Speech to the SPADA Conference 2010

Good morning

Thank you for inviting me to speak at this year's SPADA conference.  It's a great opportunity to celebrate the successes of the last year and to outline the government's thinking about the screen and broadcasting sectors.

The government is fully aware of the importance of the screen sector to New Zealand - not just for the substantial revenue it brings, but also for the flow-on effects for the economy, the stimulus for the development of technical industries and for our tourism sector. 

We also understand New Zealanders like and want to see their stories on screen - and believe it is important for them to do so.

I'll speak more about the government's vision for the screen sector and broadcasting later, but first it's worth reminding us about the recent successes the film industry has enjoyed.

Successes

New Zealand screen production and post-production have clearly developed a reputation for high-end expertise and excellence.

It's great to know international projects are as much attracted by New Zealand intellectual property as they are by diverse and spectacular scenery.

By working on and producing big name international projects like The Lovely Bones, District 9 and Avatar, New Zealanders' impact on the film industry extends globally. Kiwis can be proud of our contribution and success this year at the Oscars and BAFTA's.

In the domestic sector, Boy's big wins at the Qantas Awards and at the box office was a triumph. Congratulations to Taika Waititi and all those involved with the production. 

And congratulations to Gaylene Preston for Home by Christmas - well-received by critics and audiences alike, a solid performer at the box office, and like Boy, an audience favourite at Australian Film Festivals.

A special mention also to Jason Stutter for being invited to show Predicament to a Director Finders screening in Hollywood, and to Mark Albiston and Louis Sutherland for the success of The Six Dollar Fifty Man at overseas film festivals.

I understand Matariki was sold out for its world premiere at the Toronto International Film Festival last month, and Tracker was also warmly received by audiences at the Festival.

To help boost our country's wealth, we need to earn more overseas, and the film industry can add substantial value to our economy.

The film sector gives the world a very large window in which to view New Zealand. It raises our profile overseas to great heights and helps to attract tourists in droves. The exposure is invaluable and to pay for that through advertising is money we could just not afford. 

We have shown we can make great productions and we can also export more of what we make overseas.

The film industry is worth $2.8 billion to the New Zealand economy and Co-productions are an area of potential growth.  The most recent Co-production Agreement with China signed by the Prime Minister in July has great possibilities.

I hope more New Zealand companies will follow the example of Natural History New Zealand, which has been a pioneer for co-productions in China.  Its series on Rewi Alley, made in conjunction with China's CCTV and our Ministry for Culture and Heritage, was broadcast to a potential audience of 300 million people - I hope this is a sign of things to come. I understand there is a lot of interest in expanding the existing Agreement with China to include television productions.

This year, the government's Cultural Diplomacy International Programme developed a library of New Zealand films for the use of our overseas posts.  The Programme aims to use New Zealand culture to leverage trade opportunities and to develop awareness of New Zealand. 

Film is an obvious means to achieve those aims - and I am sure the Film Library will be extended over time. Films made in New Zealand not only showcase our landscapes, but also our innovative and technological capabilities in ways and on a scale few other projects or products can achieve.

That is why it was vital for the Government to step and negotiate a deal with Warner Bros to keep The Hobbit, thousands of jobs and a production worth $670 million to the New Zealand economy in this country.

It is clearly been the most contentious topic to hit the industry in recent years and I understand yesterday's opening session on The Hobbit generated some lively discussion.

That is not surprising. There was a lot at stake for the film industry so it's worth reiterating why the Government, with the Prime Minister leading from the front, became involved in the negotiations.  The Hobbit is vitally important to our film and tourism industries which impacts on New Zealand's global brand and economy.

This will showcase New Zealand to the world as a great place to live, visit and do business. Exposure for New Zealand through the big screen boosts tourism. One in 10 visitors admitted being influenced to come to New Zealand after seeing the Lord of the Rings. The Government also secured a deal to have a promotional video, directed by Sir Peter Jackson, embedded in all of the hobbit movies DVDs and digital material.

Considering the last Lord of the Rings DVD - Return of the King - was one of the largest selling ever with over 50 million copies sold world wide-wide, securing the DVD marketing deal is invaluable.

Factor in recent figures which show international tourists spent $9.5 billion in New Zealand in the year to March 2010 - the country's highest foreign money earner for that year - and you'll agree that is a marketing coup.

If the actor's boycott succeeded in booting The Hobbit off-shore, the ramifications would have extended beyond just actors. The spin-offs from blockbuster movies are massive. The Lord of the Rings trilogy created as many as 1500 jobs for actors and crew and up to 20,000 jobs through catering, hospitality and transport contracts.

As I mentioned earlier, the film industry is worth $2.8 billion to the New Zealand economy and the two Hobbit films will generate $670 million alone.

Yes, the Government dipped into its pockets and paid around $100 million to keep The Hobbit here, but with estimates the movies could be worth an additional $1.3 billion to the economy, the outlay for a projected return of that size is a no-brainer.

The Government knew this was big, and unlike other parties involved in the saga, we were not willing to lose it. I'm sure it's a sentiment many of you here today fully agree with.

The key message I want to deliver is that this Government will take action, when appropriate, to protect the screen industry and the jobs and livelihoods that depend on it. The sector helps provide employment, investment and growth. It also fosters creative and artistic talent. They are very good reasons why this Government has taken an active role to protect The Hobbit.

As a creative activity, the screen sector has also harnessed the full spectrum of artistic talent in New Zealand. We understand the importance of maintaining a production base for home-grown television programmes, given the strong links between the television and film production sectors in this country.  The government obviously has an important role to play in ensuring television programmes and films continue to be made in New Zealand.

We want to ensure New Zealand continues to attract screen projects.  We want to keep our talent in New Zealand and we want our screen industry to thrive and grow. And it has done so, quite well in recent years.

Reviews

As you know, Minister Finlayson's review of the Film Commission has moved on to the next phase with meetings to be held with the sector early next month. I understand SPADA was positive about Sir Peter Jackson's and David Court's report and I hope SPADA members will have further input into these discussions.

The government will start a review of the Large Budget Screen Production Grant next year, along with the Screen Production Incentive Fund - to make sure the supports and incentives they provide to film and television projects are appropriate and working well. 

We have certainly seen some real successes - Boy received funding from the Screen Production Incentive Fund, and projects as diverse as Avatar, District 9, The Lovely Bones, The Wot Wots and Spartacus benefiting from Large Budget Screen Production Grants.

New Zealand has to be nimble and responsive to remain an attractive destination for overseas investment in screen productions. At the same time, we are not in a position to compete with some of the more generous incentives offered by other countries.  In the end, incentives are an important part of the mix, but we have to ensure there are other compelling reasons for productions to come to New Zealand, and that the ‘package' New Zealand can offer is understood by decision-makers

There has been significant activity in the film sector this year and there are changes on the horizon in broadcasting. One of the most noteworthy steps is repealing the TVNZ Charter.

As Broadcasting Minister, I have introduced legislation to remove TVNZ's charter obligations and to free up its archived programmes for re-screening.

The bill to replace the current TVNZ charter presents a less prescriptive list of functions, and leaves TVNZ free to determine its own priorities.

My thanks to SPADA for its constructive submission to the Commerce Committee on the bill. The majority of the Committee supports the bill, with suggestions for some minor changes to provisions around the re-use of archived material.  I am confident the bill will pass through its next stages in the House.

We have always considered that the existing charter saddles TVNZ with a dual mandate that's been unworkable. It expected TVNZ to give full effect to the charter while maintaining its commercial performance. Experience has shown that highly prescriptive charters are incompatible with a commercial model of broadcasting. The bill aims to leave TVNZ free to function as a multimedia company.

This will allow it to continue its transition from a traditional broadcaster to a multi-platform digital media company with diverse income streams and services.

However, we know there is an expectation in the community for public service broadcasting content which a commercial broadcasting model is unlikely to deliver.  Along with the Māori Television Service, TVNZ 6 and 7 have provided an opportunity to explore those possibilities. 

I know many people in the industry have concerns about the Charter and those positions have been made very clear, but the Charter has been operating for over six years, and you could argue it has had little impact on providing quality public broadcasting.

The reality is New Zealander's have healthy appetites for seeing Kiwi stories and characters on their television screens. Although they are expensive to make, New Zealand made shows consistently rank as some of the highest watched.

Local content is down - around 3 percent on the previous year - but there is a good future for local content and the Government is committed to it. We have backed that commitment up with the $15 million Platinum fund. Launched in 2009, it provides contestable funding for free-to-air broadcasters and it has been a resounding success.

It shows that contestable funding results in high-quality projects and we have seen an interesting range of great Platinum programmes screening across our major free-to-air channels.

NZ On Air,  through $80 million of contestable television funding, ensures about 800 hours of local content can be produced each year, but the majority of local content hours are of course, financed by the networks.  They do so because locally-made programmes continue to rate well with viewers.

The Government spends around $230 million a year on public broadcasting, and with funding for TVNZ 6 & 7 finishing in mid 2012, we are looking at various options for public broadcasting that achieve the best possible outcomes for that spend. There is clearly a demand for a quality public broadcaster and there is ongoing discussion about what shape a future public broadcaster may take.

Digital Switchover

One of the Government's broadcasting manifesto commitments was to announce a date for digital switch-over. In September I announced that DSO is starting in September 2012 in the Hawke's Bay and West Coast, with the rest of the country switching over in three stages, ending in November 2013. 

This will be a real milestone in New Zealand broadcasting, with access to more programmes and better quality signal - and the economic spin-offs from the sale of the freed-up spectrum. Later this month I will also be launching the branding and marketing package for DSO, so stay tuned for that.

The needs of regional broadcasters are not being overlooked and my officials are consulting on options to assist them through the switch-over process. I expect Ministers will be in a position to make final decisions on the support that will be provided by early next year.

Extension of DTT

There is good news for many New Zealanders in the Wairarapa, Taupo, Whanganui, Taranaki, Nelson, Gisborne, Rotorua, Whangarei, Timaru and Invercargill - who cannot currently access free-to-air high-definition digital television.

The government has put $6.3 million into extending the terrestrial network into these areas, so we will move from 75 percent of New Zealand households to around 87 percent of households with access to it. We hope to have all this work done in time for the Rugby World Cup.  The details are still being negotiated between the broadcasters and the transmission companies but I expect work to commence soon.

I see the next session today focuses on the TVNZ Amendment Bill and the future of TVNZ 6 and 7.  I assure you the government is committed to TVNZ and its future as a multi-media company which is responsive to current and future media possibilities.

I am confident the work we are undertaking to clarify TVNZ's role will strengthen the company and enable it to meet the challenges of a fast-moving media environment.

I know the past few months have been tumultuous and challenging for many in the sector.  The government is keen to ensure its substantial investment in film and broadcasting is secure and we will be working with you to make sure our interventions help the industry to keep up the momentum and continue to grow.