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25 January 2010

Report on Film Indaba 2009


The National Film and Video Foundation hosted its 3rd Film Indaba on 26 and 27 November 2009 at Glenburn Lodge. The indaba was attended by various delegates including government departments, industry representatives as well as individuals.

The theme of the Indaba was titled Mapping the Way Towards 2025. The second edition of the value Charter was the discussion document to generate input from government, industry and citizens. The Council`s thrust towards 2025 is about how to take the NFVF and cinema to the Citizens and aligning the NFVF long terms visions towards 2022 with the government`s Vision 2025 for South Africa.

Professor Mbulelo Mzamane, facilitated the plenary session on the first day as well as the report back from the breakaway sessions. Proceeding on the first day took place at plenary session and were opened by the chairperson on the NFVF Council Ms Charlotte Mampane who welcome everyone. The NFVF CEO Mr Eddie Mbalo presented the NFVF Strategy, providing an overview of how government works from the constitution of clusters and the purpose of the Indaba. The Value Charter will become the blue print and will be presented to cabinet for approval.

The keynote addresses by Ms Lulu Xingwana, the Minister of Arts and Culture reiterated the President's call for unification by the industry. Mr Tumelo Chipfupa, the DDG at the Department of Trade and Industry highlighted the Department's support for the sector. He spoke on the Film and Television Incentive and its revision as well as good relations with the industry as well as the NFVF.

Ms Kgomotso Matsunyane, co-chair of the South African Screen Federation (SASFED) made a presentation which outlined industry challenges. The presentation questioned the need for an indaba as a forum. SASFED also indicated the lack of Black engineers, heads of departments as well as women. SASFED is of a view that there is no need of a national film school.

The representative for the Department of communications, who was confirmed as the main speakers for the plenary presentation did not come and there was no replacement on the day.

The panel discussion on the state of the industry was opened by remarks from Clarence Hamilton, NFVF Head of Production and Development. He gave statistics on feature films and documentaries production, budgets, distribution, in the past 15 years. The Statistics indicated that a total of 132 feature films and 615 documentaries were produced. While documentaries were largely distributed on television, a small number was released theatrically whilst distribution platforms for 556 documentaries were unknown. The figures indicate that the industry is still dominated by Whites in the creative aspects.

Desiree Maakgraaf, chairperson of the Independent producers Organisation (IPO) indicated that the industry was in state of crisis. This was largely due to the SABC crisis. Research conducted by the IPO indicated that small and larger companies were not largely affected. Medium sized companies were affected and require state support.

Day two began with a session at plenary where delegates were taken through the topics and facilitators for the breakaway session. Because of the limited turnout of delegates on the second day, NFVF Executive management decided to combine topics to ensure a fair spread. The session on Policy Alignment, intergovernmental and Stakeholder session was combined with the session on Making an Economic Business Case for the industry. The Building a Sustainable Business was merged with Development and Growth of Markets for their close relativity. The session on Human Capital development Session was the only stand alone breakaway session.

Human Capital Development

The session kicked off with a presentation of the feasibility study on the establishment of a National Film School by Terrence Khumalo, followed by elaboration by Clarence Hamilton on the training interventions the NFVF has embarked on.

From the two presentations it was evident that there was a need for training within the industry, a number of positions which proved hard to fill during 2006 were identified in the study and Clarence went on to state that there is a need for middle management training.

In response to the presentations it was argued that there is no need for a new institution, a national film school is no longer appropriate at this time. There was satisfaction with the international benchmarking, but the question that came out was, what are the similarities between the selected countries i.e. Ghana, Mexico and America. The response rate was regarded as being inadequate. Other issues raised were the level of interaction with the institutions of higher learning. The commission called for an extended research with a broader consultation and bigger panel. The commission unanimously agreed that the current training does not meet the needs of the industry.

It was felt that training is essential and people out of school need to acquire knowledge and the question was “will the current training gaps be fulfilled by a school within an institution”? Care should be taken to ensure that if ever there is a school it should not produce more of the same.

There was a general agreement that the industry does not need a national film school. Some were of the view that rather the focus should be on supporting existing institutions and focus should be more on internships and short courses.

It was also agreed that there is a need for a centre of excellence. There is a need for accredited upskilling courses that will be recognized by companies and have certificates and internships and short courses for people in the industry. Apprenticeships are good models. In conducting training focus should not only be on feature film but also in television. It was also said that the industry needs to consider who is teaching at the film schools, look at the demographics within the existing film schools.

A representative from SASFED pointed out that it is so difficult for the industry to talk about training when the industry did not have a sustainable industry. She also pointed out the industry should prioritise apprenticeships as the film industry is a hands-on industry and practitioners need to learn by doing. She also asked if there was a way of accessing more funding from MAPPP SETA. A representative from MAPPP SETA responded saying that they are disbursing grants and made calls for discretionary grants recently for the film industry and the response was poor.

Gina Bonmariage was of the view that for the industry to conduct research that will address industry issues, there need to be a strong partnership between the NFVF, MAPPP SETA, DTI and DoE. She also proposed that there be a national pool of funds to initiate national up-skilling courses that are accredited.

Both Melanie Chait of Big Fish film school and David Wicht of Film Afrika spoke about the training programmes run by their companies. David Wicht talked about a model that they are currently using in their company to address skills challenges. He said companies are requested to contribute a certain percentage of their projects budget to training and that they currently have not encountered companies that are not willing to contribute. He also pointed out they try to select students who have shown passion for the industry. He said the training also includes life skills course.

There was consensus on the need for transformation within the industry. There was a question on how to access the Mapppseta funds and a representative from the seta reported that they have made three calls for discretionary grants this year.

Policy Alignment, Intergovernmental and Stakeholders Relations and Making an Economic Case for the Industry Session

This session was facilitated by Ms Lindi Ndebele- Koka from the Department of Arts and Culture. Mr Thami Nxasana was the speaker. Mr Nxasana gave a presentation on the history of the Film Industry, its current state, national competitiveness of the sector, its governability and its concurrent competency nature of film. The presentation gave a snap shot of how the Industry transformed from a laissez-faire economy into a government/political interfered one. It was stressed that the industry should realize that it is operating in a developmental state and should therefore meet government’s national imperatives which include poverty alleviation, skills development and redressing historical imbalances etc.

One of the questions asked was why government intervened with economic states? It was agreed that government intervention was due to the failure of markets. Markets succeed when they are levelled and government’s responsibility is to level the playing field by assessing risk factors so that entrepreneurs can participate in the film economy. The industry needs to prove its national competitiveness through capital diversion.

The industry's concurrent competency was discussed at large. Legislations which purport this were interrogated; these include section 76 of the Constitution which promotes good intergovernmental relations, schedule 4 and 5 of the Constitution which deals with concurrent competencies of provinces and national sphere of government. One of the ways in ensuring good intergovernmental relations is through 'sectoral integration' and this entails establishing an Intergovernmental Relations Forum (IGRF) that would consist of all relevant stakeholders of the industry. This forum needs to gazette this forum so that all resolutions taken become binding to all parties involved.

In making an economic case for the industry it was important for the industry to grapple with the Industry's structure and its dynamics. This includes understanding and identification of gaps within the value chain that in turn causes fragmentation. The value chain of film and video according to the Sectoral Industry Classification shows that it straddles across Major Division 6 (Wholesale, Retail Trade and Hospitality), Major Division 7 (Transporting, packing and warehousing) and Major Division 9 (Broadcasting and Communication). It was important for film to belong to its major division so that its contribution to the SA Gross Domestic Product (GDP) can correctly be assessed. This will also aid in riding fragmentation that currently exists within the industry.

Recommendations

Indentify Stakeholders and have a working committee
Need to have a language that the industry and government understands
NFVF has to allow creative and freedom of expression
Government needs to inject direct funding into NFVF, not through rebate schemes
Need to strike a balance between cultural and economic sectors
There's a need for a unified communication from the government to industry
SARS needs figures of how the industry is performing
An economic agenda needs to be put forth
Government needs to drive the global competitiveness of the sector
Need to integrate structures of government
Resolutions

Take the gazzetted IGRF and amend it to align or expand on it
Get raw data from production companies that will provide statistics
Government needs support organizations to be able to get information
Distribute key economic indicator and implement the sectoral information system
Monitoring and evaluation mechanisms are needed: stop new policies Collaboration with the Office of the Presidency
Intellectual Property should be seen as a mediator between the community of practice industry and government
therefore all departments should prioritize IP

IP should be unbundled

Building a Sustainable Business, and Growth and Development of Markets

The breakaway session centred mostly around the factors involved in building a market for the film business, as well as sustainable business models and a consideration also of the challenges of developing a sustainable film industry business.

The issues raised during the discussion were:

Television poses the challenge to film production since it provides cheaper and easily accessible platform.
There is a limitation of market buyers (i.e. broadcasters) and this presents special challenges to building sustainable business.
Broadcasters need regulation so as to benefit the industry. ICASA and the Competition Commission would play a pivotal role in this area.
Since M-Net & E-TV do not directly compete with SABC for local content; this further reduces the impact that should be on the market.
The disadvantage of having a broadcaster own IP rights is that the content is not competitively exploited to generate additional revenue which could add to sustaining businesses within the industry.
The 'cost plus' business with broadcasters is hampering growth of industry.
There is a need to look at different sources of funding. Venture capital firms could provide desired solution if solicited correctly.
Although making an effectively quantifiable business plan may make it possible to secure private funding, the unavailability of reliable industry specific information makes it hard to show potential investors how their investment will be returned.
The failures of distribution/exhibition pose a greater threat to the industry.
There is no subsidy in place for nurturing distribution, whereas other countries, with the exception of the USA, have a distribution subsidy.
Competition issues for theatres/distributors are similar to those of TV broadcast. Imperfect competition is perpetuated.
Resource development in terms of distribution still needs to be significantly formalised.
Producers are earning more returns from Airline deals than they do from other platforms.
The DVD market is currently being run by the pirates, and at the rate it is growing it will be impossible to curb it in the near future. And with the technological advancements globally available, film will, much like music, be freely available to any and everyone. The industry has to start looking at ways to impose a “Freemium” for online audiovisual content.
It was suggested that, as an alternative production model, the best way to make films is by making sure that the cost of production is always lower than the expected return. That way it is easier for films to break even and maybe even see good revenue from sales.
This should be coupled with a change of focus from production, to a more market/audience oriented focus.
The industry needs to understand who it is producing for. Therefore good market intelligence needs to be nurtured and fully utilised.
The "star-effect" could be an added solution to why certain features do well in the market. Therefore the industry needs to work at promoting the "star culture" to drive the productions.
Positive externalities to these would be the proliferation of both TV and theatre markets, possibly coupled with local content regulation for theatres.
Action points that came out of the session were:

Focus on markets, particularly on prising, not only on production
Budget costs based on industry markets
Abandon 'cost plus' business
Find new routes to domestic market i.e. exploiting new media platforms
Reclaim IP rights
Strengthening industry bodies – Companies need to act together to win market
Commit to transforming the industry
Collaborate on gathering and publishing data
Lobby for a change in the market power of bodies in theatre, distribution & broadcast. This involves increased competition and active regulation from government.
There is a need for the IDC to be market oriented in its participation in the industry and not just product oriented. Industry feels that IDC intervenes with a view to add gains on film products rather than developing and growing the industry.
Appointed representatives from the breakaway sessions gave report back on the discussions at plenary. Justine Loots gave a report on Human capital Development, the policy Alignment and making an Economic case for the Industry session was co-presented by Mandla Dude (lecturer at TUT) and Lindi Ndedele-Koka (DAC). Producer Jeremy Nathan and Indra de Lanorelle (consultant) reported on Building a Sustainable Business and Development and Growth of Markets merged session.

It was not possible for all sessions to reach consensus on the resolutions from some of the discussed topics. However, there was consensus on the challenges and actions that needed to be taken.

The proceedings were closed by the NFVF CEO Eddie Mbalo, who indicated that the industry needs to be familiar with government processes and how government work. The CEO indicated that the NFVF will circulate the second edition of the Value Charter to the industry and other stakeholder to input on the document as part of further consultation. The NFVF is targeting the MTEF period that will begin in June 2010 to submit the final Value Charter.

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