Creative industries are growing the economy

In 2021, UNESCO published The African Film Industry: Trends, Challenges and Opportunities for Growth. This document contains a detailed report on the South African film sector. Extracted here are sections on the institutional framework and the economic impact of the sector.

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Main representative and regulatory institutions

The National Film and Video Foundation (NFVF), an agency of the Department of Sport, Arts and Culture, is mandated by the NFVF Act to develop, promote and transform the sector, through the provision of grants and bursaries, training programmes and promoting the industry at home and abroad.

Their work is supplemented by provincial Film Commissions (which report to regional Economic Development Departments); the KwaZulu-Natal Film Commission, the Gauteng Film Commission, the Eastern Cape Development Corporation and Wesgro in the Western Cape, who also offer grants and training for regional producers and productions (Wesgro, however, does not provide grants). They, in turn, are supported by City Film Offices, for example, the Durban and Cape Town Film Offices which provide logistical support to productions filmed in their jurisdictions.

In an attempt to improve coordination and collaboration between all the departments noted above, the South African AV Forum, an inter-governmental body, has been established.

The industry has various industry bodies, the largest of which is the Independent Producers Organization (IPO) which represents over 70% of the country’s producers. It identifies and shares new developments and international industry best practices. The Independent Black Filmmakers Collective (IBFC) represents a broad spectrum of people active in the industry, with the aim of enhancing the industry’s transformation and economic development. Sisters Working in Film & TV (SWIFT) addresses the specific needs of women working the sector, Animation South Africa (ASA) is a guild representing and promoting the interests of the country’s growing animation sector, while the Documentary Filmmakers Association (DFA) represents people throughout the documentary value chain. The country also has a guild for actors (SAGA), for editors (SAGE), for writers (WGSA) and for agents and talent managers, the PMA. All the above organisations are members of the South African Screen Federation (SASFED) which advances the cause of the entire sector.

Other smaller organisations represent regional or demographic-specific interests in the sector. The National Association of Broadcasters represents the interests of the country’s public and private broadcasters.

Regulation of the sector is undertaken by two organisations. The Independent Broadcast Authority of South Africa (ICASA) regulates both the telecommunications and broadcasting sectors. It functions under the Department of Communications and Digital Technologies (DCDT).

The Film and Publications Board (FPB), also reporting to the DCDT, is responsible for classification of content. The oversight function of these bodies and the broadcasters falls to the Parliamentary Portfolio Committee on Communications.

Production

South Africa’s cultural creative industries have seen a rise in activity and economic contribution in recent years. The direct impact (also called Value Added) of the CCIs in 2018 was $5.51-billion, accounting for 1.7% of GDP (compared to 1.5% in 2016). Taking the Direct Effect, Indirect Effect, and Induced Effect into account, the CCIs’ total effect on the economy was $18.01-billion, or 5.6% of the country’s GDP.

This GDP contribution has grown at an average of 2.4% per annum, which is significant compared to the economy as a whole, which was only 1.10% pa over the same period. Notably, the local Audiovisual and Interactive Media sector, which has seen significant increase in local appeal and international recognition in recent years and which is the main driver of advertising revenues for broadcasters, enjoyed one of the highest growth rates within the CCIs, at 5.2%. South Africa generates some $600-750-million in production value annually, of which some $220-million is Foreign Direct Investment, mostly coming from foreign film production which delivers a multiplier of five for the dtic’s investment.

The industry’s overall economic multiplier is 2.8, higher than tourism at 2.3, and the employment multiplier is 4.1. The sector creates around 60 000 full-time equivalent and freelance jobs, with indirect jobs created throughout the value chain including suppliers and service providers estimated to be well over 100 000.

Copyright and Performers’ Amendment Bills

The ACA and CPA have submitted joint feedback to parliament on the Copyright and Performers’ Amendment Bills, legislation that has stirred intense controversy. On the website Act Now, Netflix’s critical line-by-line interrogation of the bills runs to 20 Powerpoint slides. MultiChoice, M-Net and DALRO were among many organisations to weighed in with hefty submissions. The press release that accompanied the ACA and CPA submissions is reproduced here.

South Africa offers tremendous cultural diversity for photo shoots, advertisements and films. Pantsula dancers, Gauteng. Credit: SA Tourism/Flickr

The Association for Communication and Advertising (ACA) and the Commercial Producers Association (CPA) have made a joint submission to the Parliamentary Select Committee on Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour on the key concerns for stakeholders in South Africa’s advertising and television commercial production industries. The representation was made in relation to the proposed Copyright Amendment Bill and the Performers’ Protection Amendment Bill.

The submission was made on behalf of over 200 member companies and businesses from across the advertising and television commercial production sectors. The ACA and CPA have called for a balance to be struck between the need to protect intellectual property and the need to foster creativity and innovation in these industries.

The ACA and CPA have raised key concerns on behalf of industry stakeholders in South Africa’s advertising and television commercial production industries. The submission was made during oral representation to the committee on Tuesday, 21 February 2023 by Leo Manne, ACA Board Member and MD of Network BBDO, and Bobby Amm, CEO of the Commercial Producers Association.

Karabo Songo, ACA chair, says the Amendment Bills have far-reaching consequences for the advertising industry: “The proposed changes could impact greatly on our ability to create and innovate. We welcome the opportunity to engage with Government on these issues and we hope that our submission will contribute to a constructive dialogue on the way forward.”

According to the ACA and CPA, the advertising industry is in favour of self-regulation, and the two organisations have agreed on best practices and guidelines on performer remuneration and standardised commercial production contracts. These practices ensure that performers are engaged on fair and equitable terms.

Key advertising industry concerns on the bills

While the industry supports updating South Africa’s Copyright and Performers’ Protection Acts, the joint submission raised several key concerns with the Amendment Bills, including the following:

  • The absence of a meaningful economic impact assessment for proposed legislative changes in the Copyright Amendment Bill.
  • The bill seeks to introduce new statutory royalty entitlements, creating uncertainty around who would pay and how these royalty rates would be determined.
  • The introduction of royalties will also create an additional administrative burden for agencies.
  • The bill also seeks to criminalise the non-reporting of all commercial uses of audiovisual works, including TV commercials, which would be practically unfeasible and add additional administrative burdens.
  • Advertising agencies’ bespoke requirements and production environment may not have been considered during prior public consultation rounds.

In their joint submission, the ACA and CPA expressed their concern about the competitive landscape of the global audiovisual content production industries, which has become increasingly intense due to the value it holds for driving foreign direct investment, job creation and broader economic growth in countries with thriving creative content production sectors. The production of television commercials is not limited to a single territory, and clients have the freedom to decide where to produce their commercials based on various factors, including a legislative environment that is conducive to the production process.

The submission cautioned that should the underlying legislative environment change and become disadvantageous for productions to take place in South Africa, local and international advertisers could well look to other territories in which to produce their commercials and advertising campaigns, which could cause runaway productions.

The CPA’s Bobby Amm adds: “We are proud of our industry’s accomplishments in South Africa, and we believe that our joint submission reflects our commitment to creating sustainable jobs and supporting transformation initiatives and protecting copyright. We hope that our submission will convince the NCOP that making the necessary changes to the bills will ensure the continued success of the audiovisual content production industry in South Africa.”

The submission also calls for parliament to engage more closely with stakeholders in the advertising and television commercial production industries to ensure that any amendments to the Copyright Act and the Performers’ Protection Act take into account the unique challenges and opportunities of these industries.

“Prescribing compulsory and standard contractual terms for all copyright agreements, and to prescribe royalty rates and usage tariffs will impact the freedom to trade and contract which could result in a negative impact on our economy,” concludes Songo.

The submission concluded by arguing that the bills suffer from numerous material defects, and that the passing thereof could harm the viability and growth of the industry, and other creative content production industries in South Africa, and that the bills should be rejected in their current form in favour of redrafting thereof in cooperation with recognised industry experts and lawyers who are experienced in practicing copyright law.


About CPA

The Commercial Producers Association of South Africa is a professional trade association of production companies that specialise in the production of television commercials for the domestic and international markets.