Why Australia's Film, TV Business Has Hollywood Buzzing Again

Warner Bros. Entertainment
"Happy Feet Two"

The boom has sparked a boost in the quality and diversity of production and an increasing number of international projects and co-productions.

There's a frisson of excitement around Sydney's Fox Studios Australia, the likes of which hasn't been seen since X-Men Origins: Wolverine wrapped years ago. Leonardo DiCaprio and Tobey Maguire sun themselves during breaks from filming Baz Luhrmann's buzzy remake of The Great Gatsby, while extras -- men in black-tie evening wear, women in exquisite gowns and dresses -- stroll the 1920s-appointed lot.

At the same time, The X Factor Australia and Celebrity Apprentice are filming in smaller studios nearby, and Alex Proyas' dark epic feature Paradise Lost is in preproduction, with stars Bradley Cooper and Casey Affleck promising archangels and demons in January. Across town, director George Miller is putting the finishing touches on Happy Feet Two,  and a couple of kilometers from the Fox lot is See-Saw Films, where Emile Sherman's best picture Oscar for The King's Speech lives -- the first such prize won by an Australian.

STORY: From 'Great Gatsby' to 'Happy Feet Two': 7 Hot Movies, Series Coming Out of Australia

Australia's burgeoning production slate is billed as one of the world's biggest and most diverse, from indie films to studio pictures and from hard-edged festival fare like Julia Leigh's Sleeping Beauty to Kriv Stenders' 2011 breakout hit Red Dog, the eighth-highest-grossing Australian film of all time at the local box office.

What's driving the boom?

For the most part, it's three key incentives. Australia's locations incentive was increased to a 16.5 percent rebate in 2011, and its postproduction, digital and visual effects (PDV) incentive recently doubled to 30 percent. But only growing in popularity since its creation in 2007 is the producer offset, which provides a 40 percent tax rebate for features and 20 percent for TV projects with significant Australian content, which can include  a mix of creative teams, cast and an Australia-based shoot.

Many here say the incentives have boosted the quality and diversity of production and, vitally, attracted an increasing number of international projects and co-productions. More importantly, they are bringing home Australian talent to make those projects.

"It's had a major role in attracting internationally recognized Australian talent back home and has shifted the level of production to more sophisticated, robust feature films," says Tania Chambers, the outgoing CEO of agency Screen NSW. "High-end studio fare has been quite dramatic and fundamental to the strength of the Australian screen industry, so the impact of the U.S. dollar has been minimized while the indie midrange sector has woken up."

Adds Brian Rosen, president of the Screen Producers Association of Australia: "The idea of the producer offset is to build relationships with people who are well-financed, which really means Hollywood or some of the major players in London and Europe like Gaumont and Pathe. It was always going to take time for that to happen, but we are getting there."

Some using the offsets are working to meet the notion of what an "Australian film" means in 2011. Case in point: Who would have thought an adaptation of  F. Scott Fitzgerald's great American novel Gatsby, with its Long Island setting and flapper-culture backdrop, would shoot here? 

With the offsets, state government incentives and Luhrmann's insistence that Gatsby be made in his hometown, Fox Studios Australia is bringing to life 1920s America and the fictional towns of East Egg and West Egg while still qualifying as an "Australian production":  Luhrmann's creative team at his Bazmark Inq shingle, including the writers, department heads and producers, is made up mostly of Australians, and key roles are played by Aussie actors Joel Edgerton and Elizabeth Debicki.

Australia's secretive tax laws prevent projects that receive offsets from being identified, but pundits say Gatsby's reported $120 million budget will actually be $80 million thanks to incentives. That's more than enough to overcome the Australian dollar's high value against the U.S. dollar, which has proved difficult for local production the past few years.


Indeed, of the big-budget, studio-backed productions to call Australia home during the past two years, it is believed that only Fox's new sci-fi TV series Terra Nova could not take advantage of the offsets because it's under the creative control of U.S. producers. 

According to DreamWorks Television co-head Justin Falvey, the decision to shoot the series here was based on the producers' preference for the look of the Australian rainforest, the locations incentive and available nearby studio space.

It also has the imprimatur of series director Jon Cassar, who tells The Hollywood Reporter: "I've filmed all over the world, and I'm enjoying shooting in Australia. The look of the place is very different, and that's what we were striving for, particularly moving away from Hawaii. And the crews are really solid; for me, that's a big sigh of relief."

But while facilities like Fox Studios Australia, Village Roadshow Studios on Queensland's Gold Coast, Melbourne's Docklands Studios and the new Adelaide Studios are beginning to host more big-budget fare, a raft of midrange projects -- including many of the 24 Australian films set for release during the next 12 months -- have kept the local sector busy in 2011.

Most notable on that crowded calendar are Simon Wincer's The Cup; Stephan Elliott's A Few Best Men; P.J. Hogan's Mental; the surfing movie Drift, starring Sam Worthington; Kieran Darcy-Smith's debut feature Wish You Were Here, starring Edgerton and Teresa Palmer; the musicals Goddess, starring Irish pop singer-turned-X Factor Australia judge Ronan Keating, and The Sapphires, with a mostly indigenous cast; and Jonathan Teplitzky's The Railway Man, starring Colin Firth. And down in Victoria, Stuart Beattie will film I, Frankenstein, starring Aaron Eckhart, in 2012.

Meanwhile, the visual effects sector has ramped up significantly with the doubling of the PDV incentive. Proyas' Paradise Lost has a massive 78 weeks of effects work scheduled in Australia under the aegis of L.A.-based wizards Digital Domain, which has used the incentives as an opportunity to open its first offshore arm here.

That means the 500 or so effects specialists working on Happy Feet Two can move to Paradise Lost, stopping the brain drain that often occurs when big projects finish.

But if features are the sexy end of the business, television is the workhorse here.  Among a growing slate of small-screen projects with international flavor is Jane Campion's return to TV with Top of the Lake, an atmospheric mystery series to be shot in New Zealand and produced by Sherman and Iain Canning, with money from BBC, Australian Broadcasting Corp., TV3 and Screen Australia.

And U.S. producers are joining their U.K. counterparts like FremantleMedia, Shine and BBC Worldwide in investing in Australia, eyeing the TV offset for its commercial benefits and local partners for their creative output.

NBCUniversal International is the first U.S. major to gain a foothold here, buying a majority stake in high-end TV drama and film producer Matchbox Pictures this year. It was the company's first investment in a production entity outside the U.K.

Announcing the deal, NBCU president of international TV production Michael Edelstein said Matchbox "shares our vision to produce amazing television in Australia and around the world. Matchbox's team have great taste, with an inventive ability to tell compelling stories."

But Rosen warns against complacency. The next step, he says, is to make more films in the $30 million to $50 million range. "We have to move from the cottage industry of doing one film every so often to moving into the space being vacated by the studios," he says.

Pictured below: "Drift"