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ARTS, CULTURE, SCIENCE AND TECHNOLOGY PORTFOLIO COMMITTEE
8 March 2002
THE NATIONAL FILM AND VIDEO FOUNDATION: BRIEFING
Documents handed out:
Draft NFVF Strategy
Chairperson: Mr S l Dithebe
The Committee was invited to give in-put on the Draft National Film and Video Foundation Strategy, approved by the NFVF Council. The goal of the strategy is to encourage collaboration between the Portfolio Committee and NFVF and to bring about a paradigm shift regarding film. That is, commodification of culture.
The strategy would assist the NFVF to mobilise key competencies to achieve sustainable competitive advantage.
Drawing from the experience of India and Cuba, the Committee was told that the reality was that film must be seen to be moving away from being perceived only as entertainment for the privileged few. It must, on the contrary be seen to be a form of communication, alternative to print media, radio, and outdoor marketing.
Briefing by Mr Shan Moodley
Mr Shan Moodley, Chairperson, explained that research by the South African Advertising Research Foundation (SAARF) shows a decline in cinema attendance over the past few years. This decline is evident on the graph presented on the slide.
Mr Shan pointed out that concurrently, the disposable income of the average moviegoer has increased. The upward trends back up the Minister's statement that the sector holds potential for economic growth. However, consumer trends show there is an elusive element that needs to be identified and addressed.
He expressed the view that ordinary South Africans need to be empowered by a clear understanding of how wealth is created in the knowledge economy. This, he noted, is the paradigm shift that is required in the cultural arena and particularly the Portfolio Committee as the principal legislators in our land.
He noted that much has been achieved towards this end. Among other things, empowering cultural legislation has been passed and an institution such as the NFVF has been established. To take the challenge forward, NFVF has articulated the moral imperative as part of its contribution to a Cabinet memorandum, recently formulated on the film sector.
Mr Shan concluded his remarks by emphasising that the country needs to establish a macro cultural economic paradigm, which will unravel the country's hidden treasures, culture and film.
Presentation by Mr Eddie Malo
Mr Eddie Malo, Chief Executive Officer informed the Committee that the Draft NFVF Strategy was accepted and approved by the Council of the NFVF a few days ago. He invited the Committee to make their in-put to the draft strategy before it is adopted as the final Strategy Document for the sector.
The goal of the strategy was to seek for collaboration between the Portfolio Committee and NFVF to bring about a paradigm shift about film, that is commodification of culture. It was also to seek a joint Portfolio Committee and NFVF workshop on this strategy.
He sought collaboration with the Portfolio Committee to carry out competitive intelligence programmes and investigations on best practice and to strike an understanding on ongoing communication and engagement.
Mr Malo pointed out that the draft strategy was the culmination of the endeavours of Council since the founding of the NFVF. This includes the strategy documents that emerged out of various Council processes including bosberaads, the EU-SA Film Symposium and the Indaba 2001. The NFVF Act guides this strategy. It is also informed by changes that have taken place in the legal and technological environments and other dynamics in the film sector.
The draft strategy was informed by the Pricewaterhouse Coopers study, which was incorporated into the research and consultation processes that led to the Indaba 2001.
With respect to the strategic model, Mr Malo said that the model balances the history and the status quo. It is about what is happening now and the challenges for the future. The history consists of strategic assumptions and past issues, key successes, the learning curve experienced old business plans, performance assessments and evaluation.
The future is informed by policy, regulation, legislation, government, operational and organisational issues. The NFVF has been proactive in encapsulating this ethos in its response to DACST's request for input into a Cabinet memorandum and the strategic focus presented here.
Mr Malo revealed further that this strategy will assist the NFVF to mobilise key competencies to achieve sustainable competitive advantage. He projected an earning of an additional R50 million in the form of an integrated marketing campaign to position the sector in the short term. In outlining the business plans, Mr Malo pointed out that NFVF strategic imperatives are prescribed by its organic lifecycle.
In his business plan Mr Malo said that the first phase in this life cycle was the founding, which happened 1997-1999. The focus at this point, he said, was to constitute the Council and the NFVF body. The main resources at that time came from DACST.
The next phase would be attributable to the Council, which is the formation and establishment that happened 1999-2001. The focus was the NFVF institutional development at a cost of R2.675m and this constituted 25% of the government allocation for that period. The culmination point was the setting up of office, appointment of the incumbent CEO and staff.
The CEO assured the Committee that the rapid growth phase would be kick started by this strategy. He clarified that the organic lifecycle is not necessarily aligned to the budgetary cycle and that the figures that are shown may not be attributable to any particular financial year.
Mr Malo noted that the Re-Invention would be made necessary by new inventions, and mega trends. He foresaw a scenario where movies would be viewed on cell phones! He emphasised that the strategy must always indicate the economic value added in order to aspire to a certain figure.
Mr Malo explained that the Normative Strategy is the morality, legislation and mega-trends on which overall strategy is based. This is the legislative convergence of ICT's and the Indaba 2001 research and report. The legislative environment is captured in the Cabinet memo, the essence of which is a moral imperative that forms the basis of the regalia, which the Chairperson alluded to earlier.
Mr Malo said that the green paper on e-commerce, launched towards the end of 2001, provides a good basis for sectoral development and emphasised the importance of investigating new opportunities for content development and distribution of the NFVF products.
He noted that the Indaba 2001 was a very successful process of consultation with the industry. It was hailed as one of the most positive engagements ever undertaken in the sector. This was an unprecedented development in the sector, noting that the event would always stand out as one of the many achievements during formative stages of the NFVF.
On the issue of strategic trust Mr Malo explained that it was all about gathering momentum and energy and launching and projecting the NFVF into the future. The NFVF would need to make a quantum leap to move from the establishment phase to rapid growth.
It was critical that multidisciplinary competency becomes an absolute requirement in order to make what he called a the 'quantum leap' to rapid growth. This forms the basis of the intellectual capital that is desperately needed in this sector as part of the knowledge economy. To date the film sector has largely been viewed as an arena for artistic expression. Part of the challenge is to develop a cadre of film professionals qualified in different disciplines.
Mr Malo said that NFVF has to demonstrate leadership by having a strong sense and understanding of diverse stakeholders and their needs. In this respect it is imperative that in future, the annual report covers the extent to which diverse stakeholder needs have been met and shows the costs incurred in that regard. Credible instruments of market segmentations would be used in future to ensure that no consumer community is excluded from film, as has been the case in the past.
The challenge for NFVF and the film sector in general is not only to address the audience decline in LSM 6, but rather to attract the disposable income of other LSM categories especially LSM 4 and 5 which are now showing massive growth. The inability of the sector to attract these LSM categories thus far betrays the incidence of weak marketing in this sector.
Mr Malo averred that the reality was that film must be seen to be moving away from being perceived only as entertainment for the privileged few. It must, on the contrary be seen to be a form of communication, alternative to print media, radio, and outdoor marketing. The experiences of countries like Cuba and India were most informative in this respect.
Mr Malo observed that culture is a concurrent competency between the spheres of government; National, Provincial, and Local, and promised that the NFVF will work with the provincial government to formulate budgets and monitor expenditure. He cautioned, however that consumption by Government must be well profiled. Every Department has communication campaigns where film has not been utilised effectively as a medium of communicating government programmes and activities. Whilst the NFVF proceeds to rapid growth; consumption by government will be a focus area to generate revenues.
On the question of funding Mr Malo said the possible sources of revenue would be television licencing, cinema levy, the lottery fund and ad valorem tax. These sources of capital will need to be explored in conjunction with all other sources of capital including development funding which can be obtained through the European Union, the European Investment Bank for Development and the European Programme for Reconstruction and Development.
Mr Malo noted that this strategy has shown how rapid growth can be capitalised. The sourced capital would be employed to fund the Film and Video Initiative and the Film Development Fund. The NFVF would explore other avenues for investing capital created for return. The sources of funds identified are what constitute a legitimate economic claim. Policy must be developed to restructure the sector and facilitate access to these funds. This would constitute a quantum leap in restructuring the fiscus of South Africa.
The operational strategy includes the governance of NFVF and presents the key structures, functions, and processes that drive the normative strategy, fuelled by the strategic thrust. These structures, functions, and processes are explicit and implicit in policy and legislation and the structure of the executive management is in line with Section 3 of the NFVF Act, the Cultural Amendment Act and the PFMA.
Mr Malo concluded his presentation by stating that the NFVF is an on going concern and the strategy he had rolled out is futuristic, based on the strategy already forwarded to the Department. What is of importance is that it constitutes compliance with the legislative amendments to the cultural laws. After consultations with all immediate stakeholders, the NFVF would then proceed to formulate a futuristic business plan and budget.
The Chairperson asked the CEO to confirm whether the NFVF had received a sum of R 8 million from the Industrial Development Corporation (IDC) as claimed in some quotas.
Mr Malo denied that such funds had been received by the NFVF. He clarified that the NFVF had only engaged the IDC through the Deputy Director General and the Minister but that nothing material had come out of these informal consultations. The IDC has some funds, which it wishes to invest in the film industry and the NFVF was exploring ways and means through which to work with the IDC.
Ms Tsheole (ANC) wanted to know whether the NFVF impacts the rural areas through their programmes.
Mr Malo replied that audience development is one of the critical areas the NFVF was paying close attention to. The NFVF was working closely with the film industry to spread its programmes to the rural out-posts.
Ms Tshoele asked whether efforts have been made to support African artists.
Mr Malo replied that the NFVF was negotiating with theatres on a filming project.
Ms Mpaka (ANC) asked whether there are any plans to establish a film industry to develop relevant skills in the region.
Mr Malo replied that it was critically important that a survey be undertaken before such a facility is established. Plans are underway to put together a panel to start work on the viability of such an institution. This precaution is necessary to avoid duplication and ensure that there was no under utilisation of resources.
Ms Tsivhase (ANC) asked why the government was not utilising the film to propagate its throughout the country.
Mr Malo admitted that the government was presently not using the film as a medium of articulating its programmes. One of the strategies was to try and see how government could access and make use of the film in this respect.
The downside to this was that funding would be needed and yet no outside donors would be willing to invest in such a programme. He noted that at least the Department of education was making use of television programmes at its own budgetary expense.
Mr Mtsweni (ANC) asked whether the NFVF networks with government Departments in the formulation of its business plans.
Mr Malo replied that the NFVF had a strategy for reaching out to government Departments. The NFVF was in the process of trying to put up a business plan on how to crystallise this networking. He promised to keep Members posted on this item.
Ms Motubatse (ANC) requested that more information on Departmental networking be made available to Members. She queried the absence of a woman in the NFVF delegation.
Mr Malo explained that the Deputy Chairperson is a lady but she could not accompany them due to commitments elsewhere. Eight percent of staff in key positions were women; the NFVF is determined to remove the myth that the film industry is the preserve of males.
Ms Mbombo (ANC) asked why the NFVF was delaying the development of relevant skills in this area while the promised survey was being undertaken. The University of Cape Town has a well-developed film school with which the NFVF could collaborate.
Mr Malo clarified that training in the film industry was on going, which is the reason why the NFVF would like to be convinced that there was need and demand for expansion of the existing facilities.
At present the NFVF is encouraging black people to enter the industry. He noted with concern that 80% of the film industry is dominated by white people. The NFVF are giving out bursaries to students to attend private film schools.
The Chair pointed out that the Committee was holding the NFVF accountable on the basis of the document it had lodged. There is support for the NFVF draft strategy and Members would be watching with keen interest the implementation phase of the stated objects this year. He noted that there had not been adequate interactions between Members and the NFVF but that there was a clear commitment to improve on this.
The meeting was adjourned.
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