A Strategic Economic Analysis of the Cape Town and Western Cape Film Industry
This research is a base line study for the financial year July 2005 to June 2006. It is not a time series study but rather puts in place mechanisms where more rigorous measurements can be made and the performance of the industry can be assessed in the future.
Download the full report at 'Policy & Incentives'.
Many areas were identified where rigorous analysis was not possible or where detailed measurement could not be made. However, a rigorous baseline of information and analysis has been set in place which provides a solid platform for future monitoring and strategic and enterprise development. This is the first time that this type of research has been undertaken in the film industry in South Africa and is based on a thorough analysis of data and informed assumptions. Where assumptions had to be made this was done in a conservative manner so as to limit potential overestimations.
The starting point of the research was to determine the overall size of the industry. This proved to be a very challenging exercise for a number of reasons. There is no industry census; it is a very disparate industry in which people move in and out as opportunities arise; because of this many of the work opportunities are seasonal in nature. Many avenues were explored in trying to measure the size of the industry, of which the permit offices and crewing agents proved the most productive. It is thought that in the last financial year in the region of 30 long form, 600 commercials and 2,100 stills productions were made in the Province.
Total industry turnover was estimated by establishing the average cost of each of the different types of production. For long form this was done by interviewing the main production companies. The Commercial Producers Association (CPA) and the South African Association of Stills Producers (SAASP) made available the average cost of commercials and stills productions respectively.
The total turnover of the Western Cape film industry is estimated at R2.65bn for the 2005/6 financial year of which about 77 percent (R2.03bn) occurred in Cape Town. Long form, with a turnover of R1.12bn, was the largest part of the industry. This is followed by commercials at R0.87bn and stills at an estimated R0.66bn. Inside of long form, feature films added R934.3m and made-for-TV productions R181.3m. Service commercials are the most numerous and are the largest part of the commercials industry, followed by local commercials and then international commercials. Service commercials had a total turnover of R631.8m, compared to the R162.5m for local commercials and the R77.9m for international commercials.
One of the key thrusts of the study was to identify the cost components of the industry and to use these to establish a value chain analysis. The objective is to provide strategic direction to the industry for the purpose of growing local and international competitiveness. It was found that production costs make up 73.5% of all costs for the entire industry. This is followed by ‘other’ (22.2%) (this includes insurance, contingencies, profit, office overheads, etc), post production (2.7%) and pre production (1.6%).
In long form the five largest cost components make up 70% of overall spending. These are crew remuneration (25.6%), travel & living expenses (19.8%), camera hire (10.9%), set lighting (7.2%) and vehicle hire (6.9%).For commercials the five largest cost components contribute 74.7% of total spending. These are crew remuneration (26.9%), equipment hire (17.8%), art department expenses (13.3%), locations (8.9%) and talent fees (7.7%).
In the stills sub-sector the five largest cost components contribute 78% of total spending. These are talent remuneration (20.7%) general expenses (production costs – 17.7%), travel & living expenses (16.0%), crew remuneration (13.6%) and camera hire (9.6%).
Analysis was done on the potential change in industry costs for a depreciation in the Rand and an increase in wages. It was found that a 10% depreciation in the Rand could reduce costs by 8.02% in long form, 8.15% for commercials and 8.06% for stills. Similarly a 10% increase in wages would result in cost increases of between 3.9% and 4.5% for the different sectors.
Finally, the macroeconomic contribution of the industry was estimated. While there are a number of different types of macroeconomic effects, the two most important are contribution to gross domestic product (GDP) and the creation of jobs. The importance of job creation is clear. Increases in GDP are synonymous with increases in peoples’ economic standards of living. Increased GDP – i.e. increased production – is experienced in the form of more jobs, higher wages, more opportunities and reduced economic hardship. It is clearly an important measure.
It is estimated that the Western Cape film industry contributed R3.5bn to South African GDP in the 2006 financial year. Of the R3.5bn contribution to SA GDP, long form contributed R1.49bn, commercials R1.16bn and stills R0.9bn. At the same time the film industry contributed R936m to the Western Cape Gross Geographic Product (GGP), of which R684m is contributed to the Cape Town GGP. The estimate of the contribution to the Western Cape GGP and Cape Town GGP are minimum estimates. The direct spend would have occurred in the city and province and many of the linkage effects, which the input output tables assume occur nationally, would in fact have taken place in the city and province. Hence the contribution to city and provincial GGP will be higher.
It is estimated that the film industry created 6,058 full year job equivalents in the Western Cape; while a further minimum 2,501 indirect jobs were also created in the province as a result of the multiplier effect. Of the 6,058 direct jobs, 1,841 were in long form, 2,459 from commercials and 1,758 in stills. It is estimated that about 4,638 (77%) of these direct jobs are in Cape Town. Total jobs are the sum of the direct and indirect jobs. It is estimated that in total 8,559 full year job equivalents were sustained throughout the province of which a minimum 6,552 are in Cape Town.
A number of recommendations are made to help improve the accuracy of future studies. These relate primarily to the permit offices, private location companies, crewing agents and protocol around the primary data collection process amongst the various associations.
Article from http://www.filmmaker.co.za/
Filmakers love Cape Town, but not as much as Wise Wheels Car Rental
Download the full report at 'Policy & Incentives'.
Many areas were identified where rigorous analysis was not possible or where detailed measurement could not be made. However, a rigorous baseline of information and analysis has been set in place which provides a solid platform for future monitoring and strategic and enterprise development. This is the first time that this type of research has been undertaken in the film industry in South Africa and is based on a thorough analysis of data and informed assumptions. Where assumptions had to be made this was done in a conservative manner so as to limit potential overestimations.
The starting point of the research was to determine the overall size of the industry. This proved to be a very challenging exercise for a number of reasons. There is no industry census; it is a very disparate industry in which people move in and out as opportunities arise; because of this many of the work opportunities are seasonal in nature. Many avenues were explored in trying to measure the size of the industry, of which the permit offices and crewing agents proved the most productive. It is thought that in the last financial year in the region of 30 long form, 600 commercials and 2,100 stills productions were made in the Province.
Total industry turnover was estimated by establishing the average cost of each of the different types of production. For long form this was done by interviewing the main production companies. The Commercial Producers Association (CPA) and the South African Association of Stills Producers (SAASP) made available the average cost of commercials and stills productions respectively.
The total turnover of the Western Cape film industry is estimated at R2.65bn for the 2005/6 financial year of which about 77 percent (R2.03bn) occurred in Cape Town. Long form, with a turnover of R1.12bn, was the largest part of the industry. This is followed by commercials at R0.87bn and stills at an estimated R0.66bn. Inside of long form, feature films added R934.3m and made-for-TV productions R181.3m. Service commercials are the most numerous and are the largest part of the commercials industry, followed by local commercials and then international commercials. Service commercials had a total turnover of R631.8m, compared to the R162.5m for local commercials and the R77.9m for international commercials.
One of the key thrusts of the study was to identify the cost components of the industry and to use these to establish a value chain analysis. The objective is to provide strategic direction to the industry for the purpose of growing local and international competitiveness. It was found that production costs make up 73.5% of all costs for the entire industry. This is followed by ‘other’ (22.2%) (this includes insurance, contingencies, profit, office overheads, etc), post production (2.7%) and pre production (1.6%).
In long form the five largest cost components make up 70% of overall spending. These are crew remuneration (25.6%), travel & living expenses (19.8%), camera hire (10.9%), set lighting (7.2%) and vehicle hire (6.9%).For commercials the five largest cost components contribute 74.7% of total spending. These are crew remuneration (26.9%), equipment hire (17.8%), art department expenses (13.3%), locations (8.9%) and talent fees (7.7%).
In the stills sub-sector the five largest cost components contribute 78% of total spending. These are talent remuneration (20.7%) general expenses (production costs – 17.7%), travel & living expenses (16.0%), crew remuneration (13.6%) and camera hire (9.6%).
Analysis was done on the potential change in industry costs for a depreciation in the Rand and an increase in wages. It was found that a 10% depreciation in the Rand could reduce costs by 8.02% in long form, 8.15% for commercials and 8.06% for stills. Similarly a 10% increase in wages would result in cost increases of between 3.9% and 4.5% for the different sectors.
Finally, the macroeconomic contribution of the industry was estimated. While there are a number of different types of macroeconomic effects, the two most important are contribution to gross domestic product (GDP) and the creation of jobs. The importance of job creation is clear. Increases in GDP are synonymous with increases in peoples’ economic standards of living. Increased GDP – i.e. increased production – is experienced in the form of more jobs, higher wages, more opportunities and reduced economic hardship. It is clearly an important measure.
It is estimated that the Western Cape film industry contributed R3.5bn to South African GDP in the 2006 financial year. Of the R3.5bn contribution to SA GDP, long form contributed R1.49bn, commercials R1.16bn and stills R0.9bn. At the same time the film industry contributed R936m to the Western Cape Gross Geographic Product (GGP), of which R684m is contributed to the Cape Town GGP. The estimate of the contribution to the Western Cape GGP and Cape Town GGP are minimum estimates. The direct spend would have occurred in the city and province and many of the linkage effects, which the input output tables assume occur nationally, would in fact have taken place in the city and province. Hence the contribution to city and provincial GGP will be higher.
It is estimated that the film industry created 6,058 full year job equivalents in the Western Cape; while a further minimum 2,501 indirect jobs were also created in the province as a result of the multiplier effect. Of the 6,058 direct jobs, 1,841 were in long form, 2,459 from commercials and 1,758 in stills. It is estimated that about 4,638 (77%) of these direct jobs are in Cape Town. Total jobs are the sum of the direct and indirect jobs. It is estimated that in total 8,559 full year job equivalents were sustained throughout the province of which a minimum 6,552 are in Cape Town.
A number of recommendations are made to help improve the accuracy of future studies. These relate primarily to the permit offices, private location companies, crewing agents and protocol around the primary data collection process amongst the various associations.
Article from http://www.filmmaker.co.za/
Filmakers love Cape Town, but not as much as Wise Wheels Car Rental
Labels: Cape Town - Film
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