I have a lot of sympathy for these people (we have worked with many of them), but I think the issues are, unsurprisingly, more complex than the levels of Government subsidy.
Firstly, there is the rise in the NZ$ vs the US$, Sterling and other currencies. The screen production services sector, like other commodity suppliers, has borne the impact of this, and even though a strong New Zealand dollar is an indicator of the strength of our economy, macro benefits often have micro disadvantages.
But there is a much bigger underlying issue which has influenced the current issue. And it's something which will take a while to rectify.
It's an issue which also bedevils almost every other sector of our New Zealand Screen Industry - domestic production, screen education, New Zealand brand building, and the uneven nature of our local hits and misses:
We have not developed enough creative producers.
If you look at almost any successful aspect of our screen history, it has been creative producers who have built the platforms that provide the employment, the growth, the box office and the innovation.
Undoubtedly, the most successful New Zealand Creative Producer is Peter Jackson. It is as a Producer that he has driven through and created the reputation, the infrastructure, the continuity of employment, the scale of projects and the development of Wellington as a world class destination for production and post-production.
In the television area, the Weta associated Pukeko Pictures under Andrew Smith's leadership, is beginning to show the potential that comes from leadership by a Creative Producer.
These two operations have the overseas market as their primary focus, and that is what will lift the industry beyond its dependence on NZ On Air/NZFC funding.
In Auckland it has been Rob Tapert who has single handedly built the industry which services the production of non-domestic TV and film.
Over 20 years, Rob's Pacific Renaissance has been the backbone around which hundreds of technicians and suppliers have built their livelihoods.
Should the Auckland crews and suppliers have planned for this rainy day? It's easy to say yes, because like all industries, huge change has been a factor in recent times. We've seen the elimination of film labs, we've seen the end of film projection manufacture and service all in 4 or 5 years. We've seen a fall in TV ad revenue, and we've seen piracy erode DVD income, so uncomfortable though it may be, there were signs that the good times wouldn't last forever.
But the real problem for all the crew, cast and suppliers is that they don't create the work. They are dependent on one significant player to initiate the ideas, develop them, sell them to a broadcast customer and oversee their production and deliver - which is what Creative Producers do.
And in that regard Steven Joyce is right we need to own more of the IP, because that's what creates our long term growth and benefits.
But that won't happen overnight.
So why are we so short of entrepreneurs in an industry that Government, film agencies and the industry itself believe is bubbling with potential?
As a nation, we've subscribed to the No 8 Wire theory, and we've believed that specialists are unnecessary anyone can do everything has been a factor in the early growth of many of our industries. But once we engage in international markets and begin selling more than commodities, specialist skills are imperative.
The New Zealand screen industry in its current form has grown along 2 distinct paths.
Initially the focus was about telling our stories and that has remained as the basis of half of the industry. It was a struggle to establish the idea that we had stories to tell, and that we could tell them. But as we gained confidence and audiences, the NZ Film Commission and NZ On Air were established and the TV networks saw the appeal of local content. It is the home grown stories that have contributed to our sense of ourselves as a nation. And mostly it is in the production of our local stories that our skills and talents developed and were recognised here and around the world.
The idea of New Zealand as a location for movies began over 100 years ago when the Melies brothers (their story was told in Scorcese's Hugo) came here from France to shoot silent films. They took Maori stories and characters and legends and made them into exotic films for European audiences.
In 1980 Race for the Yankee Zephyr transferred its story and shoot from Queensland to Queenstown, and the modern era of offshore production began. It's ironic to reflect back on the then prevailing view that offshore production would ruin the New Zealand film industry.
And the transition by Peter Jackson from local story telling (Heavenly Creatures) to Producer/Director of the huge Tolkien hits, saw another strand take its place international stories told by local talent. This strand includes Rob Tapert's productions Xena, Hercules, Spartacus etc, because Rob lives here.
So today the industry falls into 3 strands:
a)Local production around $300-$350million pa NZ television and films funded by NZOA/NZFC/TVNZ/TV3/Maori TV/commercials etc.
b)International stories locally driven, c$400million pa (Jackson/Tapert).
c)Offshore Production shooting in New Zealand (Power Rangers, Avatar, 10,000 Years BC, Last Samurai, etc), $200-$400million in a good year.
Some in the industry claim it's a $3billion industry it isn't! The $3billion that statistics report on includes:
-Sky TV's income - $885million
-TVNZ/TV3/Prime ad income - $620million
-Cinema box office - $170millsion
-DVD sales - $150million
The Production business is about $1 billion if an Avatar is being shot here.
So how can Government and the industry maintain that $1 billion of activity, grow the earnings and jobs, and increase the local IP?
Firstly, the domestic industry must maintain as it is, with NZOA and the NZFC continuing as the agencies charged with enabling the telling of our stories, with our faces, and our voices.
Secondly, the matter of offshore production coming to New Zealand must be addressed.
Steven Joyce isn't wrong when he warns of the possible downside of pushing the Large Budget Incentive up from 15 per cent. There will always be a country or territory that will offer more.
There are a couple of pertinent points here. Gerry Browlee is on record saying what's wrong with this incentive? You give me a dollar I didn't have and I give you 15 cents back. I'm 85 cents ahead.
And that is how the rebate works. It brings in money we didn't have, and it creates jobs, expertise and infrastructure. It doesn't leave big holes in the ground or empty factories, or white elephant capital projects. It doesn't pollute or exploit. So it's a very good thing for the country and the economy.
How should we increase it? Well one way is to look at the Regional Assistance incentives and interventions that make Australia, Canada and Europe so attractive. New South Wales/Victoria/Ontario/Quebec etc all have top up incentives which add to the national incentive.
So in Auckland that could be easily solved.
Auckland Tourism, Events and Economic Development (ATEED) has been set up to lift the region's economic well-being and enhance the ability of the region to compete internationally.
ATEED makes many decisions to back cultural, economic, social and sporting activity, and as is the nature of that process, many of its decisions are subjective - a number struggle to achieve the benefits promised.
But if ATEED were to commit $3million as a 5 per cent top up for Large Budget Grant Projects based on expenditure in Auckland, the region would benefit from $60-$70million of activity.
This would cover the shortfall for Spartacus and Power Rangers, and the absence of these two projects, or projects of this size, is what has led to the current crisis.
A 5 per cent regional top up would involve a minimal admin cost to ATEED as the NZFC and Government already audit all aspects of the projects. And even more importantly, there is nothing subjective or speculative about this top up, it would only occur if a project actually happened.
ATEED have spent a number of years assessing whether or not to support initiatives to build studios, but that involves significant speculation on whether or not work will arrive, and the capital expenditure would take place before any benefits might arise and it will take two years to complete.
The need is now, the benefits of a 5 per cent top up could flow within months.
And there is another resource we have here which should be a major influencer on Government. Two New Zealanders (Peter Jackson and Andrew Adamson) and one New Zealand resident (James Cameron) have generated over $15 billion box office worldwide.
Put the three of them together in a room and any Government would ignore their advice at its folly.
- John Barnett is chairman of South Pacific Pictures
