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SPADA 09: the truth is out there

In a session cruelly programmed against Matthew Weiner’s second appearance, Film NZ’s acting CEO Sue Thompson presented the double act of Tony Eaton, Suzanne Shively and Tim Thorpe presenting Stats on Stats, useful information about where useful screen industry statistics can be found, most of them – usefully – for free.

On Piracy
Possibly, if not surprisingly, this was the worst-attended session of the conference. It was a shame not to see more (any?) content creators in attendance, as they are the ones losing revenue from illegal downloading – but maybe they felt there was enough bad news around this year and wanted cheering up.

Piracy has long been with us, and Sue reminded us of the 10-80-10 rule, which states that 10% of people will commit illegal activity regardless of consequence, 80% will (occasionally) commit illegal activity if the opportunity is there and minimal risk is perceived, and 10% of people never commit illegal activity.

Tony Eaton of the NZ Federation Against Copyright Theft (NZFACT) reminded the attendees of previous research showing that the New Zealand industry lost $70.8 million through piracy in 2005: $27.1 million for the six major Hollywood studios (who fund NZFACT); and $43.7 million for local film and television makers. Sione’s Wedding is a well known case which lost an estimated $1 million due to copyright theft.

Whilst it’s easy to argue that illegal downloading should be stopped, it seems strange that NZ filmmakers and TV networks – with their very limited output – are losing so much more potential revenue than the combined output of the major Hollywood studios.

The figures relate to 2005, when both King Kong and Narnia were released, so it’s possible NZ losses were higher than average for this particular year. Local television’s losses have presumably also declined since then, with the advent of free video-on-demand services from TVNZ and TV3.

Tony warned that New Zealand faced losing more revenues due to copyright theft as broadband reach and speeds increase, making it easier for the 80% to ‘get away with it’.

NZFACT is backing an amendment to the Copyright Act, Section 92A, which would give copyright holders the ability to police any infringement without resorting to the courts. Amongst other things, it would enable copyright holders to send written warnings in the first and second instances of copyright breach and enforce internet service termination as a last resort.

Tony noted that NZFACT has already taken 44 people to court for copyright theft and has a 100% success rate in seeking convictions. This has, amongst other things, resulted in 8 deportations.

On numbers
Tim Thorpe from Tim Thorpe Consulting noted how important it is to have reliable statistics on the sector and encouraged members of the production community to continue to respond to requests for information for such reports as Statistics NZ’s annual Screen Industry Survey.

There are, he said, many sources of information available to screen producers and others, many of them at no cost, such as Box Office Receipts via the Motion Pictures Distributors Association.

Tim noted that there are a number of initiatives under way to improve the availability of meaningful statistics to the sector. This includes the review of the NZ Film Commission, its current approach to providing information and research and whether any changes should be made to meet the needs of filmmakers and audiences. Tim encouraged those with particular data needs or sources of information to get in touch with him.

New Research
Susan Shively, a partner at PricewaterhouseCoopers (PwC) presented information from Economic Impact of the Film and Television Industry, commissioned from PwC by NZFACT.

According to the research, the screen industry in 2008 contributed $2.54 billion value added to the New Zealand economy, once multiplier effects have been taken into account. It created 22,000 full-time job equivalents and over $6 billion total gross output. The industry’s total value added was nearly 1.5 percent of New Zealand’s gross domestic product.

The authors note that it is likely that the contribution for the industry will continue to grow in 2009, trading against the recession, due to such epics as Avatar, Tintin and The Hobbit which all have elements that were or will be produced in New Zealand. They quoted statistics to show that the digital production sector in New Zealand has now grown larger than the wine sector.

A word of caution should be attached to the study as, with most studies of this nature, it is designed for a particular purpose. In this instance the sector has been defined to include both retail and rental sales of DVDs and videos which makes the sector seem larger than normal.

Additionally, the comparison with the wine sector is skewed as the wine industry statistics do not include retail sales or distribution. Export receipts for wine exceed the screen industry, a fact not noted in the report.

Now that we have informed you about the excitement you missed, we look forward to greater numbers attending similar sessions in future.

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