SCREEN PRODUCERS IRELAND€¦ · SCREEN PRODUCERS IRELAND 77 Merrion Square South Dublin 2, D02...

SCREEN PRODUCERS IRELAND77 Merrion Square South

Dublin 2, D02 DH22

Tel: (01) 662 1114

www.screenproducersireland.com

Charity no: CHY14539

ANNUAL REPORT

2016

SPI_2016_Annual_Report_Final_Cover.indd 1 22/06/2017 16:43

Inside front cover Inside back cover

SPI_inside_cover.indd 1 22/06/2017 20:25

SCREEN PRODUCERS IRELAND | 2016 ANNUAL REPORT

CONTENTS

Report from the Chair & the CEO 3

Industry Funding overview 7

SPI Progress Report 25

Policy Papers 29

SPI Strategic Plan 2017-2020 45

Screen Producers Ireland Overview 49

SPI Board 2016 51

SPI Committees 2016 59

SPI Executive & Corporate Structure 63

SPI Financials 65


REPORT FROM THE CHAIR & THE CEO

THE VOICE OF INDEPENDENT

FILMTELEVISIONANIMATION


JOHN HENNESSY

THE CHAIR

My focus as Chair in 2016 was on the Audio Visual (AV) Sector and Organisation strategy, collaboration and connecting with the broader sector and continued development and communication of SPI Policy.

The longer term sustainability and development of the AV sector remains a major challenge. Effective communication of SPI policies remains a priority as it is the path to growth and securing additional funding for quality content. Government understanding of the sector and its importance to the culture of Ireland together with their ongoing support is a prerequisite to the implementation of policies to support the sector. In 2016 SPI continued to build upon and communicate our key policy papers to government and all stakeholders. Work to communicate these policies included policy meetings held with Ministers in key Departments, many senior Government officials and with all relevant sector stakeholders. An important challenge for SPI is to build a vibrant AV sector with a strong voice and influence.

The policy work also informed other communication strategies and papers. In advance of the 2016 General Election SPI initiated a ‘message to candidates’ campaign, highlighting the necessary infrastructure required to support the audio-visual sector. In August 2016 SPI also issued pre-budget 2017 submission to Government. A response to the ‘Culture 2025’ Report entitled ‘The indigenous producers perspective’ was also submitted to the Joint Oireachtas Committee on Regional Development Rural Affairs, Arts and the Gaeltacht. SPI also attended the Oireachtas to discuss the Culture 2025 framework. In November SPI was invited to discuss Public Service Broadcasting with the Oireachtas Joint Committee on Communications, Climate Action and Environment along with RTÉ and TG4.

The active lobbying in 2016 lead by outgoing CEO, Barbara Galavan, raised the profile of Screen Producers Ireland and continued to establish the organisation as a respected thought leader for the Audio Visual sector. Promoting the cultural and economic value of the Independent production sector at Government level was at the forefront of the lobbying. The research and analysis made an impact as Government listened to and acted upon some of the policy issues. In 2016 the Government committed to an economic analysis study of the audio-visual sector of Ireland as well as a report on the

impact of opt-out advertising on the Irish broadcasting landscape. This was followed in late 2016 by the launch of the Creative Ireland programme. The Creative Ireland programme is a hugely important opportunity which places the creative industries at the heart of policy and government. SPI welcomes this initiative, particularly as there is a specific objective to create an industry-wide, long term plan for Ireland as a global hub for the production of Film, TV Drama, and Animation.

The creative industries are one of Irelands great strengths. Irish made productions are enjoyed by audiences around the world. They enhance our reputation, provide high value employment and attract tourism to Ireland. The sector is facing many challenges because of increased complexity of the competitive environment. Technology advancements, changes in audience behaviours, lack of adequate funding of Public Broadcasting and our national screen agency and unfair or antiquated regulation. Irish Government support and the European Commission’s Digital Single Market Strategy are important for the screen based creative industries to thrive and develop.

As Chairman, I am confident that our creative industries will continue to make the people of Ireland and global audiences proud in leading the world in the fields of innovation, creativity and art if given the right supports.

In 2017 my focus will be collaboration between all stakeholders to develop a holistic creative industries strategy in conjunction with the Creative Ireland Programme.

I would like to thank the board of SPI, SPI board sub-committees, all SPI members and the very committed SPI staff for their contribution and commitment to the organisation during 2016. In addition, I would like to thank outgoing CEO, Barbara Galavan well in her new endeavours and for her enormous contribution to SPI over her six-year term as CEO. I wish the incoming SPI CEO, Elaine Geraghty every success in her new role.

John HennessyChairman


CEOBARBARA GALAVAN

2016 was another year of steady trading results for the Irish film and television production sector.

2016 was the first full year of operation of the amended Section 481 Film Tax Incentive Scheme. Total Irish Expenditure in the year was €265M, the highest ever achieved.

TV Drama remains the outstanding contributor to production activity with an average S481 Irish Expenditure of €127M per annum over the last three years.

Film activity for the three years 2014 to 2016 averaged €39M per annum, illustrating a slight increase over the preceding 3 year period.

Animation activity in the same period had an average S481 Irish Expenditure of €30.6M per annum, which is consistent with the previous 3 year period.

In 2016 SPI continued to participate on the Section 481 Industry Policy Group. This group seeks to ensure engagement with key stakeholders and provides feedback to Government on the operation of the Section 481 scheme. Delays in the processing of S481 applications and payments, was the principle concern of the Group in 2016.

RTÉ spend on independent production during 2016 increased slightly by €1M to €39M.

TG4 have invested over €20M annually in original Irish programming from the independent production sector since 2013. Indications are that this level of investment continued in 2016.

The Broadcasting Authority of Ireland awarded €10.2M over two rounds in 2016 representing a decrease in the 2015 figure. The Irish Film Board capital grant increased slightly to €11.7M.

Of central importance to the independent production sector is the need for a strong indigenous broadcasting sector. As is the case in other European countries strong public service broadcasting leads to a strong indigenous production sector. Broadcasters generate work so that producers can develop talent as well as being incubators for talent themselves.

The Irish Film Board also plays a critical role in the development

of local talent by providing funding for the development and production of Irish films. The funding constraints of Ireland’s Public Service Broadcasters and the National Screen Agency are impediments to growth and are impacting on their ability to fulfil their remit.

In 2016 SPI increased awareness of the issues facing the audio visual sector, through its policy campaign initiative and pro-active lobbying. As part of the Culture 2025 consultation I addressed the Oireachtas and advised that the Culture 2025 process provides for the perfect opportunity to foster an all industry approach to developing a strategy for the sector. In late 2016 the Creative Ireland programme was launched. We were pleased to see that this collaborative initiative ‘will facilitate an industry-wide plan to ensure strategic coherence around the objective of making Ireland a leader in this sector’. The Creative Ireland programme provides the opportunity for an overarching strategy to be developed for Ireland’s Creative Industries allowing it to address the impediments to growth while recognising the opportunities in a changing technological landscape.

The first collective agreement between Irish Equity/SIPTU and SPI was signed in March 2016. The agreement covers actors employed on indigenous TV drama productions. Work continues on a similar agreement to cover indigenous TV docu-drama which it is hoped will be concluded during 2017. SPI and SIPTU remain committed to building on the relationship to provide the industry with competitive professional collective agreements.

In September the European Commission published its package of proposals to modernise copyright rules across the EU. This included a Directive on copyright in the Digital Single Market and a proposed regulation on online transmissions and retransmissions of television and radio programmes. The Commission’s proposal in the Broadcast Regulation to extend the Country of Origin principle to broadcasters’ ancillary online services, despite the opposition of the majority of consulted stakeholders and no legal or economic evidence of its benefits, will undermine the principle of territoriality upon which the financing of audiovisual works rests. The potential impact that this proposed regulation will have on the independent production sector is extremely concerning. SPI remains committed to The European Coordination of Independent Producers (CEPI) to communicate our concerns to the Commission.

SPI hosted 9 SPI members’ events in 2016 fulfilling our aim to bring about greater stakeholder collaboration at the RTÉ and TV3 events which were attended by all senior commissioning personnel.

Finally, I would like to say that it has been a privilege for me to have led SPI as CEO over the past six years. I would like to take this opportunity to thank the Chairman John Hennessy, the Board and the sub committees for their support during this time. And I would like to say a particular word of thanks to the staff for their continued hard work and commitment to the SPI agenda.

Barbara GalavanCEO


CEO UPDATEELAINE GERAGHTY

I took up the role of CEO at SPI in January 2017 and I look forward to working with our Board, our members and stakeholders at this very exciting time for the audio visual sector. Having formerly spent over 20 years working in independent broadcast sector, I’m delighted to return to what feels like my natural home.

2016 was a year of significant change in the media landscape. Virgin Media entered the marketplace with the purchase of UPC, TV3 Group and UTV Ireland. All national commercial television in Ireland is now owned by one well resourced, international media organisation. We look forward with interest to see what impact this will have on investment in and committment to Irish independent production. Eircom also entered the market with the purchase of Setanta Sports, a new 350,000 sq ft studio opened its doors and Troy is now the biggest studio space in Ireland creating opportunities for Limerick and the mid west region.

There were also changes to key personnel working in the industry, with a new Director General appointed to both public state broadcasters, Dee Forbes at RTÉ and Alan Esslemont at TG4. I look forward to ensuring that SPI builds upon the relationships already forged by SPI with both broadcasters and ensuring the voice of independent producers is communicated and supported.

The launch of the Creative Ireland programme in late 2016 offers a significant opportunity to progress a meaningful A.V. strategy involving all key stakeholders. This, along with the release of the Olsberg SPI/Nordicity A.V. economic study will underpin my focus for 2017.

Finally, I would like to wish the outgoing CEO Barbara Galavan every best wish for the future and to thank her and the team at SPI for ensuring that I am stepping in to a well-developed and well respected industry body. I look forward to continuing to implement SPI’s strategy and working hard on behalf of all of our members.

Elaine GeraghtyIncoming CEO

INDUSTRY FUNDING

S481 IS ESSENTIAL TO IRELAND’S PRODUCTION LANDSCAPE

INDUSTRY FUNDING

PAGE 8 SCREEN PRODUCERS IRELAND | 2016 ANNUAL REPORT

S481

Ireland’s film and television tax incentive, Section 481 is essential to Ireland’s production landscape.

S481 provides a competitive tax incentive which is of benefit to indigenous productions, co-productions and gives independent producers leverage to attract incoming productions, thereby creating high value industry jobs in Ireland.

Productions availing of Section 481 relief in 2016 continued to be the main contributors to production activity in the State with a total of €265M certified in the year.

During 2011 and 2014 the value of S481 certified projects had increased by approximately 25% year on year. In 2015 the legislation governing the delivery of the scheme changed from an investor led model to a Corporation Tax Credit model. The change to the scheme impacted on the total value of projects certified in that year, and caused fluctuations in the statistics as the S481 application deadline for 2014 extended into 2015. 2016 shows an increase of 12% on 2014 from €237M to €264M.

TV Drama remains the biggest contributor to production activity in the State with an average of €127M S481 for the last 3 years. The main growth area is Incoming high-end TV Drama which has increased 285% from € 28M in 2011 to € 161M in 2016. This is in line with the growth in this genre being experienced worldwide.

The year on year increase in S481 projects certified confirms that Ireland’s film and tax incentive scheme works to increase production activity in the State.

SPI will continue to ensure S481 is renewed in 2018 to take account of the long lead time required for film and television production.

The principal growth in projects availing of S481 is in incoming productions. Incoming productions grew by 235% between 2011 (€61M) and 2016 (€204M). The increase of incoming productions highlights the ability of the Independent Production sector to achieve the high standards required for large scale production and the ability to compete in a global marketplace.

The twin pillars to a successful film and television production industry in Ireland is a competitive tax incentive scheme together with adequate supports for indigenous productions. The value of indigenous Irish projects has not followed the same year on year growth experienced by incoming productions, the value gap in 2016 between indigenous projects and incoming projects was €111.6m or 239%. To ensure sustainable growth of the industry, the value of indigenous projects needs to grow in tandem with that of incoming projects. The trend of continued growth of incoming projects and stagnation of indigenous productions is a potential risk to the continued development of the industry. The stagnation of indigenous productions could be linked to the stagnation of available national funding, the fact that amounts available from the IFB have not changed substantially since 2011, and the lack of development funding.

To remain sustainable and build companies of scale Independent production companies need to maintain security of funding and develop original IP. The ownership of IP provides producers with the potential for future earnings. The development of the indigenous industry is extremely important to avoid the sector becoming a service industry for International companies who hold the IP and the downstream revenues.

The IFB are also cognisant of the imbalance between indigenous industry investment and foreign direct investment. Their 2016- 2020 strategy stated that they ‘need to work on ensuring the right balance of resources allocation in respect of inward production and on ways to make it work for creative talent development’. The IFB have also confirmed that the funding constraints are already impacting on indigenous drama production, ‘due to funding constraints only development of high-end international tv drama is currently supported’.1

The SPI policies provide potential solutions to increasing the level of national funding available, and developing the infrastructure to support the audio-visual sector. Although there is currently no clear overarching government vision or strategy for the audio visual industry, a number of key stakeholders are aligned with the SPI strategy to work in collaboration to establish a vision for the audio

Section 481 Projects Certified by Revenue Commissioners 2011-2016

1 IFB Strategic Plan 2016-2020 building on success

2011 2012 2013 2014 2015 2016

No of S481 projects 57 52 67 67 66 77

Irish Expenditure €118,248,839 €142,968,378 €183,142,646 €237,387,613 €118,618,238 €264,829,803

Animation Total €31,982,729 €32,127,088 €44,942,020 €39,104,231 €20,752,709 €31,999,653

Documentary Total €4,853,720 €3,797,207 €2,717,403 €7,108,573 €8,959,749 €12,533,745

Film Total €33,231,456 €29,243,763 €35,856,614 €49,221,388 €34,022,510 €35,155,980

TV Drama Total €48,180,934 €77,800,320 €99,626,609 €141,953,421 €54,883,270 €185,140,425


2012-2016 – Growth of S481 Projects Certified by Genre

Animation Documentary Film TV Drama


150M

160

140

120

80

60

40

20

180

100

200

0

120M

90M

60M

32.0 32.1

44.939.1

20.7

3.8 7.19.0

2.7

29.235.9

49.2

34.0

4.9

33.2

48.2

30M

2011 2012 2014 2015

77.8

99.6

142.0

54.9

2013

€Million


150M

120M

90M

60M

32.0 32.1

44.939.1

20.7

3.8 7.19.0

2.7

29.235.9

49.2

34.0

4.9

33.2

48.2

30M

2011 2012 2014 2015

77.8

99.6

142.0

54.9

2013

2011Genre 2012

200

300

150

250

100

50

02013 2014 2015 2016

2011 2012

200M

150M

100M

50M

0M2013 2014 2015

€Million

2011-2016 – S481 Projects Certified Incoming v Irish Local Value

2012 n 32.1 3.8 29.2 77.8

2013 n 44.9 2.7 35.9 99.62014 n 39.1 7.1 49.2 142.02015 n 20.7 9.0 34.0 54.92016 n 32.0 12.5 35.2 185.1

Irish n 0 57.1 52.7 41.1 62.9 52.5 60.3Incoming n 0 61.1 90.3 142.0 174.5 66.1 204.5Total n 0 118.2 143.0 183.1 237.4 118.6 264.8

visual sector. Stakeholders in the industry are also aligned on a number of other elements of SPI Policy namely the SPI policy to increase funding for the IFB and Public Service Broadcasters, government support in the form of legislative changes to protect IP

and increase the funding available to support locally produced content, the extension of S481 beyond 2020, and ensure that Revenue is resourced sufficiently to be able to deal with any

increase in S481 applications.

INDUSTRY FUNDINGFILM


The total Irish expenditure of S481 film projects certified in 2016 decreased 42% from € 49.2M in 2014 to € 35.1M in 2016.

2014 was an exceptional year for film in Ireland. Films such as ‘Room’, ‘Brooklyn’, ‘The Lobster’, ‘My Name is Emily’, ‘11 Minutes’, ‘A Date for Mad Mary’, ‘The Secret Scripture’, and ‘Sing Street’ were certified in 2014. Due to the nature of production, the success of these productions was not visible on screen until 2016. A number of these productions received multiple Oscar and other prestigious nominations and awards in their first year of release.

The success of Irish Film is an indication of what can be achieved by the industry if adequate funding is available.

In 2016 the value of indigenous Irish film projects decreased from €29M in 2014 to €14.7M in 2016. This represents a 50% decrease. The number of indigenous projects receiving certification remained largely similar, 12 in 2014 to 11 in 2016. In 2016 the average value of a S481 certified Irish project was €1.3M. This suggests that a larger number of small budget films are now being made. The average value also suggests that Irish films with micro to small budgets are dominating output.

This domination of bottom heavy production is a worrying trend which exacerbates the existing issues around production company sustainability. The lack of available local funding and the impact digital disruption has had on the international market place, are the key issues for Irish Independent film production sector, limiting the

potential to grow thriving sustainable business with multiple income streams.

The traditional sales model relied on revenue streams from the DVD, Broadcaster, cinema theatre sales market. Digital disruption has eroded the sales potential as DVD sales have diminished, broadcasters are diluted by streaming services, cinema is predominantly focused on big budget blockbuster films and piracy has further eroded the market. Income streams and any potential downstream revenue for film producers has now diminished and companies are becoming solely reliant on producer fees alone to sustain their business. Producers who are new to the market have not had the opportunity to build up revenues before the impact of digital disruption.

The traditional sales model is no longer relevant in the digital age and a new sales model that can monetise on the digital market to an equivalent level as the traditional model and one that finds alternative income streams for film has yet to be devised.

In contrast to TV Drama, the introduction of the S481 tax incentive has had little impact on Film Production in Ireland to date as the total spend remains relatively static. The worldwide market is now dominated by High End TV Drama and Large Budget US studio film. In the absence of a new sales model, international financiers are focusing on projects with recognised onscreen and off screen talent to provide the commercial security in the current landscape. The level of funding available through local sources is not sufficient

Film 2011-2016S481 Projects Certified by Revenue Commissioners

€50,000,000

€45,000,000

€40,000,000

€35,000,000

€30,000,000

€25,000,000

€20,000,000

€15,000,000

€10,000,000

€5,000,000

€0

2011 2012 2013 2014 2015

2011 2012 2013 2014 2015

€60,000,000

€50,000,000

€40,000,000

€30,000,000

€20,000,000

€10,000,000

€0

2011 2012 2013 2014 2015 2016

2011 2012 2013 2014 2015 2016

Film Irish €20,504,507 €14,362,156 €12,399,328 €29,297,469 €13,359,548 €14,715,171

Film Incoming €12,726,949 €14,881,607 €23,457,286 €19,923,919 €20,662,962 €20,440,809

Film Total €33,231,456 €29,243,763 €35,856,614 €49,221,388 €34,022,510 €35,155,980


to adequately fund medium to large productions with recognised onscreen and off-screen talent. Independent production companies need to be well resourced to develop projects of this scale and secure the funding from outside of Ireland. Access to slate funding schemes enable producers to be more ambitious and provide an opportunity for producers to develop sustainable companies of scale. Company development is also linked to the availability of onscreen and off screen talent. The Irish Film Board agree that ‘in order to achieve national and international recognition it is vital to invest (and continue to invest) in home-grown talent.’* The increased pressure on finance and the lack of local financing increases the number of co-produced projects. Co-productions, although a requirement in the Irish market, have the potential to dilute the downstream revenue for producers unless the Irish producer is bringing a developed project to market or bringing additional financing to secure their position.

Irish film producers are faced with a confluence of challenges when it comes to securing incoming films, and Ireland has not been able to attract film productions of scale, while the UK is close to capacity levels. The international film market is highly competitive, as most countries offer similar tax incentives. The competitiveness of Ireland is affected by the rates of exchange, currently US dollar and Sterling rates are weaker than the Euro making Ireland more expensive. It is also difficult to get a film which is not set in Ireland to shoot here. The Irish tax incentive on its own is not enough to attract large film productions into Ireland. Brexit could provide an

opportunity for the industry to be a gateway for Hollywood to Europe provided that Ireland has the required infrastructure, available studio space and the volume of experienced crew.

The industry needs to unlock the growth potential of Irish film by investing in talent and company development.

Irish film production companies are one of the most vulnerable sectors in the current AV landscape. SPI will continue to lobby Government for an increase in capital funding for the Irish Film Board and for other legislative changes to increase the amount of local funding available for film producers.

* IFB Strategic Plan 2016-2020 building on success

INDUSTRY FUNDING


ANIMATION

The total value of S481 certified animation projects increased slightly from € 20.7M in 2015 to € 32M in 2016. This represents a 54% increase from 2015, however the 2016 total has decreased €12.9M 29% from 2013 when the total was € 44.9M. Animation has not experienced year on year increase, the figures continue to fluctuate. The highest level achieved for incoming production was € 35.5M in 2013 and €11.6M in 2011 for Irish Animation.

The value of indigenous Irish animation increased from € 7M in 2015 to €8.7M in 2016. Although this represents a 23% increase, the value of indigenous Irish animation has yet to surpass the highest level achieved in 2011 of €11.6M.

The stagnation of indigenous animation is directly linked to the level of local funding available, Irish animation companies are reliant on the IFB, BAI and RTÉ for local investment. In 2016 this equated to roughly €1.9M in production funding. Independent producers have shown themselves to be highly skilled at developing different sources of finance for their programmes, in 2016 they leveraged the €1.9M with a x 4.6 multiplier to reach the €8.7M in Irish S481 eligible spend.

Indigenous animation is operating in an unhealthy monopsony (single buyer) environment, with RTÉ as the single Irish buyer for the indie sector to engage. RTÉ recognises the importance of a young audience and have a dedicated childrens channel RTÉjr. The annual average level of investment of € 450k in Irish produced

animation represents 0.11% of the €40M statutory spend for independent production. Children are the audience of the future and they are currently underserved as the main PSB RTÉ are failing to invest in any meaningful way. It is in the public interest to produce quality childrens programming to deliver knowledge, values and cultural identity. In the absence of any meaningful investment in Irish animation, International programming swamps local content as animation can be cheaper to acquire than local content. According to the SPI analysis of the RTÉjr schedule in 2016, the percentage of independently produced programmes was on average 7%, while acquisitioned programmes accounted for 69% of the schedule. While this trend continues, Irish children will learn their values and perhaps subsume the cultural identity of the UK the main supplier of acquisition programming into Ireland. The SPI policy advocates for RTÉ to have a guaranteed annual spend on animation programmes. While this might address the Irish versus acquisition imbalance, the industry also needs a solution to the single buyer market to encourage programme diversity.

Irelands S481 tax incentive is a main driver for growth in the animation industry. Access to S481 has enabled Irish production companies to attract international projects and achieve a reputation as a hub for animation production. Irish animation companies collaborate with all the major studios in the international animation industry. Producing a number of high quality animations for international clients including Peter Rabbit, Octonauts, The Amazing World of Gumball, Littlest Pet Shop,

Animation 2011-2016S481 Irish Expenditure – Projects Certified by Revenue Commissioners

€50,000,000

€45,000,000

€40,000,000

€35,000,000

€30,000,000

€25,000,000

€20,000,000

€15,000,000

€10,000,000

€5,000,000

€0

2011 2012 2013 2014 2015

2011 2012 2013 2014 2015

€50,000,000

€45,000,000

€40,000,000

€35,000,000

€30,000,000

€25,000,000

€20,000,000

€15,000,000

€10,000,000

€5,000,000

€0

2011 2012 2013 2014 2015 2016

2011 2012 2013 2014 2015 2016

Animation Irish €11,588,733 €10,209,245 €7,447,823 €5,020,803 €7,076,047 €8,722,559

Animation Incoming €20,393,996 €21,917,843 €37,494,197 €34,083,428 €13,676,662 €23,277,094Animation Total €31,982,729 €32,127,088 €44,942,020 €39,104,231 €20,752,709 €31,999,653


Roobard and Custard, Danger Mouse. In 2016 the value of incoming animation was €23M. Fulfilling servicing contracts for international studios is the foundation of the industry, it allows Irish animation companies establish themselves in the International marketplace and provides their staff with the requisite training and experience to go on and develop original animations. A current impediment to growth is the shortage of available industry ready staff. The industry is subject to continuous and rapid technological changes which means that the skills base needs to be constantly updated. The Higher Education curriculum requires continuous investment in order to train graduates with the relevant skills. The industry must be able to access the necessary skills on the jobs market to allow it to grow and take on new projects. This will ensure that there is

capacity in the sector for further growth. SPI and the animation committee initiated engagement with animation colleges in 2016 with the aim of increasing industry and college collaboration and upskilling to meet the needs of the sector.

Greater support is required for indigenous animation productions to increase the level and total value of Irish animation production which has not increased from 2011.

To build sustainable animation companies, it is essential that we increase funding to the sector and address emerging skills shortages. S481 as the main driver for investment in animation in Ireland must be extended beyond the current 2020 cessation date.

INDUSTRY FUNDING


DOCUMENTARY

The total value of documentary projects certified in 2016 was €12.5M Irish expenditure, the highest value achieved to date. Documentary was the only genre to increase in value since 2014. The total value of S481 projects certified for Documentary increased from €7M in 2014 to over €12M in 2016. This represents a 76% increase. The number of projects has more than doubled from 11 in 2014 to 25 in 2016. In 2016 the number of documentary projects exceeded any other genre with Animation totalling 15, Film 17 and TV Drama 19. The total S481 is not divided into Irish projects and incoming projects. Therefore we are not currently able to determine if the increase is due to an increase in Irish projects or incoming.

Documentary is experiencing a year on year increase since 2014 and this indicates a positive outlook for documentary projects availing of S481 for 2017.

Documentary 2011-2016S481 Irish Expenditure - Projects Certified by Revenue Commisioners


150M

120M

90M

60M

32.0 32.1

44.939.1

20.7

3.8 7.19.0

2.7

29.235.9

49.2

34.0

4.9

33.2

48.2

30M

2011 2012 2014 2015

77.8

99.6

142.0

54.9

2013

2011 2012

€80,000,000

2013 2014 2015 2016

2011 2012 2013 2014 2015 2016

€10,000,000

€12,000,000

€14,000,000

€8,000,000

€6,000,000

€4,000,000

€2,000,000

€0

Documentary n €4,853,720 €3,797,207 €2,717,403 €7,108,573 €8,959,749 €12,533,745

INDUSTRY FUNDING

PAGE 15SCREEN PRODUCERS IRELAND | 2016 ANNUAL REPORT

TV DRAMA

TV Drama has experienced unprecedented growth from an Irish expenditure of €48M in 2011 to €185M certified for S481 in 2016. This represents close to a fourfold increase in the period. The increase is driven by incoming High-end TV Drama which has increased from €28M in 2014 to €161M in 2016, representing a 575% increase.

Between 2011 and 2014 incoming TV Drama production experienced a year on year increase. The significant decrease in 2015 coincides with the introduction of new S481 rules whereby the 2014 scheme deadline was extended into 2015. The 2015 figures therefore do not capture a full 12 month period.

The total value of TV drama projects certified in 2016 continues to surpass the value of film projects certified in the year. This illustrates the worldwide trend in increased TV Drama production and the high international value of recurring prestige TV drama series. In 2016 three High-End TV drama productions accounted for 78% of the TV Drama total in the year. In 2016 ‘Penny Dreadful’ alone employed 1,200 cast and crew over the course of the production last year. This is more than the number currently employed by Facebook in Ireland. This demonstrates the scale and the high-quality production value of these productions.

The internationally successful drama series Vikings is an Irish originated international co-production. Vikings which was in its 5th

series in 2016 and 2017 has created a micro economy in the local area of Ashford, Co. Wicklow. The production provides local employment for up to 700 and occupies Ashford Studios, which was built in 2012 to accommodate the production and in turn increased capacity for the industry. This production provides quality employment for periods of around 6 months at a time and provides a substantial training ground for crew to upskill to the high standards required.

Funding for indigenous Irish TV Drama has remained relatively static since 2011. The lack of available national development and production funding is stymying growth in the industry. In 2016 the IFB stated that ‘due to funding constraints only the development of high-end international TV Drama is currently supported’ 2. Those funding constraints on the national screen agency towards Indigenous Irish production will further impact on the development and production of Irish TV Drama. In the absence of sufficient development funding for Irish originated co-production independent production companies could be required to source development funding, and co-produce with international broadcasters to realise their vision. Across the border in Northern Ireland by comparison, Game of Thrones received $15.3M from Northern Ireland Screen in its first 4 seasons. The overdependence of Irish producers of TV Drama upon the PSBs, which are facing funding challenges, is unhealthy and a serious impediment to the

TV Drama 2011-2016S481 Irish Expenditure - Projects Certified by Revenue Commisioners

€160,000,000

€180,000,000

€200,000,000

€140,000,000

€120,000,000

€100,000,000

€80,000,000

€60,000,000

€40,000,000

€20,000,000

€0

2011 2012 2013 2014 2015 2016

2011 2012 2013 2014 2015 2016

TV Drama Irish €20,153,467 €24,317,347 €18,562,284 €21,429,352 €23,124,451 €24,305,355

TV Drama Incoming €28,027,467 €53,482,973 €81,064,325 €120,524,069 €31,758,819 €160,835,070

TV Drama Total €48,180,934 €77,800,320 €99,626,609 €141,953,421 €54,883,270 €185,140,425

2 IFB Strategic Plan 2016-2020 Building on Success

INDUSTRY FUNDING


TV DRAMA

growth and sustainability of the genre. TV Drama is a highly competitive market which is currently dominated by American and British High-end Drama which has international appeal but which presents a significant growth opportunity for Ireland. The national broadcasters are not sufficiently resourced to develop and commission international Irish co productions. RTÉ has cut back its investment in TV Drama commissioning activity and have rather focused on TV Drama designed to solely cater for a domestic market. To compete in the international market place along side ‘Downton Abbey’, ‘War and Peace’, ‘Outlander’ etc, the national broadcaster needs to develop a dual strategy to invest in Irish originated co-production tailored for a global audience and continue to invest in nationally funded indigenous TV Drama productions with the domestic audience in mind.

International co-produced TV Drama has further potential for growth and Irish producers are key to leveraging and building on the success to date. To maintain high levels of employment a consistent pipeline of production is required to ensure the studios and employees are not on standby. Independent producers need access to high level development funding to create further International co-production projects of scale.

TV Drama presents the most significant growth opportunity of all genres. To ensure growth, the industry needs to continue to highlight impediments to growth. These include the need to increase funding opportunities for Indigenous Irish TV Drama, address the issue of film and television studio capacity and the need to ensure adequate training for employees in the sector.

INDUSTRY FUNDING


THE IRISH FILM BOARD

In 2016 the Irish Film Board capital grant from the Department of Arts, Heritage & the Gaeltacht was €11.7M. Following substantial lobbying by SPI and the IFB for increased funding. IFB received an increase of €500k in 2016, the first increase since 2008. While this was a welcome increase the level of funding available to the Irish Film Board is insufficient and is not only inhibiting the IFB ambition to widen its remit and become the national screen agency for creative screen content but is having an impact on the allocation of development funding for indigenous TV Drama. In 2016 the IFB stated that ‘due to funding constraints only the development of high-end international TV Drama is currently supported’. 3

In 2016 the IFB launched their 5 year Strategic Plan 2016-2020, Building on Success. The strategy has 3 central pillars namely Vision for 2020, Building on our Core Strengths and Strong Foundations. Funding is a key requirement for 2 out of the 3 pillars funding of and support for development of creative screen production and creative talent, funding for investment.

The IFB strategy pillar for a vision for the industry is aligned with the SPI strategy for collaboration between all stakeholders to build a strong industry by setting out an action plan to mobilise a vision for the audio-visual industry.

‘The remit of the IFB is as the development agency to promote creative talent working in film, television and animation. Our aim is to develop a sustainable industry for filmmaking in Ireland. Our purpose is to support the highest quality in creative filmmaking and our ambition is to see this quality recognised by Irish and international audiences.’ James Hickey Chief Executive Irish Film Board Strategic Plan 2016-2020

Without adequate funding for the Irish Film Board, the production sector risks becoming over reliant upon incoming productions.

SPI’s Irish Film Board policy calls on the Government to restore funding levels to the 2008 level of €20M.

3 IFB Strategic Plan 2016-2020 Building on Success page 9

Irish Film Board Oireachtas Grant €M 2008-2016

2016 2015 2014 2013 2012 2011 2010 2009 2008

11.7Funding 11.2 11.3 11.9 13.2 16.0 16.5 18.8 20.0

20

15

10

15

0

20

18.817

16.5

16

13.15

11.898

11.227

11.2

11.7

0 5 10 15 20 25

2008

2009

2010

2011

2012

2013

2014

2015

2016

INDUSTRY FUNDING


BAI

⁴ Department of Communications, Climate Action and Environment Dáil Éireann Debates. Oireachtas. 16 September 2016. p. 67. Retrieved 27 September 2016 “Written Answer No. 1704: Television Licence Fee”.

BAI S&V Broadcaster Overview 2016Summary of BAI S&V Rounds 26, 27

BAI S&V Genre Overview 2016 Summary of BAI S&V Rounds 26, 27

Projects Broadcaster Award €’000 % Total TV

32 RTÉ €5,753 56%

11 TG4 €1,481 14%

6 TV3 €1,710 17%

1 Setanta Sports €88 1%

1 UTV Ireland €180 2%

8 Community TV €396 4%

1 Oireachtas TV €70 1%

2 Irish TV €211 2%

1 BBC2 €50 0%

1 BBCNI €300 3%

Total 64 €10,239 100%

Projects Genre Award €’000 % Total TV

17 Drama €3,740 37%

32 Documentary €3,604 35%

7 Entertainment €1,300 13%

4 Education €850 8%

4 Animation €745 7%

Total 64 €10,239 100%

Through the Sound & Vision Scheme the Broadcasting Authority of Ireland distributes 7% of the annual value of the Licence Fee for high quality television and radio programmes on Irish culture, heritage and experience and programmes to improve adult literacy. In 2016 the BAI awarded €10.2 M to 64 television productions over two application rounds. The BAI Sound & Vision scheme makes a significant contribution to Independent productions. In 2015 and 2016 the average amount available through the Sound & Vision scheme was €12M per year. The inadequacy of the TV licence system impacts on the BAI S&V scheme and the amount available to the BAI has decreased over the period 2011 to 2016, while the number of households have increased by 18 thousand between 2011 and 2016. In September 2016 the evasion rate was estimated at 13.75%, representing a loss of €40m per annum to public service broadcasting.4 By addressing the ongoing issue of evasion, additional income to support quality broadcasting can be realised.

In 2016 the amount awarded to RTÉ via the Sound & Vision scheme remained at the same level as 2015, i.e. €5.7M. RTÉ, TG4 and TV3 continue to be the top 3 broadcasters receiving more than 85% of the total amount awarded in 2015 and 2016. Drama and Documentary combined received the majority of the funding in

2015 and 2016 at 72%, €7.4M of the total awarded €10.2M. The broadcasting landscape changed significantly during 2015 and 2016. UTV Ireland launched in 2015 and it was announced that Virgin Media was to purchase TV3, with Alex White the Minister for Communications at the time approving the sale by December 2015. In 2016 Virgin Media announced the takeover of the TV3 Group. In July 2016 UTV Ireland was sold to the TV3 Group and was re branded as be3. In December 2015, Eir purchased the Setanta Sports Ireland Ltd. and on July 5th 2016 Setanta Sports was rebranded as Eir Sport.

The market changes are reflected in the BAI Sound and Vision funding awards where there was a significant decrease in the amounts awarded to Setanta Sports and UTV Ireland in 2016. The amount awarded to UTV Ireland decreased 76% from €736k in 2015 to €180k in 2016 and Setanta Sports decreased 88% from €737k in 2015 to €88k in 2016. 2016 was also the first year that Oireachtas TV received an award from the S&V scheme.

The impact of the introduction of the Virgin Media Group and Eir into the broadcast media landscape has yet to be experienced.

INDUSTRY FUNDING


CREATIVE EUROPE IRELAND DESK

The Creative Europe MEDIA fund has been allocated €823m for the seven year period 2014-2020. This represents 56% of the total Creative Europe budget. Creative Europe MEDIA supports EU film and audio-visual industries with funding initiatives for development, distribution, promotion and training administered by the Education, Audiovisual and Culture Executive Agency EACEA in Brussels.

In the three years from 2014-2016 the average amount awarded to Europe was €107.1m per annum, Ireland received an annual average of €1.8m or 2% of the total European fund.

This fund is an important one for development funding. In 2014 €2m was awarded to 21 companies. Animation companies received 43% of the total development funding awarded in that year.

Ireland has been very successful at accessing development funding through Creative Europe. In the years 2014-2016, Ireland received € 3.44m or 6.2% of the total €54,877,278 amount of development funding awarded across Europe. This places Ireland in 6th position out of 32 countries in Europe with only France, Sweden, Belgium, Denmark and Germany above us. This is of particular significance given that Ireland represents less than 1% of the EU population and that non-EU countries also participate in the programme.

In 2014 Ireland was awarded €1.4m for slate development funding. This reduced by 72% to €399k in 2015. Ireland currently has a certain number of companies of scale who are eligible to apply for this funding and any company who applied in 2014 were not eligible to apply the following year. Ireland needs to create more companies of scale and companies should be more aware of the funding opportunities available through Creative Europe MEDIA at an early stage of their company development, as companies need to be running for 3 years to qualify for slate funding.

Ireland also received support for the Development of 22 international projects under the Single Project Development scheme in the 2014-2016 period. The amount of single project development funding awarded in Ireland has not grown year on year, despite there being a lack of development funding available in Ireland. This is perhaps due to a lack of awareness of the funding scheme and the eligibility criteria for applying for the fund. At the stage of developing a business and finance plan the producer should consult with Creative Europe Ireland to discuss the opportunities and the company requirements for accessing the scheme.

This scheme is perhaps currently underutilised there is no cap on the amount available per country and so Ireland could apply for more funding. This fund has the potential to enable producers to further develop original IP which could in turn increase the sustainability of the company.

There may also be other funding opportunities for organisations, in particular TV and training. During the years 2014-2016 only 4 projects were awarded TV production funding from Creative Europe MEDIA. Two animation productions and two Creative Documentaries. The TV Programming Scheme is extremely competitive as it offers a significant percentage of production finance while the rights for that element of the financing remain with the Producer. While a minimum of 3 European Broadcasters are required to be eligible to apply, in reality, a minimum of 4 Broadcasters in addition to strong Distribution investment is required to succeed.

In 2016 SPI had a focus on the animation skills requirements to ensure graduates are industry ready. There is a clear need for a continuous training programme which bridges the gap between college and industry. The Creative Europe MEDIA fund could provide access to funding for a college and industry collaborative training initiative.

2014 2015 2016

2014 2015 2016

€1,600,000

€1,400,000

€1,200,000

€1,000,000

€800,000

€600,000

€400,000

€200,000

€0

Creative Europe Media Funding Ireland 2014-2016

Single Project Dev Funding n €585,000 €320,000 €220,000

Slate Funding Dev n €1,436,524 €399,524 €648,689

TV Production Funding n €130,291 €25,704 €570,000

INDUSTRY FUNDING


RTÉ

RTÉ Grant in Aid expenditure in Independent Sector €’M 2008-2015

20

18.817

16.5

16

13.15

11.898

11.227

11.2

11.7

0 5 10 15 20 25

2008

2009

2010

2011

2012

2013

2014

2015

2016

Total expenditure RTÉ IPU stat and non stat costs Total RTÉ Grant in aid

200.90

200.20

196

183.6

180.9

182

178.6

178.9

2008

2009

2010

2011

2012

2013

2014

2015 38.6

39.7

36.6

41.1

47.5

53.2

57.1

75

0 50 100 150 200 250

37%

29%

27%

26%

23%

20%

22%

22%

Actual expenditure committed to new commissioning activities in 2015 was €33M (excl. RTÉ attributable overhead). The statutory level for 2015 was €39.5M (i.e.€40M subject to CPI) and we understand that the figures for 2016 have remained largely in line with 2015. RTÉ new commissioning spend resulted in 406 hours of programming produced by 74 independent production companies.

In addition to investment of €33M, Drama and Animation programmes attracted funding from other sources to the value of €10.8M. This additional funding from other sources represents 33% of RTÉ’s committed expenditure. The total value inclusive of all third-party funding was €43.8M.

RTÉ young peoples, including RTÉjr, RTÉs dedicated commercial-free channel for children under seven and TRTÉ on RTÉ2 commissioned 23.2 hours of independently produced programming in 2015.

The RTÉ Commissioning activity table below shows the continued decrease in the Independent Production Unit activity. The number of programme hours commissioned in 2015 is a reduction of 406 hours from the total of 812 hours in 2010. This decrease represents 50% of the number of hours commissioned in 2015. The Independent production sector has also experienced a significant decrease in RTÉ

spend from €75M in 2008 to €38.6 M (inc RTÉ attributable overheads) in 2015. This is a decrease of €36.4 M or 48%.

There is a critical need for reform of the television Licence Fee with evasion levels estimated at 14% of Irish households now not paying the TV Licence Fee. This equates to €40M 5 in lost revenue each year.

SPI policy advocates for Licence Fee reform and for a doubling of the current statutory spend on independent production from €40M to €80M.

RTÉ receives grant aid of 85% of the revenue generated from the TV Licence Fee. RTÉ grant aid has decreased dramatically since 2009 from € 200.2M to € 178.9M in 2015. This represents an 11% decrease or €21.3M.

The decrease has had the biggest impact on the independent production sector. The total expenditure on independent production reduced by €36.4 M between 2008 and 2015. €75M was spent in 2008 compared to € 38.6 M in 2015. This represents a 48% decrease in the period.

The decrease in the value of the grant in aid is intrinsically linked

⁵ Joint Committee on Communications, Climate Action and Environment Consultation on the Funding of Public Service Broadcasting, Tuesday November 22nd 2016 Opening Statement by Dee Forbes, Director General RTÉ.

RTÉ Commissioning Activities 2011-2015 2015 2014 2013 2012 2011 2010 No of Companies that submitted proposals 293 244 212 224 273 274No of Proposals Received 1402 970 861 973 1273 1224No of Commissions awarded 136 132 150 151 136 144No of Hours Commissioned 406 490 536 602 646 812


to the reduction in the number of TV licences paid year on year. The reduction in the number of licences paid is reducing at a time when the number of television households has increased.

Ireland has one of the lowest TV Licence Fees in Europe, both on a per household basis and per capita. It has one of the highest TV Licence Fee evasion rates in Western Europe at 14%. There are a further 8% of households that claim they do not have a television and therefore do not pay the Licence Fee. In aggregate, circa 22% of Irish households now do not pay the TV Licence Fee. This equates to over €50M in lost revenue each year.

In 2016 there were organisational changes in RTÉ. RTÉ director General Noel Curran resigned, and Dee Forbes was appointed to the role in April 2016. Dee Forbes was the first director-general in almost 50 years to be appointed externally, and was the first female to hold the role. Shortly after joining the organisation Ms. Forbes announced that RTÉ needs to ‘re-engineer and rethink the shape of the organisation and delivery of output.’ 6 She ‘highlighted that the two traditional revenue streams for RTÉ – the licence fee and advertising revenue – had both taken a hit in recent times.’ 7 All the revenue streams are falling annually and digital disrupters caused a collapse in the DVD and distribution market.

In the face of falling revenue and increased competition from commercial operators in the Irish market the next few years will determine RTÉ’s survival.

SPI advocates for Public Service Broadcasters to be adequately funded and their role within the media landscape to be preserved and supported by Government policy and legislation.

RTÉ is central to the Irish media eco system, and holds a vital role in preserving Irish culture on screen, nurturing Irish talent and providing Irish audiences with high quality programming.

‘RTÉ connects Irish people with the events and moments shaping their lives and our world.’ 8 RTÉ investment in the Independent Production Sector enables producers to leverage on the investment and gain access to international funding. RTÉ provides an environment for producers to develop original programming, generating IP which is a prerequisite for building sustainable companies of scale and increasing employment in the sector.

Public service broadcasters are dependent upon Government support for security of funding to meet their obligations under the Broadcasting Act.

RTÉ currently relies on a dual funded PSB model where commercial activities are needed to bridge the gap in public funding received. This places RTÉ at risk from external factors relating to the advertising market and other digital disrupters. In 2016 RTÉ advertising revenue decreased as UK advertising reacts to Brexit.

RTÉ recognises that the organisation needs to reinvent itself to ensure that it is relevant in the digital age. The media landscape is rapidly changing but government legislation and policy for broadcasters is outdated and designed for a different era.

SPI advocates for the Government to support public service broadcasters, recognise the urgent need for reform of the television licence fee and update legislation to mitigate the other risks in the media landscape which distort competition, ensuring fair regulation of all broadcasters, both foreign and Irish, broadcasting in and into Ireland.

‘The issues of a media fee and increased attention to licence fee evasion still need sustained consideration at a political level and it is the view of the Board that the resolution of these issues, in conjunction with other strategies, is the key to RTÉ’s overall funding.’ 9

Moya Doherty RTÉ Chairperson RTÉ 2015 Annual Report

SPI continues to highlight the issues to Government and proposes legislative change be enacted to enable License Fee reform.

⁶ Irish Independent article TV Times How Dee Forbes plans to make RTE ready for the future of broadcasting October 30 2016

⁷ Speaking on RTÉ’s Today with Sean O’Rourke 22nd March 2017

⁸ RTÉ 2015 Annual Report page 6

⁹ RTÉ Chairperson Moya Doherty RTÉ 2015 Annual Report

INDUSTRY FUNDING


RTÉ

Ranked by Average TVR, Individuals 4+ National / Consolidated / Based on Any Day, Any Time, Best Episode (Minimum Duration: 10 Minutes)RTÉ Top Programmes 2016

Indigenous Irish Independent Production

Co-Production/Enhanced Acquisition by RTÉ

In-House RTÉ Production

Acquired Programme

RANKING DESCRIPTION DAY OF WEEK DATE TIME R(TVR) 000s SHARE

1 Late Late Toy Show, The FRIDAY 02-12-2016 21:37 - 23:57 38.41 1,571.6 76.18

2 RTE News: Nine O’clock SATURDAY 27-02-2016 21:00 - 21:45 17.58 721.4 45.69

3 Rebellion SUNDAY 10-01-2016 21:30 - 22:31 17.37 713.0 42.29

4 Mrs Brown’s Boys: Mammy’s Forest SUNDAY 25-12-2016 22:28 - 22:57 17.27 706.6 38.84

5 Mrs Brown’s Boys: Chez Mammy SATURDAY 31-12-2016 21:35 - 22:12 16.62 680.3 42.87

6 Room To Improve SUNDAY 28-02-2016 21:37 - 22:38 16.55 679.1 44.11

7 Late Late Show, The FRIDAY 19-02-2016 21:38 - 23:40 16.54 678.8 47.35

8 Mrs Brown’s Boys Live SATURDAY 23-07-2016 21:46 - 22:21 15.41 630.6 45.81

9 RTE News: Six One FRIDAY 01-01-2016 18:01 - 18:20 15.29 627.5 40.79

10 Prime Time Leaders Debate TUESDAY 23-02-2016 21:38 - 23:11 15.24 625.4 43.81

11 Rose Of Tralee 2016, The TUESDAY 23-08-2016 21:35 - 23:16 15.18 621.0 42.49

12 Voice Of Ireland, The SUNDAY 24-01-2016 18:32 - 19:56 15.07 618.4 38.84

13 Claire Byrne Live Leaders’ Debate MONDAY 15-02-2016 21:36 - 23:36 14.32 587.8 45.06

14 Fair City TUESDAY 09-02-2016 20:02 - 20:29 14.29 586.4 38.02

15 Sugar Crash MONDAY 11-01-2016 21:36 - 22:31 13.77 565.2 34.36

16 Mrs Brown’s Boys: Mammy’s Christmas Punch SATURDAY 24-12-2016 22:34 - 23:13 13.74 562.1 39.24

17 Prison In Peru: Michaellas First Interview SUNDAY 03-04-2016 21:30 - 22:01 13.68 561.5 34.09

18 Operation Transformation WEDNESDAY 20-01-2016 20:31 - 20:57 13.35 547.9 32.46

19 At Your Service SUNDAY 21-02-2016 20:31 - 20:57 13.18 540.8 32.21

20 Centenary MONDAY 28-03-2016 21:35 - 22:59 12.38 507.9 33.93

21 Election 2016 SATURDAY 27-02-2016 18:45 - 20:56 12.30 504.6 33.38

22 Mrs Brown’s Boys TUESDAY 20-12-2016 21:36 - 22:09 12.28 502.7 33.01

23 RTE Irish Country Music Awards FRIDAY 24-06-2016 21:36 - 23:07 11.64 477.8 37.72

24 Mrs Brown’s Boys - Mammy Christmas THURSDAY 22-12-2016 21:36 - 22:10 11.41 466.8 31.33

25 Ireland’s Fittest Family SUNDAY 18-12-2016 18:32 - 19:27 11.29 461.8 34.75

26 Celebrity Operation Transformation WEDNESDAY 07-09-2016 21:35 - 22:36 11.10 454.0 35.33

27 Ray D’Arcy Show, The SATURDAY 29-10-2016 21:49 - 23:12 10.91 446.2 34.26

28 Prime Time THURSDAY 07-01-2016 21:39 - 22:13 10.85 445.3 27.90

29 Nathan Carter Show, The SUNDAY 30-10-2016 21:30 - 22:29 10.84 443.8 35.09

30 Dragons’ Den SUNDAY 17-04-2016 21:30 - 22:30 10.61 435.5 29.64

Programming made by independent producers for RTÉ continues to rate very highly and consistently performs successfully across digital and social media platforms. In 2016, 2 of the top 10 and 10 of the top 30 rating programmes on RTÉ One were produced by

RTÉ One | Top 30 Programmes | 2016

independent producers. The independent production sector in Ireland continues to deliver quality, diverse, innovative and cost-efficient programming for the national broadcaster. See further details in table below.

Source Nielsen/TAM Ireland RTÉ One only, excluding sports programmes.

INDUSTRY FUNDING


2015 2014 2013 2012 2011 200820092010

2015 2014 2013 2012 2011 200820092010

30

35

40

25

20

15

10

5

0

TG4 n €11.0 €11.1 €11.3 €15.0 €15.3 €15.3 €17.2 €17.3

Independent sector commissioning n €21.2 €21.7 €21.5 €17.8 €17.5 €17.0 €18.0 €18.1

TG4 Grant in Aid spend on the Independent Production Sector €’M 2008-2015

TG4

TG4 has invested over €20m annually in original Irish programming from the independent production sector in Ireland from 2013-2015. In 2015 this investment directly supported 300 jobs in the sector and an additional 673 in associated employment.10 TG4, as a publisher broadcaster, sources a major share of its programming from the Irish language independent production sector. TG4 committed to the publisher broadcaster model because of the benefits it delivers to both TG4 and the Irish economy including: helping to ensure that TG4’s schedule is distinctive and reflects Irish cultural identity; supporting the preservation and development of the Irish language production sector; new and original programming in the Irish language provides a diversity of perspective and a fresh approach to entertainment.

In 2015 TG4 received €32.24M in the form of a grant via the Department of Communications, Energy and Natural Resources. The 2015 funding represented a reduction of €0.5M on 2014/2013/2012. TG4 sources content from over 100 Irish independent production companies. Over 300 highly skilled and creative full-time jobs in the sector are directly sustained by TG4 commissions. Most of these are small companies and many, but not all, of these jobs are located in Gaeltacht areas. In 2015, TG4

commissioned 680 hours of new Irish language programming and almost 291 hours of re-voiced material and subtitling from the independent sector. Independently produced programmes include ‘Ros NaRun’, ‘Corp agus Anam’ and ‘An Klondike’.

TG4, as a publisher broadcaster, sources a major share of its programming from the Irish language independent production sector. TG4 continues to increase the total funding to the Independent production sector from 51% of the total TG4 grant in aid in 2008 to 66% in 2015 (€18.1M in 2008 to €21.2M in 2015). TG4 committed to the publisher broadcaster model because of the benefits it delivers to both TG4 and the Irish economy including: helping to ensure that TG4’s schedule is distinctive and reflects Irish cultural identity; supporting the preservation and development of the Irish language production sector; new and original programming in the Irish language provides a diversity of perspective and a fresh approach to entertainment.

In 2016 the Government committed to providing funding of €32.8M to TG4 for 2017 an increase of €147k. TG4 ‘This continues to be short what was required to reinstate 2014 current funding levels and also to allow TG4 to develop its services and deliver on its

10 TG4 2015 Annual Report p17 note 5. Based on an analysis of TG4’s 2015 actual expenditure (operating and capital including programme funding) in Ireland.

INDUSTRY FUNDING


INDUSTRY FUNDINGTV3

TG4

objectives as set-out in its five-year strategy.’ 11

As a public service broadcaster TG4 face many of the same challenges as RTÉ including the lack of security of funding as the TG4 funding commitment from Government is discretionary, the decrease in revenue streams due to the decrease in license fee income, digital disrupters and reduced advertising. The combination of the downturn and media market developments have resulted in TG4’s advertising and sponsorship income declining by approximately 50% between 2008 and 2016. 12

TG4’s public funding remains the key source of income for TG4 and it is vital that current funding is set at levels which can enable TG4 to develop the service, grow its audience across all platforms and respond to the challenges it faces in the digital environment.

SPI advocates for Public Service Broadcasters to be adequately funded and their role within the media landscape to be preserved and supported by Government policy and legislation.

In 2016, the Director General of TG4 since 2000 Pól Ó Gallchóir resigned from the position. Alan Esslemont was appointed to succeed Pól in mid-October 2016. He had previously worked with Teilifís na Gaeilge for the first twelve years of its operation and oversaw the rebranding to TG4 before returning to his native Scotland in 2008 to work on the establishment of the Gaelic language channel BBC ALBA. In December 2016 Alan informed the sector that TG4 would be announcing a new programme commissioning model in 2017.

11 TG4 Joint Committee on Communications, Climate Action and Environment, Public Consultation on Funding of Public Service Broadcasting in Ireland, 22nd November 2016 p4

12 TG4 Joint Committee on Communications, Climate Action and Environment, Public Consultation on Funding of Public Service Broadcasting in Ireland, 22nd November 2016 p4

The TV3 schedule comprises approximately 40% of Irish produced content. TV3 has a substantial in-house production unit which produces mainly news, current affairs, daytime programming and studio based programming. In recent years, TV3 has increased the volume of commissioning from independent producers.

In 2016 TV3 commissioned the third series of the channels independently produced flagship Drama ‘Red Rock’ for transmission in 2017. ‘Red Rock’ has proved a major success for the channel in terms of ratings and in terms of the export sales in the US to Amazon Prime and in the UK to the BBC who acquired 80 episodes.

Independently produced programmes commissioned by TV3 in 2016 also included ‘The Restaurant’ an Irish originated TV Format by Vision Independent Productions, ‘Masterchef’ produced by Shinawil, ‘The Great Guide to the Future’, ‘Paul Williams – State of Fear’, ‘Paramedics’, and ‘Aerial Ireland’ produced by Tile Films, ‘This is Jobstown’, ‘The Airport up in Knock’ produced by Motive TV, and ‘The Great Irish Bake Off’ produced by Sideline.

Expenditure figures by TV3 on independent production are not currently published. Under their 2009 contract with the Broadcasting Commission of Ireland (now BAI), TV3 undertook to spend between 15% – 25% of its annual programme budget on independent productions.

In 2015 TV3 was sold to UPC. UPC Ireland is part of Virgin Media, Liberty Global’s UK subsidiary and in 2016 Virgin Media purchased UTV Ireland, which just launched in 2015.

The purchase of Virgin by Liberty Global and the subsequent takeover by Virgin of both TV3 and UTV Ireland now means that all national commercial television in Ireland is owned by one highly resourced international media organisation. It is not clear at this stage if this new conglomeration will lead to any significant increased investment in Irish programming or commissions from the independent production sector in Ireland, however SPI will be lobbying for this.

SPI PROGRESS REPORT

SUPPORTING GROWTH AND DEVELOPMENTOF A DYNAMICAV SECTOR


PROGRESS REPORT

SPI

In 2016 SPI increased awareness of the issues facing the audio visual sector, through its policy campaign initiative and pro-active lobbying. As part of the Culture 2025 consultation SPI addressed the Oireachtas and advised that the Culture 2025 process provides for the perfect opportunity to foster an all industry approach to developing a strategy for the sector.

In late 2016 the Creative Ireland programme was launched. We were pleased to see that this collaborative initiative ‘will facilitate an industry-wide plan to ensure strategic coherence around the objective of making Ireland a leader in this sector’ and that one of the five pillars of the programme will focus on ‘Ireland’s potential to be a global leader in film production, TV drama, documentary, children’s storytelling, and animation for the screen’. SPI will engage fully with this initiative as it presents a significant opportunity to develop one overall strategy for the Audio Visual industries.

Following a productive meeting with Deputy Hildegarde Naughton, Chair of the Oireachtas Communications Committee, SPI, represented by Larry Bass and Jennifer Keneally, was invited to attend a Committee hearing on PSB funding in November. The Independent Broadcasters of Ireland, Professor Kevin Rafter of DCU, RTÉ, TG4 and the IFB also attended the session.

Well researched policy papers provide a platform to highlight the issues facing the AV industry to Government. In 2016 SPI developed the SPI Animation policy and we will continue to build on the policy papers.

Industry Statistics The Industry S481 Policy Group convened and chaired by the IFB agreed on Nov 13th 2015 that the group would support and find a way to fund a sustainable method of collecting data which could be published in an industry report.

In November 2016 the Dept. of Arts, Heritage and the Gaelteacht commissioned an economic analysis of the screen based creative industries. The study would examine the economic impact and potential of the Irish film, TV and animation sector. The commissioning of the study is committed to in the Action Plan for Jobs 2016.

Following an open tender process, Olsberg SPI Ltd in association with Nordicity, were selected to conduct the study. A steering group led by Minister Humphreys’ Department, with representatives of the Department of Communications, Climate Action and Environment, the Department of Jobs, Enterprise and Innovation, the Irish Film Board and the Broadcasting Authority of Ireland would liaise with Oslberg SPI Ltd/Nordicity. Involvement of Government Departments responsible for the film tax incentive (Arts) and broadcasting (Comms) is considered a very positive development, given the need for broadcasters and the IFB to provide the necessary data for such a report.

It is expected that the analysis would take six months and that there would be deep engagement with the sector including directly through Screen Producers Ireland. SPI welcome this research however, once the research report is produced, it is critical the data gathered forms a benchmark for industry information which should be updated on at least bi annual basis.

Film and Television Tax Incentive S481In 2016 SPI continued to participate on the Section 481 Industry Policy Group. This group seeks to ensure engagement with key stakeholders and provides feedback to Government on the operation of the Section 481 scheme. SPI also continued to engage directly with Revenue, the Department of Finance and the Department of Arts, Heritage and the Gaeltacht. To encourage consultation with the industry and to try to ensure an efficient S481 certification process.

SPI hosted a members event on March 8th to gather members and stakeholders views on the amended S481 Scheme in it’s first year in operation. Views on SPI members experience of the scheme were fed back to Revenue at a meeting in April 2016. These included both positive experiences but also concerns, particularly in relation to delays in processing applications and payments.

In late 2016 a new condition related to the tax compliance of third party suppliers and the obligations of Producers in that regard, was introduced by Revenue without prior consultation. Since then there has been intense engagement by both SPI and the Policy Group with Revenue in relation to the wording, implementation and management of this new condition. We expect to conclude upon an agreed form of wording for this new condition in early 2017 and will continue to engage on all aspects of the incentive.

RTEDee Forbes was appointed new D.G. at RTE in April and commenced in August,2016, leaving her post of President and Managing Director Discover Networks Northern Europe to take up her new role. The SPI Chair and CEO had an introductory meeting with Ms Forbes early in her tenure in September to introduce SPI, review the relationship to date with independent producers and to discuss the need for an AV sectoral strategy and for greater collaboration within the sector as a whole.

On an operational level, SPI continued to engage with RTE regularly in 2016 to monitor and review the recently agreed terms of trade and the commissioning process. A survey of SPI members in 2015 regarding the impact and operation of the code, will be conducted again in 2017.

Adequate funding clearly remains a key issue for RTÉ and it will be a priority issue as part of a strategic review which RTE will now carry out. Part of that review will be to engage with a range of stakeholders, including SPI and we expect that engagement to occur in early 2017.

TG4Alan Esselmont took up the post of Director General of TG4 in mid October, succeeding Pol O’Gallchoir, who had been head of TG4 since 2000. Mr. Esselmont joined TG4 from BBC ALBA, where he was head of content. TG4’s new commissioning strategy is expected to be announced in January 2017.

An agreement between SPI and TG4 on a Code of Fair Trading Practise had not been reached up to the point of Mr. Esselmont’s appointment, however engagement has commenced to achieve this and SPI will continue to press for a Code to reflect he BAI Guidance note to PSBs.


Irish Film Board In 2016 the IFB published their five year strategy covering the period 2016-2020. The strategic objectives of the plan are centred around

Vision for 20201. Vision and Leadership

2. Gender Equality and Diversity

3. Building Audiences

Strong Foundations7. Increased Investment in the IFB

8. Partnerships for Screen Production

9. Organisations Effectiveness

Gender Equality was identified as a major priority for the IFB during 2016 having announced their 6 point plan in January to address gender equality in January.

SPI is continuing to work with the Writers’ Guild and the Director’s Guild to identify female creative talent. We held a second joint event in August which was successful based on feedback.

SPI Events 2016SPI hosted 9 SPI members’ events in 2016 fulfilling our aim to bring about greater stakeholder collaboration at the RTÉ and TV3 events which were attended by all senior commissioning personnel.

See full list on page 28.

Corporate GovernanceIn 2016 SPI continued to ensure our corporate governance structure was of the highest standard.

A new Companies Act 2014 was enacted into law in June 2015. SPI prepared a new constitution in accordance with the new Companies Act. This constitution was approved by the members at an EGM in early 2016. The new constitution provides for new rules restricting the period of tome board members can service consecutive terms and a more structured approach to how the board members declare their interest in running for election to the SPI Board.

SPI continues to improve and update the Corporate Governance manual. SPI also adheres to the obligations of the Regulation of Lobby Act, and the Charity Act 2009.

Development of a National Skills StrategyCrowe Horwath won the tender for the Development of a National Strategy for Skills Development in the AV Industry in Ireland.

Following stakeholder consultation, Crowe Horwath issued a discussion document in February. SPI facilitated further membership, SPI Board, and stakeholder consultation for this draft.

While we understood Crowe Horwath were working to a May/June timeframe for publication it is yet to be published.

Developments in Europe In September the European Commission published its package of proposals to modernise copyright rules across the EU. This included

a Directive on copyright in the Digital Single Market and a proposed Regulation on online transmissions and retransmissions of television and radio programmes. The Commission’s proposal in the Broadcast Regulation to extend the Country of Origin principle to broadcasters’ ancillary online services, despite the opposition of the majority of consulted stakeholders and no legal or economic evidence of its benefits, will undermine the principle of territoriality upon which the financing of audiovisual works rests. The potential impact that this proposed Regulation will have on the independent production sector is extremely concerning. SPI remains committed to The European Coordination of Independent Producers (CEPI) to communicate our concerns to the Commission.

Attendance at EventsSPI attended all key industry events during 2016, including the 2nd annual Media Con conference . SPI also attended the Cannes Film Festival, the Galway Film Fleadh, the Celtic Media Festival, Dungarvan the Dutch Conference of promoting cross-Border Circulation of European A.V. Content and the CEPI General Assembly in Slovenia.

Industrial RelationsThe first collective agreement between Irish Equity/SIPTU and SPI was signed in March 2016. The agreement covers actors employed on indigenous TV drama productions. Work continues on a similar agreement to cover indigenous TV docu drama and should be concluded during 2017.

Efforts also continued towards negotiating one collective industry agreement for employees in the film and T.V. Drama sector. Some changes to the Industrial Relations landscape in 2016 resulted in negotiations being challenging and complex, with new entrants seeking to recruit members and negotiate directly with SPI members. Against this background and while SPI recognises that local agreements may have to be entered into from time to time in order to secure production, at a policy level SPI remains committed to ensuring secure industry -wide agreements which will operate at all budget levels and have the required level of transparency. This work has continued into 2017 with an increased level of engagement by SPI with SIPTU and by extension ICTU.

SPI Membership NumbersAt the end of 2016, SPI had 113 members, the same level as 2015. In 2016 the Board approved an increase in the Membership Fee to €400 per annum, with effect from January 2017. SPI members received notification of the change in August 2016. The Board also approved a new simplified Independent production levy structure moving from a six tiered structure to a single levy of 0.25% for all productions and a cap of €20K per production, with a discount of 65% for Animation projects. SPI members received notification of the change in November 2016.

Building on Core Strengths4. Development and Support of Screen

Creative Content Production

5. Development of Talent and Skills

6. Inward Production and Investment


EVENTS 2016

SPI EVENTS

Practical Guide for Film & TV companies to new Companies Act 2014 event in collaboration with Screen Training Ireland. Panel: Jillian O’Sullivan, Grant Thornton; John Gleeson, Grant Thornton; Ruth Hunter, Matheson.

RTÉ Commissioning Overview & Audience Insights Update. Speakers: Glen Killane, Adrian LynchChannel Controller, Bill Malone, Sheila DeCourcy, Paul Loughrey, Aoife Byrne. The Genre Heads who attended the networking sessions with SPI members included: Emer Beesley, Digital; Sharon Brady, Senior Communications Manager TV & Digital; Roger Childs, Religion, Eddie Doyle, Comedy, Music & Talent; Jason Duffy, RTÉ Player; John Dunne, Business & Finance Executive; Janet Frawley, Formats; Jane Gogan, Drama; Dermot Horan, Director of Production & Acquisitions; Grainne McAleer, Daytime & Lifestyle; Rónán Mac Con Iomaire, Group Head Irish Language.

Practical Guide to Section 481 for Novice Users. A workshop on the application procedure and management of Section 481 for producers new to using the scheme. Panel: Brian Gormley, Philip Lee Solicitors; Róisín Henehan, Grant Thornton; Siobhán Ward, Crossing the Line Films.

Utilising Irish & UK Film Tax Credits. Breakfast Briefing Event with Animation Ireland in association with Mazarz. Panel: Paul Mee, Mazars Ireland; David Prestwich & Ben Adams, Mazars UK.

SPI Annual General Meeting - 'Enterprise Growth Strategies for Production Companies'. The panel discussed how to move your company from a project based model and how to create a sustainable enterprise model. It also examined the effect of spreading ever reducing resources thinner and the choice between Quality over Quantity. Panel: Jane Kelly, Big Mountain Productions; Andrew Lowe, Element Pictures; Irial MacMurchú, Nemeton TV; John Phelan, Halycon Business Solutions.

Gender Equality Pitching Event – Part 1. A pitching event for female writers and directors in response to the IFB's plans to improve gender equality in the sector. This event was organised in collaboration with the Writers Guild and the Screen Directors Guild. Each participant was given twelve minutes with three assigned producers to pitch ideas and scripts.

1. Gender Equality Pitching Event-Part 2. A second pitching event for female writers and directors in response to the IFB's plans to improve gender equality in the sector.

2. Supporting Regional Producers. As a follow up to the SPI hosted event Producing Beyond the M50 held in November 2015 and the Celtic Media Festival event The Future of Production in the Gaeltacht held in April 2016, this event was arranged to identify tangible supports for the regional production sector. Facilitator: Mairéad Ní Nuadháin (ex RTÉ commissioning Editor for Irish Language & ex RTÉ Deputy Director of Programmes).

Irish Equity TV Drama Agreement Event aimed at producers, production accountants, line producers and anyone involved in drafting contracts or budgeting TV Drama productions. Panel: Barbara Galavan and Caroline Skinnader, Screen Producers Ireland

Section 481: How to Make the System Work for You. The event provided producers on how to navigate the Section 481 application process. Tips and best advices were given by experienced applicants on how to ensure quick application process. Speakers: Catherine Tiernan, Metropolitan Pictures; Roisin Henehan, Grant Thornton; Elaine Gill, Clancy and Associates; Stephen Rooke, Tile Films.

TV3 Breakfast Briefing for SPI Members. Presented by TV3's Managing Director Pat Kiely and Virgin Media's Chief Digital Entertainment Officer David Bouchier the event outlined TV3 future strategy (as part of Virgin Media) and independent commissioning plans.

RTÉ Briefing and Networking Event outlined RTÉ's strategic and commissioning plans for RTÉ One and RTÉ 2 television channels for 2017-2018. Speakers: Dermot Horan, Adrian Lynch and Paul Loughrey.

January

February

March

April/May

June

July

August

September

October

November

December

POLICY PAPERS

EFFECTIVECOMMUNICATIONOF SPI POLICIES

Screen Producers Ireland have identified a number of policy areas which are of key importance to indigenous producers. The organisation has produced a number of policy papers on these issues for distribution to government and other relevant stakeholders.

1. Policy on Section 481

2. Policy on Public Service Broadcasting

3. Film Policy for Ireland’s National Broadcaster

4. Policy on Strengthening the Animation Sector

5. Policy of Fair Regulation of Broadcasters

6. Policy on Irish Film Board Funding

7. Policy on Cable Re-Transmission and the Cable Copyright Exemption


ON SECTION 481

POLICY

KEY POINTS

• Section 481 has a positive impact on the creation of indigenously produced content.

• Section 481 attracts incoming production and has a positive impact on the creation of high end jobs.

• Section 481 contributes to Ireland’s reputation as a global hub for high-tech digital and creative content.

• SPI is calling on Government to ensure that Section 481 is continued and extended two years in advance of 2020 to take account of the long lead time required in the international production sector.

CORE POLICYA fiscal incentive such as Section 481 is necessary if Ireland’s content production industry is to continue to thrive. Section 481 is a scheme intended to provide relief in the form of a corporation tax credit related to the cost of production incurred in Ireland. Those countries with which Ireland competes have similar or comparable incentives. It is imperative for the Irish film and television industry that a fiscal incentive is maintained and modified as required to keep apace of international market conditions.

Ireland has a long history of supporting its film and television industry through fiscal incentives, dating back to 1980. Since then the Irish film and TV sector has evolved into a vibrant industry with a sophisticated infrastructure of production companies, studios, service companies and personnel, all of which provide valuable employment in the Irish economy.

Irish expenditure increased by over 20% year on year between 2011 and 2014. 2014 looks like an exceptional year when compared to 2013 and 2015. However, the following needs to be considered when looking at 2014 and 2015. An amended S481 scheme was introduced in January 2015, and the deadline for certification of 2014 projects was extended into early 2015. Therefore any of the approved 2014 projects certified in 2015 under the extended

deadline were in fact accounted for and included in the 2014 figures.

In 2016 Irish productions committed to spend €265M in 2016 in the Irish economy as a direct result of Section 481 certified projects. This is the highest level ever achieved.

SPI believes that maintaining Section 481, updating it to ensure it remains internationally competitive and improving it when necessary, is essential to ensure further growth in the sector.

Section 481 provides high end jobs, it helps to position Ireland as a leader in the creative industries, it promotes Ireland’s rich culture around the world, it contributes to Ireland’s reputation as a global hub for high-tech digital and creative content and it has a direct impact on attracting tourism to our country.

PRINCIPLES ON WHICH THIS POLICY IS BASEDIreland has a long history of fiscal incentive for film and television dating back to 1980. It was one of the first countries to introduce an incentive. Now countries with which Ireland competes have similar or comparable incentives. The UK, Hungary, Luxembourg, Germany, the Czech Republic, Canada, Australia, New Zealand and South Africa are s

Date post:	29-Jan-2021
Category:	Documents
Upload:	others
View:	2 times
Download:	0 times

SCREEN PRODUCERS IRELAND€¦ · SCREEN PRODUCERS IRELAND 77 Merrion Square South Dublin 2, D02...

Documents