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A Big Year

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It has been a big year for DEGNZ and the Screen Industry.

At the Guild we have unionised, and we have recently been accepted by the New Zealand Council of Trade Unions (CTU) as an affiliate. We are now well poised to represent New Zealand directors and editors in negotiations over minimum rates and terms and conditions should the proposed legislation go through next year that will allow collective bargaining for contractors. There are a number of other key benefits to our unionising. We are much more closely aligned with the New Zealand Writers Guild and Equity New Zealand, both of who are also unions and affiliates of the CTU. As representatives of three of the four above-the-line creatives, we have many common interests when it comes to our relationships with producers. The CTU has experience, expertise and resources we can call upon. And internationally, we now have have equal status with the Directors Guild of America, the Directors Guild of Canada and the Australian Directors Guild, who are also labour unions.

DEGNZ became a founding member of the Alliance of Asia-Pacific Audiovisual Writers and Directors (AAPA) following DEGNZ’s attendance in May at the General Assembly of the International Confederation of Societies of Authors and Composers (CISAC) and the Executive Committee Meeting of Writers and Directors Worldwide (W & DW). This has already paid dividends with the Director General of CISAC Gadio Oron here last week to help us lobby the Ministry of Business Innovation and Employment (MBIE), the Minister of Broadcasting, Communications and Digital Media Kris Faafoi and others over director’s copyright and fair remuneration for authors as the Copyright Act Review continues. Gadi is a lawyer and copyright expert and brings an important international perspective to the deliberations.

The Guild continues to input into the Film Industry Working Group (FIWG) as drafting of the proposed legislation to go to the House is finalised, and we have made considerable effort to put our views across as the NZ Screen Sector Strategy 2030 has gone about its work. DEGNZ board member Michael Duignan has played an important role with the Strategy as a member of its Facilitation Group.

DEGNZ worked closely with Equity as it updated its Guidelines for Nudity and Intimacy on Stage and Screen, and Guild board member and South Island representative Louise Leitch went through the full training conducted by UK Intimacy Coordinator Ita O’Brien on best practise guidelines for intimacy, simulated sex and nudity on set. Louise ran her first workshop for this in Christchurch in November, and we will look to her to continue this work so that all directors can have the opportunity to upskill in this critical area. As well, we maintain ongoing feedback to the Screen Women Action Group (SWAG) as it goes about its efforts to change the culture that enables bullying, harassment, discrimination and other abuses of power over women in the screen industry.

2019 was the third year we ran the Emerging Women Filmmakers Incubator to help address the poor numbers of women directing feature films in New Zealand, and to help female directors advance their projects and careers. We have now seen 23 women go through the Incubator to date and there has been good progress:

  • One has made her first feature,
  • one has just received production finance for her first feature,
  • one has gone on to work regularly as a TV drama director
  • one has moved into directing commercials as she continues to pursue feature directing,
  • one has entered the Shortland Street Directors Programme,
  • one will direct her first TV drama on a U.S. series next year,
  • two have entered the NZ Advertising Producer Guild’s Female Commercial Director Mentorship Programme

and all the others are driving forward on their careers and projects. We still have a ways to go to address the inequities in the numbers of women having sustainable careers as directors, but we are making some headway.

We maintain an extensive professional development programme for directors and editors. In particular, we have honed in on post production workflow and assistant editors as this has proven to be a problematic area because of the technical knowledge and skill required to ensure projects run effectively and eficiently. Our work on this has been driven by our three editor board members Annie Collins, Francis Glenday and Margot Francis. These three are also shaping the  standard feature film editor agreement we plan to make available in the first quarter of 2020.

As we close out the year we have just learned that Minister Faafoi will not be making an announcement about the future of TVNZ and RNZ. We expect that the merger will go ahead but there is obviously a significant cost associated with this, and it will be on an annual basis, not a one-off. The article on the RNZ website today mooted the possibility of increased funding for NZ On Air. This would be welcomed by many, as would an increase in funding for NZFC who have far greater calls on monies than their budget allows for. We shall have to wait and see.

I want to thank the membership for their continued support of the Guild in 2019. DEGNZ is committed as our slogan says to the creative, financial and cultural wellbeing of New Zealand directors and editors. We have a dynamic board in President Howard Taylor, Vice President Louise Leitch, Treasurer Phil Gore, and board members Annie Collins, Michael Duignan, Margot Francis, Francis Glenday, Roseanne Liang, Robyn Paterson and Gabriel Reid who work voluntarily and tirelessly on our behalves and have been tremendous support to me throughout the year.

I also want to thank my Events and Marketing Manager Tema Pua and Accounts person Caroline Harrow who keep the Guild operations functioning smoothly.

Thanks also go to the other guilds and associations we have worked with across the year, whether it be in our workshops, seminars and networking and social functions, or on the bigger picture representations we have made such as the FIWG and Screen Sector Strategy. We are all in this together even though we may have different perspectives and positions.

Finally, I want to extend our gratitude to our core financial supporters the New Zealand Film Commission, NZ On Air,  Vista Foundation and the Australian Screen Directors Authorship Collection Society, without who we would not be able to deliver many of the services we do, and to our other sponsors accounting firm VCFO Group and Dominion Law.

Wishing you all a Meri Kirihimete and a Happy New Year for 2020!

 

Tui Ruwhiu
Executive Director

 

War of the SVODs World

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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

An Answer to NZ’s Broadcasting Industry Dilemma?

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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

Is It Time for TVNZ to Revert to Public Broadcasting?

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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

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