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Are We Missing the Streamer Boat?

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It’s hard not to bang on about streaming services when they are continuing to upend the screen industry as we know it.

Media intelligence service FilmTake recently reported that Disney, WarnerMedia, and Apple are expected to spend between US$8 million to $20 million per episode on new drama series.

Amazon has supposedly set aside over a billion US dollars to bring a five-season Lord of the Rings series to Amazon Prime.

There are other epics planning to cash-in on the void left after the conclusion of Game of Thrones include WarnerMedia’s Dune series, Showtime’s Halo, and Apple’s fantasy series See.

Disney+ is also producing a Star Wars series, Mandalorian, which is costing $15 million per episode.

And these are just the TV blockbusters.

The Financial Times reported that in Europe, Netflix will make 221 projects in 2019, including 153 originals.

Netflix has launched its first European production hub in Madrid, targeting Spanish-language production and drama series, which have been a priority and a large source of success for the U.S. streaming giant.

In July of this year, it also announced that it is creating a dedicated production hub, featuring 14 sound stages, workshops and office space, at Shepperton Studios in the United Kingdom.

In the last year alone, over 25,000 cast, crew and extras have worked on almost 40 Netflix originals and co-productions across Britain.

New Zealand is certainly not missing out on service production for streamers as witnessed most recently by the noise about the Lord of The Rings TV Series potentially being shot here for Amazon. Netflix has already been here with Letter For the King and is currently shooting another.

But are we missing the boat with local IP to satisfy the booming global appetite for content, particularly drama?

Yes, local producers do continue to sell their NZ ON Air and TMP funded content internationally, but that’s been the case for many years now.

NZ formats for the international market have made headway, as most recently attested to by Filthy Productions’ sale of Filthy Rich to the Fox Network.

It’s easy to forget that Rob Tapert has been making TV shows here for the international market for over 25 years—everything from Hercules and Xena to Spartacus and Ash vs Evil Dead.

But there’s nothing new in all this, as it was happening prior to the advent of Subscription Video On Demand (SVOD) services like Netflix and Amazon.

While NZ On Air continues to do the best it can with limited funds for local drama, it’s essentially locked into a myopic approach by its adherence to the Broadcasting Act, and it doesn’t look like it will change that anytime soon.

But there is a little light at the end of the tunnel.

Screentime has forged into Scandi Noir with its Danish coproduction Straight Forward, now on TVNZ OnDemand, and its soon to be released copro The Gulf, with Paula Boock and Donna Malane’s Lippy Pictures and a German partner.

And we have seen one Netflix Original in Auckland-based Razor Films’ Dark Tourist, while See-Saw Films and Jump TV are into their second series of The New Legends of Monkey for the ABC, TVNZ and Netflix. Almost going unnoticed is Pango Production’s 2018 production All Or Nothing: New Zealand All Blacks for Amazon Prime.

But really! Can we survive the onslaught of service production work from streamers in New Zealand and get our own IP out there in more than an occasional way?

There are a number of factors holding us back and one of them is writers. We don’t have enough skilled writers with the experience required to get internationally-focused shows across the line. The NZFC/NZ On Air Raupapa Whakaari Series Drama Lab initiative is seeking to address this by bringing in international-calibre mentors to work on local show ideas with teams here. Hopefully this will bear fruit.

Another is lack of funding. NZ On Air production funding caps out at $6 million, and you can’t access the NZ Screen Production Grant and NZ On Air Funding for the same project. When even middle-of-the-road Aussie shows are being made for the international market at AUD $1.5 to 2 million or more per episode for 6 to 10 eps, you can see the problem. But before you get to production you have to go through development, and the cost for that is going to be anywhere between $300,000 to $500,000. Again, there’s not the funding here for that. Raupapa Whakaari’s matched funding is limited to NZ$50,000 per year.

You might well ask why do we need to create our own IP anyway, and not just be service providers for international productions?

For directors and editors there’s going to be more work on local shows than international ones. The post production is generally not done here for international shows, and there’s only a very small pool of Kiwi directors with the credits to get themselves hired on international productions. That will expand slowly over time, but local shows hire locals, and we are increasing the numbers of Kiwi directors working on NZ On Air dramas.

In the end though, it’s our distinctiveness as Kiwis with Kiwi stories to tell and landscapes to show that provides cut through in the international market. I’m paraphrasing Paula Boock of Lippy Pictures who participated on our Screenlink panel this week along with Mark McNeill of Razor Films and Steven Zanoski of Filthy Productions to discuss ‘Screen Content for the Global Market’. Locally owned IP also brings revenues back to New Zealand when it’s successful, long after production has finished.

I don’t think we are going to miss the boat entirely when it comes to creating our own shows for the streaming giants. But it does sometimes seem like we are standing at the end of the pier watching the ship sailing away and wondering how the hell we are going to get onboard.

Tui Ruwhiu
Executive Director

 

Cannes: Is it All it’s Cracked Up to Be?

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Every year, tens of thousands of film industry people gather in Cannes for the world’s pre-eminent display of film industry gauche and sublime—the Cannes International Film Festival.

Or at least that’s what used to happen.

According to one local property manager, apartment rentals are down 30 – 50% for 2019’s festival, and it’s becoming a trend.

Esteemed trade publication The Hollywood Reporter headlined the affliction of both the festival and the film industry in general when it titled an article on Cannes: ‘It’s Time to Roll Out the Red Carpet, But Does Anyone Care?’

Jury President Alejandro González Iñárritu essentially pointed the finger at the culprit—Netflix—pushing the festival line that you can watch movies on phones, iPads or laptops, but that’s not the theatrical experience that film is created for. And with Netflix not eligible for Cannes film selections, it highlights the widening gap between the old world of theatrical, particularly in France, and the new of streaming.

So, is Cannes surviving the onslaught of SVODs?

The general consensus is that the film industry has contracted. The mega mergers that have taken place attest to this with the number of major studios reduced to five when Disney gobbled up Fox.

The mini majors are reeling from bankruptcies, flops and lack of franchises. And the indie film world (non-studio) is struggling unless they have cast.

Cannes is quiet this year. The stars aren’t turning out and there are fewer big budget films. And supposedly the parties don’t go to 4AM anymore.

One highly experienced French producer said the independent film business is either going to get better or worse, which shows the lack of uncertainty still pervading the industry and obvious at Cannes. His hope for theatrical lies in filmmakers tiring of their films going into the black hole of SVOD digital archives, without the attending fanfare of marketing and promotion given to films headed for theatres where they are experienced as they are meant to be.

Sales agents are becoming production companies and financiers to survive in the same way that distributors have reacted to the changing conditions.

And it’s a common topic to talk about films going straight to SVOD, because it’s so difficult to get a theatrical release. In the old days, straight to DVD usually meant it was a bad film. Not the case now with its modern equivalent.

Netflix and Disney are supposedly not showing here this year, but there are definitely people from both companies on the ground. As undoubtedly are other players like Amazon and Apple.

China has a stronger presence than ever before, tempered by a shift in political climate back home, burnt fingers from past bad decisions, and a more discerning Chinese screen industry and domestic audiences. It’s not quite the saviour it’s been seen as in past years.

Cannes has been slammed for the lack of female directing talent walking the red carpet and screening their films here. The stats for 2019 aren’t great but they are up over previous years, with 26 per cent of features submitted from women, and four of the nineteen in official competition helmed by female directors. Festival head Thierry Fremaux has been touting the mostly gender balanced selection and jury panels, and the introduction of a creche for film festival attendees with kids has been a definite hit.

Cannes is changing, but it resembles an ocean-going liner trying to make a turn—it has to cover a lot of distance before it can come about.

Will it maintain its preeminent position as the biggest film festival and market in the world? Probably. But what does that really mean now with SVODs here to stay and audiences increasingly glued to their small screens. We shall see.

Tui Ruwhiu
Executive Director

The Realities of a SVOD World

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I’ve been watching the debates raging across the Tasman as the Austalian screen industry seeks to ensure the future of Australian content in the face of the realities of SVOD.

Research company Roy Morgan reported in March 2019 that nearly 14 million Australians now have access to some form of Pay TV/Subscription TV, up 11.8% on a year ago.

Netflix with over 11.2 million subscribers had growth on a year ago of 25.2%, with Australian-owned Stan at 2.6 million subscribers seeing a 45.2% increase.

YouTube Premium and Amazon Prime also had significant increases.

Australian broadcasting standards require all commercial free-to-air television licensees to broadcast an annual minimum transmission quota of 55 per cent Australian programming between 6 am and midnight. In addition, there are specific minimum annual sub-quotas for first-run Australian adult drama, documentary and children’s programs.

SVODs in Australia have no Australian content requirement.

Australian commercial broadcasters sought in 2017 to have the quota removed for Australian children’s content. The Australian screen industry united against this, decrying what they said would be the almost complete annihilation of Australian children’s programming.

Then in 2017 the Australian Directors’ Guild; Australian Writers’ Guild;  Media, Entertainment & Arts Alliance and Screen Producers Australia joined together to launch the ‘Make It Australia’ campaign to lobby the Government for support for the sector in the wake of sustained funding cuts and changed viewing habits, which of course includes the rise of SVODs.

They called for no more cuts to SBS, the ABC and Screen Australia; a raising of tax incentives for Australian TV and foreign productions; a cementing of the commercial free-to-air Australian content quota at 55%; and new regulations for Subscription Video on Demand (SVOD) providers.

The Australian Government launched in 2017 an Australian and Children’s Content Review.

In March of 2019, the Senate Committee released its Review paper. Among the recommendations was a call to force streaming services such as Netflix and Stan (and Amazon and any others who might enter the space) to spend a minimum 10 per cent of income earned in Australia on original Australian content. They would also be obliged to promote that content to their subscribers. The other recommendations:

  • The current quota system being preserved.
  • Examining other Terms of Trade provisions and implementing them.
  • Introducing a single Producer Offset of 40%.*
  • Ceasing recognising New Zealand content as Australian.**
  • Increasing the Location Offset to 30%
  • Decoupling the Location and Post, Digital and Visual Effects (PDV) Offset.
  • Platform Neutral Location and ODV Offsets.

*The Producer Offset, Australia’s version of the NZ Screen Production Grant, sits at 20% for TV.

**This refers to Project Blue Sky, which allowed NZ content to be recognised as Australian content because of the Closer Economic Relations (CER) agreement between the two countries.

What did they Australian Government do in response? It allowed streamers that operate behind a paywall access to the production incentive for content they make in Australia, which of course includes international productions shooting there.

“The Government’s policy announcement is inexplicable and one-dimensional given how many times our local sector has called for urgent intervention”, said Austrlian Directors Guild CEO, Kingston Anderson.

“Our screen incentives need to be updated across the board, not just those that apply to international production. This decision shows a tremendous lack of confidence in the ability of Australians to tell our stories in our own voices.”

You are possibly wondering why at this point I am so wrapped up in what’s going on in Australia? It’s because I feel it’s clearly indicative of what we face and have essentially been ignoring till now. The 10-year screen strategy recently called for by the NZ Government is a chance to address the many problems the onslaught of foreign content and SVODs are having on the NZ screen industry. We only have to look across the Tassie for some insights and thoughts on how to address the issues.

 

Tui Ruwhiu
Exeuctive Director