Questions: Q&A Eddie Mbalo: CEO's Column January 2008

The NFVF is the only institution established by state to deal specifically with issues that relate to the film sector as prescribed by the National Film and Video Foundation Act No. 73 of 1997, that makes the NFVF the lead institution on issues of film. But we know that film is also a cross cutting issue that impacts at local, provincial and at a national level. What this means is that the NFVF will coordinate film within the three spheres of government and the NFVF Act guides us in this regard.

At a national level, what this means is that all other government departmental programmes that impact on film, need to be guided by the national strategy as developed by the NFVF. The example of such is the relationship between the Department of Arts and Culture, Department of Trade and Industry, the Department of Education and the NFVF as they all relate to the national film school. This is equally so, for example in the relationship between the Department of Labour and the NFVF as they relate to national skill development in the area of film and as they are guided by the National Skills Development Act.

If you look at the NFVF’s positioning strategy therefore, we say that, the NFVF is the mediator between the interests of the state, society and the industry as they all relate to film issues and all guided by the NFVF Act.

What are the challenges facing the industry in 2008 and into the future?

There are immense challenges, and our immediate ones are:

1. How do we maintain and continue on the successes of previous years? How do we extract value and create confidence on the basis of what has happened before when we won the Oscar (Tsotsi), Golden Bear in Berlin, (U-Carmen Ekhayelitsha), Oscar nomination with Yesterday and the Stallion of Yenenga (Drum) at Fespaco? With all of these successes, have we converted this into long-term sustainable development of the film industry?

   Within that kind of thinking, how do we convince the international film community that this was not a once off thing? With that comes the challenge of finance.

2. As South African filmmakers, we need to know how films are financed throughout the world. We know for instance that, outside of Hollywood and Bollywood, films are financed through different instruments that are developed by governments in order to promote their cultures, peoples and locations.

   The challenge for SA producers is the understanding of how these instruments work in our own territory and how these in partnership with countries that we have signed co-production treaties with, we can co-produce together.

3. Another challenge is how do we develop sustainable businesses in the film industry.
4. With all the above said, how do we ensure that films reach out to audiences in order to have the revenues that will sustain the business? Which means that we need to look at the distribution channels, what informs the stories we tell and the form it takes to tell those stories.

The Value Charter is the strategy document that was adopted by the Film Industry Indaba in 2005, can you tell us why the Value Charter is still relevant today?

In relation to the challenges I have raised, then the Value Charter becomes more relevant because it articulates the aspirations of the film industry and how we could begin to address these challenges by everyone working together. The Value Charter will always be relevant, as long as there is a buy-in on programmes and strategies that are employed and there is a commitment by all stakeholders to work within these strategies.

Issues in the Value Charter will remain relevant for the next 20-30 years, simply because we need to adopt a long term view in addressing the development of a sustainable industry. It is a living document that can be adapted from time to time as we proceed within the changing technological environment.

Stemming from the Value Charter, and NFVF strategies, what will be the priorities for 2008?

1. Our priorities for 2008 are to be more consultative in our approach towards the issues that affect the film industry, our clients and other stakeholders. We honestly want to explain the Value Charter with all stakeholders in order to get it adopted by cabinet as a government programme for the development of film in South Africa in the new financial year.
2. We will to pursue the establishment of the “separate legal entity to invest in film” as articulated by the Cultural Laws amendment Act that amended the NFVF Act. We hope this will address the issue of volumes that need be increased and the distribution of South African product locally and abroad.
3. Finally, we will pursue the establishment of cinemas in the previously under service areas and hopefully begin with Soweto.

Film is said to be a risky business with no guarantees of return on investment, can you explain why the private sector should consider investing in the film industry?

Every time reference is made to film investment by the ‘private sector’, I am always tempted to ask whom we are referring to. We need to be saying to the ‘private sector’ yes, please invest in our films and this is how we are going to bring returns and value for your money. Yes indeed, film is a risky business but that is the reason why everywhere outside of Hollywood and Bollywood films are funded through tax breaks and other incentives that are created by governments. It is normal that for net-worth individuals to invest in film and the arts in general, it is done against the tax that they have to pay. It has become imperative that all efforts are made to convince our government that the development of the arts rests in the creation of a tax regime that encourages the investment in the arts.

In South Africa we have the National Lotteries that distributes funds towards film and the arts in general. The most unfortunate thing is that their funding distribution strategy is also not informed by the national arts and culture development strategy of the country.

It is good therefore to call the private sector to come to the party; it is equally our responsibility to ensure that the private sector gets a return on the investment. Our challenge is to ensure that the film industry is familiar with how film is financed around the world. Producers need to familiarize themselves with how film is financed and how the financial instruments work in South Africa.

In the annual report you suggest that PPP can increase foreign and local direct investment into South African film production? What sort of partners has the NFVF identified as suitable for the PPP initiatives?

Generally speaking, the state should get involved in business when there is general market failure in a particular sector. Public Private Partnerships (PPP’s) therefore work in instances where there is perceived risk and the private sector requires some form of cushioning in order to invest in a sector. It is an agreed fact that the film sector is averse to these risks and therefore calls for PPP arrangements. The areas that require this sort of intervention are production marketing and distribution.

What we want to do in state intervention Partnered with experts and those who are knowledgeable in the private sector about such issues. In South Africa majority have no access to cinema in townships and rural areas, we need to establish cinemas in those areas and again it a partnership between the state, public and private sector it is in this case when the state underwrites losses incurred.

In increasing volumes of films made it requires, public, private partnership, so the entity is another opportunity for PPP’s.

How will the NFVF contribute to effective skills development in the industry in 2008?

The NFVF has allocated more funds into bursary scheme and that is meant to bring more trained people into the film industry. We will continue to do that and we will make it more effective, but also invest in skills that are in greater need. Our strategy for skills development into the future will be guided by an industry analysis, which will assist in identifying areas of investment. What we know is that there is a need for Heads of Departments across the board particularly when it comes to servicing international productions. Other areas that lack in skills are production accounting, production management even producing.

The NFVF has recently completed the National Skills Survey once its results have been certified, we will be able to inform the greater areas of need and guide our skills development strategy.

What is the NFVF’s view on transformation in the film industry?

Transformation in our industry is imperative if it is to develop to meet our strategic objectives. The South African film industry is still very much predominantly white and this needs to change. We need to foster relationships between white businesses and black entrepreneurs who have an interest in investing in the film industry. There is more of it happening already but we need to see more. There is a tendency to equate transformation with training and development when it applies to black individuals. The reality is that whilst the two generally go together, it also begins with giving opportunities those who are already in the system as skilled individuals and can deliver on the job. The legacy of our past also demands that we bring in more people into the system through training and development programs.

Can you explain how the NFVF will redress imbalances that are still prevalent in the industry?

The redress of the imbalances is a continuous and transformative process, and the Value Charter in its nature is a transformative document. If we pursue our aspirations as articulated in the Value Charter then we will begin to transform our industry.

It is important though that, the Value Charter is not equated to other industry charters such as the Mining Charter or as prescribed by the BBBEE codes, which sets target and specific milestones in terms of ownership and control.

How will the NFVF ensure that South Africa produces 15-20 films annually over the next five years consistently?

This is a matter that requires consultation as I have referred earlier. All of us as an industry need to sit down and figure how we will achieve the target of 15-20 films. In the Value Charter we articulate that we must increase the volumes and margins if we are to gain competitive edge. As the NFVF we realise that we have to intervene, consult and negotiate with the industry to achieve this. There are two interventions that we have identified, firstly the establishment of the entity as anticipated by the Act to produce and distribute, which will result in the first Public Private Partnership in the film sector. Secondly, during the last four years we have learnt that slate funding is a way to go and will assist in addressing the issue of volumes that we refer to. Therefore the investment in multiple projects and where we all collaborate during development and production processes will begin to address some of the issues.

The NFVF recently released its findings on a feasibility study for the establishment of cinemas in the townships, what is the next phase for this plan?

The next phase is the development of a business plan, the launch of a pilot project and the identification of sites where these cinemas should be established in the townships.

The ten cinema screens at the Maponya Mall are a welcomed development, but we do not believe they will address all the problems of cinema access in Soweto and other previously under-developed areas. We need a comprehensive strategy of where people will have access to films.

The NFVF Act allows the institution to set up a separate legal entity for investment in film, the NFVF has stated that it intends to submit a proposal to the Minister of Arts and Culture and the Minister of Trade and Industry, as prescribed by the act, can you give us more information on the South African Film and Development Corporation?

At this point, there are different to the establishment of this entity particularly as a state entity. The NFVF has to date developed a model that could address the prescription by the act.

The next step for us is the development of a business plan and we are engaging the IDC in this regard. Once the business plan has been developed it is required that we present this to the Ministers of Arts and Culture and Trade and Industry who would then give authority for the establishment of that entity as required by the act.

The entity would co-exist with the NFVF in its current form but would be a separate legal entity. This would allow for the NFVF funds to specifically focus on developmental issues rather than the current combined activity of attempting to produce commercially viable films and at the same time focusing on developmental films. The intention of this entity would not be to compete but to supplement the work of the independent production sector. If we say we need to produce 15-20 films annually, this entity will assist in achieving this goal.

What is the role of the NFVF in Southern Africa and the continent?

First and foremost, the NFVF’s mandate is to develop cinema in South Africa. Be that as it may, we have to acknowledge that during the apartheid era, South Africa was isolated culturally from the rest of the continent. It becomes important therefore that the NFVF through film plays a role of assimilating us back into the continent through partnerships that will develop.

It is also important that the NFVF works with sister institutions in the continent and also participate at events and festivals like Fespaco in Burkina Faso and Dockanema in Mozambique. It is imperative that as South Africa pursues co-production arrangements with European countries, the same is encouraged to ensure that co-production takes place with the rest of the continent.

It is in that light that the NFVF, DAC and FEPACI hosted the African Film Summit in 2006.
The media has always suggested that South Africans do not want to watch local films, what is your opinion on this issue?

It is not fair to say that South Africans do not want to watch local films when we all acknowledge that there are a number of structural changes that need to take place. One of the issues is that as a country we have not been able to supply the market regularly with films and therefore have not created loyalty within the consumer market whilst developing a cinema going culture. We cannot say that South Africans reject local films if we are not supplying enough films to them at affordable rates and at their doorsteps. In this regard, even our audience development efforts are a futile exercise if we are not able to supply the films consistently.