Challenges and opportunities for production studios

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Charlene Govender, Sasani Studios

SCREEN AFRICA EXCLUSIVE:

Screen Africa chats to Charlene Govender of Sasani Studios about how increased investment in local studios could influence the trajectory of the South African production industry.  

According to PwC’s Insights from the Entertainment and Media Outlook (2019-2023), the South African film and television industry market revenue is expected to reach the R40 billion mark over the next three years.

Despite the positive outlook, however, the industry is not without its commercial pitfalls, with the public broadcaster fostering uncertainty by pulling the plug on some of the country’s most popular and longstanding productions. While the SABC ails and simultaneously looks to re-position itself as the key-player in this sphere, the attention now shifts to other players, including independent and privately-owned platforms, to take up the mantle.

With an expected increase in the amount of productions that will be carried out over the next few years, it is imperative to understand the role of production facilities in this growth and why it is important to invest and improve the standard of studios across the board.

The Role of Foreign Investors

It is not all doom and gloom, however, as the failure of the SABC has opened up the industry to new opportunities and possible participation by organisations with private resources, including those from outside the country.

“Overseas investors would be more comfortable to bring in foreign productions, which would enhance creativity in our local market and result in job creation, as well as a high level output of content,” says Sasani Studio’s Charlene Govender.

However, attracting those resources to our shores is impacted by a number of factors, some of which are favourable and others not.

“The steady decline of South Africa’s currency, albeit detrimental to our economy at large, is an attractive factor for many foreign investors,” Govender says. “Foreign investors, on the basis that the rand has declined, therefore look forward to lower fees for purpose-built studios, predictable production schedules and conditions that will propel a higher rate of return on investment.”

The country’s legislature around the production of international projects is seemingly luring more international production houses to explore local studio offerings, as there are highly appealing financial benefits (including tax rebates) for foreign companies that meet the incentive criteria.

“There is a move for foreign investment into the country, with the intention of using South Africa as the ‘African-base’ (for foreign investors), with purpose-built studios and infrastructure. However, our television and film industry needs to remain relevant on the international stage: for the industry to achieve a high level of content output, the infrastructure needs to be continuously maintained and upgraded to suit the ever-changing technology and what society dictates.”

Revisiting the Business Model

In Sasani Studio’s case, one of the strategies they aim to implement in order to secure consistent industry penetration is re-working their business model.

“We have often considered entering into joint ventures with production companies, with the view that a ‘long term venue’ for soap, drama and ad hoc productions may reduce costs normally paid to external suppliers and convert them to internal funds instead,” she says.

Govender believes that favourable business models are central to every effort made to attract private investment for local studios. In order for this to succeed, the South African film and television industry needs to prove that it can remain relevant on the international stage so that it can attract the attention of the necessary organisations.

Prudent commercial management of these opportunities, such as being able to guarantee medium to high returns on investment – as well as consistent profit-sharing in joint ventures with production companies (both local and international) – is a key to their success. According to Govender, there are steps that studios can take in order to remain visible to potential investors – one of them being consistency when knocking on international doors.

“The consistent highlighting of specific qualities of the production landscape in South Africa will make it more appealing to investors. This includes magnifying the safety and security measures that are in place, which means low risk for production data and content management, as well underlining the welcoming nature of the environment for big names in the industry.”

Long-term Benefits

The ultimate goal is for the local production industry to eventually have an immense economic impact with job creation and industry growth being the most obvious objectives. 

According to Govender, local studios need to continue building on the reputation that the film and television industry has already established over the last decade through housing international productions and leverage the existing credibility as currency for doing business in the future.

Inter-country collaborations have also been instrumental in bringing international productions to our shores through collaborations that have awarded local talent the opportunity to be part of projects that transcend our borders. These collaborations have also afforded local studios the opportunity to show that our skills base can match our international counterparts.

“It is pivotal to have multi-skilled crew members that can step into higher positions when the need arises,” she enthuses. “For example, studio assistants and various other talents should also have ‘on the job’ training in boom swinging, camera operation, lighting skills, vision control and the like.”

Adjusting to the Times

With the current economic climate in the country, production studios are in a position where they need to implement measures that will entice production houses to opt for studio productions as opposed to other – often cheaper – options available to them.

“Although the appetite for content is ever-increasing, the platforms for the production and delivery thereof have changed from that of television studios to other options,” says Govender.

“Investment of funds would result in securing a non-moveable asset with low risk, ensuring a continued passive income and – in the process – position our film and television industry in the foreign market as a lucrative investment opportunity,” she concludes.