The last financial year saw the amount spent on drama production in Australia crack $1 billion for the first time, thanks in part to record levels of foreign project spend and bolstered local feature film production.
According to the Screen Australia 2016-17 Drama Report, released today, a record $1.3 billion was spent across 151 titles last year – a dramatic jump from $850 million from 120 titles in 2015-16.
The report attributed this increase largely to feature films, and in particular, foreign feature spend. With films like Aquaman, Thor: Ragnarok and Pacific Rim: Uprising lured down under by uplifted tax offsets, state incentives and a dollar under $USD0.80, it was a record breaking year for foreign features, with figures totalling $567 million.
However, after two years in a slump, bolstered levels local of feature expenditure at $284 million have also had a positive impact.
Adult television drama has also outpaced last year’s record year, in terms of both spend – $321 million – and titles produced – 46. However, the report has also demonstrated a stark result for kids TV, with expenditure down 20 per cent on the five-year average.
Total PDV expenditure is also up 17 per cent at $252 million, with $123 million coming from foreign PDV-only projects.
Screen Australia CEO Graeme Mason told IF the report, with the exception of children’s, demonstrated a “spectacular year”.
He pointed out that the challenge going forward will be maintaining that progress, particularly in an industry that is by its nature cyclical.
“I couldn’t be happier with the numbers,” Mason said. “We in the industry know just how amazing that [result] is, but also just how fragile the ecosystem is; that you need to maintain things like the government’s support and focus. We all need to stay on it to make sure that we can continue to grow from this.”
Foreign blockbusters boost numbers
Big budget blockbusters shooting in Australia, as well as PDV-only projects like Spider-Man: Homecoming and Logan have seen foreign feature expenditure more than double since 2015-16. Foreign television drama has also seen a 39 per cent increase to $43 million – 84 per cent above the five year average.
Mason is pleased to see that much of the foreign work was “repeat business”. Beyond the benefits for local crew and facilities, he’s also happy that the films shot in the last year have local feel: Aquaman is directed by Aussie James Wan and stars Nicole Kidman, while Thor: Ragnarok stars Chris Hemsworth and Cate Blanchett and is directed by Kiwi Taika Waititi.
“Even on some of the really big foreign stuff you had real opportunities for Australians and showcase for Australia,” he said.
Asked whether such large international spend is sustainable in the long-run, Mason said: “We know some of our offsets are low by comparison. So that’s an issue.”
He adds there is “still an awful lot to be done” to work with Aussie talent with international clout, like directors Justin Kurzel and David Michôd, to bring projects with them back to Australia.
“I think that’s something we as a sector will need to do a lot more work and help on.”
Local feature expenditure recovers from slump
The total expenditure of $284 million on local feature films sees a recovery from a two year slump: 2015-16’s figures were $195 million and 2014-15’s $125 million by comparison. The jump is driven by a strong slate including the Sony-backed Peter Rabbit, Sweet Country, Cargo and Australian-UK co-production Mary Magdalene.
The number of features produced, 41, is a five year high, as is the proportion of films with budgets greater than $10 million at 22 per cent.
Mason said the recovery in feature expenditure is in part because many of the films shot in the last financial year have “scale and real ambition”, which take time to put together.
However, he adds there also seems to have been a “turning point” where foreign investors have realised Australian features can work globally; foreign investment accounted for 47 per cent of the finance for this year’s feature slate ($162.9 million on 23 titles).
“Some of those projects have some real heft to them. But another thing is… a lot of the ‘local local’ stuff is getting some real inward investment on it, whether it be sales advances or private investment. I think that’s very exciting and again, something the sector has to do as much with as it possibly can.”
The Producer Offset provided $99.7 million towards local features, accounting for 29 per cent of local finance. Government funding contributed 8 per cent, or $28.4 million. Of that, $13 million came from Screen Australia and $14.9 million came from the state agencies. The industry contributed $28.4 million towards features (8 per cent of total finance), and private investment $23.6 million (7 per cent).
Adult TV drama spend continues to climb, but children’s faces steep decline
Mason said the continued growth in TV drama is a testament to the fact it is resonating with audiences. “Every network has multiple dramas on air at the moment, which Australians are watching and really enjoy. We’ve also got to keep building on that incredible momentum.”
With the exception of Home and Away and Neighbours, the long-form serial has disappeared. However there has been a resurgence in series with more than 13 episodes, driven particularly by half-hour comedy formats such as The Family Law, Here Come the Habibs and Get Krack!n. Mini-series production continues to dominate, with Mason noting a pleasing number of return seasons for shows like Cleverman, The Wrong Girl, Secret Daughter and Doctor Doctor. However, there has been drop in telemovies, with spend falling from $11 million last year to $8 million.
And while adult TV drama is on an up, the children’s TV drama expenditure has steeply dropped to $48 million. This is significantly below the five-year average of $60 million and last year’s result of $66 million. Total hours are also at their lowest point in five years at 111.
The decline is in part due to the fact that co-productions took work off shore (total budgets were $100 million), and as the report notes, children’s drama naturally sees year-to-year fluctuation due to commercial broadcaster’s quota requirements. However, Mason said there is cause for concern: while he believes that hours will even up on the rolling three year average, he is troubled by a drive away from live-action.
The $16 million spent on live-action is the lowest in five years; well below the five year average of $24 million. By comparison, animation spend is at $32 million, however, that is also the lowest recorded expenditure in the format since 2012-13.
“One of the issues we all still need to look at is: How do we maintain a kids sector? Part of that is how do we fund something, but equally, where are kids watching stuff? You can’t just focus on one little bit of it,” said Mason.
This year’s report has separated online drama (over 30 minutes in duration) from TV drama for the first time. While the report acknowledges it is difficult to capture all online production, it said that 22 dramas contributed $14 million to the overall expenditure.
In terms of finance for Australian TV and online drama, 57 per cent came from the industry, with the commercial free-to-air networks making the largest contribution ($107 million). The largest contribution from a single broadcaster came from the ABC, which provided $55 million.
The Producer Offset made up 12 per cent of total finance ($52.9 million). Government funding made up 9 per cent, or $38.9 million, $24.3 million of which came from Screen Australia. Of the $14.4 million from the state agencies, 88 per cent came from Create NSW and Film Victoria.
Foreign investment in TV was at $86.9 million or 20 per cent of total finance, well above the five year average of $69.1 million. Private investment made up just $5.6 million of total TV investment.
Off the back of such a record year, Screen Australia’s focus is on maintaining the momentum, and Mason said the industry must work out together how the current success can be leveraged into the future.
“It’s up to all of us: what do we do to build from [this]?” he said. “And, how do we also ensure we don’t fall off cliffs when any one area particularly has a downtown – which they are always going to do. To me, it’s about getting as much inward investment as we can going forward.”
In a statement, Screen Producers Australia CEO Matt Deaner said the increased investment in the industry demonstrated the strength of Aussie talent in a global market, however also cautioned that this report was only a snapshot in time. “I hope to see this continue to increase in the 2017-18 Drama Report and beyond.”
SPA has now long been advocating for children’s quotas to be protected on commerical networks, and Deaner said the report confirms “Australian children’s television is in a state of crisis.”
“We know the commercial broadcasters have devalued the audiences for targeted children’s content and the numbers back this up – record low expenditure and hours. They should not be rewarded for this neglect by having children’s obligations abolished, as they have asked. We must instead look to adapting regulatory models to ensure our children are supported with Australia stories from a variety of formats and platforms now and into the future.”
On the record level of foreign project spend, Deaner said: “To maximise the benefits of this to our industry, the incentivisation and effect of foreign investment must be carefully considered and well managed. While the industry welcomes foreign productions to Australia, the inflationary effect on production costs can create problems for our small businesses.”
Deaner said all boats – local and foreign – need to rise together, arguing if the industry skews too far towards an “offshore fee for service sector” there will be a destabilisation of the industry.
“Balance and stability in our content ecosystem is critical – as is certainty around government incentives and regulation. The outcome of the current government reviews for our industry have never been more important.”
Read the 2016-17 Drama Report in full here.