Hard News by Russell Brown

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Hard News: Movie Disaster

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  • Rich of Observationz,

    I'm all for putting more money into NZ On Air (which makes maybe a thousand hours of TV for about the same input as the Hobbit subsidy) as a straight cultural public service. Or even a state owned commercial film investor like Film4, with the aim of making a profit (maybe we could con some overseas taxpayers into giving *us* money).

    If we do those things, we boost our film industry, tell our stories and aren't handing taxpayers money to overseas multinationals.

    Back in Wellington • Since Nov 2006 • 5550 posts Report Reply

  • chloe smith,

    As someone who has no Facebook or Twitter account – I am now posting my first blog response and to correct this SJ misconception as noted in the headline article = Joyce singled out …. Rob Tapert’s production shift to South Africa as a factor in the industry slump =

    it is not RT who has taken work to South Africa or UK or any other territory for that matter – it is in fact STARZ – the funder of SPARTACUS that they brought to NZ in 2009 when the exchange rate was 0.5469 and the incentive was 15% – STARZ are currently in screen production in these territories for the TV series BLACK SAILS / SA and OUTLANDER / UK.

    Why? The encouragement and packages that these Governments now promote in order to secure what they acknowledge to be an economically positive industry and asset – is the INCENTIVE.

    While not in any way fairly mentioned, it is appropriate however to acknowledge his contribution = since 1993 RT has brought $787,649,180 of screen production into NZ (specifically Auckland) and 50% of this spend has been on labour alone.

    Let’s move on >>>> In the 2012 MBIE Evaluation of the Large Budget Screen Production Grant 2004-2011, recommendations on page 77 0f 104 note that *internationally, Government incentives for large budget screen productions are now essential factors in pre-production decision making, that the (LBSPG) grant is likely to decrease its international competitiveness and attractiveness unless there are some adjustments to reflect changes in the global screen production industry, that the (LBSPG) grant successfully contributed to the increased capability and capacity of the NZ screen production sector and with spillover of screen technology to the domestic sector etc. etc. etc.

    After a 2 year review process and including a late 2012 PM trip to Hollywood plus a subsequent and separate TV consideration, this Government has elected to hold the 15% and yet bring in minor and debatable tweaks such as a 4M threshold for TV and a reduction of PDV from 3M to 1M. Perhaps our sensible step is to go back to first principles and ask the Government (or their agencies New Zealand Film Commission or Film New Zealand) to remind us why this sector was valued in 2003 with the LBSPG ….. and what has changed 10 years later and after an entire industry sector rose to that 2003 challenge and stepped up and grew to the reputation and capacity that has been achieved = goal met = it seems to me that we have ‘failed’ by succeeding’. ?????????????

    NZ • Since Oct 2013 • 1 posts Report Reply

  • Sacha, in reply to David Hood,

    is there any reason that the production centre has to be in Auckland with the attendant high costs of living and operating?

    Screen sector companies tend to cluster together to share services, staff, etc. And skilled creative workers tend to like living in interesting cities of scale - like Wellington, Auckland or suchlike.

    Ak • Since May 2008 • 19688 posts Report Reply

  • Sacha, in reply to chloe smith,

    it seems to me that we have ‘failed’ by succeeding’.

    we have failed you by electing a government with 1950s worldviews

    Ak • Since May 2008 • 19688 posts Report Reply

  • Russell Brown, in reply to chloe smith,

    While not in any way fairly mentioned, it is appropriate however to acknowledge his contribution = since 1993 RT has brought $787,649,180 of screen production into NZ (specifically Auckland) and 50% of this spend has been on labour alone.

    Hi Chloe -- thanks for coming here. I was in no way trying to shortchange Rob Tapert's extraordinary contribution.

    Those figures are the ideal riposte to claims that the LBSPG only benefits a wealthy few.

    For those who don't recognise her name, Chloe has produced nearly 200 episodes of Hercules, Xena and the others for Pacific Renaissance -- and more besides.

    Auckland • Since Nov 2006 • 22756 posts Report Reply

  • Sacha, in reply to Rich of Observationz,

    I'm all for putting more money into NZ On Air

    with some conditions imposed on broadcasters

    Ak • Since May 2008 • 19688 posts Report Reply

  • Kumara Republic,

    And I get the distinct impression that it’s somehow tying in with recent musings, by Spielberg and Lucas of all people, that the days of the Hollywood blockbuster model in its current form are numbered.

    The southernmost capital … • Since Nov 2006 • 5420 posts Report Reply

  • Kumara Republic, in reply to Sacha,

    with some conditions imposed on broadcasters

    And if these broadcasters refuse to come to the party, a new one à la TVNZ6&7 may have to be created. The burning issue is, how could it be future-proofed against it going the way of 6&7?

    The southernmost capital … • Since Nov 2006 • 5420 posts Report Reply

  • Craig Ranapia, in reply to Russell Brown,

    Hi Chloe – thanks for coming here. I was in no way trying to shortchange Rob Tapert’s extraordinary contribution.

    And neither was I. I just think it's more than a little naive to pretend producers don't look very closely at things like exchange rates and what subsidies/tax credits are on offer. And if you think Joyce is a shitbag for pointing out the real opportunity costs involved, how about California Governor Jerry Brown?

    A California Film Commission report bewailed the industry's "pronounced erosion". LA's new mayor, Eric Garcetti, has declared the phenomenon a "civic emergency". In a statement to the Observer, he added: "Entertainment is LA's signature industry, and we can't afford to lose it. It's about more than just Hollywood actors and stars – it's an industry of over 500,000 good-paying, middle-class jobs like electricians, carpenters and caterers, and I'm committed to doing everything I can to keep filming here in LA."

    Garcetti says California must offer better tax breaks and credits to compete with rivals, including Canada and the UK. For a big production these inducements can mean tens of millions of dollars. Disney's Iron Man 3, which has grossed more than $1bn, paid no tax to its host, North Carolina, because it was deemed a "temporary business entity".

    Legislators in California's state capital, Sacramento, including governor Jerry Brown, have rejected Hollywood's pleas. They say the state already grants about $100m of annual film credits, while schools are underfunded. Many think the studios have little interest in restoring LA's glory and prefer to play rival locations against each other to extract greater tax concessions.

    North Shore, Auckland • Since Nov 2006 • 12370 posts Report Reply

  • Phil Gregory, in reply to Rich of Observationz,

    Hey Rich, sure film workers can all get jobs in other areas, but why let an industry die that earns large overseas income? and why take other people's jobs when we are trying to create more employment?
    Remember the rebate is only paid when the money comes in.

    Auckland • Since Oct 2013 • 10 posts Report Reply

  • Phil Gregory, in reply to Rich of Observationz,

    But Rich, that's not new money that's the same old worn out kiwi dollars that's already in our economy, these rebates attract huge money from overseas, loverly new shiny green backs.

    Auckland • Since Oct 2013 • 10 posts Report Reply

  • Ian Dalziel,

    Auckland may be hurting,
    spare a thought for Hollywood too...

    Christchurch • Since Dec 2006 • 7892 posts Report Reply

  • Craig Ranapia, in reply to Ian Dalziel,

    spare a thought for Hollywood too…

    Well, of course "runaway production" isn't so bad when they're running towards you. (I'm pretty sure the local actors and crew who worked on Top of the Lake didn't particularly care they were working on a project mostly financed, indirectly, by Australian and British taxpayers; and the shareholders of AMC (who own Sundance).

    The irony is that there's been some rumbles of discontent in Australia and the UK why the hell they're paying for a shoot in the colonies, written and directed by a couple of Australians with an American lead. The politics and economics of cultural nationalism are a funny beast. And very quietly, I'm pretty sure a good chunk of the Screen Actors Guild membership would really like it if Kiwis like Jay Ryan, Manu Bennett, Karl Urban and Daniel Gillies would stop stealing good honest American jobs and go back to Australia. :)

    North Shore, Auckland • Since Nov 2006 • 12370 posts Report Reply

  • Bruce Hopkins, in reply to Stephen Knightly,

    Thanks Stephen for putting into words what I have thought is the way forward for the NZ screen production industry for many years. We are actually reaping a bit of the legacy of how the industry has operated for way too long, … that being we are many separate entities who come together to work on projects but don’t have any dialogue around industry issues and forward planning, we’re just happy to have a job from project to project.
    One of the great shames of what has happened in very recent times is that this government figured they could offset the competition from overseas players by stripping any remaining rights local ‘independent contractors’ in the screen production industry had and by also opening the industry up to offshore workers so that production companies could import workers without having to apply for visas… a quite astounding slap in the face to all NZ screen production workers.
    As an actor I had a contract for my work on Lord Of The Rings that stated I would receive residuals from the merchandise sold based on my characters likeness. After enquiries it was revealed this totalled over US$10M. However having not received any monies I decided to seek recompense through the generous support of an LA entertainment lawyer. Finally after 2 yrs and having reached the Superior Court of LA, the big boys got away with not honouring that contracted commitment, they had made a mistake in their acounting! Residuals are screen production workers IP payments and one of the ways many overseas workers survive between gigs. Unfortunately here in NZ we have never really taken the long term view instead we’re just happy we have a job, from job to job, but when the jobs dry up ………… well we may be about to find out what happens.
    Lets look at the NZ gaming industry and how they're doing it, lets get the government to encourage private investment in local production to supply a global market, lets get cracking!

    New Zealand • Since Oct 2013 • 5 posts Report Reply

  • tussock,

    So, just from an outside perspective, y'all are talking about subsidising exports, right? I mean, we're exporting the production of local labour here, so that's how I'd categorise it. Selling the production of films to foreigners.

    Because subsidising exports is a universal disaster. Horrible stuff. All your local capital and skill gain goes into gobbling up the subsidies, rather than seeking out natural market profits. Market distortions and so on, the underlying cause of boom and bust cycles.

    Wool mountain, Butter mountain, (psst, milk powder mountain, giant truck mountain), film production capacity mountain. Whoops, did it again.

    Now, yes, these subsidised exports produce a lot of high-paid local specialists, some of y'all are here. But there's no natural market for your investment in time and money, never was, certainly not locally, and that's the whole problem. More subsidies just distort the market further and drive more capital into this false investment opportunity.

    Since Nov 2006 • 608 posts Report Reply

  • Simon Bennett,

    It strikes me there's a simple equation here: provide incentives to make NZ competitive as a location for large scale international screen projects, with all the attendant international money and employment opportunities. Or fail to keep NZ competitive, and lose the big projects to other countries, thereby avoiding any large injection of foreign money and employment opportunities on international screen projects. I fail to see how anyone could favour the latter proposition over the former for ideological reasons.

    Auckland • Since Nov 2006 • 169 posts Report Reply

  • Russell Brown, in reply to tussock,

    Now, yes, these subsidised exports produce a lot of high-paid local specialists, some of y’all are here. But there’s no natural market for your investment in time and money, never was, certainly not locally, and that’s the whole problem. More subsidies just distort the market further and drive more capital into this false investment opportunity.

    I understand that argument. You could take the view that it’s a more desirable form of subsidy than letting dairy farmers destroy our waterways to keep their competitive advantage in their industry, or selling cheap hydro power to preserve jobs in Southland.

    But I would debate that there’s “no natural market” for skilled screen workers. All of them work on local productions, which would not be viable were it not for the presence of their skills and, in many cases, specialised equipment. In the past, that standing workforce has been supported by public money, via public broadcasting and the National Film Unit. The problem now is that the industry is nearing a critical point at which that skill and technical base would disappear.

    Also: there’s the fact of the sheer amount of money this industry has been spending locally – literally billions of dollars. That does start to make rather a large hole in the economy if it goes.

    Auckland • Since Nov 2006 • 22756 posts Report Reply

  • BenWilson, in reply to tussock,

    Because subsidising exports is a universal disaster.

    Not universal. But sometimes a disaster, certainly. I'm not sure why "this is picking winners" is considered such a knock down argument. Sometimes governments do, in fact, pick winners. Sometimes they pick losers. As does everyone, regardless of training. Indeed, if the classic idea of market efficiency is even partly true, this going to always be the case. Failing to pick winners is also making a choice, and involves opportunity cost. It's not at all clear that it's a better, sounder investment strategy.

    If we had a really dynamic, risk-taking investment class, with a lot of money, in this country, we wouldn't need the government to do it. Unfortunately, our investment class is risk averse. This is not how capitalism is meant to work, unless we want low growth and gradual wealth polarization. So ironically, it is government investment that is the main thing keeping capitalism alive these days. At least the government can force people to spend money, which in turn forces them to earn money, which keeps people working. It's not a great system, but it's the only system we've got, now.

    Auckland • Since Nov 2006 • 10641 posts Report Reply

  • Rich of Observationz,

    our investment class is risk averse

    What about that jetpack thing?

    This is not how capitalism is meant to work

    It's exactly how it works. Investors everywhere are generally unwilling to take a punt on anything they consider risky (they may be convinced that the risk is less than generally thought, as in the jetpack guy). Typically, they look to offload risk onto suitable mug punters, such as 'Dumb and Mad' investors, or governments.

    Back in Wellington • Since Nov 2006 • 5550 posts Report Reply

  • BenWilson, in reply to Rich of Observationz,

    It’s exactly how it works.

    Yes, but not how it's meant to work, in the fictitious model where the market provides everything and we still somehow get large scale transformative projects.

    Investors everywhere are generally unwilling to take a punt on anything they consider risky

    Not sure. I think that changes from time to time. Actually, I'm talking crap. I don't think it's down to the failure of individuals, even collectively. This is a small economy, and thus not the kind of place you'd want to develop something big and new. Of course you'll wait until you see it work overseas. And if you have a big new idea, you'll take it there to get it started, in the end.

    Which means that there really isn't any chance for dynamic change other than from government.

    Auckland • Since Nov 2006 • 10641 posts Report Reply

  • Russell Brown, in reply to Rich of Observationz,

    Typically, they look to offload risk onto suitable mug punters, such as ‘Dumb and Mad’ investors, or governments.

    That was more the case during the mad period of tax breaks that gave us Merry Christmas, Mr Lawrence and Queen City Rocker. Investors didn't even have to make good films to come out winners.

    The screen production grants are rebates on actual local spending, so the government's chief risk is being drawn into a bidding war.

    Auckland • Since Nov 2006 • 22756 posts Report Reply

  • Russell Brown, in reply to Rich of Observationz,

    If we do those things, we boost our film industry, tell our stories and aren’t handing taxpayers money to overseas multinationals.

    But even by Treasury's sceptical analysis, the net cost of the grants scheme was about $36 million over seven years -- that is, about $3m less per year than funding a season of Outrageous Fortune. It would cost way, way more than that to maintain a similar skills and technical base to that fostered in recent years by foreign money.

    Auckland • Since Nov 2006 • 22756 posts Report Reply

  • Sacha, in reply to Bruce Hopkins,

    the big boys got away with not honouring that contracted commitment

    That disgusts me, Bruce.

    Ak • Since May 2008 • 19688 posts Report Reply

  • Sacha, in reply to Simon Bennett,

    I fail to see how anyone could favour the latter proposition over the former for ideological reasons.

    Joyce, English, Key and co ignore how their own personal business 'success' has been supported by public infrastructure investment. Subsidies are for weaklings. Or finance companies. Or farmers. Or casinos.

    Ak • Since May 2008 • 19688 posts Report Reply

  • Sacha, in reply to BenWilson,

    our investment class is risk averse

    And our private sector R&D spend has long trailed world levels. Expecting the government to prop them up seems a feature of our local Atlases.

    Ak • Since May 2008 • 19688 posts Report Reply

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