A dinner has proved Film New Zealand’s biggest box office smash of the past 18 months, setting the country’s stage to lure more of the estimated $500 million worth of television production currently touring the world.
Co-hosted by Film New Zealand, filmmaker James Cameron and his business partner Jon Landau, the dinner in Los Angeles was a significant strategic move for the national film office, chief executive Gisella Carr says.
“Taking the prime minister of New Zealand to meet the customers in the United States and have him see first-hand all the opportunities that lie around screen production.
“When major filmmakers get in to help a country like New Zealand, doors open.”
On the trip in 2012, John Key visited three Hollywood studio lots, and met film industry business partners based in the United States.
Film NZ said the visit sent a “strong signal” to those partners, showing the New Zealand Government valued the screen business.
Furthermore, it gave Key an opportunity to hear from the industry “heavy-weights” first hand about what they wanted.
A stronger signal, too, was December’s announcement that big-budget international screen productions would be able to claim back 20 per cent of spending in New Zealand, up from 15 per cent.
Some productions would get as much as 25 per cent back, meaning Cameron’s Avatar sequels will get at least $125 million in taxpayers’ money in return for spending at least $500m making the films here.
But Treasury had disputed the economic benefits of raising such incentives, claiming the previous ones had already offered poor returns, negatively hitting the Crown’s books by $168m.
Competing with other countries to offer more-generous perks for the film industry was not good economic development policy, Treasury said.
Carr, however, said rebates had to be offered to attract international productions.
“A country can choose not to have it, but you won’t get the international production without it. We’re dealing here with the realities of global screen production.”
She said New Zealand’s position had eroded, particularly as the exchange rate had changed so much since the rebates were first introduced.
People often misunderstood how the rebates worked, she said, because the money had to be spent first before any incentive was paid back.
“So they’re spending 80 cents and we’re giving them 20c, but also it’s not understood that that 80c wouldn’t come here.
“A production like Avatar, it’s not a question of we’d get that spend without it – we wouldn’t get tkhat spend.”
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Carr said stresses on the industry, including the concluding Spartacus and The Hobbit productions, had required a look into incentives for television production as well as film.
“We weren’t at a competitive position with our rebate.
“What’s been absolutely apparent is that New Zealand needs to diversify the kind of production we’re bringing in.”
Changes to government funding for screen productions, announced in August, were expected to open the door to more television productions.
Film NZ had been commissioned to provide the report, in which the body pushed for a 20-25 per cent rebate in order for there to be any hope of bringing these productions to New Zealand.
The Large Budget Screen Production Grant was previously open to those valued at $15m or above, which had excluded most television shows.
The changes meant this threshold was reduced to $4m.
Television was targeted because of its more ongoing nature, particularly compared to the project-style work of film production.
Carr said television production had “a new frock on now”.
“They’re substantial economic vehicles, so if you get a production like Game of Thrones you’re not just getting one concentrated spend over a period of months, you’re getting years of production.
“American television is an incredible machine, it doesn’t just do one season, they might do seven years.”
Games of Thrones’ first three seasons were estimated to generate about $124m for the Northern Ireland economy, where it was filmed.
Carr said the Government understood the need to protect the existing industry as well as take the opportunity to think strategically about what needed to be done next.
“There’s an estimated half a billion dollars in production touring the globe which is available to shoot in countries each year. We’re only seeing a fraction of that and a shift in incentives is going to be very important to get it.”
Following the December 16 incentive announcement, Carr said a number of productions which had been considered “lost” to New Zealand were re-budgeting within days of becoming aware of the 20 per cent figure.
The new rebate levels gave Film NZ a “hand to play” in attracting overseas productions to New Zealand, she said.
“Already it’s got the attention of people who to some extent had started to write New Zealand off simply because they knew without the numbers it wouldn’t work.”
Carr said New Zealand was primarily known for its feature films, but as a result of the raft of incentive changes, television would become interested as well.
The partnerships developed with the United States in the past 20 years had brought scale to a country which otherwise would not be able to compete.
“New Zealand’s reputation is second to none.
“We’ve got very significant New Zealand companies generating our own intellectual property in this space as well.”
The most recent Statistics New Zealand figures, released in April last year, showed New Zealand’s screen industry’s star rise to record more than $3 billion in revenue for the first time.
It had grown 10 per cent in 2012 to reach $3.29b, driven mainly by strong numbers in feature film production.
Statistics New Zealand screen industry statistics manager Hamish Hill said it was the first time revenue had surpassed $3b since the survey began in 2005.
“The breakthrough has been aided by a surge in feature film revenue, which rose almost 50 per cent in 2012 to more than $1b,” he said.
Investment from North America, which was up 21 per cent to $468m, drove an overall rise in international investment.
Hill said 40 feature films were completed in New Zealand in 2012, five more than in 2011.
“This shows New Zealand’s film industry is expanding from its success in creating and producing world-class content,” he said.
In Wellington, 2012 film industry revenue rose 67 per cent on the year before, to $828m.
The Hobbit, Tintin and Rise of the Planet of Apes had contributed most to Wellington’s figures, which represented nearly a third of all New Zealand screen-industry riches.
Film NZ, a $1m organisation of seven people, had handled 459 inquiries from budding film projects for the year ended June 2013. This was 72 more than for the year before. Carr said the heart of the organisation’s role was connecting international productions with New Zealand workers.
“You don’t get anything without the filmmakers actually coming here and looking at it and we help them look at it.
“And we work with the New Zealand professionals and the industry to help to really show off that they can indeed make this production here.”
Taking an inquiry from the initial phone call to committing a project to New Zealand could take five minutes or five years, she said.
Part of this involved a budget comparison detailing what it would cost to make a production in Canada or the United Kingdom versus filming in New Zealand.
But it also meant not just waiting for phone calls and ensuring the industry was actively seeking potential productions.
“We make a set of promises to these people, if they come to New Zealand it’ll work for them.
“And we work hard here to make sure those promises are delivered.”
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