BUSINESS NEWS

New TV finance model

Thu, 05 Jan 2012 16:07

Johannesburg-based producer Marc Schwinges of Underdog has created a new business model for TV production in South Africa which utilises the Department of Trade & Industry (the dti) rebate and sees two language versions of a new documentary series licensed to two different broadcasters.

Most significantly, Schwinges and his partners retain the intellectual property (IP) rights to the show, with only 3.9% held by a private investor.

This is the first time that the dti rebate has been used on a TV show that is financed by local broadcasters.

The model was created for the 13-part Rof of Spog (Afrikaans version), which began broadcasting on SABC2 on 9 January. Pay-TV broadcaster M-Net has licensed the English version of the show, Rough or Smooth, scheduled for broadcast in February 2012.

Popular soapie stars Terence Bridgett and Paul du Toit, who have their own company Fanagalo Films, present the show. It is described as “an adventurous and sophisticated new take on the travel, lifestyle and food genre, exploring southern Africa in a way that’s never been done before.” Bridgett and Du Toit visit eclectic places, meet the most eccentric locals, attempt adrenaline pumping adventures and indulge in the ultimate luxurious experiences.

Both versions of the show are shot simultaneously creating two streams of new original local content.

Says Schwinges: “The current commissioning model of local broadcasters comprises a 100% commission with them owning all IP for life. International sales are rare and usually managed by the broadcaster which also benefits from such sales.”

As deputy chair of the South African Screen Federation (SASFED), Schwinges has been involved in the production industry’s fight to own IP of TV shows for many years.

“The dti’s South African Film and Television Production and Co-Production Incentive is designed to offer a rebate of up to 35% of Qualifying South African Expenditure (QSAP). It has been successfully used on many local films and co-productions but never on a TV series financed by local broadcasters.

“A documentary TV series of up to 13 parts qualifies for the rebate as long as the total production budget is over R2.5m and, most importantly, if a South African broadcaster does not own it,” explains Schwinges.

Bridgett and Du Toit first approached Schwinges with the idea for Rough or Smooth in September 2009 and he proposed a unique model of finance for the project that would allow the team to own rights in the project.

“We did not want to give away all rights as is usual in a commission, and believed in the potential of some foreign sales. After a year of development we were ready to pitch the project. We needed a large portion of the money from a local broadcaster, by way of a licence deal, to meet the dti’s requirements.”

When Schwinges submitted the project as unsolicited to the SABC, acting programme manager of SABC 2 Ziaynda Ngcaba requested that the show be in Afrikaans.

An English version was still important if the show was to be fully financed and have foreign sales potential. This meant producing two different sets of deliverables.

“Even with SABC’s licence deal and the dti rebate, we were still short of about 25% of the budget,” says Schwinges. “We had to start shooting in February 2011 to cover the Dusi Canoe Marathon but only had verbal commitment from the SABC. I managed to get another 3.9% from a private equity investor, but still needed more. In the nick of time for that shoot SABC signed its licence deal.”

Because they were still short of finance the filmmakers were not able to access the completion bond required for the dti rebate. “We needed to license the English version of the show quickly. Luckily Lebone Maema of M-Net’s local content channel, Mzansi Magic, agreed.

“In October last year, the deal was finally in place to finance the full budget. It has been incredibly challenging producing a show this way but I hope it proves to be a viable model for the local industry,” concludes Schwinges.

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