are rarely used.

I’d have to say that I’ve never before met as many film festival programmers from other festivals before as I met here. That can probably be attributed to the fact that it’s a smaller market than others I’ve been lucky enough to attend. I think, however, that it’s another sign of the European interest in the region.

Streamers are having the same impact in Asia as is happening elsewhere, with the future of indie film still very uncertain. SVOD still hasn’t picked up the slack that DVDs used to bring in terms of revenue. That doesn’t seem to have slowed the Asian passion for indie features though. Everyone still seems to be rushing forward. But nobody it would seem is yet sure if it’s towards oblivion or a brighter future.

Tui Ruwhiu
Executive Director

 

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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