Danie Bester, director of Afrikaans teen movie hit Bakgat!, has done what most local filmmakers only dream of – making a successful film that’s also a huge box office hit.

Anton Burggraaf

Film finance and distribution are the alpha and omega of the filmmaking process. In South Africa these often-arduous processes are complicated by history, geography and culture. Yet neither appears on the syllabus of our film schools. It’s the creative side of filmmaking that is somehow deemed more important (admittedly it is more glamorous!) and perhaps this is the way it has to be to shield impressionable minds from a harsh reality. More’s the pity.

The Gauteng Film Commission (GFC) and Johannesburg Professional Network (JPN) were recently hosts to a debate on the state of film financing, marketing and distribution, held in Johannesburg on 15 October 2010. The discussion panel comprised eminent film professionals including veteran producer Mfundi Vundla (Generations), film financier Kevin Fleischer (White Wedding), Afrikaans teen film enfant terrible Danie Bester (Bakgat!) and stalwart distributor-producer Dan Jawitz. The JPN was founded by Debbie Peters who, after returning in a stint in New York, saw a gap in South Africa for a networking forum where “fellow professionals, entrepreneurs, start-ups and corporate titans can connect”.

Discussions on film finance and distribution are perennial. What is depressing is that they seldom give us answers to prescient questions that plague our industry. What is the best way to raise money? What do audiences want? How do we deliver what they want in the best way to suit our unique consumption landscape? How do we make it a business where everyone in the value chain benefits?

Yet, this year things seem a little different. Why? Because we are finally coming to grips with the success of the 2008 hit Bakgat!. Yes, that film. As much as the cinephiles and haughty industry types may dismiss it, this is a movie that is making money, and making people sit up and take note.

Watch the Bakgat! trailer

The film’s producer Danie Bester was on the JPN panel – a real treat. He has now done what most local filmmakers only dream of – making a successful film that’s also a huge box office hit. Before Bester there was Schuster and only Schuster. Bakgat! has changed all that. With this Afrikaans hit teen comedy romp, Bester and co delivered a shrewd finance and distribution deal backed up by a seriously clever marketing plan.

Bester cut a modest figure for someone who has just cracked the local big time, introducing himself to the audience of professionals as a “jack-of-all-trades producer”.

As a sign of his admiration for Bester, Kevin Fleischer called for the house to applaud the producer's achievement. Fleischer is not a film man first and foremost. He hails from big business, so is more than aware of what the Bakgat! phenomenon means for our industry: films making money, making more films, making money … Fleischer thinks we need more of this, and expressed his liking for the role he can play: “Every team needs someone who can say to the film guys, ‘Come on, you guys are smoking your socks!’”

He saw the potential in White Wedding (2009) and was fortunate to come across a large financial backer to fund the movie. “We were really lucky,” he said. According to his film-finance rule of thumb, the current cost of a local vernacular movie is about R5-million (US$715 000). “That’s what you are looking at, roughly. You can make movies here for soft money but it’s simply not commercially viable. What you really want is a return on your investment, one that you can plough back into the company to make more films.”

This is exactly what Bester is doing. “With the success of Bakgat!, we are looking at developing a few independent features over the next three years,” he said, “some aimed at the local market and some at international.” Cool. He has created an equity fund founded on the profits of Bakgat!. This fund will ensure development and production of his next films. Yes, films – plural: Ubuntu, Samurai, Bakgat 2, Night Drive and Superhelde. What a list.

It was soft money and venture capital that did it for Bester. He recalled a defining moment with director, Henk Pretorius. They were discussing who to ask for money and settled on the usual friends and family. Bester then suggested R1 000 apiece. Pretorius’ rejoinder was bold: “If you’re asking for R1 000, you may as well ask for a R150 000.” Bingo. That decision sealed the duo’s first financing success and their filmmaking future.

So much for the money. What about content?

The old argument is one of supply and demand: give people what they want and they’ll flock, and it’s a theme the panel returned to again and again. But what do people want? Who are “the people”? What is “the market”? No one on the panel could answer with certainty.

South Africa is a unique mix of developed and developing economies and this extends to distribution: upmarket multiplex cinemas coexist with cheap, nasty and mostly pirated DVD. Somewhere in between these two worlds and catering to both markets is a healthy TV industry. (And here we mean healthy for its rich content, not its management.)

Perhaps the better question then is how to make films for markets that respect existing niches. Perhaps we have many markets, each with a unique finance, marketing and distribution model. Sadly the panel did not pursue this line of thinking.

It’s true, whether filmmakers like it or not, that TV is exemplary. It’s true too that TV has turned consumption into a domestic affair. So what?

The medium of television has a respect for and a command over “the market” that cinema can’t hope to emulate. Think of it this way: the broadcasters are de facto distributors; they know their market – their viewers – intimately. This market is defined by language, culture, socioeconomic status and content preference. In TV-land production and consumption is guided by LSM, or living standard measure. The aforementioned criteria are factored into this measure and prescribe everything a broadcaster does, from issuing commissioning briefs to scheduling programmes according to advertising rate cards. It’s the LSM challenge that broadcasters throw at producers and it’s what producers succeed or fail by: you must deliver to the required LSM or you are shown the door. It is also this measure that drives advertisers. More precisely, it’s one that binds broadcasters and advertisers in a mutual win-win dependency.

So why can this perfectly healthy model not be replicated in film? Simply, because no one has yet come up with the how.

So films will still be distributed in the usual way until other models arise. Currently that means to a local minority in urban areas, where the cinemas are, through the Ster-Kinekors of this world. Both Fleischer and Bester are caustic about the existing setup. “I go along with Danie,” said Fleischer. “The distributors and the DVD people are a big cartel. Government can play a role, sure, and there are many attempts to find other ways to distribute.”

And it’s not only that independents are ring-fenced by the establishment: there is the added problem of piracy. “This is the biggest problem for us,” Fleischer told the panel. “We sold 40 000 units of White Wedding, but still the movie was pirated and on the streets three weeks before. There was a raid at the time and they found 1 000 units in someone’s house. Producers don’t get a cent from that.”

It was much the same experience for the producers of Tsotsi. At the time of its release, a great many South Africans – even the film’s lead actor Presley Chweneyagae – watched the pirated version. (In this case it was apparently due to a copy being leaked by the post-production facility, later leading to a number of arrests.) Again, no one says it, but television has that problem cased: distribution happens through the ether! The internet was mentioned a few times in the discussion as a possible solution, but the idea evaporated in a room tinged with bandwidth despondency.

Another challenge is education. Dan Jawitz has a distribution background but he’s also a producer so he’s always had a foot on one side and one on the other. “I own a distribution company financed by production. It’s a weird mix but it’s one I like.” He is aghast at how the industry does not actively teach these skills: “I don’t know why distribution isn’t taught at film school,” he said. “If you don’t know understand distribution you’ll always be in a revolving wheel as a producer.”

Jawitz also believes that distribution should be subsidised, much like the effective and popular Department of Trade and Industry rebate that has seen the recent production of many South African films that otherwise would not have been made. Together with partners Neil Brandt and Bridget Pickering (local producer of Hotel Rwanda), he is now focused on straight-to-DVD releases and unreleased films. “We are looking to explore DVD distribution in a big way in the future.”

In the current climate of underdeveloped financing and inherited distribution models, it is unsurprising that African film has a poor showing in the international market. “We go every year with our wares to MIP [the bi-annual global multi-platform content market],” said Jawitz. “Africa accounts for less than 1% of the media buy – that’s $100-million. But to get your movie sold you have to have an international producer, you have to give them stuff that is not exclusive. You go to Ster-Kinekor and they say this is the deal, take it or leave it. Danie has the right films. There’s no support from the government for distribution.” He issued a challenge to the panel: “What about an amount of 35% to pay for prints of the films or help with distribution?” A very good point.

The magic 35% that Jawitz and every savvy producer knows about is what the government has got right for film. This is the percentage rebate a film can get from the Department of Trade and Industry. It’s a de facto discount guarantee where the department funds 35% of a film’s production budget, albeit after stringent eligibility terms are met. This has been a godsend to local film. For Mfundi Vundla this sets us apart from countries whose filmmaking prowess we tend to envy. “We have a government that supports film in a big way with funding and the rebate. This is better than Australia and better than Canada. With vision, willpower and talent, you can make movies here. It’s totally possible.”

Desmond Ntembu from the GFC agrees. “We and [other bodies like us] are the agents of government,” he said. “But what can be done? There is a bubblegum movement out there that is pushing huge volumes. They make a film for R100 000 and sell their DVDs straight to market for R20. We need to be in competition.”

The DVD model he refers to has proven successful in Nigeria for some decades now, for both production and distribution. One only has to tune in to DStv’s Africa Magic to get a taste. What is worth noting though is that this massive business rose from the ashes of a dysfunctional and disintegrated broadcast landscape, which failed through gross mismanagement and corruption.

But Jawitz is sceptical. “The Nigerian model doesn’t allow for the full value chain; the films there are pirated a week after release,” he said. “We still have a chain in distribution, so the Nigerian model won’t work here.” His argument holds for the developed model, but as to satisfying the needs of a two-tier economy, perhaps it offers a solution. No one mentioned that this model is already successful for local artists such as Chico Twala.

Bester had another solution: “In eastern countries there are cinema quotas, just like we have local TV quotas. This has led to an explosion of local films in South Korea. There 30% of screen must be local.” This has led to a massive inflow of capital since the 1990s. Again, the precedent set by YV is revealing.

Despite the challenges, the panellists were enthusiastic about recent successes, agreeing that they are good for the industry in every way. “You can knock Schuster, but look what he does,” said Vundla. “Anant Singh sold Yesterday for $2-million to Home Box Office. District 9 is a Hollywood-style independent feature, it’s a different game.”

For Fleischer this is a pity: “The biggest tragedy is that District 9 was not a South African-made film. It made $290-million [R2-billion] from a capital outlay of R30-million [R210-million] and that sits in the US.” Funding is still a tricky business, and he pointed to a current example in the upcoming movie Spud. “It’s a big gamble for the backers. The finance model is a lot of big corporate money. The book was popular in UK, Australia and the US and they have John Cleese, but that’s not enough. It has to travel. That’s what those corporates have bought. It’s what they hope will bring them a return.”

Again, the discussion turned to what is practical. Fleischer reeled out a frightening statistic: of the 135-odd movies made in South Africa to date, only about 12 have broken even and about six have made a profit. “The chances of making more than R5-million back on a movie, well, till now it’s only been Schuster,” he said. “If your movie has international appeal then you are talking a different game. But then you have to make the movie for the market, where it’s going. The bankers look at movies and say its better to put my money in Masterbond, that’s a better investment.” His advice at the session was to make a movie for less than R5-million (US$715 000). By the end of the evening, everyone agreed that producers should aim to raise R3-million ($430 000).

Tough challenges. Tough talk. But with recent triumphs in film finance and distribution taken at face value, there does seem to be a positive shift. Who knows, perhaps the local trickle of successful films will become a flood. Clearly only when we have the dollars and the DVD story right. Time will tell.