New Zealand Film Commission chair David Cullwick has issued a response to criticisms by producer John Barnett about the performance of the NZFC, published in the November issue of industry magazine OnFilm.

John Barnett is head of New Zealand's largest production company, South Pacific Pictures, and an ex-board member of the NZ Film Commission. New Zealand Film Commission chair David Cullwick has issued a response to criticisms by producer John Barnett about the performance of the NZFC, published in the November issue of industry magazine OnFilm.

John Barnett is head of New Zealand's largest production company, South Pacific Pictures, and an ex-board member of the NZ Film Commission.Barnett says there is an absence of accountability and the Film Commission's performance or failure cannot be measured. He says the lack of hard data has created a 'dependent' film industry, not an independent industry.

Read the full opinion piece at OnFilm

Statement: New Zealand Film Commission chair David Cullwick

In the November issue of On Film, John Barnett gives an opinion of the NZFC's operations and processes and the NZFC's accountability for them. It is clear from John's comments that many of his concerns are of long standing. As many of these issues are historic I cannot answer them directly but I will answer for the current staff and Board. In addition John has raised issues of fact, many of which we dispute. We have answered these in an accompanying document which is also available on our website.

I welcome debate on how best the NZFC can work with the domestic film industry in promoting talent and script development and supporting the production financing of specific films within our cultural mandate. This debate needs to be about key priorities and functions as viewed by the industry as a whole, and needs to consider the changing environment and the measures by which success should be judged. The timing of such debate is especially appropriate with the NZFC appointing a new Chief Executive for the first time in over a decade, and with the possibility that a new government will have new viewpoints on arts and culture policy. An important dimension to such debate is that it takes place in an atmosphere of constructive and open discussion. The NZFC is committed to engaging in such discussion with its industry partners.

An illustration of NZFC's willingness to engage in open discussion has, in my view, been well illustrated by the response to the SPIF funding policy initiative announced in May 2008. NZFC had worked with the industry to develop policy proposals to the Government as to how it might best respond to the Australian offset scheme. NZFC and the industry were supportive of seeking additional funding support to reduce the impact of the above scheme on New Zealand capability and filmmaking. In the event the Government proposal involved some new funds and those previously allocated to NZFC for Film Fund type films. The transfer of these funds was unanticipated and was initially of major concern to NZFC, but we were delighted in the overall increase in production funding made available to the industry. Following the announcement of SPIF, NZFC quickly initiated discussions with the industry on how best to make the scheme work at a practical level and within the spirit of the new 'producer equity' approach. In my view the final scheme details benefited significantly from this partnership approach, and has, I believe, been well accepted by most in the industry.

As I see it John's concerns relate to three distinct areas, all of which are bound together by an overarching theme relating to accountability in respect of all the NZFC's activities.

The three areas are:
1. NZFC transparency - particularly relating to production financing and judging performance
2. Prioritisation of funding in relation to NZFC functions
3. The NZFC's sales and marketing activities - economic outcomes versus industry support

Transparency - decision-making and performance

The issue of transparency has several dimensions. These include the way the NZFC reports its funding decisions and the accountability of its decision making processes regarding how its funds are allocated.

In respect of production funding and the way it is reported, as I understand it, the approach of the NZFC has developed over time with the basis being concerns about commercial confidentiality as producers finalized specific projects and while completed films went to markets.

What this has meant in practice is that annual reports have included total production investment but not the production investment in each individual film project. This practice has developed through a common film industry understanding that this information could affect the price of completed films in the market. At a later date when a film has completed its market cycle, (usually within three years of the initial investment decision) the NZFC has released full details of its project investment and makes it freely available on the NZFC website which is current to 2005 at this point.

The issue of whether the reasons for operating this way are still relevant in the current international market is a real one and one which the Board intends to address in consultation with the industry. This is also pertinent to SPIF funds and any discussion of reporting grants allocated will have to be agreed with Government.

Personally, my view is that experienced producers and financiers are quickly able to assess the scale of a project and make estimates about the nature of funding. This will be even easier under SPIF. I am supportive of an approach in which funding decisions are promptly in the public arena.

Another area I am keen to promote for discussion is whether the funding process for NZFC co-investment funds should be changed to focus on a small number of competitive rounds - say two or three times a year. I understand that there are concerns about this kind of approach because timing regarding talent availability, other funding offers and production scheduling is often quite critical.

In terms of judging the performance of our investment in films, I agree that clarity about investment and outcomes will benefit discussion and production financing decisions both for the NZFC and individual producers. However, we need to balance commercial imperatives with the cultural mandate under which the NZFC operates.

Prioritisation - supporting film production

There will always be debate between those who want all or most funds allocated only to film production financing and those who support a wider approach encompassing talent and script development, production financing, international sales and marketing, support of industry organizations and administration. The NZFC is compelled by the statutory obligations outlined in the New Zealand Film NZFC Act 1978 to take the wider approach.

Nevertheless, production expenditure remains the most significant focus. Despite comments to the contrary, commitment to support film production financing continues to be a critical role for the NZFC with a total of $20.3m approved for feature films during 2007/08, and an average of $13.2M over the last four years despite 2006/07 being a lower year. 2008/09 is shaping up under SPIF to be another strong year, despite the challenges of international financing uncertainty which require a high degree of flexibility from all involved on particular projects.

John has raised concerns about funding that is made available by the NZFC to a range of industry organizations including, I assume, to the producers' own organization, SPADA. Let me start by observing that when I took up the post of NZFC Chair just over two years ago I was quickly aware of the fragile organisation models which existed in the industry, both in terms of film production businesses and of industry organizations. Increasing the level and frequency of screen production (in its various forms) is critical to improving the industry's sustainability: seeking increased funding for film production was an early initiative. The success of companies like South Pacific Pictures, with their astute involvement across television and films, is applauded. The challenge is that there are too few such companies within an industry still strongly focused on single projects.

Another critical dimension, in my view, is that a strong base for script and talent development is maintained, whether it be supported by the NZFC or by others. Having strong production companies and industry guilds is an important part of that along with a robust development process supported by the NZFC. During the last year NZFC has reviewed its approach in this area and concluded that it could do better. It has now moved to funding a wider base of projects at the initial development level with a more rigorous process which will create a tighter development pyramid as projects progress.

Finally, in discussing our work supporting industry organizations, John has stated that the NZFC required from them an undertaking to “refrain from public questioning of NZFC policy if they wish to continue to receive largesse”. I can assure him that no such undertaking is required. We strongly value input into our policies from such organizations. Whether such organizations decide to make their contributions in the public forum is up to them.

Sales and marketing - supporting films and filmmakers

NZFC is committed to ongoing assessment of how it can best work in partnership with the industry to promote New Zealand films locally and in the international arena. At the time of writing, an independent assessment is underway of the sales and marketing area and it will form the basis of discussion with the industry as to ways in which this area can be developed.

John Barnett also makes claims about a lack of commercial discipline in terms of income from sales activity, both as sales commission and film income. One important aspect, which must be a part of our ongoing discussion, is the relationship between economic outcomes and industry support in this sales and marketing area. Sales and marketing encompasses not only direct sales activity but also support for films and filmmakers in the international arena, marketing and communications activity in relation to the industry in New Zealand and support for the cultural impact of New Zealand films and film production including short film production, sales and promotion. John appears to be measuring this activity against a purely commercial yardstick whereas the NZFC, as I mentioned at the outset, is required by its statutory obligations to undertake activity in support of films which may not be easily measurable by that commercial standard. The balance of these activities is something which the NZFC continually assesses and on which we also welcome the views of the industry.

Conclusion

The world is different and the industry has progressed substantially since the NZFC was established thirty years ago. The New Zealand public now actively engages with New Zealand films in the most positive way as evidenced by box office results in the last few years and accepts that some films are more successful than others. The industry (including the NZFC) has strong international recognition which is a great platform for the future. The NZFC as an organisation has, in my view, excellent staff capability and receives strong support from members of the industry for what it does and how it operates. Nevertheless it will always be able to do better. John Barnett has strongly put his views out there in his 'opinion piece'. The challenge for us all is to take the discussion wider to develop a cohesive voice for the industry as to what changes may be desirable. The NZFC looks forward to promoting those discussions with our industry partners.

David Cullwick
Chair, New Zealand Film Commission

18/11/08

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