The economic power of local films

An economic impact assessment conducted by the National Film and Video Foundation (NFVF) and released earlier, found that the South African film industry had a R12.2bn impact on the local economy in the last financial year.

This is made up of a direct impact of R4.4bn on economic production, an indirect impact of R4.9bn and an induced benefit of R3bn. Of the 106 films released in South Africa in the first half of 2017, 10 were local titles, according to the NFVF. These 10 raked in R30m, or 5% of the total box office taking of R568m.

The star performer was Keeping up with the Kandasamys, which earned R16.3m, followed by Kalushi, with R3m. The top international film, The Fate of the Furious (the eighth film in the Fast & Furious franchise) earned R72.8m.

Speaking at the Durban FilmMart in July, filmmaker Sara Blecher, known for works like Otelo Burning and Ayanda, said that government had ploughed a lot of resources into the sector and understood that building the local film industry is a long-term process. This had spurred on “extraordinary” growth, she said.

The FilmMart, held alongside the Durban International Film Festival, was attended by local and international film industry professionals, with representatives from 38 countries (17 from the African continent).

“There are so many young filmmakers at FilmMart hustling to get their films made,” said Blecher.

“That didn’t exist 10 years ago.”

The local film industry

The NFVF report found that public funding has decreased from R4.2bn to R2.9bn over the past four years, while the value of publicly funded productions has increased from R401.5m to R1.4bn. While the growth in private funding is an important development, more than two-thirds of local films produced last year were still funded using public money, and film funding in general remained largely stagnant.

“There are usually significant challenges for upcoming film producers to secure loans from banks,” stated the report. Films were viewed “as a risky investment that might not generate revenue”.

According to Industrial Development Corporation (IDC) executive William Smith, the film sector isn’t lucrative, but does have the potential to grow into a commercially viable industry with the potential for job creation. The IDC looked at the media and motion picture value chain in 2001 and found that banks were not funding it, he said at FilmMart. “No one was funding it.” The IDC realised it needed to help build the industry.

“We need to create television shows and movies that the rest of the world wants to buy from us.”

One of the most successful IDC-funded films was 2012’s Adventures in Zambezia made by Triggerfish Animation Studios in Cape Town. The film raked in R464m with a budget of R173m. The IDC and Triggerfish hooked up again for 2013’s Khumba, which raked in R365m. The IDC also partnered with 2004’s Hotel Rwanda, which brought in R458m; 2013’s Mandela: Long Walk to Freedom (R112m) and 2005’s Tsotsi (R40m).The IDC funds up to 49% of any project. All these funds must be spent within SA’s borders, Smith said, adding that requirements for funding through the IDC are rigorous.

Producer Bianca Isaac, owner and executive producer of Figjam Entertainment, said she would never have been able to make her first film, The Jakes are Missing, in 2015, if it wasn’t for the IDC. She has partnered with the IDC as venture partner in one project and as cash flow partner on another. “Accessing finance when you are not a trust-fund kid is hard,” she said. “If that door hadn’t been opened, I wouldn’t be able to make films.”

The role of the dti

At a FilmMart-workshop held by the department of trade and industry (dti), the dti announced that by March 2018, it would have spent R100m supporting emerging black filmmakers with 40 projects through the South African Emerging Black Filmmakers Incentive – a project launched in 2014. But the dti’s director of film production, Nelly Molokoane, said that despite the dti’s support, filmmakers were finding it difficult to raise additional capital.

Present at the workshop was filmmaker Rehad Desai, whose critically lauded Miners Shot Down documentary about the Marikana massacre was funded through the dti’s incentive. He said that he was not surprised at how well attended the workshop was as it was “hard to get funding to make films”.

Desai added that the dti scheme was one of the most important developments for the local film industry and had resulted in a lot more films being funded.

He singled out the lack of a reputable local distributor as a major problem in the sector, arguing that international distributors don’t understand the potential of African content.

But the NFVF report also suggested that local filmmakers often approached films as art and not a commercial activity, a point reinforced by Teboho Pietersen from the KwaZulu-Natal Film Commission, who said that many filmmakers are not making films with commercial sales in mind.

Need for coordination

The day before the dti workshop, Blecher had painted a very different picture. She criticised the dti, saying that it’s trying to find faults in order to avoid funding filmmakers. The dti was meant to meet regularly to approve projects but hadn’t met for three months, she said. “I spent three weeks trying to get a phone call or email answered by dti. It’s like they don’t want to help films get made.”

But Smith maintained that the dti is “crucial to the South African film industry”, adding that the IDC is currently cash-flowing the dti rebates, because the dti can take up to six months to pay them out. The NFVV report singled out as a weakness that there was “no coordination between key support bodies” in the film sector.

But Greig Buckle from Enigma Pictures suggested that, while the dti had internal issues, other stakeholders in the country needed to be scrutinised more closely: “Where are the broadcasters?” According to Buckle, it’s easier to license content straight to Netflix and other international players than to local broadcasters.

Blecher said the contracts forced on filmmakers by local broadcasters were loaded in the latter’s favour. “You really need to look at what you are giving away when you sign.” Smith agreed that “[w]e need to start getting tough with the broadcasters”, as they were responsible for many practices that denied the filmmakers any right to the finished product.

Sustainable employment and transformation

A significantly large proportion of jobs created in the industry have been temporary employment, a characteristic of the industry, stated the NFVF report.  This removed “the job stability factor and the employee benefits associated with full-time employment”, argued the report.

According to Buckle, a producer needs to have five or six projects in various stages of development at any given time in order to survive. For this reason the IDC is now talking to producers about working on a slate of films, said Smith. He described this as a bid to fund five or six productions from one producer, spaced out over four years. This would help create sustainable jobs and will help to transform the industry.

The NFVF report criticised the local film industry as being “one of the most untransformed industries in the country”, stating that “the top half of the industry is still largely occupied by minorities”.

This article originally appeared in the 2 November edition of finweek. Buy and download the magazine here.