I was privy to a recent seminar from Italy-based independent consultant Linda Beath on the shakeup in the digital world and thought I would pass along to you a number of (substantiated) facts that she presented, and some of my opinion.

Internet Users

December 1995………… 16 million users………… 0.4%

December 2000………… 361 million……………….. 5.8%

September 2005……….. 957 million……………….. 15.7%

September 2010…………. 1,971 million…………….. 28.8%

December 2015………… 3,366 million…………….. 50.1%

Where are they?:

Asia………………………… 48.4%

Nth & Sth America……… 21.8%

Europe…………………….. 19%

Africa………………………. 9.8%

Oceania…………………… 0.9%

Obviously there is dramatic growth in Internet usage, with Asia far outstripping every other region.

Cinema Attendance

Globally, the drop between 2010 and 2011 was in attendance. Nth American ticket sales sagged 4.7%.

2012 and 2013 attendance was stable

2014 attendance was down 5% from 2013

2015 is up 5.2% from 2014

Movie box office has stabilized—it’s not going down. There are fluctuations but they are not substantial.

In the UK, digital video (transactional VOD), such as iTunes, earned 1.3 billion pounds in 2016.

DVD and blu ray disc sales fell 17% to 894 million pounds.

Rental fell 21% to just 49 million pounds.

This merely confirms what everyone knows and that is that DVD revenue is falling away. The problem is that transaction VOD revenues are nowhere near the peaks of DVD—Digital video is not making up for the significant loss in DVD revenue. Piracy has a lot to do with this.

In Europe at least, sales agents can’t afford the time and expense to handle transactional VOD rights. Therefore, filmmakers will need to try and retain their transactional VOD rights and learn how to market and sell those rights themselves to get revenues in this area.

To 2021, transactional DVD is going to grow, but slowly. The real growth will come in the subscription VOD market, the likes of Netflix, Amazon Prime and Google Play.

SVOD is a global phenomenon.

In the fourth quarter of 2016, Netflix had nearly 90 million subscribers. In the US, they are in 40% of all broadband households. Their content spend in 2017 will be US$6 billon.

But there is competition for Netflix. Amazon spent $3.2 billon on video content last year. Their spend this year is expected to double or triple.

The trades recently reported the latest numbers out of the 2017 Sundance Film Festival, providing a good indicator of these companies’ purchasing power, with Netflix number one buyer at a total of US$36.5 million, while Amazon was number two at US$23 million.

If Netflix follows the business model it has used in other parts of the world, we can expect to see Netflix original programming in Australasia in the not too distant future. Undoubtedly, Amazon won’t be too far behind.

It’s interesting to ponder that NZ On Air’s entire budget for national TV screen content in the 2016 year was NZ$81. 5 million (US$59 million)—1.36% of Netflix’s 2017 budget.

Netflix is spending US$66.67 for every subscriber in a growing global SVOD market. NZ On Air is spending US$13.11 in a shrinking domestic free-to-air market.

One other piece of information Linda reported was that the BBC is going head-to-head with Netflix with its iPlayer, abandoning linear exclusivity.

Years ago, British broadcasters were banned from pooling their resources behind a common streaming platform, killing off Project Kangaroo. Perhaps there’s a bit of strategic thinking to be done by public service broadcasters globally on this.

A pity we don’t have one.

Tui Ruwhiu
Executive Director

As 2016 draws to a close it’s time to look back and prepare for 2017.

First item on the agenda is my editorial of two weeks ago titled ‘It’s Up To You (Unfortunately)’. Some people mistook this to mean that the guild won’t go into bat for you when there are issues. Not true. I had hoped my mention of the effort we went to in regard to the appalling terms and conditions on some productions being produced for Māori TV with Te Māngai Pāho funding (some of which I did not write about) was evidence that we intervene when necessary. And as I also mentioned in No. 3 of my points in regard to what to do with a contract presented to you, you can bring it to us. And if there are real issues with the contract, we will take them up with the producer or production company.

Copyright has been a biggie here at the guild, particularly this year. We are fighting for directors to get copyright in audiovisual production and cinematographic film as they have in many other countries around the globe. When you have copyright, you have a better opportunity to earn revenue for your creative effort beyond the actual production phase. And as the author (not yet recognised either) of the production you deserve it. One of the avenues we work through on this is We Create (former Copyright Council), a body that represents the interests of many organisations in the creative sector. Separately and with We Create, this year we made representations to Government as they investigated the role of copyright and design in the creative sector. You can read the Ministry of Business, Innovation and Employment review here.

2016 saw the end of our original three-year programme of professional development thanks to the New Zealand Film Commission. In 2016 we were able to draw for our membership on the expertise of directors Niki Caro, Australian Rachel Perkins and Canadian Jennifer Baichwal, editors David Coulson, Australian Dany Cooper and American Doug Blush, Sundance Artistic Director Gyula Gazdag, cinematographer Alun Bollinger, and a host of other talented Kiwis who have given their time and expertise to help advance your craft skills and knowledge. The year ahead will see more of the same, once again thanks to NZFC.

Our efforts to open the doors for directing in TV drama with our attachment initiative has seen two male and three female DEGNZ members observing and directing on episodes of drama series or one-offs: Matthew Saville, Aidee Walker, Jamie Lawrence, Helena Brooks and Cathy McDonald have all had placements, and we will announce one other early in the new year. We look forward to seeing more of these directors’ work on the small screen. NZ On Air has kindly funded our TV drama directors initiative again for 2017.

Our Women Filmmakers Incubator is halfway through its approximately yearlong course, and so far it has provided plenty of stimulation for our participants. Our hope is that it will fast track our filmmakers, providing them with insight and knowledge that will enable them to make good decisions about their projects and careers.

The Incubator is the first of the guild’s practical initiatives designed to help address the gender issue, which has really come to the fore in 2016. Various other approaches have been implemented around the world to deal with gender inequity in the film industry. At home, NZFC has made some moves with a second year of a gender specific award, an unofficial equity policy around talent development, script development and production funding, and the backing of our Incubator. Their statistics, announced at the Big Screen Symposium were encouraging, but expect more on this next year. I had the pleasure of meeting with Australian producer Sue Maslin in November at the SPA – Screen Forever conference. Sue produced the very successful The Dressmaker, directed by Jocelyn Moorhouse. Her take on gender inequity in film here.

At the Film Commission, Dave Gibson has been in place for three years now and things have certainly changed in his time. Whether or not you like the direction the NZFC is going in, Dave has made it very clear what direction that is, and that’s a good thing.

There have been some great critical and commercial local box office successes in the last three years: Hunt for the Wilderpeople, Tickled, Poi E, Free In Deed, Chasing Great, Mahana, Born to Dance, A Flickering Truth, The Ground We Won, 25 April, What We Do In The Shadows, Housebound, The Dark Horse, The Deadlands, Fantail and others. Where the line is drawn with these films between Dave Gibson and past CEO Graeme Mason due to long lead times is debatable, but we can celebrate their successes none the less. There’s certainly an obsession now both domestically and internationally with people in the industry for the next Wilderpeople. We may just have to wait for Taika to get around to it. When you look at the figures for the NZ box office earnings in 2016, you can see why. It’s depressing to say the least to see the local box office almost exclusively dominated by US studio films. There is no consolation that it’s the trend globally, even in France.

                                                  TOP 25 FILMS AT NZ BOX OFFICE 2016
(As of 14 December)

                 Film                                                                           NZ$                                   Genre

NB: Hunt for the Wilderpeople, Finding Dory, The Secret Life of Pets, Fantastic Beasts and Where To Find Them, Doctor Strange and Pete’s Dragon are still in theatres.

NZ On Air now has a new and streamlined funding strategy in place after a very quick round of consultation. They are still getting lambasted for their drama funding decisions, and seem to be trying to make up for it in the low-cost web series space both with ideas and gender. But a $100,000 webseries budget is a bit different to a $7 million drama one. It is in a tough place, though. NZ On Air hasn’t had a budget increase in nine years and it’s at the mercy of broadcasters who decide what’s going to get made for broadcast. Everybody including NZ On Air is looking to the online space for freshness and innovation, but the revenue model still isn’t there. And that’s not the panacea anyway. The Danish public broadcaster DR has proven with The Killing, The Bridge and Borgen that you can take risks and earn rewards in a non-commercial broadcast environment if you make the commitment. Commerciality seems to kill innovation not breed it in our advertising-driven public broadcaster model. Now that Broadcasting is no longer a Ministerial portfolio, we could be up for more woes in the NZ TV sector in the year ahead. Will we as Screenz editor Keith Barclay mooted in his latest e-news see the merging of NZFC and NZ On Air in 2017?

2016 has been the year of the streaming player Netflix. They are firmly cemented in the production and distribution landscape, and a staple of the NZ screen consuming diet. Their acquisition and production might is immense, from Oscar fodder like Beast of No Nation to Baz Luhrmann’s The Get Down and now The Crown. You can’t talk to a NZ TV producer these days who isn’t scheming to sell something to Netflix. Together with Lightbox, Neon and now Amazon Prime, Netflix dominates the screen content landscape, at least amongst particular demographics. I was at an event recently where a broadcaster asked for a show of hands from a small group of filmmakers for those who watch free-to-air TV—nobody put their hand up. Yet free-to-air audiences in NZ are still big, as NZ On Air’s 2016 audience survey attests. But the changes in the screen industry won’t let up.

AR (Augmented Reality) and VR (Virtual Reality) are the new buzz acronyms. At every conference or market I’ve been to this year in Europe, the US, Australia and here, AR and VR are being touted as the next big thing. The only examples I’ve experienced have been VR. And I’ve yet to come across anything that’s delivered more than novelty value. But there’s always next year.

2016 has been a very buoyant year for the screen industry. Domestic production levels have essentially stayed the same. There has been a lot of international film & TV production in New Zealand, thanks to the incentives. When speaking to one of the main crewing companies a week or so ago I was told that 80 per cent of the people on their books were on jobs. Commercials filmmakers are busy, and branded content is still on the up. Inquiries at NZFC for international projects are steady, and there are a number of big projects confirmed: Ash Versus Evil Dead 3, Peter Jackson’s Mortal Engines with Christian Rivers at the helm, The Shannara Chronicles, and Ava Duvernay’s film A Wrinkle In Time for Disney.

We may well see more of an Australian invasion in 2017. Matchbox and Seesaw have set up here, and the Australians are very keen on our incentives for TV. Matchbox has been shooting the second series of Wanted in Queenstown, and SPP has the third series of their NZ – Aus copro 800 Words with Seven Productions well in hand. There is the possibility of a yet-to-be officially announced series in the offing from Seesaw, which will likely be shot here.

At the guild, our long-serving president Peter Roberts has stepped down after nearly four years to be replaced by Wellington-based director Howard Taylor. Peter served the guild well during some tumultuous times and proved an ever-present resource for the guild and the membership, and we thank him for it. Howard is a highly experienced director (and former editor) who, living in Wellington, gives us a stronger presence with government and the funding bodies as well as an ear on the ground with our Wellington colleagues. We said goodbye to board members Richard Riddiford and Costa Botes and thank them for their efforts, and welcomed Alyx Duncan to the board, which now has equal gender representation.

Thanks for your support in 2016.

Next year DEGNZ will undoubtedly see more of the same challenges and some new ones. We remain committed to ensuring the creative, cultural and financial wellbeing of our members. We are here to serve your needs and available to talk, meet and take up issues on your behalf, so get in touch if you need to.

Have a safe and enjoyable break, and see you all next year.

Ngā mihi o te Kirihimete me te Tau Hou

Tui Ruwhiu
Executive Director