Film and TV production spending slumps as foreign productions dry up

The domestic film and TV production industry saw a 37% slump in spending over the last twelve months as foreign productions dried up, however the post-production, digital and visual effects sector were a bright spot in Screen Australia’s 2017-18 Drama Report.

Last year, the industry saw record spending of $1.3bn, largely driven by foreign TV and feature productions which accounted for $624m of the sector’s spend. This year, foreign production spend fell to $96m.

Mystery Road was one of the titles in production during the 2017/18 financial year. Credit: Screen Australia

Children’s TV production barely recovered from last year’s 27% drop, with only a 3% rise. The volume of hours produced fell 36%, caused by fewer official co-productions, less animated content production, and the cyclical influence of the children’s content quotas on commercial free-to-air broadcasters.

The fall coincides with the commercial TV networks barely meeting their legislative requirements for children’s TV quotas.

However the free-to-air TV sector was the biggest commissioner of Australian drama, with the commercial TV networks and the ABC commissioning 36 titles worth $295m. This was down from last year’s $321m spent on 45 titles.

Foreign investment in Australian TV and online drama was $92.7 million, 23% of total finance, with Netflix financing two original titles. Private investor funding in TV productions was below $1m, and overall private investors accounted for 5% of total investment across all productions.

Graeme Mason, Screen Australia’s chief executive officer, said: “The Drama Report is one of the ways we measure the health of the screen industry, giving us a good indication of the pipeline of content and expenditure. However, the end game for us here at Screen Australia is not only to help make content, but for those stories to reach an audience, and Aussie drama is delivering on that front.

“When you look at the titles made in 2017/18, we’ve had Ladies in Black take over $10m at the local box office. Mystery Road was the most-watched general drama series on ABC iview in history and secured international broadcast deals in the US and UK. Underbelly Files: Chopper on the Nine Network was a ratings hit attracting 1.5m viewers in Australia, and Foxtel series Mr Inbetween has already been commissioned for a second series and was listed by The Hollywood Reporter as one of the ‘best shows of 2018’.

“For online, the first three episodes of comedy series Superwog trended number one on YouTube and have already been viewed over 5m times. Quite simply, Australian audiences want local drama, and the global market is hungry for our stories.”

In the report, Screen Australia warned the  85% slump in foreign productions could be partly attributed to concerns around government offset programs and the Commonwealth Games affecting access to studios on Queensland’s Gold Coast.

While the Australian dollar remained at or below US$0.80 and helped PDV businesses stay competitive and effectively leverage the 30% PDV Offset to attract foreign work, several factors may have had an impact on the absence of any large budget foreign productions coming to Australia to shoot in 2017/18. These include industry concerns around the process of obtaining the Location Offset top-ups and potential studio limitations in Queensland due to the Commonwealth Games in 2018.

However four titles are already confirmed as shooting in Australia in 2018/19. Dora the Explorer (Queensland) and Chinese series If Time Flows Back (South Australia) have already commenced production, whilst Godzilla vs Kong and the 13 episode US series Reef Break (Queensland) were named as the first recipients of the Federal Government’s $140m top-up ($35m over four years) to the 16.5% Location Offset.

Despite concerns about the government programs, the Producer Offset provided $53.6m to 46 titles and made up 13% of total finance while the PDV Offset was accessed by four titles and contributed $5.2m in finance.

The PDV sector – post-production, digital and visual effects –  was a bright spot in the report with PDV-only spend up 31% on 2016/17 to a total of $88m.

26 features contributed to the result including A-X-L, Alita: Battle Angel, Animal World, AntMan and the Wasp, Captain Marvel, Christopher Robin, Cliffs of Freedom, Crazy Rich Asians, Halloween, Mary Poppins Returns, Monkey King 3, Outlaw King, Peppermint, Skyscraper, Tomb Raider and X-Men: Dark Phoenix.

Total spend in the PDV sector was up 11% to  $284m.


Funding from direct government sources was $47.2m for 57 titles which accounted for 12% of total finance. Screen Australia was the major source of government funds and provided $25m to 39 TV and online drama titles. State agencies contributed $22m for 51 titles.

New South Wales at 37% accounted for the greatest share of total expenditure, followed by Victoria at 30% and Queensland at 17%. 2017/18 saw a record year of spend for both South Australia and Western Australia.

Michael Brealey, chief operating officer of Screen Australia said: “It’s fantastic to see record expenditure on Australian projects demonstrating the demand for local content remains high. We’ve seen some incredible film, television and online projects go into production during this period, providing industry jobs across the whole of Australia, from Storm Boy in South Australia, mini-series Doctor Doctor in New South Wales, Top End Wedding in the Northern Territory, Official Co-production The Whistleblower in Victoria, the third series of Rosehaven in Tasmania, the mini-series Tidelands in Queensland, and the 30-episode serial The Heights in Western Australia.

“Whilst overall the total expenditure figure this year was down, that was mainly due to no big-budget Hollywood movies starting to film during the year, and we know this has already improved. Dora the Explorer is shooting now, plus series Reef Break and feature Godzilla vs Kong are also confirmed, so adding in the Federal Government’s new $140 million Location Incentive to the mix, we anticipate foreign expenditure will significantly improve in 2018/19.

“We also just had a record investment round for Australian television drama, so we expect to see a lift in television drama production in the next financial year.”


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