PRESENTATION TO PORTFOLIO COMMITTEE FOR ARTS AND CULTURE FEBRUARY 2011

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PRESENTATION TO

PORTFOLIO COMMITTEE FOR

ARTS AND CULTURE

FEBRUARY 2011

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VALUE CHARTER

• Articulates desirable ends about the structural objects of the film sector that are currently unevenly distributed in our society.

• Reminds us that film and video are not about “pacifying the nation with forms of escapism”.

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MORAL IMPERATIVE

The charterist character of the “Value Charter” is encapsulated in the moral imperative which reads:

 “It is a national imperative to create facilities for ordinary

South Africans to bear influence in the expression of their own images, thereby deepen democracy

and create prosperity”.

“The National Film & Video Foundation strives for the realisation of this noble ideal”.

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MORAL IMPERATIVE&

VALUE CHARTERThe Moral Imperative together with the Value Charter could be the basis for:

• Legitimate political engagement,• Policy and programme formulation• Consensus between the state, industry and citizens

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NFVF POSITIONING STRATEGYNFVF POSITIONING STRATEGY

Civil Society

Private SectorThe State

NFVF

•Political Communities• NGO’s, CBO’s, FBO’s• Lobby Groups• Individual Actors• Traditional Structures• Emergent Structures

•Investment• Labour• Industry Associations

•National Government Departments• Provincial Government Departments• Statutory Bodies

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CONTENT STRATEGY

In 2003, the Content Industry strategy was co-formulated by DAC, DOC, DTI, NFVF and SARS

This strategy calls for a comprehensive strategic thrust that would create sustainable development and growth of the whole audiovisual content industry.

Cabinet approved the Content industry strategy based on the Sectoral Programme Approach:

• Dti developed the Film and Television Production Incentive (Rebate)• NFVF developed its Business case

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CONTENT STRATEGY (cont.)South AfricaInvestment

Foreign Cont Local Content Digital Content

C0 Production Indigenous

Capital Outflow Partnerships Capital Formation

Capital Formation

Service and Hospitality

Content ServiceHospitality &Entertainment

ContentCommunity &Language Service.Entertainment

e-Governancee-LearningDigital ContentAnimationGames

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BUSINESS CASE

KEY OBJECTIVE

The essence of the business case is that the NFVF has formulated programmes that will address critical issues of

development and growth of the film industry as part of Cultural Industry Growth Strategy (CIGS) framework, the

Macro Economic Reform Strategy (MRS), the Accelerated and Shared Growth Initiative for South Africa (AsgiSA),

Industrial Policy Action Plan (IPAP) and New Growth Path

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ANNUAL REPORT 2009/10 - HIGHLIGHTS

GOVERNANCEGOVERNANCE

• Unqualified Audit each year since NFVF’s establishment Good financial and performance management

systems and controls Effective internal control function

Annual Risk Assessments 3 year internal audit plan

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ANNUAL REPORT 2009/10 - HIGHLIGHTS

GOVERNANCE (Cont.)GOVERNANCE (Cont.)

• Effective Executive Controls Council Executive Committee (Exco) Audit Committee Human Resources Committee

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ANNUAL REPORT 2009/10 - HIGHLIGHTS

HUMAN RESOURCESHUMAN RESOURCES

• HR Strategy The HR Strategy is in line with the NFVF strategic direction.

• Performance ManagementTalent Management and Mentorship Programme

successfully developed and implemented • Remuneration

Salary Increases based on DPSA and Performance Management Reviews

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ANNUAL REPORT 2009/10 - HIGHLIGHTS

HUMAN RESOURCE (Cont)HUMAN RESOURCE (Cont)

• Employee Benefits Comprehensive Provident Fund and Medical Aid Scheme

• Employment Equity and Workplace Diversity Staff Complement of 26

92% Black 74% Females

67% Senior Management 76% Middle Management

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ANNUAL REPORT 2009/10 - HIGHLIGHTS

TRAINING & DEVELOPMENT FOR THE TRAINING & DEVELOPMENT FOR THE SECTORSECTOR

• Lionel Ngakane Scholarship Fund (2001 – 2010) Total No. of bursaries 453

(81 % to PDI)

Black Female - 31%; White Female - 6%Black Male - 50% ; White Male - 13%

• Trevor Jones Scholarship FundTotal No. of bursaries 2

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ANNUAL REPORT 2009/10 - HIGHLIGHTS

TRAINING & DEVELOPMENT FOR THE SECTOR TRAINING & DEVELOPMENT FOR THE SECTOR (cont.)(cont.)

• SEDIBA SKILLS DEVELOPMENT PROGRAMME• Screenwriting programme

Spark for Narrative Spark for Documentaries Sediba Masters Programme

• International Financing Programme for Producers Emerging Masters

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ANNUAL REPORT 2009/10 - HIGHLIGHTSSEDIBA SKILLS DEVELOPMENTSEDIBA SKILLS DEVELOPMENT

PROGRAMMEPROGRAMMEIntroduced in 2007

SPARK & MASTERS (2007 - 2010)No. of Scriptwriters trained 104Black Female - 27%; White Female -10%

Black Male - 52% ; White Male - 11%

No. of Script editors trained 44Black Female - 48% ; White Female - 11%Black Male - 34% ; White Male - 7%

PRODUCERS PROGRAMME (2009/10)No. of Producers trained 18Black Female - 38% ; White Female - 31%

Black Male - 13% ; White Male - 18%

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ANNUAL REPORT 2009/10 - HIGHLIGHTS

TRAINING & DEVELOPMENT FOR THE SECTOR TRAINING & DEVELOPMENT FOR THE SECTOR (cont.)(cont.)

• SHORT FILM CONTESTS Indigenous Languages

FATHER CHRISTMAS Women Helmers

SUPERHERO•25 Words or Less

JIMMY IN PINK KHUMBA

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ANNUAL REPORT 2009/10 - HIGHLIGHTSTRAINING & DEVELOPMENT FOR THE SECTOR TRAINING & DEVELOPMENT FOR THE SECTOR

(cont.)(cont.)• Investigation into the Feasibility of Establishing a National Film School (NFS)

Conducted in terms of Section 2(e) of NFVF ACT between 2006 -2008. Extensive consultation with DAC and DTI and discussed at Indaba

2009 with industry and government stakeholders. Major findings of the study

film education and training does meet the needs of the industry- graduates do not have the necessary skills for the industry.

the industry is not yet transformed – Black graduates still struggle to find work and industry dominated by White owned companies and creatives.

The study recommends the establishment of a NFS for South Africa. Way forward : continued advocacy for support and engagement with other

departments and cluster. Feasibility study to inform a business plan for the establishment of a

NFS.

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TEN YEARS - HIGHLIGHTS

PRODUCTION & DEVELOPMENT OF CONTENTPRODUCTION & DEVELOPMENT OF CONTENT

• Philosophy of P&D department Understanding the SA market place Encouraging work that resonates local audiences and

addresses national imperatives. Increasing volumes of scripts Increasing volumes of productions Developing sustainable businesses

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TEN YEARS - HIGHLIGHTS

PRODUCTION & DEVELOPMENT OF CONTENT PRODUCTION & DEVELOPMENT OF CONTENT (Cont.)(Cont.)

NO. OF PROJECTS FUNDED : 2001 - 2010

Production Development Total

Documentary 186 121 307Features 57 113 170Shorts 33 17 50Animation 8 5 13 TV Series 0 24 24

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TEN YEARS - HIGHLIGHTS

PRODUCTION & DEVELOPMENT OF CONTENT PRODUCTION & DEVELOPMENT OF CONTENT (cont.)(cont.)

Co-productions certified• 5 active film co- production treaties with Canada, Germany, Italy, the United Kingdom and France• Treaty with Australia signed but not yet active.• NFVF certified 26 films with a production budget value of R680 million.• SA financial participation amounts to R380m of the total production budgets for the 26 certified films.• Of this amount R369,4m was spent in South Africa, qualifying for the Local and Co production Film and Television Incentive.

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TEN YEARS - HIGHLIGHTSTEN YEARS - HIGHLIGHTS

STATISTICSSTATISTICSRAND VALUES : 2001 – 2010

Total allocation received from DAC 293 389 000

Special project income – DAC 8 961 439

Other Revenue 33 210 231

Total Revenue 335 560 670

Total Grant Expenditure 248 405 206

Current annual allocation 38 859 000

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TEN YEARS - HIGHLIGHTSAWARDSAWARDS

Achievements by South African films Tsotsi – Oscar for Best Foreign Language Film

Hotel Rwanda – 4 Oscar nominationsYesterday – 1 Oscar nominationElalini – Oscar for Best Student Film

U-Carmen e-Khayelitsha – Golden Bear, BerlinWooden Camera – Silver Bear, BerlinDrum – The Golden Stallion & Best Art Direction,

FespacoZulu Love Letter – European Union Prize & Best

Actress, FespacoMax and Mona – Best First Time Director (Feature), FespacoLion’s Trail – Emmy AwardSkin – 4 international awardsIzulu Lami – 4 International awardsShirley Adams – Best film , LocarnoFather Christmas – Best Narrative Short, Tribeca

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TEN YEARS - HIGHLIGHTSPERFORMANCE INDICATORSPERFORMANCE INDICATORS

UNOFFICIAL CO- PRODUCTION Title Tsotsi

Produced with United Kingdom

Total Budget R 22 200 000

South African Contribution R 13 700 000

QSAPE R 18 000 000

No. of jobs 197

Box Office R 8 152 864

WW Revenue R 42 000 000 ($6 million)

Awards Winning an Oscar

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TEN YEARS - HIGHLIGHTSPERFORMANCE INDICATORSPERFORMANCE INDICATORS

UNOFFICIAL CO- PRODUCTION (cont)

Total Budget R 22 200 000

Labour costs (1/3) R 6 000 000

PAYE R 1 500 000

Vatable production amount R 16 200 000

VAT on production R 1 989 474

VAT on Box office R 1 001 228

Total amount back to the state R 4 490 702

Total State contribution R 13 700 000

% back to the state 32.78%

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TEN YEARS - HIGHLIGHTS

PERFORMANCE INDICATORSPERFORMANCE INDICATORSSOUTH AFRICAN FILM

Title White Wedding

Total Budget R 4 665 604

DTI Contribution R 1 632 961

No. of jobs 387

Box Office R 4 971 581

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TEN YEARS - HIGHLIGHTSPERFORMANCE INDICATORSPERFORMANCE INDICATORS

SOUTH AFRICAN FILM (cont)

Total Budget R 4 665 604

Labour costs (1/3) R 1 555 201

PAYE (25%) R 388 800

Vatable production amount R 2 726 900

VAT on production R 381 979

VAT on Box office R 610 545

Total amount back to the state R 1 381 324

Total State contribution R 1 632 961

% back to the state 84.59%

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TEN YEARS - HIGHLIGHTSPERFORMANCE INDICATORSPERFORMANCE INDICATORS

Republic of Korea South Africa

Population 48.5 million 47.7 million

GDP $951.1 billion $282.6 billion

Total Box Office $282.7 million $ 56.9 million

Local films’ share 50.80% 0.70%

Admissions 58.9 million $27.1 million

Sites/Screens 348/2085 30/743

Pop. per screen 23 261 64 199

Ave. Ticket price $4.80 $2.10

Government Contr. $34 million $5.5 million

Films per annum 82 10

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TEN YEARS - HIGHLIGHTS

FINANCE & FUNDING FOR THE SECTORFINANCE & FUNDING FOR THE SECTOR

• Innovation initiatives Co-Finance sourcing assistance

e.g. OTELO BURNING Business case for entity Low budget model developed with IDC, DTI, SABC Exhibition platform – business case

29A wide range of government interventions have had positive impact, but are neither large enough, nor integrated enough

DTI rebate35% rebate on SA qualifying films >R2.5m

• Total pool capped at R250m• Pool can be exhausted by big

co-productions & locations based foreign films (66% of all payouts have gone to servicing companies all of which are white owned.)

IDC investmentEquity investments of up to 49% of the budget of films

• Not able to support new entrants due to lack of structured financing experience.

• Difficulty of financing institution making decisions on creative merits of projects

• Commercial investment criteria skew support to large budget foreign films

• New Low-Budget pilot model could change the above drastically, but SABC participation is holding up the process.

SABC advances and investmentInvestment driven by acquisition of TV rights for SA films

• No clearly defined film investment policy

• Desire to commission 100% leaving no upside for investors or producers

NFVF production investmentProduction finance grants <R1m per film

• Sums typically too small to make material difference in maintaining creative input eg typically <5% of budget

SARS 24f reliefProvides tax relief for investment in SA owned films

• Highly complex for individual producers to access

• Previous abuse has led to restrictions making impractical for film usage

• Technical incompatibility with DTI rebate & other instruments that exist

NEED• Greater investment• Greater co-ordination

Department ofDepartment ofArts and CultureArts and Culture

Department ofDepartment ofTrade and IndustryTrade and Industry

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TEN YEARS - HIGHLIGHTS

GLOBAL POSITIONINGGLOBAL POSITIONING

• International Markets & FestivalsSouth Africa is a competitor in the filmmaking value chain and so it becomes imperative that we exploit international platforms to position ourselves as:

Filmmaking nation Filmmaking destination of choice Co-producing partner of choice

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TEN YEARS - HIGHLIGHTS

GLOBAL POSITIONING (cont.)GLOBAL POSITIONING (cont.)

• International awards• Provincial Film Commissions

Consolidated efforts toward positioning South African resources Durban Film Office; Cape Town Film Commission

and Gauteng Film Commission

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TEN YEARS - HIGHLIGHTSDEMAND STIMULATION & AUDIENCE DEMAND STIMULATION & AUDIENCE

DEVELOPMENTDEVELOPMENT• SAFTA’s

Entering 5th session of awards Building talent and stars

• National Film Festivals Durban International Film Festival Kwa Mashu Film Festival Encounters Documentary Film Festival Tri-Continents Film Festival Out in Africa Gay & Lesbian Film Festival, Bafundi Student Film Festival Nab’ubomi Schools Film Festival

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TEN YEARS - HIGHLIGHTS

DEMAND STIMULATION & AUDIENCE DEMAND STIMULATION & AUDIENCE DEVELOPMENT (cont.)DEVELOPMENT (cont.)

• Distribution (e.g SKIN) Quadrupled expected box office revenue Leveraged R20million in PR Student outreach - National campaign for school pupils

and research

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TEN YEARS - HIGHLIGHTSINTERGOVERNMENTAL & STAKEHOLDER INTERGOVERNMENTAL & STAKEHOLDER

RELATIONSRELATIONS

• NFVF hosted an Intergovernmental Indaba in 2008• The Indaba built cooperation on issues of the development of film and video in SA.• Increased collaboration and strengthened relations between NFVF, IDC, DTI and provincial film commissions (GFC, CFC, DFO).• NFVF has cooperation agreements with TUT and University of Limpopo.• Low budget model

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2012 - 2025• NFVF received an additional R135m for 2012 - 2014• NFVF programmes are aligned to New Growth Path• Programmes include :

Education & Training programmes that address skills gap Increase resources to both script development & production Introduction of 3 additional slate funds Short film contest to launch careers of new entrants into the

sector Set up & support incubation programmes nationally Support innovative distribution initiatives Empower entrepreneurs from Previously Disadvantaged

Communities to access the film industry

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NATIONAL FILM AND VIDEO FOUNDATION

Eddie Mbalo• Finishing: 31 March 2011

Karen Son• New Chief Executive Officer: 01 April 2011

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THANK YOU