On-Point PR

Motion Picture Association (Europe, Middle East and Africa)

Editorial

20 March 2018

SA film and television industry aims to attract big-budget movies and series
Delegates at International Film and TV Dialogue propose exciting development initiatives

South Africa will need to review its incentives for foreign film and television producers if it is
to catch up with the more competitive incentive frameworks available in other parts of the
world. While the local industry has been growing at a rate of around 8% per annum in the
past few years, growth in countries with more extensive incentives is well into the double
digits.

Local and international delegates who attended the second annual International Film and TV
Dialogue in Sandton this week have therefore proposed some far-reaching changes to South
Africa’s current incentive regime. These are aimed at attracting greater foreign direct
investment (FDI) and promoting development across the entire industry.

The changes being proposed come after robust debate at the conference, as well as after
several years of engagement between international film industry executives and local
stakeholders. They have been presented to the Department of Trade and Industry (dti), which
also had a number of representatives in the forum, for consideration.

The International Film and TV Dialogue, which is the country’s premier platform for
engagement on all aspects of the industry, was convened by the Motion Picture Association
of Europe, the Middle East and Africa (MPA EMEA), the international arm of the Motion
Picture Association of America (MPAA), together with a number of US producers, studios and
industry associations. It was opened by representatives of the MPA and its associates, and
included opening remarks by Gauteng Premier, David Makhura, who has a bold vision for the
province’s business, industrial and intellectual future.

Six workshop sessions, attended by over 200 delegates, covered such critical topics as
developments in the global marketplace, South Africa’s position in the global marketplace,
local content, distribution, incentives, infrastructure development, skills development,
intellectual property and changes in the regulatory environment. In particular, delegates
examined ways in which the country could attract more large-scale and ongoing productions
to its shores.

MPA Editorial
Page 1 of 3
According to Stan McCoy, the Managing Director of the MPA, the local industry’s current
incentive structure for foreign producers, although attractive to some companies, is failing to
attract larger, high-budget productions from other jurisdictions. Proposed changes to this
structure, should they be implemented, will significantly increase direct foreign investment,
grow the number of employment opportunities available in the industry, and bring to the
country the kind of expert knowledge that will promote the transfer of top-level skills.

Delegates have, for example, proposed a 15% above-the-line (ATL) incentive for foreign film
crews, easing minimum production requirements and raising the cap on the rebate for high-
impact projects. This is just one of the ways other destinations are attracting US Filmmakers,
leading to a notable increase in FDI and related growth in their film and television industries.

Countries like Canada, the UK and Ireland, for instance, all of which have introduced
progressive incentives for foreign filmmakers, have seen a dramatic increase in spending by
US producers over the past three years. Similarly, Hungary has experienced a twentyfold
increase in film production since 2014 as a result of its competitive incentives and its skilled
workforce. In 2016 alone, it was able to attract blockbuster productions such Blade Runner
2049 and a number of high-impact series, including NBC’s Emerald City.

The proposed changes to South Africa’s current rebate structure would significantly enhance
the country’s potential to attract larger and more long-term productions, while the increased
expenditure associated with this would result in thousands of additional jobs, both within the
industry and within support industries. It would also give skills development and knowledge
transfer a huge boost, and significantly increase the potential for infrastructure development
and the creation of more local content.

In addition, the proposed changes would allow for greater black representation within
production companies and for the creation of more opportunities for interns. If implemented,
they would ensure that a minimum of 25% of production services on foreign film and
television productions would be conducted by Level 2 B-BBEE companies in order for the
producers to qualify for enhanced incentive rebates. Co-venture partners would also have to
be able to participate in the creative, administrative and financial processes in a way that is
commensurate with their scope of participation.

The intention is also to allow for the use of a number of different facilities and equipment
vendors across the country in order to promote healthy competition within the industry, and
to provide for additional incentives for companies that shoot in locations where higher
numbers of black-owned facilities and equipment vendors are located.

MPA Editorial
Page 2 of 3
The proposed changes, if adopted, will mark the start of an entirely new era in the South
African film and television industry, giving it the opportunity to claim its place not only as one
of the oldest industries in the world, but as one of the largest and most progressive.

End.
Word count (with headings): 816

MPA Editorial
Page 3 of 3