Here in New Zealand we’re heading into a series of industry discussions about the implementation of Peter Jackson’s review of the New Zealand Film Commission. I thought it an opportune time to step back from the day to day production tasks and reflect a little on the status of filmmaking in our country. I suspect that the issues here are a microcosm of those which exist in many corners of the world – excluding perhaps the USA.

It’s always been tough to get films up, and there’s nothing particularly novel about that struggle. What is different currently is the shortage of money around to fund them. In NZ the cornerstone of financing has always been the NZ Film Commission. Where a project fulfills their criteria, they have traditionally come in with the provisional financing commitment which has allowed producers to build on top of to achieve production funding. Two factors are impacting on this received way of doing things. One is that the cost of filmmaking, like everything else, has risen steadily. What was a reasonable budget for a feature of $3m is now $7m. The second influence is the shortage of available soft money. The NZFC currently has around $8.8m to spend on features annually. At a generous estimate, that would allow for 3 films, but more realistically 2. Naturally enough, chasing those funds has become very competitive – something which I find understandable but not necessarily beneficial to filmmaking as a whole. On top of this, mezzanine and finishing funds are in extremely short supply due to the recession.

Peversely, this is also a time when there is a massive output of material for the screen. Everyone wants to be a filmmaker, and the digital revolution has provided access to the game for people who would previously have been excluded. Time was, everyone wanted to write a novel. Now everyone wants to make a film. And at the other end of the chain, digital delivery of product means a huge increase in options, formats and runtimes for exhibitors and distributors. So, we have a huge appetite for funds and a diminished supply of them.

In the face of this, it seems to me that the industry is splitting into two streams. One is the high end, pursuing the traditional route. To clear the hurdles to get such films up, there’s an increasing necessity for bigger stars, better effects, international copros, and huge p&a budgets. In our context, we’re talking The Hobbit. And then there’s the low end, where films like The Insatiable Moon find their place. These are made for budgets which would have been deemed not feasible in the near past. Typically they concentrate on story, performance, and originality.

Under current proposals, the NZFC is backing both horses. The new Escalator programme is offering four filmmaking teams up to $250k each in funding for digital features. At the same time, there is the intention to give more significant funding to 2 or 3 features at the top end, providing cornerstone funding. It’s a pragmatic way forward. However, as a producer who has just made a feature for $500k which was only possible because the writer, director and producers took nothing, I suspect the Escalator scheme is setting people up for a bitter failure. And for the big boys, $3m toward a feature is not a hell of a lot to go on.

Where to, then? I have no doubts that the future is digital, and the effects of that will revolutionise the film world as they have the music world. Audiences will determine what they want to watch and how they want to watch it in a way that has never been possible before. At the moment we have digital inroads at the filmmaking end of the process, but the revolution has only begun in terms of alternative models in distribution and delivery to an audience. These are exciting and enabling times to be in the creative sector.

Is it in fact time to live without the NZFC? The two great new developments in NZ have been the Large Budget Screen Production Fund (LBSPF) and the Screen Production Incentive Fund (SPIF). While nominally administered by the NZFC, these are actually tax breaks which serve to encourage investment. The LBSPF has been very successful in easing the way for projects such as The Hobbit and Avatar. The usefulness of the SPIF, however, has been seriously curtailed by the qualifying threshold set at $4m. This cuts out any incentive to the lower end of the market for the generous 40% rebate (in actuality closer to 35%). However, were it to be lowered to a threshold of $500k, it would make even projects like the Escalator films an attractive proposition for investors.

These schemes are innovative in that they don’t call on anyone to second guess what films will succeed. There is no group of people attempting to pick winners in a field that experienced players know to be the most difficult of all to assess. As one of the speakers at SPADA producers’ conference said last week, if people knew what films were going to fly, they wouldn’t need to be working for anyone! So perhaps it’s time to envisage the demise of the NZFC – not with recrimination but with deep gratitude for all they’ve achieved over the years. But it may be that in this country at least, the industry has now reached a state of maturity which enables new ways of thinking about the future.

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