Gauteng Film Commission, 56 Main Street, Johannesburg, 2108, South Africa Tel +27 11 833 0409 Fax +27 11 833 0282 Email email@example.com Website www.gautengfilm.org.za PO Box 61840 Marshalltown 2107 Business Plan 2008 Big Ideas. Perfect Locations. Document Control DED Agency Gauteng Film Commission Chief Executive Officer Terry Tselane Business Planning Period April 2008 – March 2009 This draft Version 2 Signature of CEO Terry Tselane Date Chief Executive Officer Signature of Chief Financial Officer Elliot Maluleke Date Acting Chief Financial Officer Signature of Chairperson of the Board Nkenke Kekana Date Chairperson Signature of MEC Paul Mashatile Date MEC: Finance and Economic Affairs Table of Contents Message from the Chief Executive 4 Section A 6 Strategic Direction 1. Business and Strategic Objectives 6 2. Operating Environment 9 3. Organisational Analysis 14 4. Core Business and Clarification of Priorities 15 5. Business, Legal and Regulatory Priorities 18 6. Analysis of Performance of the Previous Year 18 7. Risk Management 21 8. GFC and Community Outreach 21 9. Future Direction 22 Section B 23 GFC Operational Plan Priority 1: Marketing & Research 23 Priority 2: Industry Support & Development 32 Priority 3: Advocacy & Strategy Development 39 Priority 4: Management & Governance 40 Section C: Budget Summary 48 Section D: GFC Organisational Structure 50 Message from the Chief Executive The Gauteng audio-visual industry is experiencing a marked growth phase. Local demand for entertainment content is undoubtedly on the increase, largely being fuelled by the rise of a black middle class. Whilst much of this latent demand is still predominantly serviced through TV, the experience of inner-city cinemas shows that a youth market is increasingly (re-)discovering the magic of cinema theatres. Similarly, it is also clear that both South African - and African - feature films have seen renewed interest on the international independent circuit with South African productions being well received at Cannes, Toronto and elsewhere. During the past and current financial years South African productions and co-productions, including Tsotsi, Elalini, Bunny Chow, Catch a Fire and Wah Wah, have been well received by audiences and critics alike. Increasingly the province is benefiting from technical and infrastructural expansion in particular of its ICT infrastructure. This is as a result of digitisation (and the switch from analogue to digital), 2010 world cup-led improvements in broadcast technology and infrastructure, the expansion of mobile telephony, the expansion of broadband, and other developments. With world-class filmmakers, production houses, studios and internationally recognised film and drama schools, Gauteng can arguably be described as one of the continent’s leading hubs for film, television and new media. It is clear that the Gauteng film industry has the potential to be a significant economic force if it can capitalise on the already-existing base of TV, commercials and local film. As is clear from the following Business Plan, public sector support will however be required to sustainably develop Gauteng as a major international production hub. Interventions required include: • revival of a strong screen culture in particular in under-serviced areas through micro cinema support, community screenings and the development of screening facilities • reinforcing the strength of the Auckland Park – Randburg corridor as a major economic and cultural cluster of national importance • capitalising on Gauteng’s strong skills base and educational capacity • harnessing Gauteng’s strong institutional capacity as a political and broadcast hub • addressing scarce skills constraining growth • lobbying for greater public and private sector support by making film ‘everyone’s business’ In addition, a number of significant challenges need to be addressed as a matter of priority. These include: • packaging Gauteng holistically as a location of choice • unlocking greater investment for local productions while simultaneously attracting more international productions to the province • ensuring much more focused programmes aimed at building talent, skills and entrepreneurship • fostering a film-friendly environment • supporting greater national coordination and institutional reform. We look forward to working with the industry on meeting these challenges. Terry Tselane Chief Executive Officer Section A Strategic Direction 1. Business and Strategic Objectives The Gauteng Film Commission (GFC) is an agency of the Gauteng Provincial Government tasked with the development and promotion of the audiovisual industries in Gauteng. Flowing from this mandate, the GFC’s core business is to facilitate and enhance the contribution of the industry to the economic growth of the province. Vision Making Gauteng an innovative world-class hub for the film and television industry. Mission To cultivate, facilitate and enhance an environment that allows the film and television industry to play a meaningful role in the socio-economic development of Gauteng. Our values Our values incorporate the following Batho Pele principles: • Respect • Leadership • Responsibility • Responsiveness • Progressive and innovative • Passion, excellence and commitment • People development and empowerment • Efficiency, accountability and transparency Strategic Objectives • To promote Gauteng as film location and production hub of choice • To coordinate data collection, analysis and dissemination • To facilitate, enhance and support production capacity, audience and content development • Support greater access to and participation in the audiovisual industry by previously disadvantaged individuals and communities • To promote the social and economic value of film to all Gauteng’s citizens • To inform, shape and influence the national and provincial agenda on the audiovisual industry • To improve efficiency and effectiveness in the management of GFC resources and processes Our institutional stakeholders The key stakeholders involved in the delivery of production in Gauteng can be outlined as follows: Our Clients The GFC seeks to provide a world-class film commission service to the many individuals, organisations and communities that constitute its core client base: Public Sector Clients Key political clients include provincial and municipal departments and agencies that rely on the GFC to supply them with: • Specialist sectoral data and intelligence • Advice on film policy and strategy development • Guidance on provincial and municipal programmes and strategies impacting on the AV sector • Marketing support • Institutional support Industry clients The industry – consisting of participants across a complex production value-chain – requires a wide range of direct and indirect services from the GFC: • Training and skills development support • Production development support • Direct financial support and the facilitation of funding and financing • Marketing support • Institutional support and advocacy • Location and logistics support • Specialist sectoral data, market intelligence and research support • Access to markets • Access to exhibitors, distributors and broadcasters • Support to audience development Societal clients The citizens of Gauteng, local audiences and consumers, the business and corporate community, special groups including women, youth and the disabled, as well as broader civil society also look toward the GFC for information, support and assistance, in particularly in respect to: • Information and intelligence • Provision of access to audiovisual material • Edutainment • Access to opportunities • Institutional support 2. Operating Environment The Gauteng audio-visual industry encompasses a range of creative production activities including film, TV and documentary production, commercials, stills photography and multimedia. Gauteng accounts for the bulk of TV production in South Africa and enjoys a large slice of the commercial production sector with an estimated 48% of all commercials filmed in South Africa, shot in Gauteng. The main stream of the production industry consists of the local production of commercials, documentaries and feature films. Increasingly, however the province is also used as base for the facilitation and provision of logistical and technical services for foreign productions. Spatially Gauteng’s film and TV industry is located predominantly along a corridor linking the two main broadcast hubs around the SABC headquarters in Auckland Park and Multichoice in Randburg. Whilst the province is strong in the initial stages of the value chain (pre-production, production and post-production), there are still spatial inequalities around distribution of the final product with most cinemas being located in the (sub)urban areas of Johannesburg, Tshwane and Ekurhuleni. A weak distribution network means that large parts of Gauteng’s peri-urban communities are effectively without access to commercial cinemas. With more than 900 organisations registered on the GFC database it is clear that competition is rigorous and cast and crew costs, are, as a result, competitively priced - nationally and globally. Location fees are generally still very low across the province and the GFC has initiated a process of engagement with municipalities to ensure that access to locations is easy and hassle free. Evidence suggests that studio capacity is extensive and current demand needs are adequately met. Studio facilities available in Gauteng generally service TV, commercials and low budget films. There is also evidence to suggest that many of the medium and larger- scale studios are expanding due to increased demand. SA market research conducted by Deloitte Consulting during 2007 on behalf of the GFC show: TV Broadcast Gauteng is home to approximately 70 % of all South African TV productions with total Gauteng TV production estimated to be worth approximately R700m. Importantly, major television series can have larger budgets than some films: The Lab cost an estimated R7 500 000, and Jozi H created an estimated 500 jobs. Gauteng has a large viewership with SABC TV reaching 19 million viewers and DSTV/MNet 1,5 million, mainly in Gauteng. Also significant is the fact that 7 out of the top 10 SA TV shows are Gauteng-based. In terms of TV channels: • The South African Broadcasting Corporation has 3 national channels and an Africa channel, as well as 2 licenses for regional channels that will broadcast in indigenous languages; • There are two M-Net channels and over 40 DSTV channels; • One free-to-air channel i.e. E.TV • CNBC Africa launched in June 2007 broadcasting daily from its headquarters in Sandton • 2007 also saw the licensing of additional pay TV channels Corporate Video Estimates are that corporate video makes up a quarter of turnover in production in South Africa. Gauteng is a leader in this market with many production companies servicing the large corporate community of Gauteng. Commercials Research undertaken by the Commercial Producers Association and Evolutions (2007) indicate that during 2006/2007: • Johannesburg Head Office production companies produced an average of 44.67 commercials per company, compared with an average of 18.81 commercials produced per Cape Town Head Office production company • Although fewer Johannesburg Head Office production companies participated in the survey, these companies produced (marginally) more commercials (402) than Cape Town Head Office production companies (395) • Johannesburg Head Office production companies produced the above commercials using fewer (i.e. 675.50) shoot days, compared with Cape Town Head Office production companies' 823.00 shoot days • The Cape Town Head Office production companies were responsible for R344,824,785.77 billable production value, and the Johannesburg Head Office production companies for R344,031,883.30 The commercials sector is very competitive, with over 50 companies that specialise in TV commercials. Gauteng-based advertising agencies consistently produce internationally competitive creative work as evidenced by the high proportion of Loerie or other national award winners from these agencies. Most recently the province raked in a number of awards at the annual Cannes Lions advertising film festival, suggesting that the industry meets rigorous international industry standards. Economic Impact According to the recent GFC/ Deloitte study, audiovisual production in Gauteng accounted for R1,1 billion revenue in 2006, whilst the economic multiplier effect is estimated to range between 2 and 2.5. Secondary industries that benefit from the industry include tourism, hospitality, insurance, marketing, tax, legal and other advisory services. Distribution and Exhibition New technologies such as digitization have enabled new content delivery channels such as DVDs and online portals. Digitisation has lead to an increase in small independent companies that can produce for TV due to reduced cost of production and distribution. Digitisation is increasingly also driving the emergence of micro cinemas and other independent cinemas as technology costs decrease. Cinemas Gauteng has the largest and wealthiest cinema audiences in South Africa with cinema theatres boasting a combined seating capacity of more than 22,000 seats and well-attended year-round festivals. According to research, cinema attendance is on the rise with 5% annual growth reported between 2005 and 2006. Most cinema complexes are however primarily located in the more wealthy suburbs of Joburg and Tshwane, however figures show that inner-city cinema complexes are increasingly attracting a younger generation of new cinema goers. In Soweto an eight theatre cinema complex opened in Soweto last year. Skills training In terms of skills development and training, the majority of leading national film, drama, new media and advertising schools are based in Gauteng whilst data from the National Film and Video Foundation (NFVF) shows that by far the highest number of scholarships awarded by the NFVF is to students from Gauteng. According to the GFC there are more than 19 schools, colleges and universities servicing the industry in Gauteng. Skills data is however still unobtainable and the GFC is in contact with the MAPPP Seta to address this information gap. Spatially most educational bodies are located in Johannesburg and in particular around the main hub of Braamfontein, Milpark, Auckland Park and the northern suburbs – again supporting the claim that the Auckland Park – Randburg corridor can be described as Gauteng’s ‘Film City’. Studios The studio facilities available in Gauteng have technical infrastructure and equipment that are ideal for TV, commercials and low budget films. Studio capacity is extensive in Gauteng. According to market research the investment in large-scale feature-film production studios should be undertaken with caution in order to first assess the impact of Dreamworld – a major studio development in the Western Cape which is being developed specifically for large-scale feature film productions. 3. Organizational analysis The GFC is a maturing organization. Key strategic and executive components can be depicted as follows: (Source: Deloitte / GFC 2007) A maturity assessment of the GFC was completed during 2007 which informs the organisation’s strategies in terms of: • Strategy and policy formulation • Organisation and business processes • Organisational governance • People and culture • Information technology 4. Core Business and Clarification of Priorities In line with the GFC’s three year strategic plan the following priorities are guiding the organisation’s business activities: Priority 1: Marketing & Research Strategic Objectives: • To promote Gauteng as film location and production hub of choice • To promote the social and economic value of film to all Gauteng’s citizens • To coordinate data collection, analysis and dissemination Priority 2: Industry Support & Development Strategic Objectives: • To facilitate, enhance and support production capacity, audience and content development • Support greater access to and participation in the audiovisual industry by previously disadvantaged individuals and communities Priority 3: Advocacy & Strategy Development Strategic Objectives: • To inform, shape and influence the national and provincial agenda on the audiovisual industry Priority 4: Management & Governance Strategic Objectives: • To improve efficiency and effectiveness in the management of GFC resources and processes In response to Departmental priorities, the following programmes will form key priority projects for the 2008 - 2009 financial cycle: Strategic repositioning of the Gauteng Film Commission (GFC) The formulation of provincial enabling policy to formalise the governance of the Gauteng Film Commission as a public entity is on track. This policy development coincides with the strategic repositioning of the organisation as a Film Commission – a process that was initiated in the latter half of 2006. This work will ensure that the organisation will play a more strategic role as a sector development agency – and goes beyond the more-narrow mandate of the organisation as defined until recently. Investing in ‘Film City’ The ‘Film City’ project has been conceptualised as a cluster development strategy aimed at consolidating the aggregate capacity of the sector. As a second level phase, the project seeks to identify infrastructural gaps with the medium to long-term goal of expanding the production capacity of the province through new studios and sound stages. Towards this end the GFC has comprehensively mapped out the cluster. A comprehensive database of all services facilities and companies have now been compiled which for the first time presents a comprehensive picture of the size and scope of the industry. During the course of 2008 the GFC will expand this work through the development of a sector strategy. Amongst others this strategy will focus on a). identifying critical skills shortages and constraints and formulating appropriate strategies to address these and b). investigate opportunities for investment in studios and other similar production facilities and infrastructure. Transformation of content distribution channels According to independent data only 3% of black South African’s regularly go to cinema. This figure is in contrast to 30% of the white population that has regular access to cinemas. To address this imbalance the Gauteng Film Commission is currently driving a process of facilitating the development of a township film circuit. The aim of the project is to progressively develop a market for local content whilst nurturing a movie-going culture. In addition, the GFC is working with independent cinemas operating in disadvantaged areas to facilitate re-investment in such facilities. Ongoing engagement with major commercial cinema houses will focus on expanding business operations to underprivileged areas. Lastly, the GFC is currently investigating mirco-cinema business models that have been successfully employed elsewhere on the continent to foster a cinema going culture. Location & production services marketing The advertising and production services industry – similar to the business outsourcing industry – offers extensive export opportunities for Gauteng. Marketing Gauteng as a major production service hub is therefore a vital component of the overall strategy of the GFC. The focus of the strategy is to target national and international producers and location scouts and managers, whilst increasing awareness of facilities and services on offer in the province. Partnership agreements with the National Film & Video Foundation, the Department of Trade and Industry, the Cape Film Commission, the Durban Film Office and private sector bodies will be formalised in 2008. Film Indaba In 2008 the GFC will host the second Gauteng Film Indaba. In light of the uncertainty around the future of Sithengi, the GFC will use the Indaba as a platform to engage the industry around a number of strategic issues. 5. Business, Legal and Regulatory Priorities As highlighted above, the formulation of provincial enabling policy to formalise the governance of the Gauteng Film Commission as a public entity is on track. Business, Legal and Regulatory Priorities during the past 12 months have been: • Formulation of draft enabling policy; • Advancing the listing of the company as a public entity; • Formulation, adoption and implementation of requisite management and operational Policies and Procedures in line with legislative requirements; • Development and approval of the annual Business Plan and MTEF budgets in compliance with PFMA and Treasury Regulations; • Successful filling of critical vacancies including Chief Financial Officer, HR & Office Manager, Company Secretary & Legal Advisor, Communication Manager and IT Manager; • Finalisation of Financial Statements for 2005 - 2006 and securing unqualified audits; • Successful appointment of Internal Auditors; • Introduction of a performance management system; • Identification and implementation of skills training programmes; • Development of a Scorecard in-line with the Gauteng Growth and Development Plan. 6. Analysis of Performance of the Previous Year Performance Highlights The following section provides an assessment of the strategic objectives, key performance indicators, targets, programmes and project performance of the GFC during 2006 and 2007. Result highlights for the year included have been structured in terms of the results achieved at a corporate level, the marketing and information management unit and investment promotion and transformation unit: Corporate Services • Formulation of draft enabling policy; • Advancing the listing of the company as a public entity; • Formulation, adoption and implementation of requisite management and operational policies and procedures in line with legislative requirements; • Development and approval of the annual Business Plan and MTEF budgets in compliance with PFMA and Treasury Regulations; • Successful filling of critical vacancies including Chief Financial Officer, HR & Office Manager, Company Secretary & Legal Advisor, Communication Manager and IT Manager; • Finalisation of Financial Statements for 2005 – 2006 and securing unqualified audits; • Successful publication and distribution of the GFC Annual Report for 2006; • Successful appointment of Internal Auditors; • Introduction of a performance management system; • Identification and implementation of skills training programmes; • Development of a Scorecard in-line with the Gauteng Growth and Development Plan; Marketing and Information Management Marketing’s key function is two-fold: to market Gauteng as a preferred film production centre and location of choice to international and national content creators; and to develop international and domestic markets for local made content. The achievements for the year under review include: • Development and implementation of an annual marketing plan • Corporate identity development and brand repositioning: o The organisation was successfully rebranded the Gauteng Film Commission. Visual branding such as logo, colours, promotional material and web presence were also enhanced. • Communications programme and campaigns: o Roll-out of monthly communication programme including monthly issuing of press releases, media interviews, event support and more. Successful implementation of above-the-line trade marketing campaigns under the banner ‘Big Ideas, Perfect Locations’. Since its launch in 2006 ‘Big Ideas, Perfect Locations’ has become a well established African film brand. • Web development & Sector database: o A comprehensive sector database has been developed and is available on-lie at www.gautengfilmdirectory.org.za. More than 900 service providers have been registered to date and cover more than 1000 different service categories ranging from casting and crew to pre- and post-production. • Provincial Image Library: o Photo libraries of major marketing partners have been accessed and a provincial image library is currently in development. The services of a professional locations photographer were secured and more than 80 location shots have been completed. • Sector research: o During 2007 GFC appointed Deloitte Consulting to assess the state of the Gauteng film industry. Dubbed ‘Project Gaullywood’ the project involved the comprehensive investigation into the size, scope and competitiveness of sector activity in the province. Phase I of the project was completed and presented to the Gauteng industry at the 2007 Gauteng Film Indaba in November. Investment Promotion and Transformation • Script research and development: o A Scriptwriters lab has been opened at the SA Scriptwriters Institute and is supported by the GFC. Support includes training and script development. • Community Screenings, Audience development and independent Distribution o Initiatives include sponsorship of various local film festivals and the successful roll-out of ‘Gauteng Bioscope’. • PDI production company development o A number of qualifying projects have been identified and supported. Support include assistance with pre and post production, assistance with distribution and assistance with attendance at international film festivals. • Training and Development o Partnership agreements have been initiated with film schools including AFDA on collaborative programmes around skills training and the ongoing development of young talent. 7. Risk Management A strategic risk analysis of the GFC’s main risks (including financial, human resource, political, environmental, organizational and operational) is carried out as part of an annual internal risk management process and risk mitigation strategies developed. 8. GFC and Community Outreach The Gauteng Film Commission actively promotes programmes and projects aimed at addressing some of the developmental and transformation needs of the province. Objectives of these programmes include: • To cultivate diverse and distinctive local content • To foster a cinema going culture through the development of distribution channels (e.g. township and micro cinemas) • To actively assist Previously Disadvantaged Individuals (PDIs) to participate in the film and television industry • To actively assist Youth, Women and People with Disabilities to participate in the film and television industry • To facilitate finance for PDIs in film and television • To facilitate the continued growth and development of the local film and television industry • To facilitate the infrastructural development of the sector • To support training and development initiatives within the sector. 9. Future direction With an economic contribution of in excess of R2.5 billion, the last twelve months have continued to show the importance of the moving image industry to the Gauteng economy. Following short on the success of Tsotsi, Gauteng has played host to a number of important productions, whilst Gauteng-based content creators have continued to impress international audiences and critics alike. Building upon the foundations laid in the agency’s first few years, the Gauteng Film Commission is now in a position where it provides individuals and companies with greater opportunities to develop their commercial and creative talent. The upcoming year will see a greater emphasis on partnerships, as well as improved client- relations around logistical support. The GFC will also facilitate greater debate around the province on the important role of the film industry in developing Gauteng as a leading creative hub. Looking towards the future, and in particular towards 2010, there are significant challenges that needs to be addressed.
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