Johannesburg - The Western Cape film industry has contributed at least R3.5bn to South Africa's gross domestic product (GDP) in the 2006 financial year.
At the same time, the film industry contributed R936m to the Western Cape gross geographic product (GGP), of which R684m is contributed to the Cape Town GGP.
This was one of the key findings of a baseline study commissioned by the Cape Film Commission (CFC) and conducted by Barry Standish, an economist at the UCT Graduate School of Business (GSB) and Antony Boting, a consultant at Strategic Economic Solutions and an MBA graduate of the UCT GSB.
According to Standish, this is the first time that this type of research has been undertaken in the film industry in South Africa and it will assist in monitoring the size and growth of the industry, and strengthening its competitive advantages and skills.
"The South African growth initiative ASGISA has a target GDP growth rate of 6% plus for the country as a whole. The film making industry is seen as one industry that would make an important contribution to achieving this growth rate," said Standish.
"This study, which the CFC intends to conduct on an annual basis, will provide strategic direction to the industry for the purpose of growing local and international competitiveness."
The study found that the total turnover of the Western Cape film industry is estimated at R2.65bn for the 2005/6 financial year of which about 77% (R2.03bn) occurred in Cape Town. Of the R3.5bn contribution to SA GDP, long form productions contributed R1.49bn, commercials R1.16bn and stills R0.9bn.
Movies biggest money-spinner
The long form, with a turnover of R1.12bn, was the largest part of the industry. This is followed by commercials at R0.87bn and stills at an estimated R0.66bn. Inside of long form, feature films added R934.3m and made-for-TV productions R181.3m.
Service commercials are the most numerous and are the largest part of the commercials industry, followed by local commercials and then international commercials. Service commercials had a total turnover of R631.8m, compared to the R162.5m for local commercials and the R77.9m for international commercials.
In addition to contribution to gross domestic product (GDP), the other major macroeconomic contribution looked at was the creation of jobs.
It is estimated that the film industry created at least 6 058 full year job equivalents in the Western Cape, while a further minimum 2 501 indirect jobs were also created in the province.
Of the 6 058 direct jobs, 1 841 were in long form, 2 459 from commercials and 1 758 in stills. It is estimated that about 4 638 (77%) of these direct jobs are in Cape Town.
In total, between 7.9 and 8.2 direct and indirect jobs are created in South Africa for every R1m spend on production. Of these jobs, between 2.6 and 3.8 are in the Western Cape and between 2.0 and 2.9 are in Cape Town.
Catering, hotels benefit
Catering and accommodation, which is an employment intensive sector, has the most film-related indirect jobs, followed by the business services sector, the general business sector and then the financial institutions and insurance services. The machinery and equipment renting and leasing sector is fifth.
These five sectors together account for nearly two-thirds of all the indirect employment created from film related business.
The study also found that the film industry is an important contributor to bed nights in the SA - at least 313 576 bed nights were generated throughout South Africa. Of this, at least 252 000 bed nights were generated in the Western Cape in 2006 from the film industry - this represents 10.7% of the estimated 2.36m business bed nights in the province.
Standish said that one of the other key thrusts of the study was to identify the cost components of the industry and to use these to establish a value chain analysis. A value chain is an analytical approach to maximising the competitive advantage of a business or industry.
It was found that production costs make up 73.5% of all costs for the entire industry. This is followed by 'other' (22.2%) (this includes insurance, contingencies, profit, office overheads, etc), post production (2.7%) and pre production (1.6%).
In long form, the five largest cost components make up 70% of overall spending. These are crew remuneration (25.6%), travel & living expenses (19.8%), camera hire (10.9%), set lighting (7.2%) and vehicle hire (6.9%).
For commercials the five largest cost components contribute 74.7% of total spending. These are crew remuneration (26.9%), equipment hire (17.8%), art department expenses (13.3%), locations (8.9%) and talent fees (7.7%).
In the stills sub-sector the five largest cost components contribute 78% of total spending. These are talent remuneration (20.7%) general expenses (production costs - 17.7%); travel & living expenses (16.0%), crew remuneration (13.6%) and camera hire (9.6%).