SA filmmakers need business skills

Groenewald points out that despite a huge number of incentives such as section 24F of the Income Tax Act, 1962; the Department of Trade and Industry's Film and Television Production Rebate; the National Film and Video Foundation's Development and Production Funding schemes; and the Industrial Development Corporation's commitment to assist productions with venture financing, the South African film industry continues to wallow in the doldrums.

“The biggest problem is not that we don't know how to make films. We can make them as well as anyone. Our biggest single disadvantage is the lack of business and legal skills within the film industry,” he says.

Tsotsi myth

Groenewald dismisses claims that seeming successes such as the Oscar-winning Tsotsi can be held up as proof that the local film industry is starting to flourish. Indeed, he maintains that the Tsotsi phenomenon is an indictment of the state of film in South Africa.

“Tsotsi was a great film and deserving of an Oscar. However, its worldwide grosses to date have barely topped $8 million. For a film that is based on an award winning novel by an internationally renowned playwright, that won an Oscar and received the level of publicity it did, $8 million is simply horrible.

“Certainly, Tsotsi covered its production costs of approximately R24 million - but it still has not recovered its distribution costs,” he says.

According to Groenewald, few, if any of South African films make real money – and that's preventing the industry from reaching its full potential.

He points out that it costs at least $15 million to distribute a mainstream commercial film internationally. Distributors, therefore, are reluctant to touch a movie unless they have a reasonable chance of recouping its distribution costs.

DVD sales

Today, however, the main revenues generated by a film are not from ticket sales, but DVD sales. If properly marketed, a box office hit can expect to triple its revenues through DVD sales.

“Movies that can entertain the world can be made anywhere. The only prerequisites are clean water, electricity and the absence of civil war. Dozens of overseas films are shot in South Africa as foreign producers exploit the excellent exchange rate and the fact that our production costs are a third of that in the US.

“Local producers should also exploit these factors and recognise that licensing agreements alone could generate a fortune,” he says.

“Rather than focus on making ‘relevant', ‘meaningful' films that don't sell, we should be producing many more low-budget B-grade action, sci-fi potboiler or horror yarns.

“However, we can't just make these movies – we must properly negotiate decent international distribution agreements (even if the movie is to be directly released on DVD), license all rights to sequels and merchandising and all the while have fun at generating lots of foreign revenue – revenue that will sustain and grow the South African film industry,” Groenewald concludes.