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Submission to the Australian Government's 2010 Review of The Submission to the Australian Government’s 2010 Review of the Independent Screen Production Sector ISSUED JULY 2010 REVISED AUGUST 2010 • Page 50, amended Producer Offset Summary Statistics SCREEN AUSTRALIA – 2010 REVIEW SUBMISSION CONTENTS 1. INTRODUCTION ..................................................................................................5 2. KEY ISSUES ........................................................................................................6 3. SOURCES AND DEFINITIONS ............................................................................9 3.1 Definitions and scope ...................................................................................... 9 3.2 Sources and methodology............................................................................... 9 3.2.1 Screen Australia’s consultation with industry.........................................10 3.2.2 Screen Australia database analysis ......................................................10 3.2.3 Survey of Australian screen production businesses (2010 Business Survey) ..........................................................................................................11 3.2.4 Database analysis and 2010 Business Survey combined .....................11 3.3 Information limitations ................................................................................... 12 3.3.1 The ABS Service Industry Survey .........................................................12 4. BACKGROUND .................................................................................................14 4.1 Government’s role in screen production ........................................................ 14 4.2 Screen Australia............................................................................................ 14 4.3 Screen Australia and the Producer Offset ..................................................... 16 4.4 Screen Australia and co-productions ............................................................. 18 5. INDUSTRY CONTEXT .......................................................................................19 5.1 The ‘creative industries’................................................................................. 19 5.1.1 Size of the creative industries ...............................................................19 5.2 The industry .................................................................................................. 20 5.2.1 All film and video production .................................................................20 5.2.2 Drama and documentary production .....................................................20 5.3 Production activity ......................................................................................... 22 5.3.1 Television, film and video production activity, including broadcasters ...23 5.3.2 Independent documentary and drama production activity .....................24 5.4 Challenges to sustainability ........................................................................... 26 6. INDIVIDUAL PRODUCTION BUSINESSES.......................................................27 6.1 Towards an understanding of business sustainability .................................... 27 6.2 Feature film, TV drama and documentary: specialisation or crossover? ........ 27 6.3 Characteristics of surveyed businesses......................................................... 28 6.3.1 Business structure ................................................................................28 6.3.2 Size of business, employment...............................................................29 6.3.3 Location ................................................................................................30 6.3.4 Type of business activity .......................................................................31 6.3.5 Level and sources of income ................................................................32 6.4 Indicators of sustainability ............................................................................. 36 6.4.1 Characteristics of consistent and profitable businesses ........................37 6.4.2 Profitability, budgets and income ..........................................................40 2 SCREEN AUSTRALIA – 2010 REVIEW SUBMISSION 6.5 Strategies for business viability ..................................................................... 42 6.5.1 Ownership of creative assets ................................................................42 6.5.2 Diversity of content ...............................................................................42 6.5.3 Diversity of business activity .................................................................44 6.5.4 Collaboration.........................................................................................45 6.6 Observations of survey respondents ............................................................. 47 6.6.1 Factors important to growth ..................................................................47 6.6.2 Significant barriers to growth.................................................................48 7. PRODUCER OFFSET ........................................................................................50 7.1 Summary statistics ........................................................................................ 50 7.1.1 Number of certificates issued by month ................................................51 7.1.2 Number of final certificate applications received by month ....................51 7.2 Impact of the Producer Offset on feature films............................................... 52 7.2.1 The importance of diversity across budget ranges ................................52 7.2.2 Innovative and entrepreneurial filmmaking............................................54 7.2.3 Theatrical distribution and QAPE thresholds .........................................54 7.2.4 Direct support for Australian content on emerging media platforms ......56 7.3 Impact of the Producer Offset on TV drama .................................................. 58 7.3.1 The 65-episode cap ..............................................................................59 7.4 Impact of the Producer Offset on documentary ............................................. 60 7.4.1 Difficulties for documentary makers ......................................................62 7.5 Direct and indirect support of production businesses..................................... 65 7.5.1 Producer Offset.....................................................................................65 7.5.2 Screen Australia funding .......................................................................65 7.5.3 Producer Offset and Screen Australia funding ......................................66 7.6 Certainty and the Producer Offset ................................................................. 67 7.6.1 Timing of the acquittal...........................................................................67 7.6.2 Significant Australian Content ...............................................................68 7.6.3 Qualifying Australian Production Expenditure .......................................70 7.6.4 Co-production access to the Producer Offset........................................76 8. SUPPLEMENTARY INFORMATION..................................................................77 8.1 Location Offset .............................................................................................. 77 8.1.1 Foreign drama production: PDV with location shoot..............................78 8.2 PDV Offset .................................................................................................... 80 8.2.1 Levels of PDV-only production ..............................................................80 8.2.2 Cost to government...............................................................................81 8.2.3 Type of services provided .....................................................................81 8.2.4 Impact on PDV businesses ...................................................................82 8.3 State support................................................................................................. 83 8.4 Co-production................................................................................................ 86 8.4.1 Points test.............................................................................................87 8.4.2 Non-credited writers..............................................................................87 8.4.3 Indicative approval ................................................................................87 8.5 The games sector.......................................................................................... 88 3 SCREEN AUSTRALIA – 2010 REVIEW SUBMISSION 8.5.1 Challenges to sustainability...................................................................88 9. ATTACHMENTS ................................................................................................91 A: Issues raised as part of Screen Australia’s industry consultation .................... 92 B: 2010 Business Survey .................................................................................... 94 C: Audience engagement: a snapshot from the 2010 Business Survey............. 104 D: Currently active businesses by slate composition: a snapshot from the 2010 Business Survey ............................................................................................... 106 E:
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