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SPADA09: Anthony I. Ginnane

Good morning.

Today I want to discuss, with primary reference to feature film and television drama, the history of co-production activity between Australia and New Zealand over the last 20 years and to consider why there has been so little trans-Tasman engagement.

I will also briefly consider the benefits of co-production activity and why now, in 2009, given the state of the world wide industry, co-production interaction may be more important and helpful than ever before.

Note that in this address, when I use the term ‘co-production’, I am excluding productions that may have simply involved investment from both countries; or production companies from both countries working together on a purely private contractual basis.

Therefore cross Tasman productions such as those John Barnett and I engaged in during the early 1980s are not the subject of this analysis.

What I am restricting myself to are film or TV productions made pursuant to, and in accordance with, the current Memorandum of Understanding between the New Zealand Film Commission and Screen Australia; being the 2 competent industry authorities, dated December 1994. This MOU replaces an earlier MOU from 1990, which in turn replaced a MOU dating from approximately 1987.

This Memorandum of Understanding – which is a government to government agreement of less that Treaty status (both New Zealand and Australia have formal co-production treaties with a number of other countries) basically has the effect of conferring, subject to compliance with the terms of the agreement, dual nationality on productions made pursuant to it.

What this means is that such a film or TV program is able to potentially secure whatever funding benefits are applicable in both jurisdictions and that the film or TV program satisfies local content or spend requirements of TV broadcasters in each country.

The MOU between Australia and New Zealand, like other MOUs and co-production treaties, lists key creative elements (including writer, director, producer, principal artists etc.); but unlike most other MOUs this MOU does not specify a minimum participation level by either Australia or New Zealand. Most other treaties range between a minimum of 20% to 40% or a specific points-based formula. However there is a requirement that a balance of creative and financial elements be achieved.

The Australia/New Zealand agreement also provides for a concept known as ‘twinning’. It is the only MOU or Treaty to which Australia is a party that allows for twinning.

“Twinning” makes the balancing of the creative and financial arrangements easier in that it allows 2 films to be paired that respectively have significantly more New Zealand or more Australian content than might otherwise be allowed. The 2 films are assessed together for the purposes of achieving a financial and creative balance.

Given the flexibility of the Australia/NZ MOU, one would have thought it would have been widely used.

I was therefore surprised in researching this topic – even though I was subliminally aware of it – to discover that between 1988 and 2009 there have been only 9 official co-productions and that 6 of those took place between 1988 and 1993.

Why has there been such an underutilization of this financing mechanism?

And, another controversial consideration arises from this underutilization: The unfortunate trans-Tasman legislative and judicial battle surrounding “Project Blue Sky” which still raises hackles and creates rancor within the Australian and New Zealand production community, could largely (or, perhaps, totally) have been avoided if projects in contention had been made as co-productions.

I think there are a number of reasons why we have collectively failed to make as much use of the MOU as we could have. Some of them are easily able to be addressed; some less so.

One factor in the underutilization arises out of prevailing orthodoxies within the Australian and NZ funding bodies – the New Zealand Film Commission and the Film Finance Corporation (now Screen Australia).

It is all very well for a project to obtain dual nationality, but for feature films, for example, the primary benefit of that is the ability to apply for funding to NZFC or Screen Australia. That funding is discretionary and, certainly during the period during much of the 1990s in which Catriona Hughes was CEO of the FFC, co-productions were very much out of favor.

There is much irony in this, given that, of the 248 films in which the FFC invested over its 20 year existence, only 11 returned their investment and made profits for the FFC and other investors; and 2 of them, “Green Card” and “Sirens”, were co-productions.

Anecdotally, I don’t believe the NZFC has such a pronounced anti co-production bias as the pre Brian Rosen FFC, but it certainly shared with the FFC another concern that made co-production more difficult and that was a reluctance to invest in productions where the Australian or New Zealand producer was the minority partner.

These would generally be productions where the look of the film was not going to appear both Australian and New Zealand-ish, rather it would have the look of the majority co-producer; or alternatively the setting is a fantasy world of some kind ranging from sci-fi to fantasy to animation. “Footrot Flats” is a good example (it was animation, not drama). If ever a project ought to have been an Australia/NZ co-production it was that one, given the shared creative elements and the familiarity with the work, both here and in Australia. But the then powers that be at the NZFC would not countenance that obvious model. In retrospect, it would have validated the MOUs worth early on.

This component of the treaty obligations upsets cultural purists who were not prepared to easily accept the industrial argument that, for an industry to grow and for additional finance to be attracted to it, there needed to be a quid pro quo.

Of course there were exceptions – but not under the Australia/NZ MOU.

Australian treaty titles like “Green Card” (with France) or “Black Robe” (with Canada) or NZ titles like “Jack Brown Genius” (with Germany) or, quite recently, “Dean Spanley” (with the UK) did not have an Australia or NZ look.

A closer look at the twinning potential under our MOU hopefully would make it clear that a balanced slate could be achieved with comparative ease.

Lately, Screen Australia, under Ruth Harley, is making noises about whether, with reduced funding, it should be investing in minority co-productions at all and/or whether projects with both a non Australian writer and director (technically possible under most treaties and the Australia/NZ MOU) should be ineligible. The pendulum may be swinging back against potentially worthy initiatives.

The absence of both federal and state subsidies from the NZ financing landscape may also have encouraged a mindset among some Australian bureaucrats and producers that somehow or other Kiwis could get more from us than we could get from them.

There is another issue that often dogs co-production discussions when projects are initially being considered. This is the issue of similarity and difference. In some ways it is a more pressing concern for TV producers than film-makers, but it has applicability to both mediums.

Just because a program technically meets legal requirements for content in multiple jurisdictions doesn’t mean it will, particularly for broadcasters, appeal to the audiences of both countries.

A story that looks New Zealand-like, may not rate for Canadian broadcasters, even if it’s technically Canadian.

Clearly some stories are more local than others. The Hollywood majors pride themselves on making pictures frequently set in the US that travel world wide and genre material (like horror, fantasy, sci-fi etc) lives in its own little world.

Local can travel, in cinema especially, if there’s an exotic component; “Whale Rider” being a good example. TV can be more nationality specific as “Neighbours” and “Shortland Street” demonstrate – not that either of those programmes failed to export very successfully; but prime time is more specific.

Relating this to the Australia/NZ MOU: clearly the ethnic mix and demographics of Australia and New Zealand are similar, but subtly different.

The Anglo/Maori/Polynesian polyglot here compares with, arguably, a much broader cultural and ethnic diversity in Australia. Clearly the population differences are also relevant. But I don’t see why, while both countries continue to develop and build their own specific local industries as, for example, do English Canada and Quebec, that much more interaction cannot take place.

For example, if “Outrageous Fortune” was a treaty co-production, would it have been more likely to have played on a different night to Friday and not during summer in Australia?

That’s a question for John Barnett; and would the answer to that hypothetical be different if one of the family were an ex-pat Aussie?

Another factor to be considered with regard to the Australia/NZ co-production landscape is the post production facilities in both jurisdictions; and their place in the production/financing matrix.

For example, Australia/Canada co-productions using Quebec as a partner can benefit from a CGI super credit in Quebec in addition to the generally available federal and provincial credits. That extra credit virtually equalises the stronger Australian credit with the total Canadian credits.

But there is no equivalent extra benefit for an Australian producer doing post in New Zealand and because Park Road has established such a solid and supportive presence here, NZ producers posting in Australia may be worse off – and then there’s the currency differential.

Against all this background, are there compelling reasons to see if we can utilize the MOU more frequently and will it help both our industries if we do?

Certainly the financing landscape for the feature film industry and event television has changed for the worse over the last 3 years.

This independent financing collapse has been caused by a number of factors arising partly out of the global financial crisis. Factors include:

1.The collapse of the international pre-sales model.
2.The abrupt withdrawal from entertainment financing of bank lenders.
3.Widespread global piracy of intellectual property.
4.The very slow transition from a hard goods-based DVD landscape to an electronic one.
5.The strong appreciation of the Australian and New Zealand dollar against the U.S. dollar.
6.The substantial disappearance from the US acquisition landscape of many of the so-called specialty distribution companies who typically might have been inclined to buy Australian and New Zealand product. The final evisceration of Miramax by Disney 2 weeks ago closed the door on the 1980s and 1990s phenomenon of US majors’ flirtation with what we called “smarthouse” product.

Further, within Australia and NZ, local subsidy is under siege.

Screen Australia’s funding is being progressively reduced and, while the economy is recovering and next year is an election year, it will be a tough brutal budget.

Here in New Zealand your NZFC, under new management, is under review and your Large Budget Production Fund has limited resources.

So, if ever there was a time to re-energize trans-Tasman activity, it has to be now when we are both experiencing difficulty.

Clearly there is interchange between our industries. I am here at your convention and Penelope and Richard will be at SPAA next week; but while I am the last person to argue against heading off on a plane to Cannes or LA, the fact is that we have two robust communities of English-speaking producers within 3 ? hours of one another.

Speaking for myself and SPAA’s members, I know we want to work with you more and I hope you all feel the same.

Let’s start pitching and sharing ideas. Together we’re bigger.

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