As we noted last week, we wanted a bit more time to muse on the proposed merger of the Film Commission and NZ On Air, about which MCH is seeking feedback. Partly we wanted more time because – although it might appear a reasonably straightforward decision – there’s quite a lot of stuff that could make it a good thing or a bad thing, depending on how it’s executed.
The merger itself is unlikely to deliver routes to higher levels of financing, which is what the industry sorely needs to access if it’s to become or remain competitive internationally. But a merger could do things that would impact, for better or worse, the ways available resources are directed, and how easily or otherwise productions are able to attract other finance to the party. In turn, those decisions will impact – again for better or worse – the sustainability of the local industry.
There’s a lot to consider. So, we were leaning towards a two-part editorial, because everybody loves a franchise.
We’re glad we did decide to wait and split things up – not least because James Cameron and David Seymour both addressed the issue of rebates this week, and the administration of the SPR forms part of this week’s editorial – about what it is the NZFC and NZOA actually do beyond the core biz of signing the cheques for the production of screen content.
Everybody knows that the agencies are the primary funders of most of the local content (beyond news and sports) that heads on to NZ screens, be that in a theatre, via a dish or an aerial or over the internet. The barriers between all those traditional homes of content – and between the types of content that head for those homes – has changed a lot since the funders were put in place, and changed a lot more rapidly over the last decade.
That, on the face of it, would seem reason enough to take a very good look at the agencies and legislation enabling them, whether or not that look leads to a merger.
While the business of supporting the production of NZ content is obviously important, and very much the publicly visible part of the agencies’ work, a lot of the other work that gets done by those agencies is just as important from an industry perspective.
What else?
Support for project development is obviously key. It is, after all, the absolutely necessary step before production can commence. It’s also a much cheaper place to fail or to make major changes, without spending millions of dollars for little return.
Industry development, whether that’s support for individuals or organisations, training or upskilling, events, conferences, festivals, and so on, is also important. They’re all elements that contribute to the creation and appreciation of local content.
Traditionally, that’s been more the bag of the Film Commission than NZ On Air, and – as part of the round of cuts the Film Commission was forced to make last year – some of that work was moved out of house. It’s too early to tell whether that approach is working or could use some tuning or rethinking, but the work of building, developing and maintaining skilled individuals is as necessary now as it always was.
We’d argue the current situation’s not the ideal solution, because it doesn’t take an holistic look at the industry and its needs, and provide support to help meet those needs. But we wouldn’t blame the NZFC for that – some of what it did had to be cut.
We would also argue that providing infrastructure support to guilds and organisations which have half a million in the bank maybe isn’t the best use of money, but – again – that could be addressed more easily with a more holistic approach.
Each of the funders has some specific responsibilities for which there aren’t direct equivalents in the other – NZOA’s support for NZ music would be one example, as would, more recently, its role as administrator of the Games Sector Development Rebate (GSDR). The NZFC has responsibility for attracting international productions to NZ – and our publisher Brian Kassler has a separate piece on attractions work, and a possible, alternative approach to it here.
Conflict of interest
The NZFC also administers the domestic and international SPR schemes, whether or not the titles involved are film or TV productions.
It’s in this area that there’s quite a lot of potential for harm and good, and not the least of those risks is the significant potential conflict of interest of having all things screen under one roof.
Some of that potential conflict of interest already exists under the current situation, so the argument isn’t for or against merging the agencies. It’s that, whether separate or merged, they shouldn’t be doing everything they’re doing. Although the NZFC and NZOA might be considered to be large organisations by the standards of the local production sector, they’re not large enough that ethical walls, or Chinese walls as they used to be known, could be considered effective solutions.
The international and domestic versions of the SPR have different criteria, and offer different levels of rebate, but the administration of each offers the potential for conflict of interest.
At the domestic level, many films the NZFC supports with production investment also need the SPR to be viable. That doesn’t mean they should automatically get it, and there’s a significant potential conflict of interest having the same organisation that provides support (from its contestable funds) also making the decisions about whether or not to grant SPR support to the production.
The Commission looks better if films to which it offers investment get made, and SPR support makes a film more likely to get made. Generally speaking, NZ producers are usually very good at putting whatever money they have on screen, so higher budgets usually lead to a higher quality of product.
There’s no accusation, that we’re aware of, of any actual abuse of this potential COI, but we are aware of filmmakers who feel they’ve been turned down for one of those routes to support because their project has been considered ‘unlikely’ to be offered both NZFC production investment and the SPR.
During the administration of the fixed-term Premium Productions Fund, there were allegations that the NZFC was applying inappropriate and/or irrelevant conditions to the Fund’s support of some television projects, including that some NZFC staff didn’t understand some of the differences between how film and TV productions are run.
As the NZFC’s administering of the SPR, following the recent expansion of eligibility criteria, is doing a similar job for TV productions that the Premium Productions Fund did, such allegations should be of concern.
For the international SPR, there have been a number of occasions in the last three years where producers have argued that the NZFC is overstepping its authority in its decision-making.
The SPR is not a capped fund in total, although there are per production caps for the domestic SPR. The international SPR can support $1 billion worth of production in a year or $10 billion worth of production. Or none. There can be, therefore, no conflict created by granting SPR approval to one production rather than another – the pot of gold is not a contestable one pitting projects against one another.
While some of the concerns we’ve heard could be addressed by merging the NZFC and NZOA, others wouldn’t be.
Including NZOA personnel in the group that administers SPR applications could mitigate any expertise considered lacking around TV production, for both the domestic and international SPR. That might also help balance any perceived imbalance to the weight given to projects based on whether they are film or TV.
The fundamental COI would remain however: that the (merged) organisation which awards contestable funds would also administer the SPR, and would have a vested interest in seeing projects receiving contestable funding also receive the SPR.
Seymour and the SPR
We were heartened this week to see what looks like a change of heart from David Seymour, an acceptance that the SPR – particularly the international version – does deliver benefits for NZ.
There are some practical reasons why some of his suggestions about possible tweaks to its eligibility criteria might not produce the results he wants, but. His wish to see more NZ actors getting leading roles on international productions coming here isn’t a bad wish, but it’s unlikely to be realised.
Lead actors on the sorts of international productions choosing to shoot here aren’t chosen for their nationality, but a combination of their suitability for the role – their appearance and performing abilities – plus their name recognition and ability to attract audiences internationally. Even before getting into practical issues like availability, there are very few NZ actors who have that level of profile. Requiring the participation of NZ cast would therefore be an approach that could appear to discourage productions as much as encourage them.
However, credit where it’s due. Seymour’s desire to see more opportunities for NZers to benefit from productions coming here with SPR support is a win – especially considering his previous default position of absolute opposition to the SPR scheme.
If government is of a mind to consider further tweaks to the SPR eligibility criteria, there are a few ways we could encourage productions to come to NZ and create more work for locals, by offering points that would make it easier to qualify for the SPR and the uplift. We appreciate that the wheels of government turn slowly, and that – with an election a little more than 18 months away – the work required to replace existing legislation and make all the changes the MCH discussion document envisages might not be completed this term.
We hope we’ll see some clear public statements rather than a lot of quiet backroom activity, because that was extremely unhelpful to the industry as a whole during the very long-running and paralysing review of the SPR scheme conducted under the last government.
But, as the point of the MCH discussion document is to encourage discussion and submissions, we’ll throw a few hats into the ring.
One idea would be to have a flexible uplift, to allow productions which met the necessary criteria to achieve a 1% uplift or a 3% uplift on the 20% rebate – possibly even allowing more than a 5% uplift in total, although to consider anything above 5% would require some pretty convincing modelling of the costs and benefits that would deliver.
Off the top of the head, NZ could offer stronger encouragement to international productions to shoot and post here, which would increase the overall value of individual productions coming here and spread the work for locals across more parts of the industry, helping to smoothe out some of the feast or famine.
Points for using NZ music in soundtracks would also be good. Over the years, several NZ artists have had their profiles and bank balances boosted by inclusion of their work in international screen productions, including games. Over time, this is one of those ideas that could also benefit NZ musicians by getting their music into soundtracks for productions that aren’t coming here.
Revisiting David Seymour’s ideas, we would of course love to see more opportunities for NZ personnel, be they the people in roles which seem to get fewest opportunities now (eg writers, directors, producers), actors or crew.
What might work?
We believe that, done well, a single agency could do a better job of funding and/or investing in NZ screen content, regardless of the screen or screens that content is headed to. A single agency could also do at least as good a job of supporting industry development across the sort of programmes and events it’s historically supported.
We do believe some of that depends on what a new agency looks like, and we’ll get into our thoughts on that next week.
When it comes to administering the SPR, we’re not convinced that should be done by the same organisation that hands out contestable funds. It’s not as if there isn’t a very obvious recent example of how mishandling a conflict of interest issue impacted the Film Commission and left it without an in-post CEO for over a year.
Ignoring another potential COI might seem like nothing’s been learned from that experience.
Next week, we’ll share some thoughts on how a merger might help or hinder the production of local content in the new age we’ve arrived in, which is what both organisations were originally intended to do.
Download the full MCH Discussion Document, which includes info on how to make a submission. Submissions close on 23 March.
