Industry Report: Focus: Africa
R350m investment for Cape film facility
- A R350m investment into a state of the art film facility outside of Cape Town is expected to transform the city from a diverse and useful site from which to shoot advertisements and films, into a dynamic film hub where the traditional film industry can converge with the modern media industry, and international movie makers will be attracted by the state of the art facilities available.
The studio, known as Cape Town Film Studios, proved it has what it takes to compete with the world’s best movie studios. This month the makers of Judge Dredd, a movie based on a popular comic book figure, completed their filming of the complex 3D movie – on time and without problems.
It was shot entirely in studio, using at least 20 purpose built film sets on the four ‘stages’ that together cover at least 17 000 square meters of production facilities. Producers made use of the high tech computer systems, animation technology and post production facilities available at the site. “In the past a film like this would have been shot in one of the classic studios around the world,” says Nico Dekker, CEO of Cape Town Film Studios.
South Africa’s film industry has come a long way since 1995, when the first foreign film production companies started using this country as a location for feature films and commercials.
At the time, in 1995, the industry employed around 4 000 people. This has since grown to around 30 000 people, with further jobs - and earnings - created in film-related transport, hospitality and catering.
According to most recent figures published by the Cape Film Commission, the industry in 2009 had a direct annual turnover of more than R2.65bn and contributed an indirect annual turnover of more than R3.5bn to the country's gross domestic product (GDP).
But there were still opportunities for the local industry to grow further. “On the foreign film front movies and ads were being shot here but all of the post production work was done ‘back home’,” says Dekker. “And we were not attracting the block buster movies.” And while the local industry has made tremendous strides, it has not progressed beyond the ‘important’ films like Yesterday and Jerusalema or beyond the slap stick humour of Leon Schusters ‘Mr Bones’ to mature, commercial feature films with popular appeal. District 9 was a step in this direction but it was not produced or financed by South Africans.
“We have a fragmented film industry,” says Dekker. “What we needed was a high-tech studio that would enable a different form of film. One where we could build any sets we liked and where we could control the environment – you cannot risk bad weather when you have the big stars on set.”
Enter Cape Town Film Studios. The company is owned and financed by Anant Singh’s Videovision Entertainment (42%) and by Sabido Investments (42%) which is majority owned by HCI and part owned by Remgro. The project was supported by the provincial government, which added R30m to the put in exchange for a 10% stake. Cape Town City also built the roads infrastructure on the site – which it owns and the Dti helped out with an infrastructure grant to the tune of R16m.
The R350m investment will take years to repay, says Dekker. “This is a long-term vision.” But the economic impact is already being felt: The makers of Judge Dredd spent R100m in SA. “For every R1 spent on production an economic impact factor of 2.5 is accrued,” he says. This means the production added R250m to the Cape Town economy.
The studio opens up the “elitist” world of film making to ordinary people. For instance Judge Dredd saw the producers hiring dress makers, builders, painters and carpenters from the local community to help build the sets and create costumes.
But attracting films and ads to South Africa is proving difficult in the current climate. The rand has appreciated by 30% since the financial crisis; other governments have increased their incentives and other countries have dropped their prices by as much as 30% in a bid to win business. “Suddenly Canada and the UK are looking very competitive,” Dekker says.
Rebates are a minimum of 25% in other geographies, with no cap on the size of the investment. “SA offers 15% with a cap on the investment of R20m. We need to step up our game.”
The Department of Trade and Industry (DTI) is sympathetic – it recognises that the film industry is a sector with excellent potential for growth. And even with rebates of 25% or more, governments can still make money. “The increase in taxes, like VAT and PAYE, more than compensates government,” says Dekker.
The next international film is already installed in the studios and production has begun. Dekker declines to add detail on who might be involved.