Government sources provided majority of funding for screen industry


Film-making jobs are being scorched, despite the government throwing a dragon’s den of gold at the business.

But the government says criticism of its support is unwarranted with thousands more jobs in prospect.

The Statistics New Zealand 2014 Screen Industry Survey figures released on Wednesday show the screen industry made a total revenue of $3.2 billion in 2013-14 financial year.

But the Green party criticised National’s “backroom deal with Warner Bros” which it says failed to deliver on a promise to secure more jobs, which had gone from a high of 30,600 jobs in 2009 to 27,100 in 2013.

The Government promised an additional 3,000 jobs in 2010 when it made controversial changes to labour laws for Warner Bros and paid $95m in subsidies and grants for the Hobbit films to be made here.

Greens economic development spokesperson James Shaw said: “While the filming of the Hobbit here in New Zealand has no doubt had positive spin-off benefits for our tourism and export sectors, it hasn’t helped boost employment in the screen industry.”

The New Zealand Taxpayers’ Union Jordan Williams said the taxpayer should not have to put up more cash than those who reap the rewards.

According to a treasury analysis from 2004-2011 the annual rate of return to New Zealand was just one per cent, he said.

Minister for Economic Development Steven Joyce said Government officials were expecting a threefold increase in productions being processed in 2015/16 relative to this year.

Significant work was also being done to lift the number of mid-sized New Zealand productions being made and this would make the long-term future of the industry more sustainable.

Employment in the industry fluctuated from year to year and 2013 was a quieter year, during which much of The Hobbit trilogy work had been completed.

Following changes to the government incentive programme in 2014, the New Zealand screen industry was back operating close to capacity, he said.

The Hobbit movies had generated 3000 direct jobs during their production and brought other significant  direct economic benefits, he said.

He questioned if the Greens were against international film incentives, which would mean an immediate end to the film industry in Wellington.

Statistics NZ figures out on Wednesday showed “Government sources” provided the majority of funding for the screen industry while private financing has decreased.

The survey captures data to 31 March 2014, and showed a $7 million increase in total revenues to $3.2 billion on the previous year but down $142 million from the 2012.

Government contribution increased by 10 per cent to $258m and went to 156 businesses.

In contrast, the figures show private financing has dropped by 40 per cent.

The data also shows the the number of jobs in the industry is still in decline in the producing sector, which was mirrored by a fall in revenue.

The New Zealand Film Commission, NZOA, and Film New Zealand believed the latest data was  in line with industry expectations.

However, the screen New Zealand agencies would be asking for the figures to be checked because they believe there could be a data error that saw advertisement revenue added to the Government funding figure. They also believed there was some ambiguity around job loss in production because people were actually moving into contract work.

NZFC chief executive Dave Gibson said this  year, 2015, looked like a bumper year for film.

“We look forward to next year’s survey so we can see the impact of incentives schemes introduced in April 2014 on the industry.”

Philippa Mossman, Film New Zealand’s business development director said the data provided a useful snapshot of the industry prior to the introduction of the New Zealand Screen Production Grant in April 2014.

“North America continues to be our strongest international market consistently representing 80-90 per cent of international revenue over the past decade.”

NZ on Air chief executive Jane Wrightson said she was pleased TV production was stable in the current constrained environment.

Pukeko Pictures chief executive and Thunderbirds Are Go! Producer Andrew Smith  said the government grants had generated much interest in co-producing with his company.

“The thing now is to put implement it into more production on the ground”.

The industry is made up of a few large players, and a lot of small businesses, which is reflected in the survey shows about 91 per cent of businesses earned less than half a million dollars.

The majority of were involved in production and post-production, which creates content such as films and television programmes.

Costa Botes, an independent filmmaker based in Wellington said small production companies such as Lone Pine that he owns worked from low budgets and were seeing a contraction in opportunities.

Small firms would not know anything about the billion dollar revenue, he said.

“I feel like it’s getting harder rather than easier. There is clear trend the rich are getting richer and the poor, poorer.”

It was harder for small firms with the bigger players bagging more of the pie, he said.

Grow Wellington chief executive Gerard Quinn said a fall in sector revenues and jobs nationally reflected the recent nationwide industry volatility.

Wellington’s statistics for 2014 showed a fall in production and post-production revenue from previous years.

“The Wellington region has weathered the cycle well and the diverse activities of the screen businesses we have here has ensured their ongoing success.”

The screen strategy focuses on attracting investment, talent and fee-for service projects to the region, as well as providing businesses and producers that are already here with support and assistance.

2014 Screen Industry Survey

Total Revenue $3.2 billion

$1.1 billion to the New Zealand economy and about half a percent of Gross Domestic Product

Revenue made in Wellington $711m (generated by film production work)

Feature films contributed more than 50 per cent of all production and post-production revenue

Wellington the film capital, contributing 79 per cent ($644m) of all feature film revenue

Auckland top TV location

Auckland revenue $292m ($1,403m from television broadcasting)

The total wages earned $742m (drop of $49m from 2012)

15,500 employed in the producing sector (drop of 400 from 2012)

International revenue for production and post-production activity was $495 million – the majority coming from North America.

40 reported completed films

2015 Filming in New Zealand:

Disney’s Pete’s Dragon, Legendary Pictures’ Krampus, ITV/Pukeko Pictures’ Thunderbirds and Thunderbirds Season 2.

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