Film, News & Commentary

Film: Where to the Aussie industry?

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The “new” Australian film industry is 45 years old. It was funded following a push by arts-based groups to the Gorton government on the back of the successful ’60s TV “Make it in Australia” campaign and the then prevailing zeitgeist which equated American political imperialism with Hollywood cultural imperialism.

Bi-partisan political support saw the establishment of the Australian Film Development Corporation in 1970 and then the Australian Film Commission in 1975 in an endeavour to create both a film culture and a film industry.
Australian audiences, deprived of home-grown stories on their screens since World War 2, enthusiastically embraced the blend of populist and specialty cinema that the AFDC, and the AFC  co- funded in its first years.
Commercially skewed titles including The Adventures of Barry McKenzie or Man from Hong Kong, Alvin Purple, Mad Max or my own Patrick along with more specialised titles like Sunday Too Far Away, Caddie, Picnic at Hanging Rock, My Brilliant Career and others built careers for directors like Peter Weir, Bruce Beresford, Richard Franklin, Gillian Armstrong, Fred Schepsi and Phillip Noyce.
Today some look back fondly on the 197os to 1980s as the Golden Age of Australian cinema. But during that period there wasn’t any endorsement or nurturing of producers who could develop and package subsequent productions by these local film makers.
Consequently the majority of the first wave of Australian directors progressively and inexorably moved to the US by the mid ’80s to pursue the bigger budgets, fees and production palettes that American cinema provided.
As the AFC developed into the early ’80s the industry engaged in the great debates about “Significant Australian Content” and “Australian Voices” versus the making of films for both international and local audiences. Those debates were largely won by the cultural elitists.
But the emergence of 10B and 10BA funding in the ’80s significantly freed up  producers’ choice of subject matter and resulted in films that were the most financially successful in Australian cinema history and included Crocodile Dundee 1 & 2, The Man from Snowy River, Mad Max 2 and Young Einstein.
In 1986 Crocodile Dundee helped drive the Australian share of the overall Australian box office take to 24% – a figure that  has not been achieved since.
But government bureaucrats at the AFC – now firmly entrenched on long term career paths – reacted  extremely negatively to the way in which 10BA funding eroded power from their evaluation committees and put it squarely in the hands of producers.
When negative media and political comment surfaced in 1987/1988 about 10BA financiers and the international video driven presales industry collapsed  another government inquiry resulted in the  shut down of 10BA.  In its place came the direct funding entity the Film Finance Corporation. Its selection of productions in the ’90s – largely chosen through an internal evaluation process resulted in a decade and a half of productions (with half a dozen exceptions) that almost no Australian cinema-goer went to see.
It was in this 15-year period that Australian films developed a reputation that still largely prevails today among young multiplex cinema goers; the protagonists and stories were dark, depressing, nihilistic, unattractive and that nothing life affirming or entertaining would be found within these Australian films.
In the last few years of the Film Finance Corporation regime and the following half decade of its successor– Screen Australia -the funders tried to address that perception – both in choice of productions, some tolerance of genre that extended to action, thrillers and sci- fi  and a tentative embrace of co-production as they accepted that Australia is only has six to eight per cent of the world market share.
At the same time the producer offsets were introduced including a 40% rebate for feature films and these dollars were matched by producers with Screen Australia investment.
As a result a few titles emerged aimed for multiplex audiences (and one generally per year has proved successful in Australia) but the majority of funded titles remained specialty art house titles, albeit less bleak than those of the ’90s.
Recently films including Railway Man have succeeded in hitting the bullseye in that space and producer Emile Sherman has leveraged his Oscar dividend from The King’s Speech into a number of productions for film like the upcoming Tracks (and television’s Top of the Lake) that have established his company Sea-Saw at the top of the non- US specialty heap.
But unfortunately for most Australians under 50 a memorable Australian film experience in cinemas remains elusive.
What could we have done differently and is there still time to change?
We concentrated in the main on producing films which either remain specialty titles competing in a very crowded worldwide market place or populist titles that even when they are breakouts in Australia (Tomorrow When the War Began, Red Dog, The Sapphires) have zero or extremely limited international theatrical appeal.
We validate our international exposure via film festivals and critiques rather than box office.
We quite rightly congratulate ourselves for the international and awards success of Blanchett and Crowe etc in non-Australian titles but until very recently we have made no attempt to create an industrialised film industry in tandem with a cultural one. Unlike France, where Luc Besson produces films like Taken in English that take on the world market (as does Constantin Film in Germany, or Working Title in the UK), Australia has consistently argued we cannot compete with the Americans in the film mainstream, citing budget limitations, lack of expertise or lack of interest from the funding bodies. There has been a significant failure of entrepreneurial nerve.
This defeatist attitude is not universal and recent productions like I Frankenstein, The Great Gatsby, the spectacularly successful The Lego Movie and the upcoming Mad Max Fury Road suggest some reconsideration is taking place.
And entities like Village Roadshow, Icon and more recently Animal Logic are global success stories.
But there has never been a conscious overt direction from the funding bodies that these kind of productions are valuable and should form a fully supported strand of what they fund. In the instances when they have been funded it has been done reluctantly and in an ad hoc manner.
A separate producer offset has been created to support and attract footloose productions to Australia such as Wolverine or the recent Unbroken and these titles support our visual effects and below the line talent,  but generally they don’t create sustainable production businesses or retain intellectual property in Australia.  Their occurrence is also dependent on factors outside Australian control including currency exchange rates.
The capacity for Australia productions of similar budget range developed and produced by Australians in Australia to create jobs and return investment and profit is significant. They could provide a canopy for the entire film production community in tough times.
Indeed it was the intention of the those who drafted the producer offset that it would enable bigger budget Australian productions, but the emergence of the GFC and international film industry structural problems precluded that.
Since then the Screen Producers’ Association has been pushing the federal government to increase the producer offset levels for  feature films which would compensate for international market shifts.
So far those efforts have been without success, and given the current economic reality it is hard to see progress being made on that front at least in the next two years.
In a time of government subsidy phobia, and notwithstanding the $2.5 billion plus dollars the film and TV industry have received in the last 45 years, we can no longer assume that such subsidy will either continue or retain bi-partisan support.
If we had built an industrial film industry complementary to our cultural industry we would have established sustainability and increased success. There is still time to assist producers who aspire to that space but it requires an attitudinal shift from producers and for Screen Australia to adjust its funding processes accordingly.  If that happens the Australian industry can connect with audiences, festivals and critics worldwide, and it will certainly endure.
[box] This article is edited from an address by Antony Ginnane commissioned by Currency House publishing for a forthcoming Arts and Public Life  breakfast. [/box] 

6 responses to “Film: Where to the Aussie industry?

  1. The reason for Federal funding for Australian films was cultural. The idea that we should have developed an “industrial film industry” to complement our “cultural industry” is fanciful in our English speaking market with 22 million people. The Federal government under the Producer Tax Offset introduced in 2007 should be asking why we are subsidising Hollywood with a 40% tax rebate (i.e. non recoupable gift) for films such as The Great Gatsby, The Lego Movie and a list of others which are made and principally owned by Hollywood studios or mini-major US studios. This is an all out manufacturing subsidy, short term and with no future and local companies should not be predicating their business plans on such a model. Other parts of Australian manufacturing would love a 40% cash gift from government. Our cultural industry which Mr Ginnane has repeatedly derided has produced some fine films and these are the films which have redefined Australia culturally and found good audiences. Art house relegation of most of our films is far more a consequence of our size and language and domination by Hollywood than it is of our choice of productions although I would agree many of our films lack obvious market potential in our own market and we should be asking why. The United States won the cultural wars about 45 years ago which prompted the creation of film subsidy in Australia. And every other nation bar China and India have seen their national film industries dwindle including manufacturing giants like Germany and Japan.
    Tax incentives get rorted by producers and lawyers as happened with the 10BA deductions. The Producer Offset is now giving 40% tax rebates to films which any reasonable person would recognise as Hollywood films. As a vehicle for Australian story telling it has not worked and just added huge cost to producers who have to borrow money at exorbitant cost against the tax rebate which they receive on completion of their film. As unpalatable as it may be for Mr Ginnane direct government funding is the most financially efficient way to get a film made. It may irk some producers but dealing directly with the bureaucracy with a model based upon the strength of the usually small market elements the producer brings to the table remains the best choice. It must be predicated on bureaucrats who must act transparently and are not allowed to build little empires of taste. A conscientious board chosen for their expertise and not political connections should be able to prevent this. It is perhaps time for an objective critique of the various subsidy models available but any analysis would quickly conclude that an ” industrial film industry” model never was and never is going to be viable in Australia.

  2. What I’d like to know is why our film funding bodies seem to think our culture consists entirely of heroin addicts, Aboriginal petrol sniffers, and bogan criminals.
    If Screen Australia had funded The Lego Movie, they would have insisted that the main character be a lesbian in a wheelchair who converts to Islam after being molested by her geography teacher.
    If Screen Australia had funded The Great Gatsby it would have been set in an inner city squat, where an ethnically diverse group of heroin addicts shoots up and pretends to be attending a posh party.

  3. I think Homer Simpson summed it up best ‘Less artsy more fartsy’. I have concluded that a successful Australian film needs one or both of two things: 1. Overseas recognition at a film festival before release (Animal Kingdom, The Sapphires, The Great Gatsby, Samson & Delilah) 2. A cute animal (Red Dog, Babe). While these rules do not apply to all films (Australians seemed to be the only people in the world that wanted to see a film called ‘Australia’) they apply in most cases.

  4. We still on that art versus commerce, high art vs low art, filmmaker vs audience, argument? I never really understood the arts bureaucratic approach which puts taste makers in the driving seat of an industry that on the one hand profess to know precisely what is required of a successful film but on the other hand (particularly when asked to justify the outcomes of their decisions) are quick to fall back on the “nobody knows” argument – thanks William Goldman for keeping the film industry in the dark ages.
    Here’s my two cents because I’ve got nothing better to do than sit and stew in my own bitterness because I have not yet been able to access to government gravy train…
    What could we have done differently?
    When government dropped the capital cost allowance from 150 to 133 to 120 to 100%, we could have fought to keep the other side of the incentive – the 50/33/20 tax free threshold on income earned from a film. According to Michael Porter and also the dudes who wrote/filmed Freakonomics, you really have to think about what it actually is you are incentivising. 10BA gave such huge incentives to avoid tax by spending money on film investments to the point where you didn’t actually need to make a great film, or indeed make a film at all, in order to still benefit from the incentive. However, you actually had to earn money in order to get the other incentive. The only way to earn money from a film is to make a good one, negotiate good deals, market the film successfully. But this side of the incentive was often forgotten and “too hard”.
    The screen agencies could have funded self distribution and invested in the entire product development process including commercialisation (i.e. marketing and distribution). They could have set up a distribution arm. Everyone who really knows this industry knows that the engine is in distribution, not in production, and yet for years the government has been saying “market failure” and its true – the market has been failing, the market being pivotal buyers. If government changed that mechanism, as the 1973 Tariff Board Enquiry suggested, or indeed the 1928 Royal Commission, then maybe the landscape might be different. Now we are seeing through the Enterprise Scheme and the Producer Offset, distributors vertically integrating backwards (Hopscotch, Madman, Beyond and Village a few years before) because its becoming viable to do so. Yet, ozzie producers are prevented from accessing government grants (and they are grants, i.e. gifts, non recoupable) for the market to not amend a failure but to take advantage of an opportunity. Indeed, the market place are not only the gatekeepers to market itself but are also, thanks to government policy, the gatekeepers to government indirect support through the Producer Offset itself. A distributor attached is a requirement to access the 40% offset with a preliminary certificate, even though most distribution agreements come with a “get out of gaol” free clause and are often set up so the the distributor carries very little downside and a shitload of the upside. The same “at risk” rules for 10BA productions did not apply for distributors who are able to mitigate their downside through pre-sales, all rights acquisitions (even if they never use all of the rights), phased payments, and tiered/timed return structures. All this sanctioned by government policy. Who are they supporting again?
    We could have allowed producers to keep an equivalent equity in their project based on the degree of pre-sales brought to the table, like normal investments do, instead of discounting them as the government agencies do. A property developer who pre sells half his/her units doesn’t raise equity for the other half, only to be told that the half he previously sold has to be discounted when calculating equity shares in revenue. But that is what happens in the Australian film industry. You see, the whole argument for a producer offset being needed to increase producer equity in their own projects is a furfy. If producers thought – I have sold 50% of what I need to make this film in presales and DG’s and that means I own 50% of the revenues – then there is an incentive to go out and make more pre-sales, make better films, and do better deals. But the screen agencies discount this 50% and prior to the Producer Offset, if the producer wanted equity in their film then they have to reduce their meagre fees or mortgage their house. Neither of which are good incentives nor build core competencies.
    But all that is by the by now. The world is changing at a dramatic pace and its time for bed. None of it really matters anyway because its an industry that doesn’t need to ask the tough, probing questions, or think strategically, because “nobody knows” anything.

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