South Africa: Film industry growing nicely

Distribution

With South Africa's longest-running film festival, the Durban International Film Festival having concluded this past weekend, the industry has shown growth with 55 of the 193 films screened being South African.

According to the research manager at the Gauteng Film Commission, Sebastian Ndayi, recent research reveals that the local film industry generates approximately R2.2 billion nationally of the estimated R12 billion for domestic entertainment in the country and has created over 30,000 employment opportunities on a full-time, part-time/contract and freelance basis.

"The SA film and TV industry has grown with its share of global filmed entertainment, which is valued at $1.8-trillion, growing from less than 0.5% of GDP to an average annual growth rate of about 1.1%," Ndayi said.

South Africa's image as a movie-making destination has also grown and has had many high-profile films shot on its shores such as Academy Award-nominated Invictus, Blood Diamond, District 9 and most recently Winnie, starring Jennifer Hudson.

The government has introduced various schemes to encourage foreign investment as well as to enhance the country's image and profile abroad. One of these schemes is a production incentive for foreign companies called the Location Film and Television Production Incentive that offers a 15% rebate on the costs of filming in the country. The scheme is set to run until 2014.

Not to exclude our local filmmakers, they are offered a 35% rebate for the cost of their films or any full length television programmes that they produce.

Government has set up other initiatives to grow the industry by increasing access to funds for film projects as well as for students interested in studying film. These include funding from the National Film and Video Foundation (NFVF) as well as partnering with the Department of Trade and Industry's investment unit, Trade and Investment South Africa (TISA). The film industry also receives funding from the National Lottery.

According to a co-production report released last year by the National Film and Video Foundation, in 2010 the Department of Trade and Industry contributed 46,2 million rand to fund film projects, the Industrial Development Corporation invested R45,7 million but the bulk of the investment still came from private investors who contributed R265,9 million.

Growth in the production end of the spectrum has been encouraged with the opening of Cape Town Film Studios, a movie studio that began operation in September last year. The investment in film infrastructure and the state-of-the-art studio is able to service the needs of any big-budget filming in the area of Cape Town. The studio recently wrapped up the filming of the first 3D action flick on African soil in May called Judge Dredd, due for release in 2012. According to the studio, at the height of the production, 450 people were employed, 50 being international and 400 being South Africans.

But once you have received funding, filmed your project, edited it and it is now ready for viewing, will you have a sufficient audience to not only recoup your costs, but make a profit?

A report released by Price Waterhouse Coopers about the outlook of SA entertainment and media projected that the SA box office will total an estimated R992 million in 2014, up by 6.4% compounded annually from R729 million in 2009. The trend noticed by the report is box office spending increased in 2009, while there was a decline in home video.

According to the Box Office Report released by the NVFV tracking the performance of the box office from December 31 2010 until April 28, Nu Metro distributed 41% of the films in this period, followed by Ster-Kinekor at 34%. Rounding off the top three was United International Pictures (UIP) with 20%. Smaller companies Indigenous Films and Crystal Brook Distribution were responsible for 3% and 2%, respectively.

The report noted that there were no South African titles released in January and February, but there was a concentration of local films in March and that the number of local films released by the end of April was five; whereas last year the same period yielded six local films.

Box office revenues for this period amounted to 222 million rand, but South African titles only commanded a relatively small R4.2 million of the overall revenue. This means that South African films controlled a market share of only 2%. The highest grossing film at the time of the report was comedy Paradise Stop, starring Rapulana Seiphemo and Kenneth Nkosi, which had made R1.8 million, while the lowest-grossing movie was the horror flick Night Drive, which only managed R600,000. This is based just on ticket sales and excludes the revenue from popcorn and beverage sales.

The most lucrative genre during the period was animation, largely dominated by 3D features, which made a reported R58.6 million. This shows that South Africans are more inclined towards animated films because, although there were 3D features in other genres, animation was the most popular.

With the recent release of the country's first ever 3-D animated film, Jock of the Bushveld, perhaps SA finally has a chance to cash in big.