Subsidies boost TV production, gamers promised more

The SPAA conference, an annual get-together for movie and TV producers held in Melbourne this week, brings together that uncertain strata of the industry that lies between hopeful talent and powerful TV networks and cinema chains.

The industry is waving, not drowning. Recently released figures from Screen Australia show drama production is up nationally, aided by the lifeline of a healthy government tax subsidy in the form of the producer offset.

Screen Australia boss Ruth Harley delivered a speech at the conference on Tuesday in which she argued the offset has led to a big uptick in production levels. In the five years since the offset came into effect, average annual expenditure on features has increased to $239 million a year in 2008-12, up from from $141 million a year in 2003-2007 — a rise of 70%.

Total Australian drama production expenditure (five-year average pre and post producer offset)

(Source: Screen Australia Drama Report 2011-12)

“What our survey has found is that the offset is giving producers a ‘seat at the table’ or some ‘skin in the game’, and a greater stake in the success of their projects,” Harley said.

“It’s improved the producer’s equity share in their projects which means a greater share of potential revenue that can be used to build their business and develop subsequent projects. It also gives producers some leverage — they can trade part of the equity to bring investors or talent on board.”

The main game for local producers remains television, not cinema. Compared to the fickle tastes of local feature film audiences, the television market is steadier, despite the well-publicised troubles of Channels Nine and Ten.

Having said that, the industry faces some significant challenges. Crikey sat in on a particularly interesting panel discussion as part of the conference entitled “The Rise of the Super-Indies“. Present were a number of Australia’s best-known local producers, including Matchbox’s Helen Panckhurst and Nick Murray from the newly-merged Cordell Jigsaw Zapruder.

According to Murray, the increasing dominance of big, format-driven overseas production companies in Australia such as Endemol, Grenada and Shine means small Australian producers have to consolidate or die.

“One of the reasons we decided we needed to get bigger was that companies like Shine were coming over here to Australia and operating exclusively as format factories,” Murray said during the session. “You need to be turning over $30-50 million to be mid-size.” He estimated Shine and Fremantle “must be turning over close to $200 million a year here”.

The super-indie phenomenon has been a worldwide trend. Shine’s Stephen Garrett was also on the panel with Murray, making for some lively debate. As a producer at respected British indie Kudos, Garrett sold out to Elizabeth Murdoch in 2006, while retaining the brand and talent of Kudos.

“What was exciting we actually put ourselves on the market, we had all the super-indies bidding for us, the exciting thing about Liz Murdoch was she created a super-indie instantly,” he said.

Garrett had a busy conference: during SPAA, news broke of the cancellation and then the reinstatement of Kudos’ drama series Hunted, starring Melissa George.

For its part, the Screen Producers Association of Australia continues to argue for better treatment of producers and more tax subsidies, which it claims, with some justification, are critical for the health of the local industry.

SPAA’s production executive Owen Johnston told Crikey the industry is pushing for the government to honour the Convergence Review‘s recommendation that 50% of their current free-to-air quota for domestic content should be split across their multi-channels. Currently, the free-to-air networks get a huge free kick from the government in the form of discounts on their license fees, and relaxed content quotas on digital multi-channels. The result has been to dilute the amount of Australian content.

Of course, given the unhealthy grip TV networks continue to hold on the sentiments of embattled politicians, the industry is not holding its breath. Johnston says SPAA would be happy to see the Convergence Review recommendations phased in over time, with an initial commitment of extra hours as a token of network goodwill.

“We’ve argued for 40 hours of first-run original drama for each network across the multi-channels,” he told Crikey. “We offer that in the spirit of the times that we’re in, on the understanding that the government commit to the Convergence recommendation.”

When Arts Minister Simon Crean addressed the conference on Thursday, he provided some hope for producers that the government might be listening. “I continue to say to SPAA that their arguments aren’t just with the government, I believe the TV networks should be stepping up to the plate, particularly in the circumstances where we’ve cut their license fee and given them multi-channelling,” he said.

In a subsequent interview, Crean signalled he would be pushing for local content quotas to be upped when the Convergence Review goes to cabinet next week. He told reporters: “If the TV companies continue to get the reduction in their licence fee, and we’ve given them multi-channels, why shouldn’t Australian content be an increased proportion of what goes on those channels? Why shouldn’t we be looking at the genres: drama, kids, documentary?

“I think it’s fair that the pressure be on the commercial networks, so the industry needs to join us in that … this is still an argument, I’ve expressed my view, and I’ve expressed this to SPAA. They’ve got to make this case through the other ministers to be involved. This is still an issue to be determined.”

Interestingly, Crean stated he was sympathetic to the recommendations of the Convergence Review in regards to local content on online platforms like YouTube.

“The review highlighted an interesting opportunity,” he said. “I actually like the recommendation of the Convergence Review to establish a fund, I think it has to be a fund that nurtures not just content but rewards excellence, and grants support for excellence in content.”

Crean also announced an important new measure for the games industry: a $20 million Australian Interactive Games Fund for domestic gaming production over the next three years. Crean confirmed the money would be included in May’s budget, with the details worked out in coming months in conjunction with Screen Australia, which will release a discussion paper on the measure.

The games industry was predictably delighted. Tony Reed, CEO of the Game Developers’ Association of Australia, called it welcome recognition of the cultural and economic significance of the industry.

“The games industry has gone beyond the entertainment space with games now used in education, healthcare and training,” he said. “We look forward to working with the federal government to create a program that supports growth and stability, secures jobs, encourages innovation and creativity, and promotes investment in Australian talent and capability globally.”

However, despite the good news for gaming, there is still no word on the release date for the long-awaited National Cultural Policy. “I’m ready to go,” Crean said. “I just need some money.”