Out of Africa

The South African film sector is well-positioned to weather the global economic crisis

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CAPE TOWN -- David Wicht needs a glass of water.

He has been talking ceaselessly, alternating between addressing the current state of the South African film industry and answering the incessant ringing of his phone. It is a hot, dry Friday morning in Cape Town, and Wicht, CEO of Film Afrika, is wrapping up the last day of shooting on "Free Willy: South Africa," the latest installment of the franchise about the unique bond between child and killer whale.

Despite the global economic crisis and a host of issues facing South Africa's film sector, Wicht, who returned to the country after the first democratic elections in 1994 with the sole intent of placing South Africa back on the production map following decades of political isolation, is hopeful. Now, after 15 years of democracy that has transformed South Africa's standing in the world community, the country's burgeoning industry is poised to move to the next level.

Wicht admits that it initially took a while to reassure the international industry that it was safe to make films in South Africa. "Africa is not a country," he declares, so a war in Darfur, famine in Ethiopia or civil war in the Congo should not directly impact South Africa; nor should the legacy of Apartheid which is now a distant memory reinforced by the democratic election in April that saw the African National Congress win by a significant margin.

More importantly, South Africa has proven to excel at producing lower-budget films, often making a budget of $10 million or less look more like a $20 million production. Additionally, the combination of excellent locations, top-notch cast and crew and exceptional skills in all departments has consistently delivered superb production value at a fraction of the costs of other English-language film destinations. The sharp decline in the rand against the dollar in the past two years doesn't hurt either.

A recent example is "Amelia," the biopic of legendary American pilot Amelia Earhart, directed by Mira Nair, which wrapped here recently.

An added attraction for international filmmakers is the 5-year-old DTI Tax Rebate Incentive, which enables an eligible film to qualify for a rebate of 15% of its rand spend on foreign productions, or 25%-35% of rand spend on South African films or co-productions. The scheme has been highly praised for its simplicity, speed and efficiency, and as it has helped to attract large numbers of films to the country, it has provided a much-needed boost to jobs and economic growth.

At the same time, other major film destinations, such as Canada and Australia, have dramatically increased their efforts to attract filmmakers by upping their incentives. So while South Africa continues to compete, particularly on budgets of less than $7.5 million, the country will have to make its rebate system more attractive if it is going to retain current production volumes, especially in these troubled economic times.

"We are not immune to the global crunch even though the local industry often considers itself to be somewhat removed from world events," Wicht says. The international financial downturn has sparked massive layoffs at the studios, the merging or closure of divisions and a general review of priorities -- including the postponement and cancellation of several projects.

As a result, Wicht says a new model is emerging: "The shift in production appears to be that middle-range films are falling away, and the emphasis will be on large tentpole blockbuster films and lower-budget films for DVD and cable."

One very noticeable development during the past few years is that South Africa is no longer a mystery to the studios, or international audiences, and an increasing number of films are being produced, and rewritten, for South African settings. But a handful of recently completed projects couldn't have been filmed anywhere but here, including "The Human Factor," which stars Morgan Freeman as Nelson Mandela and focuses on the unifying effect the 1995 Rugby World Cup had on the country. Elsewhere, principal photography has begun on Athol Fugard's "Master Harold ... and the Boys," which originally was banned in South Africa and is scheduled to grace the big screen next year.

"Harold's" executive producer Morris Ruskin says that because of its subject matter the film simply had to be filmed in South Africa, but he adds that the financial advantages also played a major role in the decision to film here.

" 'Master Harold ... and the Boys' is a classic South African story from the country's most famous playwright, so it would have been a crime not to shoot there," he says. "That said, the financial advantages of the region are also extremely attractive. The crews and facilities are top notch while being much more reasonably priced than most other countries. The real kicker came from the Department of Trade and Industry's tax rebate along with South African production company Spier Films' in-house financing. These components brought almost 50% of the finance for the film."

"The rebate is important to the South African film industry because it is currently the only solid piece of funding that can be built in to a finance plan and be counted on 100%," adds "Harold" co-producer Zaheer Goodman. "While other avenues of funding exist, they are all less certain than the DTI rebate.

But while professional crews and effective financing schemes are paying off for international productions, what about South Africa's indigenous film sector? Whether all this activity will be enough to give local filmmaking the jump start it so badly needs is open to debate. Jeremy Natham, producer and founder of Johannesburg-based dV8 Films, is optimistic. "The global downturn is, in fact, an opportunity for African filmmakers to keep struggling to make their films, (and) to strive harder to make better quality films for our own audiences," he says, adding, however, that "South Africa's greatest hurdle lies in lack of audience. Until there is a strong local audience supporting our own films, one is not really able to speak of an industry."

Nathan, who has been involved in the South African film and television industries for nearly 20 years, understands that like most markets, the South African audience is television-based. Until the broadcasting sector gets on board and makes a major contribution to the film industry, he says, the South African film sector will continue to grow at a painstaking rate.

"The complete lack of support from broadcasters like MNET and ETV continues to be a problem," he says, "which producers can only now confront through the ICASA (Independent Communications Authority of South Africa) and other legal routes. Broadcasters in South Africa refuse to see the film industry as important or relevant."

Adds Goodman: "The key improvements that need to come in the sector are reform in the way the state-owned broadcaster funds projects it does not commission, and also in the approach of the privately owned broadcasters in the way they deal with films."

According to Nathan, bolstering the local film scene is a win-win for all aspects of the industry, since more quality pictures coming out of South Africa means more international awareness of everything the country has to offer.

"We need to make films better, cheaper and secure better distribution locally," he says. "Only then, when we have also ramped up the number of films being made, will we start to see the world take notice of our top quality films and filmmakers."

Moonyenn Lee, South Africa's leading casting agent, agrees. "When it comes to making our own films, there is a general lack of vision. Local film is an investment in your country; it's an export."

Many in the industry feel strongly that unless strategic intervention is made by leadership in the industry and government, the South African film sector will not see much change over the next 10 years. Even though the broadening of the DTI Rebate Incentive this year to include local and international productions has been the single most positive factor supporting the production sector, the current government does not recognize films as a useful contributor to national culture. Ironically, the Apartheid government understood the value of an indigenous film industry (albeit a racist one) and pumped millions into an industry that made up to 30 films a year. But as Nathan points out, local organizations like the National Film and Video Foundation, a small statutory body mandated by a progressive act to spearhead the equitable growth and development, continue to do great work with few resources and should be given more backing.

"(It is true) that the number of indigenous films coming out of South Africa on to the international stage has slowed," Goodman says. "What has happened is a sort of burnout and regrouping. Five or six years ago, a lot of films were made at budget levels that were not matched with the sales the films were able to generate and investors lost money, so there was a natural slowdown. At the same time, a new pool of talent has emerged and they are determined to make themselves commercially viable on the continent before heading out in to bigger more international films. These are filmmakers with unique voices and they are honing their skills. So while the output has dropped, I think we have seen improvements in the overall quality of the films being made. What is set to happen next is for a funding model to emerge to support these new talents, and once they crack their home markets, they will quickly move in to broader international markets."

Says Nathan: "We as an industry, together with government, need to assess the weaknesses everywhere, to include development, production and most importantly distribution, in order for the film industry to start to deliver not only critical acclaim but also strong business models."

But, as Wicht points out, project development is the riskiest part of filmmaking, and one which few local companies can afford.

"Development funding is almost nonexistent," he says. "The bulk of films currently being made in South Africa (outside of television) were developed elsewhere."

Indeed, local production companies like Film Afrika receive a regular stream of local scripts but will only green-light a project if it has international legs.

So where does South Africa go from here? It was, after all, just three years ago that the South African drama "Tsotsi" took home the best foreign-language Oscar. Back then, the sector looked primed to take the world by storm, but these days, amid a global financial crises that continues to wreak havoc in much larger markets, steady progress and a healthy dose of hope is as good as an Oscar.

"We are optimistic about the future," Goodman says. "The reality of the global economic situation is that South Africa remains the best value for money production destination on the planet and that is translating in to a sustained boom in the sector here. In fact, there appear to be more films on the lookout for savings and so South Africa is really well positioned in terms of attracting foreign films."