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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Taking a look at it here, the first thing you will notice is that there are more clauses that are repealed than there are clauses that comprise it.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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It’s hard not to talk about what’s going on in the global screen industry when COVID continues to upend screen life as we know it.

Perhaps the biggest seismic shift that has occurred is Universal Studios and AMC, the U.S. and the world’s largest theatre chain, announcing a historic agreement for the studio’s movies to be made available on premium video-on-demand after just 17 days of play in cinemas. Exhibitors have long fought the shortening of theatrical windows and have been able to leverage their fight off the legislation in the U.S. that prevents studios owning theatres.

Some of you will remember the days when a movie came out in theatres first, three months later on VHS, pay TV three months after that and two years later on free-to-air television. This sort of worked for everyone as first VHS and later DVD was incredibly lucrative. Geographical territory releases are part of the windowing business model and still exist today.

Streaming of course upended all of this with its ability to release in multiple territories simultaneously straight into the consumer’s home. In a recent podcast, director Gina Prince-Bythewood, the helmer of Charlize Theron’s The Old Guard, while lamenting that the Netflix release of the film didn’t give it the cinematic presence that a typical theatrical release would have, also extolled the streamer for putting her film into 190 countries in one day.

It’s easy to understand why AMC caved in to Universal—it’s close to bankruptcy thanks to COVID, as are many other theatrical chains and independents. This deal is a watershed one for the movie business. Variety in an article, poses six questions on what the agreement might mean. Perhaps the most interesting for everyone in the independent film space—and that’s where all NZ films sit—is that the studios may shift away from just superhero films and towards quality fare.

In the second big piece of news for the week, the British Government launched an emergency £500M (NZ$1.17 billion) film and TV coronavirus production insurance fund. This is expected to kickstart production in the country that remains threatened by the pandemic. With this boost, British producers will be able to get back into filming, confident that the fund will effectively underwrite the cost of productions closing due to COVID. We still await a similar response from our government for the New Zealand screen industry.

And finally, across the ditch the Australian Government added A$400 million (NZ$431 million) to its location offset, essentially allowing international productions through their rebate scheme to access a total rebate of 30%, in comparison to NZ’s rebate scheme via NZSPG of 20% with a small number getting an additional 5% through the Uplift. It’s highly unlikely that the NZ Government is going to participate in a rebate race to the bottom, and I’m personally not convinced as some others are that this is going to have a significant negative impact on international productions coming to New Zealand.

Time will tell.

 

Tui Ruwhiu
Executive Director

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You would think 28 days in lockdown would give you plenty of time to think. For me, it hasn’t as I have been extremely preoccupied along with a number of other industry people in the Pan-Sector COVID-19 Action Group, working on how to get the industry back into work. I can tell you that the weekends, and in particular Easter, were very welcome.

But as we head towards the fateful Day 28 of Wednesday—which could very well pale into insignificance at 4pm today—I would like to reflect right now on what it was like before and what it will be like after Coronavirus.

I’m a Boomer. I’ve never known war, although my brother and his friends did have to give some thought to how to avoid ending up in Vietnam. The closest I’ve gotten to a bomb was when I arrived at my Soho hotel in London the day after the nail bombing of the nearby Admiral Duncan pub by a Neo-Nazi. I was living in Tokyo though when Shoko Asahara and his Aum Shinrikyo cult unleashed Sarin gas attacks on the Tokyo subway system, killing 13 and injuring thousands of others—I got to report it, not experience it, luckily.

Still, none of this compares to the devastation that COVID-19 has wrought on the world. Some have referred to it as the World War of the 21st Century without a visible enemy. Sure, we’ve had to queue for food like they used to during World War II, but we can still choose between a Savvie, a Chardie or a Pinot. Hardship? Not in this sense, to be truthful. But economically, a definite “Yes!”

Of course, like many people I’ve had financially difficult times in my past, but it’s always been up to me to get out of them and it was always possible to do so—the economic environment even during the GFC was never as bad as it is now for all of us.

Most of us in the screen industry, myself included, are contractors. I’m fortunate in that the Guild still has paid work for me to do, albeit on reduced hours that I voluntarily instituted to help out (I’m still working fulltime, though). My wife’s small business has gone from a comfortable sole trader income to almost zero. Many of you have no income right now except for the Wage Subsidy. I hope that you have all applied for and received it. And if you were declined, please ensure you entered the correct IRD number and are classified as a sole trader and not an employee. One of these could be the reason why you were declined.

Can we go back to the old normal? Even with a vaccine, it doesn’t seem possible. So what’s in store for us all in the screen industry in the new normal?

It’s clear now that the world is suffering from a lack of content. Broadcasters, streamers, cable, AVOD, TVOD—they all need it. From Israel to Bulgaria, the UK and the U.S. to Argentina, Australia and to a minor extent New Zealand, development is in overdrive and everyone is getting ready for new production to feed the Content Beast that’s starving.

Andrew Shaw, General Manager Commissioning and Production at TVNZ recently told me that internationally, existing content that had been passed on before is being re-examined in a new light. This means opportunities for sales offshore that producers might not have been able to secure previously. Then there is also produced material that hadn’t yet gone to market. All this will run out in quick time, however, and reruns are reruns no matter how you look at it.

As I’ve said before in this column: With great change comes great opportunity. But you’ve got to grasp it with both hands. Everybody internationally is gearing up to do so.

Jeffrey Katzenberg has grabbed the opportunity with Quibi, the new short-form content platform that’s just launched. Katzenberg took big risk in founding the successful Dreamworks with Spielberg and Geffen when it was considered insane to start a studio without an archive. Prior to that he took a massive punt with Roger Rabbit when he was Chairman of Walt Disney Studios. As a former professional gambler, Katzenberg was used to betting the bank. Being a card counter, you can understand that he always had a strategy to win. So, what about the New Zealand strategy to grasp all the opportunity and win in the screen industry?

Well, one was mooted before COVID-19 hit. And we have it now in the draft strategy released two weeks ago. Granted, it was formulated prior to COVID-19, so it should be measured upon that. And I’m happy to do so.

My personal opinion—and, I am at pains to point out, NOT DEGNZ’s position—is that it’s a document lacking in vision and the independent spirit of the New Zealand screen industry, being full of bureaucratic intentions rather than specific, entrepreneurial action plans needed to truly move the industry forward. The advent of COVID-19 means it now must be rewritten. And we have once again been provided an opportunity to feed back, which I encourage every single person to take.

So what might the New Normal look like that we need to strategise about?

On the film side, which is so dependent on theatrical exhibition, it’s a changed world. Sales agents are making sales but no longer paying Minimum Guarantees for films—essentially deposits that were used to help finance features, and producers were required to have.

Distributors are selling to streamers, broadcasters and others, but as Elizabeth Trotman of Studio Canal said in a Screen Producers Australia (SPA) interview two weeks ago, they were really dependent on blockbusters to make money because independent film didn’t pay. How to move from that old business model and into the new environment is something StudioCanal are thinking hard about. Paul Wiegard, co-founder of Australasian distributor Madman, said last week in another SPA interview that they are in a fortunate position because they have their own streaming platforms in DocPlay and AnimeLab, and other diversified revenue streams. While passionate about narrative feature film, Wiegard was more optimistic about documentary. In the end, he was clearly uncertain about theatrical exhibition for narrative features at this point.

The future of theatrical exhibition is decidedly unclear, with many exhibitors headed towards bankruptcy. Social distancing won’t help theatrical survivors to persuade customers back into theatres, and it certainly won’t deliver the box office they, the distributors and the studios will need. Independent film—and that is all New Zealand film—has a decidedly sketchy future for the foreseeable future unless it can find a home on a digital platform, pay channel or free-to-air broadcaster. And the NZFC requirement for theatrical release to get financing will obviously have to change.

On the television side, we will likely see a merged TVNZ and RNZ sooner rather than later. It’s clear public broadcasters have an unrivalled position when it comes to News and Current Affairs when the chips are down. And TVNZ did a very good job in building TVNZ OnDemand, a platform they can monetise, and HeiHei in partnership with NZ On Air. They are in a good spot. Let’s hope the Government gets the mix right. Our futures as television makers depend on it.

NZ platforms though are suffering a lack of content, just like their international counterparts. There’s only so much self-isolating content we can all take. With a transition to Level 2, we will likely see an increase in documentary and unscripted first, then drama as we find ways and means to operate safely in larger numbers. The stimulus package for the NZ screen sector now being talked about will absolutely be needed if we are to climb our way out of the hole we are in and back into production.

Private, free-to-air broadcasters and media organisations are struggling with the massive decrease in advertising, although SKY’s subscriber platforms are helping them to weather the storm. Private media is looking to the Government to rescue them and they should hear about their package soon.

Production for the international market in New Zealand is one of the tougher nuts to crack. On the one side, for serviced production we have to get the international talent into the country to complete projects and to start new ones. On the other side, we don’t have sufficient talent here for local production of internationally-focused shows. And the opportunity for locally-produced global shows seems to be rapidly closing. We don’t yet have the funding and processes from our funding bodies to really take advantage of the international opportunities. Hopefully, we will see changes soon enough for New Zealand producers to exploit.

The big problem facing us all is cost and how that’s paid for. Increased Health & Safety should mean new line items to the budget and increased shooting days, not greater demands on directors and editors (and other crew) to do more for less. The funding bodies understand this, and are looking to ask for more. But in an environment when every sector needs assistance, there’s only so much largess the Government can provide. Meanwhile we are back where we were a few short years ago when DEGNZ with the NZ Writers Guild waged a battle against digital platforms and producers working with measly budgets and grabbing all rights.

So here we all are, sitting with bated breath waiting for a Government announcement that will decide our immediate fate and shape our long-term future. It’s not all grim. As Queen Elizabeth said in her address, “We should take comfort that while we may have more still to endure, better days will return.”

For all of us, I’m sure that those better days can’t come soon enough.

 

Tui Ruwhiu
Executive Director

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I asked myself and my colleague whether or not I should write about the impact of the coronavirus on our industry in my regular Op Ed. I’d decided not to, then woke up to some news that has changed my mind.

CANNESERIES, the TV version of the Cannes Film Festival, has decided to postpone from April to coincide with MIPTV in October, while the Cannes Film Fest is currently going ahead as planned in May… so far. And the next in the James Bond franchise, No Time To Die (an apt title if ever there was one) has decided to move its opening slot from April to November—the only tent-pole film scheduled for this year to do so at the moment. Perhaps the studios are buoyed by the prospects of Niko Caro’s Mulan, which goes out this month in the US with a projected US$85 million opening.

In February, Paramount Pictures postponed a three-week shoot in Venice for the latest in the Mission Impossible franchise, while at Berlin, Chinese auteur Jia Zhangke (Ash Is Purest White, A Touch of Sin) told media that his next film slated for a start in April is delayed indefinitely.

The number of major entertainment companies pulling out of the SXSW Festival, due to start tomorrow, is increasing daily.

With the movie theatres empty in China, Korea and Japan, and undoubtedly so in Italy and Iran, I know I’m not the only one thinking about what this all means for the film business.

The Hollywood studios have already assembled coronavirus strategy teams and many are in contact with the Centre for Disease Control (CDC) in Washington and the World Health Organisation (WHO), monitoring the situation. As with the James Bond and Mission Impossible films, the studios are having to consider what it all means to their production and releasing schedules, but more importantly what the overall impact is going to be to their business.

In China where the virus originated and has been impacting the longest, there have been rapid moves to deal with the theatrical ramifications. Huanxi, distributor of the Chinese blockbuster Lost in Russia, premiered the film online for free, while Enter the Fat Dragon becomes the second major Chinese film to premiere online.

I’m sure the streamers aren’t rubbing their hands with glee, but they are and will be an obvious benefactor of theatres shutting down and people being forced to stay at home… as long as subscribers can continue to afford to pay for their subscriptions.

A lot of my European film colleagues attended this February’s Berlin International Film Festival. I have already given consideration as to whether or not I will go to Cannes this year. I’ve gone for the last three, and this year the head of the new Australian Directors Guild wanted to use the opportunity for all of the English-language speaking guilds to gather. I’m most likely not going to attend as I pretty much get sick with a cold or the flu every time I come back from a European trip. I have already cancelled my trip to Seoul in April, which was to attend the second gathering of the Alliance of Asia Pacific Audiovisual Writers and Directors—an event that was postponed in February after the coronavirus outbreak in China was becoming more serious.

Back home, I was talking with a New Zealand filmmaker whose feature is due out soon and COVID-19 was certainly on his mind in regard to what, if any, effect it could have on his box office. I just learned this week that NZFC has instituted a conservative travel policy for its staff.

Officially, I haven’t heard of any strategic thinking going on in regard to New Zealand’s film and TV industries in relation to the virus, but it’s undoubtedly weighing on a few minds including ours. We will update you if any news comes in.

As I sit writing this I have just learned we have a fourth confirmed case of COVID-19. I, therefore, am providing a link here to the Ministry of Health website about the virus and what to do should you display any kind of symptoms.

Take care out there.

 

Tui Ruwhiu
Executive Director

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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