Climate change: the global coproduction update

January 1, 2010 by Realscreen Staff

AUSTRALIA

When realscreen last ran a global coproduction update in January of 2008, news had emerged that a new film and television funding body for Australia was to be created from the merging of three previous ones: The Australian Film Commission, Film Australia and the Film Finance Corporation. What’s more, producers were able to access a 20% producer rebate.

The rebate happened at a good time, says Stuart Menzies, head of documentaries at Australian public broadcaster ABC. ‘Around the same time there was an introduction of a tax offset, which was 20% for television, it had an impact because last year the federal government had mandated a 10 million dollar funding drop,’ he says. ‘So the indirect subsidy kicked in when one of the direct subsidies was reduced correspondingly.’

The rebate, called the Producer Offset, is worth 40% of qualifying Australian production expenditure (QAPE) incurred on features, including theatrical docs, and 20% on programs other than features (including TV docs). Screen Australia, in findings released November regarding the Producer Offset program, reported that 90 screen productions have been certified since the offset was introduced in July 2007, for a total cost to the Australian government of over AUS$123 million. From that amount, AUS$7 million went to 46 documentaries, and AUS$25 million to 25 television projects.

Among the funding programs on offer from Screen Australia are single project doc development programs and the National Documentary Program, which combines the previous National Interest program and the Making History initiative. Also, Screen Australia offers a domestic documentary funding program (intended to match a domestic broadcaster’s license fee) and an international program. Producers looking for funds from the latter need to have an international sales agent for their projects and an international territory pre-sale and/or an advance from an international sales agent, among other conditions.

‘We don’t do a lot of official coproductions – they’re very complicated and only worth the legal gymnastics if you’re doing a very high-end documentary series,’ Menzies says. The ones they have done recently, including Darwin’s Brave New World, a three-hour special with Canadian prodco Ferns Productions, are made easier when the treaty country has lots of soft money to access. ‘But when you’re dealing with territories that don’t have those sorts of (funds) then the nature of the deals becomes different,’ says Menzies.

Australia currently holds official copro treaties with Canada, China, Germany, Ireland, Israel, Italy, Northern Ireland, the UK and Singapore, as well as Memorandums of Understanding (MOUs) with New Zealand and France. A coproduction treaty is currently being negotiated with South Africa. The Singapore-Australia treaty has recently seen companies in both territories team up for development of multi-platform projects under the MDA-ScreenWest Cross-Media Development Initiative, launched last October.

As for funding routes that local Australian producers can take advantage of, Discovery Networks Asia-Pacific in Australia launched a coproduction initiative – Discovery Ignite – in 2007. With the initiative, Discovery contributes locally up to 50% for Australian and New Zealand local productions. ‘The initiative gives independent filmmakers in Australia and New Zealand the opportunity to pitch documentaries for local coproduction and it gives us the opportunity to showcase the work of these documentary filmmakers on the international scene with Discovery’s worldwide audience,’ says Mandy Pattinson, SVP/GM, Australasia, Discovery Networks Asia Pacific.

Australian pubcaster SBS has among its funding offerings its ‘Secrets and Lives’ initiative. In partnership with Screen NSW, Film Victoria & Screen West, SBS will co-fund and air ‘real life soap operas’ or more constructed, character-driven pieces. Barry Walsh

CANADA

With over 50 official international coproduction treaties under its belt and a fair amount of soft money to offer, Canada is an appealing country to get in bed with for copro.

In 2008, Canadians produced 77 official coproductions, with a total budget of nearly CAD$387 million. Most of the projects were partnerships with France (at 28), while the second most popular partner was the United Kingdom (at 19 copros).

The benefit to qualifying as an official Canadian project – which means it qualifies under one of Canada’s coproduction treaties and has sufficient Canadian content – is that the project’s partners can access tax credits, public funds and higher license fees from broadcasters for meeting Canadian content standards. In order to qualify, projects must have a minimum 15% to 30% spend in Canada (depending upon the agreement with the country in question, though most agreements require 20%) and must apply for coproduction status at least 30 days before principal photography begins (meaning one cannot enter into a coproduction with Canada if any filming has begun before finding a Canadian partner). To have projects certified as official coproductions, partners must apply to the Department of Canadian Heritage through the Canadian Audio-Visual Certification Office (CAVCO).

According to David Brady, co-founder and executive producer at Toronto-based Cream Productions, Canada’s attractive soft monies (such as the Canadian Television Fund and tax credits) can make up 30% or more of the Canadian side of the budget. In its 2008/2009 annual report, the Canadian Television Fund (CTF) reported total production funding of $275 million for 435 new productions. Of the English projects that were funded through CTF in that time span, 17% were documentaries.

However, changes are on the horizon for one of Canada’s largest production funders. This April, CTF is due to merge with the Canada New Media Fund (CNMF), forming a $310 million multimedia fund called the Canada Media Fund (CMF). The new fund is to be divided into two key components: projects that will be available through two platforms (one of which being TV) are eligible to be funded through the ‘convergent stream’ while cutting-edge projects that don’t have to be tied to television, including interactive media and applications, will be able to access funding through the ‘experimental stream.’

The new fund has been a somewhat controversial topic; when its creation was first announced last March, it was stated that the majority of the proposed board would be nominated by cable companies, which prompted scorn from the Documentary Organization of Canada (DOC). Also, the news that in-house productions from broadcasters will be eligible for funding from the fund was met with concern from the Canadian Film and Television Production Association (CFTPA).

Other funding opportunities in Canada include the Rogers Documentary Fund, Rogers Telefund and Bell Broadcast and New Media Fund, as well as various regional and national tax credits such as the Film or Video Production Services Tax Credit (PSTC) and the Canadian Film or Video Production Tax Credit (CPTC). In Brady’s experience, the Canadian elements can contribute anywhere from 25% to 50% of the total coproduction budget, which is a combination of the Canadian broadcast license fee and public funds.

Of course, another thing that Canada’s known for, other than its enviable list of official coproduction partners, is its paperwork. There can be a staggering amount of details that need to be worked out to undertake a copro with a Canadian company. ‘The very first time [a foreign prodco does] a treaty coproduction, pretty much without exception the overseas producer is completely freaked out by the paperwork and the guidelines,’ says Ann Harbron, director of commissioning and production at Canada’s Discovery Channel. But she emphasizes that companies should not be worried, as Canadian partners should be well-versed in the process and can help guide the foreign company through the piles of forms.

Harbron has a checklist she goes through with foreign producers to help them through all the red tape. Getting a lawyer who specializes in coproductions is one of those tips. Tanya Kelen, managing partner in the Toronto-based production and distribution shingle Kelen Content, says one can expect to pay anywhere from $15,000 to $30,000 on legal fees to help with the paperwork and make sure the project is meeting all its criteria.

Perhaps the most important tip from Harbron’s list is to keep a good communication flow between partners. That includes knowing who is taking responsibility for which parts of the production, talking through all the money issues and sticking to the copro guidelines. ‘Like any marriage, make sure you’re discussing your finances, make sure you’re choosing partners you respect and admire and you have the same creative integrities,’ adds Kelen. Lindsay Gibb

FRANCE

Times are tough for production in France and although that could boost the rate of international coproductions, industry experts in the field report that it hasn’t made partnering any easier. The big story in France is that while broadcasters are facing ad revenue losses and reorganizing themselves, producers are left to come up with new methods of funding.

New to coproductions in France is a Tax Rebate for International Productions (T.R.I.P.) that, if the foreign movie or TV production fits the requirements, will reimburse 20% of eligible costs on productions shot in France. This tax rebate applies to film production and post-production on movies with dramatic content that has links to the culture, heritage or territory of France.

In other funding, the state works on a points system in order to determine eligibility. The general rule is the more French elements, the better. Of course, it always helps that there are bilateral coproduction agreements with more than 40 countries, excluding the U.S. and Japan.

On a production level, for expensive projects like the big blue-chip wildlife that Paris-based producer/distributor ZED makes, changes have come in the form of producer to producer coproductions. Celine Payot, VP international sales and marketing at ZED, says that up until 2009, the company always managed to finance its productions relying solely on French and international broadcasters. With an economic tailspin forcing broadcasters across the globe to assess their budgets that much more carefully, Payot says that the fallout has been to approach other broadcasters to help finish a production. ‘Now instead of knocking on broadcasters’ doors, which we’re still doing but it is difficult, we’re knocking on producers’ doors,’ she says.

In January 2009, public broadcasters in France faced a government-created ban on advertising on public TV in January, with a slow phase out of ads on primetime television. By the end of 2011, the complete ban on ads will be in place. The move resulted in private French broadcasters TF1, M6 and Canal Plus being forced to pay a tax to fund the revenue gap at public broadcaster France Télévisions. Payot has noted, from a production point of view, that all of this action has led to broadcasters being hesitant to engage in projects. ‘For all of 2009 there’s been some signing of course, but it took a lot more time and a lot of producers have been waiting for answers,’ she says.

Caroline Behar, France 5′s head of acquisitions and coproductions, maintains that international coproductions are still crucial to France Télévisions’ scheduling. Behar says that the television group will actually do more international copros as a result of the merger. ‘For us, even if there was the crisis, there have always been stable figures,’ says Behar. ‘It’s more good news than otherwise.’

Behar adds that France Télévisions now requires two foreign partners already on board before a project is proposed to them. She suggests that producers interested in finding a French partner seek out a French company at international markets like the World Congress of Science and Factual Producers and the Realscreen Summit. Those companies, Behar says, are really motivated to work with foreign producers and should be sought out by prodcos looking to partner with France. Additionally, an international producer should get to know foreign companies by their specialties. ‘It’s easier to approach a company when you know what they’re doing,’ says Behar. ‘You have to have content that can be really interesting for not only France but internationally as well.’

Other broadcasters that are a good source of international funding for documentaries are ARTE as well as Canal Plus. Payot also praises the French National Center for Cinema, known in France as the CNC, as a great source of funding for productions. ‘They give about a third to a half of financing,’ she says. ‘It’s a lot of work [to get the funding], but without them, I don’t know how we’d do it.’ Kelly Anderson

GERMANY

According to broadcasters and producers in Germany, not much has changed on the German landscape since the last time realscreen took up the task of writing a coproduction guide for the territory in 2008. The main sources of funding are still regional (or ‘lander’) funding systems, such as the Berlin-Brandenburg Film Commission and the North Rhine-Westfalen Film Fund which are set up to give interest free loans to encourage filming in different areas of the country – and license fees from broadcasters.

Feature film funding, which became available through the German Federal Film Fund (DFFF) when it launched in 2007, has been extended until the end of 2012, due to its success drawing more film business to Germany. However, DFFF funding is only available to feature films that have already arranged German cinematic distribution. For a documentary project, the film must have four copies set for cinematic release, the production costs must be at least €200,000 and at least 25% of that must have been spent in Germany.

ZDF Enterprises, the production arm of Germany’s second public service television network, can help foreign producers find an appropriate partner for their project. ‘We can do quite a good service for international partners of any kind because we know all of the commissioning editors [at ZDF] and we can act as a one stop shop and at the same time, as the entry into ZDF, and as a distribution company,’ says Nikolas Hülbusch, project manager, documentary coproductions at ZDF Enterprises. ‘If the producer needs both a partner in Germany and an international distributor, there are numerous cases where we have both at the same time. The producer only needs to sign one contract and we take care of it.’ According to Hülbusch, the subjects that are working best for ZDF right now include ancient history, archeology, and, more specifically, big discovery stories that are told using CGI and reenactments.

Other broadcast options in Germany include first public-service broadcaster ARD, ProSieben (Pro7), RTL and ARTE. ARD functions much like America’s PBS with stations in each region which sometimes enter into coproductions independently and other times, when there’s a large enough project, work together. For example, MDR is a Leipzig-based channel in the ARD network which contributes approximately 10% to the national ARD programs and also delivers programs to ARTE and 3sat. MDR produces documentaries on topics ranging from history, society, current affairs, science, religion and the arts.

Thomas Hennet, head of documentaries and international copro at ProSieben, says pubcasters such as ARD and ZDF are the key targets for doc fare, while his channel doesn’t have any specific doc slots and specializes instead in big documentary specials.

Producers and broadcasters in Germany say there has been a move toward more German-focused stories and, therefore, fewer coproductions in the past year as German prodcos supply the majority of doc programming. Uwe Kersken, managing director at Gruppe 5 Filmproduktion in Cologne, says the reason for this is twofold. Firstly, more non-fiction programs on German networks are heavily focused on German subjects, such as the history of Germany or homegrown architecture, and even if the subject is more universal, German networks want German hosts for their shows. From Kersken’s perspective, coproductions are difficult for both production companies and broadcasters because of all the reversioning that would be necessary to make a project suit all territories. ‘I wouldn’t say that there are no opportunities at all,’ says Kersken. ‘But the number of coproductions have decreased.’

One incentive for more copro, says Hennet, is budgetary. ‘Investment budgets, not only with the commercial broadcasters who are not significant contributors to the documentary market anyway, but of course in the public sector, [have gone down],’ says Hennet.

The key to getting a copro started in Germany is to do your homework, find out what doc opportunities are available on each channel and work from there to find a partner. ‘Germany in general is still one of the biggest media markets in the world,’ says Kersken. Lindsay Gibb

UK

Necessity is the mother of invention, and in economically uncertain times, prodcos in the UK have found they’ve had to be particularly industrious in funding projects.

A recent survey conducted by business and financial advisor Grant Thornton found that 69% of respondents from the UK production community were having difficulty in funding work. ‘Advertising levels are likely to remain flat for the best part of 2010 and the drastic fall in advertising revenues (by between 15-17% in 2009) has led to the need to increase deficit funding,’ said Christine Corner, media partner at Grant Thornton, in a statement released with the survey findings. She cited overseas tax credits, advertiser funding and money from NGOs as alternative sources of funds being sought out by UK prodcos.

Debbie Manners, chief operating officer at London-based Hat Trick Productions (Have I Got News for You, Whose Line Is It Anyway?) and chair of UK production trade organization PACT, says the cooling commissioning climate in the UK requires prodcos to work with what they can get from broadcasters. But often they’re left coming up short.

‘For a start, broadcasters are paying less and less every time they do commission so when they commission we more and more often have shortfalls on the budget,’ she says. ‘But this year, they’ve been quite averse to risk. They’ve also been stockpiling content to an extent. There’s a sense that they’re using up as much of what they’ve got already and not commissioning new programming because of the deficits in their own budgets.’ Then there were the personnel changes that impacted UK broadcasters such as ITV and Channel 4 over the past year. Add it all together – broadcaster caution married with instability, and topped off with a pesky global economic crisis – and the inevitable result is less new programming being commissioned.

Thus, UK producers have increasingly embraced international coproduction opportunities. But those opportunities are coming in different forms than in the recent past. Tom Brisley, creative director for Darlow Smithson Productions (DSP), says this past year required, to paraphrase Steve Jobs, thinking differently.

‘Having read the market over the last couple of years, we could see the traditional way of doing copros has evolved,’ he said. ‘We’ve had to think creatively about how to make copros work because they’re still very valuable for producers in North America and the UK.’

Brisley cites a recent copro with Canada’s Cream Productions as an example of this evolution. Atlantic Convoys: The War at Sea had five partners outside of the prodcos – Channel 4, Smithsonian Networks, History Channel Canada, National Geographic Channel International and the Canadian Navy.

‘That’s a recipe for problems, and yet the shows delivered and everyone was very pleased with them,’ he says. ‘I think that proves that if you open your eyes to the opportunities out there then you’ll find them, and you can still find ways of delivering programs to the client’s satisfaction.’ Brisley says that U.S.-headquartered nets have been increasingly fully funding their programs to have something that works in their home territories as well as their global brands, while UK broadcasters may be a little more cash-strapped and opt for copros for 10 out of every 30 commissioned hours.

‘Most broadcasters need a healthy dose of coproductions to make their budgets work these days,’ he says. ‘But not at the risk of alienating their audiences.’

However, Brisley says international nets that may have been strange bedfellows in the past are cozying up to each other increasingly for copro. ‘Historically, windowing in the UK with, say, a Channel 4 and a Nat Geo International hasn’t always been easy,’ he says. ‘But they’re speaking directly to each other now and sometimes we can be speaking to both of them and we find out they’ve already sorted out the windowing arrangement themselves.’

Manners says she expects the trend of prodcos creating their own distribution arms for generating revenue to quiet somewhat over the next year. ‘Distribution is a tough business and it’s difficult to build. You really need scale for it to start making sense.’ As for where UK producers can go to increase funding, she says the move to relax regulations regarding product placement and brand involvement in programming should have a positive impact on cash crunches, and producers always have their eyes open for regions offering attractive tax incentives. But a combination of creativity and resourcefulness is certainly more important now than ever before.

‘You’ve got to follow the market trends and see what’s happening with clients in North America and whether there are opportunities to partner them with clients in the UK,’ says Brisley. ‘That has to be part of our game as independent producers – as well as having the ideas, we have to have the ideas that we know the marketplace wants.’ Barry Walsh

U.S.

There is more interest in coproduction partnering in the U.S. than ever before, perhaps the only silver lining of the recession. Broadcasters have long looked to partner with international partners in order to make the high quality productions that do well with audiences, but with tighter budgets, it’s the perfect time for global prodcos to enter an American copro.

International coproducers interested in working with U.S. network partners are best served making the trip to the broadcasters’ offices. Face time is key, says David Royle, EVP for programming and production of Smithsonian Networks, a network that relies on coproductions for around 25% of its productions. ‘I think the really successful production companies successful at bringing the copros together are those that make regular trips,’ he says. And the good news is that more networks than ever are interested in hearing from international partners, as sharing the cost becomes an increasingly attractive proposition.

Members of the American film and television industries were excited that California’s governor Arnold Schwarzenegger finally passed state tax incentives which encourage filming in Hollywood, in light of the recent production exodus to other states, Canada and international locations that gave better tax breaks. Unfortunately, like with other state incentive programs, this program, which spreads $500 million over five years, doesn’t apply to documentaries, reality programs, variety shows or news and current affairs.

American producers can access funding programs such as the Sundance Documentary Fund, the Fledgling Fund, Chicken and Egg (a fund dedicated to supporting women filmmakers), Gucci Tribeca Documentary Fund, as well as the Ford Foundation and the MacArthur Foundation. A fund worth noting for filmmakers is Cinereach (www.cinereach.org), established in 2006, which grants over $500,000 annually to features that ‘depict underrepresented perspectives, resonate across international boundaries, and spark dialogue.’ Recent non-fiction grant recipients include Annie Waldman and Daniel Carbone for Phantom Cowboys and Jennifer Arnold and Patti Lee for A Small Act.

According to Royle, Smithsonian has recently worked with the National Endowment for the Humanities and the National Science Foundation, but he stresses that an international company will have a harder time partnering with a foundation. ‘There’s generally a lot of hesitance, particularly from a foundation, to put a lot of money into a film because it’s speculative and you really have to know who you’re giving money to. It’s very easy for money to be spent and nothing to appear on the screen,’ says Royle.

ITVS is also an important stop for an international producer, especially its International Call. Claire Aguilar, VP of programming at ITVS, says there have been decreases in funding for international productions because the funds come from private foundations. The decrease, however, does not stop Aguilar from declaring the International Call ‘robust’ and encourages international producers to remember to have global stories that are contextualized for an American audience. Producers applying to the ITVS International Call should aim for a request that falls in between US$10,000 to $150,000. The deadline for entries falls at the beginning of the year, with this year’s call for entries wrapping in early February.

Savvy entrepreneurs are also taking notice of the huge opportunities for international coproductions with the U.S. New York-based Myriad Entertainment has just launched, headed up by Lisa Zeff (ex-ABC News Productions) and Veronique Bernard (who has worked with Nat Geo and SBS in Australia among others). The company aims to broker international partnerships and copro funding for select non-fiction productions. Zeff remarks, ‘There is a great opportunity now for international production companies to introduce their product into the U.S. The big ones have been doing it for some time but the good small [prodcos] that don’t yet have a voice here, there’s a growing interest [for them].’

While Jon Kramer, chairman and CEO of Rive Gauche Television, agrees that from a financial point of view, multiple parties investing in a production is the way to go, he says things aren’t quite the same from the creative side of copros. He believes there can definitely be too many copro partners. ‘Just think about having six of your friends over trying to decide where to eat dinner. Two is better,’ he advises.

Still, Zeff says as money gets tighter, new ways of thinking about content creation and ownership need to be entertained.

‘I think international production companies are very used to carving up their product and Americans aren’t,’ she says. ‘The reaction I get from people is ‘Okay, I don’t mind a coproduction, but we want to own all of it.’ That doesn’t work. It’s a whole other mindset in terms of the sources of funding.’ Kelly Anderson

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