Economy

Screen industry delivers $3 billion blockbuster

New Zealand has converted its success in creating and producing world-class film content into a screen industry of substantial scale. Screen industry revenue powered beyond $3 billion in 2012 – for the first time in the survey’s seven-year history.
  • Image, close-up of person holding clapperboard.

    Feature films lead the way

    The breakthrough was aided by a surge in feature film revenue, which in 2012 rose almost 50 percent compared with 2011, to more than $1 billion. The number of businesses working on films also rose in 2012. Of about 2,500 businesses working on screen productions (eg film and television programmes), about half were involved in filmmaking. This rise was due to the volatile and project-driven nature of the film industry. Businesses establish themselves for a project’s duration and close down when it’s completed.

    Once a film is completed (40 features were completed in 2012), it is usually released in cinemas, followed by DVD and Blu-ray release, and then to television. Distributors acquire the rights to distribute films in this way, and represent the primary link between the producer (the filmmaker) and us – the consumer. In 2012, film and video distribution revenue fell 11 percent from 2011, to $157 million. Film exhibition revenue, income generated through the cinema-going public, was similar to 2011 – at $162 million.

    Giving production a kick start

    For the Screen Industry Survey, producers or production companies (different from the production sector) have end-to-end responsibility on a screen production. Contractors contribute to the work of a producer.

    Producer revenue rose to $878 million in 2012 – up from $809 million in 2011. This rise came from increased financing and funding. Financing and funding refers to direct investment received from government, distributor advances, pre-sales, or the private sector, which help kick start work on a production. Revenue from financing and funding rose 22 percent (to $653 million) in 2012.

    An important source of funding is the New Zealand Government, which contributed $249 million to production and post-production work – up $14 million from 2011.

    Money awarded by the government through the Large Budget Screen Production Grant rose from $37 million to $59 million in 2012. This grant is an incentive package offered to large-scale screen productions and encourages studios to produce large-budget films and television programmes in New Zealand. The grant provides a rebate on production expenditure that is over a certain value and is spent in New Zealand.

    Other government funding sources include New Zealand On Air and the New Zealand Film Commission (NZFC). NZFC provide loans and equity financing to New Zealand producers to help them develop and produce films and short films; NZ On Air provides funding to projects destined for television and online/mobile audiences.

    Piecing together the post-production regional scene

    The continuing success of ‘Wellywood’ helped New Zealand’s film industry grow during 2012. Revenue from film in Wellington generated $828 million in 2012, up from $495 million in 2011 (67 percent).

    Crucial to Wellington is the region’s post-production expertise. Post-production includes all activities involved in putting together scenes to complete a production; for example editing, duplication, visual effects, and audio. In 2012, 60 percent of all post-production businesses were based in Wellington, 31 percent were in Auckland, and 10 percent in the rest of New Zealand.

     

     

    Wellington businesses lead in digital graphics, animation, and effects. This includes digital production and cutting-edge 3D animation on blockbuster films and high-end commercials. In 2012, the Wellington region generated $427 million from these activities, most of the country’s $482 million total. This means that for every $10 earned from these activities, nearly $9 was generated in Wellington.

    Auckland region is where most television programming is created, and it generates most revenue for this format. In post-production, this made Auckland the hub for editing, captioning, and sub-titling. Auckland generated $46 million from this activity in 2012. Nationwide, the total amount of revenue from editing, captioning, and sub-titling was $53 million.

    Businesses outside the two main centres were involved in a much wider array of post-production activities.

    Kiwis’ love of the big screen survives Rugby World Cup mauling

    New Zealand is not only big on making films; its people also turn out to watch them

    In 2010 a new record was set for annual box office takings. Most of this revenue was captured when we surveyed businesses in 2011. That year, film exhibition revenue rose 6 percent to reach $162 million.

    Kiwis continued to show their love of the big screen in 2012, when revenue remained at $162 million. At a typical price of $16 a ticket, that’s over 10 million visits to the cinema.

    The consistent revenue came despite the distraction of the Rugby World Cup in September and October 2011. The New Zealand Motion Picture Distributors’ Association (MPDA) noted that film admissions during the World Cup declined, but this did not adversely affect revenue.

    New technologies, like digital and 3D films, offer new scope for cinemas and continue to attract people to the big screen. MPDA records show that 308 films were released in New Zealand in 2012; 39 were in 3D.

    Cultural preferences may be part of our wish to spend money in a cinema. Today, we can choose to watch films through different mediums, including the Internet.

    Statistics NZ’s Household Use of Internet and Communication Technology Survey revealed 47 percent of Internet users downloaded films or images in 2012. A further 37 percent used the Internet to watch television or listen to radio.

    Despite spending large amounts of time on computers, perhaps we like the ‘romance’ of getting out of the house to enjoy a film.

    More information

    Film New Zealand is New Zealand’s film business agency and locations office. It provides information and support to filmmakers, internationally and nationally, and helps promote New Zealand as a centre for international screen business.

    The Household Use of Information Communication Technology Survey provides information about New Zealanders’ access to and use of computers, the Internet, and mobile phones. The survey gives a better understanding of how these technologies influence New Zealand's economy and society.

    Motion Picture Distributions’ Association collects film exhibition information for box office admissions, prices, theatres, release details, censorship classifications, and ratings.

    New Zealand On Air is an independent government funding agency. It invests in cost-effective local content, to extend choices for different New Zealand audiences.

    The Screen Industry Survey provides information on businesses involved in the screen industry, including production and post-production activities, film and video distribution, film exhibition, and television broadcasting.

    The Ministry of Business, Innovation, and Employment is involved in initiatives to encourage the continuing success of New Zealand as a film-making destination.

    The New Zealand Film Commission invests in feature films, short films, script and career development, and marketing and promoting New Zealand films and filmmakers – here and overseas.

    Source: Statistics New Zealand

Income generated through the
cinema-going public, was $162 million.
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Economy
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