South Africa's film industry

South Africa has a vibrant, growing film industry that is increasingly competitive internationally. Local and foreign filmmakers are taking advantage of the country's diverse, unique locations – as well as low production costs and favourable exchange rate, which make it up to 40% cheaper to make a movie here than in Europe or the US and up to 20% cheaper than in Australia.

The jewel in the industry's crown is Tsotsi, Gavin Hood's gritty drama about a young gangster in Soweto, near Johannesburg, which won an Academy Award for best foreign language film in 2006.

The award, coming on the heels of an Oscar nomination for Yesterday, the story of the struggles of an HIV-positive mother, and U Carmen E Khayalitsha, a Xhosa-language film which won the Golden Bear award at the 2005 Berlin Film Festival, has cemented South Africa's reputation for creative, quality film making.

Building on this reputation, a string of successful big budget international productions have been filmed here, including Blood Diamond with Leonardo DiCaprio and Lord of War. Starring Nicholas Cage as a global arms dealer, Lord of War showcases South Africa's wealth of breath-taking locations - with Cape Town appearing as 57 different settings in the Middle East, Afghanistan, Bolivia, Sierra Leone and elsewhere.

Opportunities abound, with the makers of movies, commercials and other productions being attracted by South Africa's highly skilled film crews and technicians, excellent technical capacity and infrastructure - as well as the good weather.

CONTRIBUTION TO THE ECONOMY

The government has identified the film industry as a sector with excellent potential for growth. Although South Africa's contribution to global output stands at a mere 0.4%, the local film industry is getting stronger all the time.

In 1995, when the country first became a viable location venue for movie and television production, the industry employed around 4 000 people. This has since grown to around 30 000 people, with further jobs - and earnings - created in film-related transport, hospitality and catering.

According to the Department of Trade and Industry, South Africa's entertainment industry is valued at around R7.4-billion, with film and television generating more than R5.8-billion in economic activity each year.

And according to a recent economic impact assessment study commissioned by the Cape Film Commission, the industry has a direct annual turnover of more than R2.65-billion and contributes an indirect annual turnover of more than R3.5-billion to the country's gross domestic product (GDP).

The benefits of a burgeoning film industry are clear, especially when it comes to bringing in foreign exchange. Co-productions with international companies result in the direct investment of millions of rands into the economy.

South Africa has signed co-production treaties with four countries: Canada, Italy, Germany and the UK. This means that any official co-production is regarded as a national production of each co-producing country, making it eligible for any benefits or programmes of assistance available in either country. South Africa also has a memorandum of understanding relating to film with India.

TELLING SOUTH AFRICAN STORIES

South Africa has a long history of film making, beginning with the shooting of the first-ever newsreels during the Anglo-Boer War at the turn of the previous century. African Mirror, the weekly cinema newsreel, was launched in 1913 and ran until the 1980s. South Africa's first feature film, The Kimberly Diamond Robbery, was shot in 1910.

Much of the country's cinematic history, entangled with its apartheid past, has been culturally exclusive. Since the advent of democracy in 1994, however, South Africans have been reclaiming their lost histories.

The government has stressed the importance of film in building the country's heritage by telling its own stories, and has set about providing an "enabling regulatory framework" to encourage the production of local content.

South African broadcasters are obliged to meet legislated local-content quotas, which has resulted in an increased demand for local programming. More than seven South African daily dramas or soap operas are produced in South Africa.

"It is a national moral imperative to create platforms for ordinary South Africans to be able to bear influence in the expression of their own images," says Eddie Mbalo, chief executive of the National and Film and Video Foundation. "In this way, we, as an industry, can contribute to furthering our democratic ideals and creating prosperity."

DEVELOPMENTS

South African broadcasters have begun exploring opportunities to distribute local productions in the rest of Africa through direct sales and a form of bartering, where content is exchanged for advertising airtime. This is expected to increase the demand for locally produced television content.

International filmmakers and producers will also be targeted by a R430-million, Hollywood-style film studio being built on the outskirts of Cape Town. A public-private partnership, the fully fledged sound stage complex - designed to meet the needs of both local and international film makers - is expected to be completed by 2010.

The shareholders in the Cape Town Film Studios project - formerly known as Dreamworld - include Videovision, Sabido Investments, the Rico Trust, the Helderberg African Chamber of Commerce, and Western Cape trade and investment agency Wesgro.

INCENTIVES AND SUPPORT

The state, via the National and Film and Video Foundation, the Industrial Development Corporation and the Department of Trade and Industry, is the chief investor in the local film production industry.

National Film and Video Foundation

The National Film and Video Foundation (NFVF) helps the industry access funds, promotes the development of South African film and television audiences, develops talent and skills in the country - with a special emphasis on previously disadvantaged groups - and helps filmmakers represent and market their work internationally.

The NFVF offers funding for the production of films and documentaries through repayable loans or grants. It supports South African-owned production companies, and prioritises projects or organisations of national importance and proposals that contain local content and have empowerment or training components.

It also funds education and training through various bursaries; awards development funding; and supports applications for marketing and distribution funds, allowing independent producers and distributors access to test screenings and film launches.

By March 2007, the NFVF had awarded R26-million in grants.

Industrial Development Corporation

A state-owned development financing institution, the Industrial Development Corporation (IDC) seeks to create a sustainable film industry in which skills have been transferred to people from groups disadvantaged under apartheid and "homegrown" films are made and watched by South Africans.

The IDC's Media and Motion Pictures Strategic Business Unit funds film, broadcasting and post-production projects. Assistance is usually in the form of loan finance. Its minimum participation is R1-million and no more than 49% of a project.

By June 2008, the IDC had invested more than R500-million and funded more than 30 films in the country.

Department of Trade and Industry

The Department of Trade and Industry (DTI) offers industry-specific incentives to encourage local-content generation as well as attract international productions.

The DTI announced revised film and television production incentives in March 2008, dropping the qualifying threshold to open the door for lower-budget productions from emerging filmmakers.

The South African Film and Television Production and Co-Production Incentive offers financial support to South African productions and official treaty co-productions with budgets of at least R2.5-million (about $310 000). The incentive offers a 35% rebate on the cost of films and full-length television programmes for the first R6-million ($745 000) spent and 25% for the remainder of production expenditure.

The Location Film and Television Production Incentive aims to attract big-budget overseas film and television productions. It offers a 15% rebate to foreign-owned productions with a South African spend of at least R12-million (about US$1.5-million).

Both schemes, set to run until 2014, cap the rebate at R10-million ($1.24-million) per production.

Other DTI initiatives aimed at developing the industry include:

  • Capacity development for emerging production companies.
  • Development of writers and editors through the DTI's Enterprise Development Programme.
  • The establishment of five pilot programmes in different locations to address distribution infrastructure, local content and audience expansion.

Regional film commissions

Three regional bodies - the Cape Film Commission, Gauteng Film Commission and Durban Film Office - have been set up to market their cities as location destinations and create enabling environments for film makers.

The commissions offer a range of help and advice. The Gauteng Film Commission's support programmes, for example, include assistance with funding and finance facilitation, as well as negotiation of co-productions and partnership projects with broadcasters.

Tax incentives

The South African Revenue Service, through Section 24 F of the Income Tax Act, grants a deduction of the production cost of a film to the film owner. It excludes any deductions for production costs, or any allowances relating thereto, under any other provisions of the Income Tax Act, providing for a film allowance instead. Section 24F also provides that a film owner may deduct a film allowance from his income.

Article last updated: June 2008

SAinfo reporter. Sources:

Using SAinfo material

Would you like to use this article in your publication
or on your website?
See: Using SAinfo material

Print this page Send this article to a friend