The future of South African content in a new broadcasting

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The future of South African content in a new
broadcasting convergence environment

• Setting a course for sustainability

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• IPO
• INDEPENDENT PRODUCER ORGANISATION Medium size
  enterprises.
• TPA
• THE PRODUCERS ALLIANCE Small to Macro
• enterprises

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• We are the producers of local content with the
  exclusion of News and Sport which is produced by
  the broadcasters. We produce Drama, Actuality,
  Documentary, Children and Youth, Variety,
  Entertainment and Educational programmes.

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• REPRESENTATION
• Collectively, we represent over 100 production
  entities produce 80 of all local content in SA
• Independent Production Companies are the
  businesses that producers run in order to make
  content

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• Producers initiate and manage - idea
  development, scripting, budgeting, raising
  funding/pitching to broadcasters, hiring key
  personnel, shoot supervision, the overall quality
  and survivability of a production, arranging for
  distributors, delivery of the final product.

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• WHY WE ARE
  HERE

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PURPOSE

• Concerned with sustainability growth of our
  sector
• Challenges that face immediate future
  sustainability
• Vision for future growth sustainability
• Seek government support intervention where
• appropriate

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OUR ROLE

• Collators of our history, living within
  communities, gathering and curating our
• stories and committing them to our collective
  memories.

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• We investigate, educate, inspire and challenge.
• We promote the diverse heritage of our nation
  telling stories in our own languages.
• It is our stories that capture who we are, where
  we come from and where we may go.

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• Not an industry of arts culture alone
• Key role content creation for SA public
  communicated mainly through broadcasters
• Our industry generates in excess of R12 billion
  worth of economic activity per year (source
  Deloitte Survey)

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THE CHALLENGE

• Create sustainability that will lead to growth
  development
• Create employment, minimize underemployment
• Speed up transformation
• Seize opportunities created by government
  (AsgiSA)
• Grow independent production industry to be
  economically profitable industry
• Capture rich cultural heritage

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THE CHALLENGE

• Intellectual property ownership vests in creators
• Create allure for storytellers investors
• Access capital for development research
• Ensure choice for SA public
• Creation of enterprises self-sustaining jobs

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THE GLOBAL INDUSTRY

• New media platforms digital convergence
  increased demand for content.
• Gearing up to meet the need
• Global brands vs Cultural identity
• Producers at the centre of supply chain
• Content is being democratized globally
  proliferation of global television brands.

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THE SA INDUSTRY

• There is a growing demand for reliable, high
  quality expertise -
• Our industry is on the brink of the new media
  explosion
• New broadcast licenses advent of regional
  television
• SABC primary consumer of local content therefore
  largely determines terms of trade for industry
• Creative business skills are required
• Incentivised businesses

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TRANSFORMATION

• THE CHALLENGE
• Skills transfer throughout the value chain
• Luring retaining talent in key areas
• Lack of financial rewards, stability growth

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TRANSFORMATION

• THE PROGRESS
• Skills development initiatives not only at entry
  level
• Increase in employment equity
• BBBEE plan for industry being formalized
• Unity of purpose
• Diversity is now a source of strength pride

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CHANGING THE FACE OF A NATION

• 80 of top TV shows in SA are local
• Broadcasting Act created impetus
• SABC and Producers partnered in effecting change

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CURRENT PREDICAMENT

• Financial stability, securing investment,
  sustainability
• Production sector small macro enterprises
• Limited infrastructure
• No ability to acquire skills or business acumen
• Inability to access capital for research
  development
• Inability to access business infrastructure
  capital no clear business model / system with
  reasonable guarantees

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CURRENT PREDICAMENT

• Reliance on 3 broadcasters commissioning
  process
• All equity belongs to broadcaster
• Broadcaster terms of trade
• Performance does not translate into business
  building
• Broadcaster obligations accountability
• THE RESULT A DISEMPOWERED PRODUCTION SECTOR

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A Bouyant industry

• Industry is not one of poverty but one of great
  cultural wealth
• Highly bankable industry
• Increase in ad spend 7.7 Billion AD Spend
• SABC profit / income
• Advertisers investors recognize valuable
  audiences culture

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• BUT we are not delivering a self-sustaining
  ecology from local content - WHY?
• LIMITING FACTORS?
• Are NOT regulation, audiences or lack of
  potential investors

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THE BLOCKAGES

• Terms of trade
• Ownership of rights
• Participation in secondary rights

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CHANNEL 4 CODES EXCERPT

• The broadcaster expects the following
  benefits to flow to Producers
• Producers able to build valuable rights
  catalogues / archives
• Producers able to choose the deal structure that
  best supports their creative and commercial
  aspirations for a given project
• Producers participating more fully in the value
  of their secondary rights
• Producers finding the broadcaster professional
  and timely to do business with.
• Channel 4 Code of Practice for Commissioning

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INDEPENDENT PRODUCERS SABC

• Meetings between independent production sector
  SABC exec to find common solution
• Agreement that solutions for broad growth
  sustainability must be defined by blue print /
  declaration

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INDEPENDENT PRODUCERS SABC

• Fundamental points of agreement
• Industry growth
• Empowerment
• Avoid excessive concentration of power wealth
• Express national identity
• Transparency
• Creation of enterprises self-sustaining jobs

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SOURCES OF DISAGREEMENT

• Core issues are
• SABC operating model
• Producers treated as employees
• One-sided contracts
• Patronising disenabling operations
• Limited independence
• Margins set at low rate
• Intellectual property 100 owned by SABC

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CONCERNS

• young/inexperienced/un-empowered entrants into
  the market how to empower
• efficiency
• pressure to meet ICASA regulations and deliver on
  a mandate within certain fiscal constraints.
• Transparent and fair commissioning process
• Managing IP is increasingly difficult and thorny
  it is much simpler to control everything.

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SOURCES OF DISAGREEMENT

• At core of problems are
• Increased control
• Lack of creator ownership
• Heavy-handed management policy
• RESULT
• Industry sustainability problems

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• INDUSTRY STRUCTURE
• Broadcast not open competition industry
• Dominated by a large government owned buyer with
  a complex mandate public and commercial

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SOURCES OF DISAGREEMENT

• MARGINS
• Low inflexible margins cost of capital no
  sustainable growth or investment
• No work, no income
• INTELLECTUAL PROPERTY
• No differentiation based on quality
• No capital value
• No exploitation of IP results in lost IP
• No exploitation of multiple IP rights by SABC,
  yet creators are denied these rights
• Tragic under-utilization of national asset

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SOLUTIONS

• Recognition of independent production sector as
  businesses operating in a competitive environment
• Terms of trade to reflect this
• IP to rest with / accrue to creator/s

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BENEFITS

• OPERATIONAL
• Greater independence
• Accumulation of skills
• Less onerous on broadcasters
• INTELLECTUAL PROPERTY
• Empowering
• Increase IP value
• Owners invested in exploiting properties

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WAY FORWARD

• Difficult changes need to be mediated

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CONCLUSION

• A commitment to interrogate current industry /
  broadcaster model with independent producers and
  broadcasters re-shape re-design to create a
  globally competitive growth model
• A process that gives birth to a vibrant viable
  industry that is self-sustaining

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THANK YOU