More film incentives in the pipeline

26 October 2009

Recognising the potential of South Africa’s film industry and the impact its growth could have on economic development, the Department of Trade and Industry has proposed the option of an incentive paid according to production milestones achieved.

With the production of films generally regarded as high-risk, small emerging producers often have difficultly raising the necessary funding, and the department believes the proposed incentive will help producers to improve their cash-flow.

“The option of milestone payments [would be] restricted to South African film and television productions and co-productions, and applicants wishing to make use of this payment method [would have to] acquire a completion bond,” the department said in a statement this week.

As this might be costly for smaller producers, where the cost of a completion bond could be as much as R300 000, 70% of the cost of the completion bond would be subsidised for productions costing between R2.5-million and R6-million, and 50% of the cost of the completion bond for productions costing between R6-million and R10-million.

Productions over R10-million are normally required by financiers to have a completion bond in place, therefore no additional subsidy would be granted.

“In the case of television episodes – including animation – payments can be made after the successful completion of each episode and delivered to the [department] with an auditor’s statement confirming the qualifying South African production expenditure,” the department said.

“A completion bond will therefore not be necessary where payments are made after each episode.”

Film and television incentive programmes

The department’s South African Film and Television Production and Co-Production incentive, and Foreign Film and Television Production incentive, aim to encourage large foreign and local productions in South Africa.

So far, 81 productions – 44 South African productions, 12 co-productions and 25 foreign productions – have been granted a combined rebate of R387.5-million. Combined expenditure on the productions is projected to be around R2.3-billion, of which R1.2-billion would be direct foreign expenditure.

Under the incentive programmes, the department has supported a number of award-winning movies and box-office hits, including Tsotsi, Blood Diamond, Mr Bones, White Wedding, District 9 and Diamonds.

District 9, the 2009 science fiction film that was shot in Soweto with a largely South African cast and crew, has been hugely successful internationally.

SAinfo reporter