News / Events

Some reflections on 2024, as the Spada office closes for the year...

2024 has been incredibly tough for the New Zealand screen industry - perhaps our most challenging year ever. With Google and Facebook hoovering up NZ advertising dollars and the international TV streaming companies taking the viewer's eyeballs that our free-to-air television networks made advertising revenue off, TV ad rev had been gradually declining for some time. Then, early this year, combined with a tight economy, it completely fell off a cliff.

Our two biggest networks TVNZ and Three both made huge cutbacks to News and to Local Production - Spada calculated that about $50m came out of the local production spend across our two big TV companies. They roughly halved what they had been spending on local content.

This has been devastating for our local production sector - we are vulnerable. To be fair, a lot of industries are facing tough times and getting smaller, but screen is not just another business. We are the New Zealand voice. Our cultural role is huge. What is a country without its stories? Who are we if we can't see our people, our culture, our places, our humour, our struggles, and our successes on our screens?

We are grateful that successive Governments have supported our screen funding agencies NZ On Air, Te Māngai Pāho, and the NZ Film Commission, but static funding along with inflation is, of course, going backward. And with so little network money to go around now, the pressure on our funding agencies is intense.

We are also incredibly grateful for the Screen Production Rebate - it is vital to our industry. With domestic money so tight, it's essential that producers are entrepreneurial - doing co-production deals, finding international money, and making our industry more global. Last year Spada lobbied for the Rebate to be altered so that NZ On Air and Te Mangai Pāho-funded productions would be eligible. We were successful in this advocacy, and it has been a positive change for our sector as it helps the money go further. We have NZ programmes screening all around the world now - generating export money that can be invested back into developing New Zealand productions. Two different recent research surveys have calculated that for every Rebate dollar spent, six dollars come back to the NZ economy.

So, as well as our cultural contribution to New Zealand, we are also an industry worth investing in for economic reasons. Our screen sector eco-system comprises domestic and international productions, and its value is over three billion dollars per annum. In order to keep that eco-system balanced and sustainable we have to ensure our domestic industry is as strong as can be. We need to hang on to what we've still got and try to build on it.

Spada has a good relationship with our Minister Paul Goldsmith. He managed to do the smaller things we asked for when the TVNZ and Three cuts threw us into crisis - NZOA and TMP were exempted from the across-the-board 7.5 percent Gov cuts, the Rebate was tweaked to make Shortland St eligible to help it to survive, and the networks can now do Sunday morning and Christmas trading. But now we need some bigger, harder things to happen.

For some time Spada has been lobbying for Government regulation of the international streamers so they contribute to the local industry in some way. This should have happened years ago, to avert the crisis we now face, but it's never too late. The streamers don't pay tax here, they use our broadband infrastructure, they harvest our data - and they don't currently contribute anything. This has been remedied in many other countries with levies, quotas, or hybrids of the two. We're a little late to the party.

Spada has suggested that the most straightforward option for New Zealand might be a simple percentage levy on the streamers' NZ revenue, which is then invested back into the industry via our existing funding agencies. For example, a 5 percent levy would generate approximately $25m. The good news is the government is finally taking this seriously and looking into what might be done. It is the big tech-ers who broke our business model - they should be a part of the solution in trying to fix it. We just want a level playing field.

The bad news is it will take time to do this if it happens at all. We need to keep going in the meantime. We are mindful of how tough the economy is - there are stories about food-banks closing down, a health system in crisis, etc, etc. We are realistic. It's probably not a time when we are going to get a major cash injection into our funding agencies.

However, a special export incentive would be timely, as the invested money comes back to the NZ economy, with more finance attached. Spada's big campaign for the new year is going to be a $20m export initiative attached to NZOA-funded Rebate projects—something that builds on the success of the Premium Production Fund.

You will hear us making a lot of noise about this in the lead-up to the 2025 Budget, and we will keep on beating the drum on streamers regulation.

We salute all of you who are still standing. It's been a hell of a year.

Meri Kirihimete everyone,

Irene Gardiner
Spada President

NB: The Spada office will close on Friday, 20 December 2024, and re-open on Monday
January 6, 2025.