The film industry in South Africa – an opportunity to attract foreign investment

South Africa is well endowed with beautiful landscapes and rich cultural heritage that offer ideal locations for films and digital content. Movies such as Invictus, directed by Clint Eastwood and released in December 2009, which tells the inspiring story of how Nelson Mandela used the 1995 Rugby World Cup to unite a post-apartheid South Africa, was filmed in various locations around Cape Town.

According to the WOW report on the film, gaming and animation industry, film has been an important generator of foreign investment and has earned the country a global reputation as a preferred destination for filming.

As illustrated in the accompanying graph, this is a growing industry with a total of 155 films released in South Africa in 2021 compared to 96 in 2020, with box office revenues of R325m, up from R230m in 2020.

Opportunities in the South African film, gaming, and animation industry

The industry is dynamic and competitive, and several multinational companies have taken an interest. Prominent players include the following.

• Walt Disney Company which has been involved in co-productions and distribution agreements with South African film companies.
• Sony Pictures Entertainment has co-production and collaboration arrangements with South African filmmakers and seems to have a long-term view on investing in the film industry.
• Warner Bros. Entertainment, which is known for extensive licensing and merchandising activities related to its popular franchises including toys, apparel and other consumer products, has been collaborating with South African companies in the film, gaming and animation industry.
• Recently, with streaming technology having become more popular, Netflix has been actively expanding its presence in South Africa both in terms of content creation and distribution. It has invested in original South African productions and has partnered with local filmmakers.

The interest of such global players demonstrates the attraction and viability of the industry. What further contributes to South Africa’s success is the wealth of creative talent and animators who bring diverse perspectives, drawing inspiration from the nation’s rich cultural tapestry.

The rise of digital platforms has resulted in a burgeoning community of gamers. E-sports, in particular, has gained popularity, with South African teams making their mark on the global stage.

There has been an increase in educational programmes focused on game development and design with institutions such as the University of the Witwatersrand offering specialised courses, nurturing the next generation of game developers and animators, and the UCT launching an online teaching platform for high school learners

Hurdles to overcome for the film industry to continue growing

Filming and animation production can be resource-intensive, requiring specialised software and skilled animators. Access to the latest technology and continuous training are essential to compete globally.

The sector, and independent game developers in particular, often faces challenges securing funding, and access to venture capital and funding opportunities are crucial for innovation and growth.

While there are film incentives in place, some industry stakeholders are agitating for more comprehensive and competitive incentive programmes that could attract more foreign investment and stimulate local film production. They also advocate for a less bureaucratic process of obtaining permits for shooting locations.

There isn’t a single industry that is not impacted by the relentless energy supply challenges, and according to the WOW report on the film, gaming and animation industry, the energy crisis and loadshedding resulted in reduced audience viewing hours, which reduces revenues from advertisers. Investments in alternative energy sources like solar and diesel increases operating costs, harming especially SMEs in the value chain. MultiChoice found that when loadshedding consistently reached stages five and six, TV viewing and subscriber activity deteriorated.

What is South Africa’s value proposition in the film industry?

International stakeholders stand to gain access to a growing market with increasing consumer demand, particularly given the country’s position as a strategic gateway to the broader African continent, offering opportunities for market expansion.

Government has demonstrated its commitment to fostering a thriving creative industry. In addition to financial incentives, policies and initiatives aimed at supporting local content creation engender a conducive environment for foreign investors.

South Africa can become an even more attractive destination for global players looking to contribute to and benefit from the growth of its creative sector. The collaborative spirit and creative energy that define the industry make it an exciting space for foreign investors seeking new horizons and untapped potential. This can only be achieved if licensing processes can be smoothed and applications for funding, especially for upcoming filmmakers and disbursements for the Department of Trade, Industry and Competition (DTIC) can be fast-tracked.