Screen Industry: 2013/14 Embargoed until 10:45am – 08 April 2015 Key facts In 2014:      New Zealand screen industry revenue was $3.155 billion, up $7 million from 2013. 91 percent of businesses in the screen industry are small businesses, earning less than half a million dollars. Government funding increased, while private financing dropped. Auckland based businesses lead TV production, while Wellington leads film production. International revenue remained stable. Liz MacPherson, Government Statistician ISBN 978-0-478-42967-1 (online) 8 April 2015 Commentary       Gross revenue remains constant, while exhibition continues to rise Government funding increases, while private financing drops Auckland leading the pack International revenue remains stable Total wage earnings fall Value added by New Zealand's screen industry Gross revenue remains constant, while exhibition continues to rise Total revenue for the screen industry for 2014 was $3.155 billion, only a small $7 million increase from 2013. The growth in the number of businesses in the industry was also stable. Even though the overall revenue was similar to previous years, there were changes within the different formats. Revenue from film and video distribution increased 11 percent (to $153 million) in 2014. While film exhibition decreased 6 percent (to $161 million), the number of businesses engaged in this activity rose 22 percent (to 99 businesses). 2 In the screen industry, 91 percent of businesses earned less than half a million dollars in 2014. This shows the industry is made up of a few large players, and a lot of small businesses. The majority of these were involved in production and post-production, which creates content such as films and television programmes. Revenue earned from film production fell 5 percent (to $816 million) in 2014. The number of reported completed films was constant, at 40. Film revenue accounted for almost 57 percent of total production revenue. Non-broadcast media, which includes creations such as internal 3 training materials, had a rise in total revenue from $32 to $48 million. Businesses in this sector completed 28 percent more works than in 2013, even though 9 percent fewer businesses were involved. Government funding increases, while private financing drops The majority of funding and financing received for producing from within New Zealand in 2014 came from government sources. Government funding rose by 10 percent (to $258 million), including an increase of $22 million from public broadcasters. Government funding went to 156 businesses in 2014, 22 percent fewer than 2013. 4 The contribution to funding and financing from the private sector dropped to $46 million in 2014, a decrease of 40 percent. Funding received directly from overseas has been relatively constant over the past few years. International sources contributed 43 percent of all production funding and financing in 2014. Of the $531 million total funding and financing for producing, 47 percent went towards television programmes, a similar proportion to previous years. Auckland leads TV production, while Wellington leads film Auckland and Wellington remain the screen industry hubs of New Zealand. Auckland screen revenue was $2,299 million – of which $1,403 million came from from television broadcasting. Wellington had total revenue of $711 million, most of which is generated by film production work. In 2014, production and post-production revenue (which includes revenue from film and television) were relatively similar for Auckland and Wellington, worth $647 million, and $690 million, respectively. Wellington remains on top for the third consecutive year. While these figures are much closer than in previous years, this amount can vary quite a lot due to the project-based nature of the film industry. 5 While screen businesses may be primarily based in one part of the country, they can carry out their producing activities (production or post-production) in a variety of locations. Auckland remains the most frequently used location, continuing a decade-long trend, with 76 percent of businesses carrying out producing activities there. Wellington had 38 percent of businesses carry out producing activities in the capital in 2014. International revenue remains stable International revenue earned from production and post-production activity was $495 million in 2014. This was similar to last year, despite the slight fall in total revenue earned in this sector. 6 Most international revenue continues to come from North America, since this is where most bigbudget projects are financed. Revenue earned from Australia increased for the third consecutive year in 2014. Australia is now the source of 6.9 percent of international revenue for production and post-production, compared with 4.0 percent three years ago. The number of businesses receiving revenue from Australia has also increased over the three years. Some projects are produced through partnerships. In the 2014 year New Zealand businesses worked on 79 co-productions with international partners, up from 60 in 2013. However, despite this increase in co-productions, the number of businesses having a co-production relationship with international companies fell from 33 to 15 in 2014. Total wage earnings fall Many people employed in the screen industry are contractors. The most recently available employment data including contractors is for the year ending March 2013. In the March 2013 year, total revenue earned by businesses in the screen industry was $3.148 billion, down $142 million from the March 2012 year. 7 Total wages earned by people employed in the screen industry fell $49 million from 2012, to $742 million for the March 2013 year. Most of this fall occurred in the producing sector in 2012, where content such as films and television shows are created. The fall in revenue is also mirrored in the fall in the number of people employed in the producing sector. The number of people employed in the producing sector in the year ending March 2013 was 15,500, a 400 fall. Employment in the other screen industry sectors remained stable. Value added by New Zealand's screen industry Value added is an indicator of the screen industry’s contribution to New Zealand’s GDP and the economic benefit to New Zealand. It is calculated as sales for the industry, minus the costs of the goods and services purchased. This is a measure of the amount of value added to a product at each stage of the production process. 8 Value added to end products by the New Zealand screen industry remained relatively constant from the March 2012 year to the March 2013 year, at $1.132 billion, despite a fall in gross revenue earned over this time. This represented a contribution of just over half a percent of total GDP, roughly the same as business expenditure on research and development. See Research and Development Survey: 2014 for more information. For more detailed data see the Excel tables in the ‘Downloads’ box. 9 Definitions About the Screen Industry Survey The Screen Industry Survey measures the size and shape of the New Zealand screen industry, and the range of activities involved in it. The activities include film and television production, post-production services, motion picture distribution, film exhibition, and television broadcasting. We published data from the first survey in 2005. More definitions ANZSIC: the Australia and New Zealand Standard Industrial Classification is a system classifying industries by industry group. We use the 2006 version in this survey. Broadcasting: the distribution of works through media such as television or the Internet. Business Frame: a register maintained by Statistics NZ of all businesses operating in New Zealand. Contracting activity: activity that contributes to a work for which another business has production responsibility. Digital technology: a measurement of the use of digital exhibition (eg digital cinema) and digital broadcasting (eg digital television broadcasting). Distribution: the process of delivering the completed work for display to the public market. This includes marketing the completed work. Economically significant business: one that meets at least one of these criteria:  has greater than $30,000 annual GST expenses or sales  12-month rolling mean employee count greater than three  is part of a group of enterprises  is registered for GST and involved in agriculture and forestry  over $40,000 of income recorded in the IR10 annual tax return (this includes some units in residential property leasing and rental). Employees: the number of employees as defined by a business' rolling mean employment (RME) count. RME is a 12-month moving average of the monthly employment count figure, obtained from taxation data, and related to PAYE. RME does not include those who are not paid PAYE, such as contract staff, and owner operators. Enterprise: a business or service entity operating in New Zealand. It can be a company, partnership, trust, estate, incorporated society, producer board, local or central government organisation, voluntary organisation, or self-employed individual. Exhibition: the display of a completed work to the public at pre-set locations, such as cinemas or museum displays. Funding and financing: direct investment made by government and private organisations that specifically target a single project or series of projects, to aid with costs and to enable production. This includes production investment provided to businesses. 10 Gross revenue: the measure of total turnover for a particular variable. It measures all transactions and money flows, including internal transactions. We measure the screen industry using turnover, rather than net revenue earned by the industry. GST: goods and services tax. Imputation: the process of accounting for missing values in the data, either per question, or for whole unit responses. Non-broadcast media: works intended for a specialised audience, such as corporate, marketing, training, or educational media. Post-production: all activities involved in putting together scenes to make a production complete; for example editing, duplication, visual effects, and audio. Producing: business activity on a work for which the business has end-to-end responsibility. This does not preclude the business contracting aspects of the overall production to other businesses. Production: all work leading up to and including filming. This includes development, preproduction, and principal photography. RR3: randomly adjusting values up or down to a number divisible by three, otherwise known as random rounding to base 3. Screen industry: all aspects of the industry included in the Screen Industry Survey. All businesses and activity involved in creating screen content (production and post-production), and the display of such works (distribution, exhibition, and broadcasting) are part of the survey. Value added: income formed in the production process. Value added equals output minus intermediate consumption. Value added is the income available to reward the production factors involved. Weighting: if we don’t get a response from a business, we give other businesses with similar profiles a weight to represent the missing business. 11 Related links Next release The Screen Industry Survey: 2014/15 will be released in April 2016. Subscribe to information releases, including this one, by completing the online subscription form. The release calendar lists all information releases by date of release. Past releases Screen Industry Survey has links to past releases. Related Information The Data Book is New Zealand’s only directory of the screen production industry. It provides free listings for businesses and individuals involved in screen production in New Zealand. Motion Picture Distributors Association of NZ provides information on box office takings in New Zealand. Ministry of Business, Innovation and Employment supports the development of the New Zealand screen industry. Screen Production and Development Association (SPADA) is an industry body that represents screen production, post-production, distribution, and broadcasting in New Zealand. New Zealand Film Commission helps New Zealand films get made, promoted, and seen. Film New Zealand facilitates access to New Zealand as a film destination. 12 Data quality Period-specific information This section contains data information that has changed since the last release.     Population selection Response rates Reference period Data not published General information This section contains information that does not change between releases.        Target population Data collection Data processing Quality of data Interpreting the data Consistency with previous releases Confidentiality Period-specific information Population selection The population for the Screen Industry Survey 2013/14 was 3,312 enterprises. In 2013 it was 3,351 enterprises. In some cases, employers supplied information about their contractors. This improved the quality and consistency of responses, but also increased the number of contracting businesses in the population. See 'Criteria for population selection' below for more detail. Response rates The target response rate for the Screen Industry Survey 2013/14 was 75 percent. We achieved an overall response rate of 79 percent. Some businesses were identified as key units if their response to a survey question was considerable in the previous year, or if GST figures suggested that they would significantly affect the results in the current year. The target response rate was 100 percent for businesses identified as key units. We achieved a 100 percent response rate. Reference period The reference period for the survey was the 2013/14 financial year. Businesses with balance dates falling between 1 January and 30 September supplied financial data for the year ending 2014. Businesses with balance dates falling between 1 October and 31 December supplied financial data for the year ending 2013. Given the transitory nature of businesses in the industry, we excluded any business that stopped operating before 1 April 2013 or that started up after 31 March 2014. 13 Data not published The 'Digital switch-over' for television broadcasting occurred during the collection period. Due to the different times when regions were required to switch over, the data collected in the survey this year on digital content could be very difficult to interpret. Therefore, we have removed the figures for the percentage of income received from digital broadcasting, as all businesses should now have 100 percent of their broadcasting as digital broadcasting. General information Target population The target population is all economically significant New Zealand businesses involved in any screen industry activity. The screen industry encompasses all film, video, television, commercial, music video, and non-broadcast media activities in the aspects of production (including preproduction), post-production, distribution, exhibition, and broadcasting. All enterprises identified as part of the population are required to complete the questionnaire. The population includes all businesses that meet the economic significance criteria and fall within the Australia New Zealand Standard Industry Classification (ANZSIC06) classifications listed below. J5511 Motion picture and video production: businesses mainly engaged in producing motion pictures, videos, and television programmes or commercials. J5512 Motion picture and video distribution: businesses mainly engaged in acquiring distribution rights and distributing motion pictures and videos. These products are distributed (through leasing and wholesale channels) to a range of exhibitors such as motion picture theatres and television stations using a variety of visual media. J5513 Motion picture exhibition: businesses mainly engaged in screening motion pictures using a variety of visual media. Businesses screening productions at festivals and other similar events are included in this class. J5514 Post-production services and other motion picture and video activities: businesses mainly engaged in providing post-production services and other motion picture and video activities, including specialised motion picture or video post-production services such as editing, film/tape transfers, titling, subtitling, credits, closed captioning and computer-produced graphics, animation and special effects, as well as developing and processing motion picture film. J5621 Free-to-air television broadcasting: businesses mainly engaged in free-to-air television broadcasting of visual content, in the form of electronic images together with sound, through broadcasting studios and facilities. These businesses may also produce or transmit visual programming to affiliated broadcast television stations, which in turn broadcast the programmes on a pre-determined schedule. Transmissions are made available without cost to the viewer. J5622 Cable and other subscription broadcasting: businesses mainly engaged in broadcasting television programmes on a subscription or fee basis (such as subscription cable or satellite television broadcasting) to viewers. J6020 Other information services: businesses mainly engaged in providing other information services. 14 Exclusions to the population We exclude any business primarily undertaking activities not directly related to the process of making or screening a screen production from the population. Businesses and individuals providing acting services and recruitment are excluded. Other examples of excluded businesses are those providing services to crew (accommodation and catering), services to office management (accounting and legal), and services that support the industry but are not involved in screen productions (educational bodies, film libraries, and film trusts). We also exclude any businesses that supply services to the industry but not on an exclusive basis. These businesses (which include builders and vehicle hire) are excluded as information is unlikely to be easily isolated from other business activities. The following ANZSIC06 classifications are excluded from the population: G4242 Entertainment media retailing: businesses mainly engaged in retailing audio tapes, compact discs, computer games, digital versatile discs, or video cassettes. N7211 Employment placement and recruitment services: businesses mainly engaged in listing employment vacancies and in referring or placing applicants for employment in any field. L6631 Heavy machinery and scaffolding rental and hiring: businesses mainly engaged in hiring, leasing, or renting (without operators) heavy machinery and scaffolding (including mobile platforms) from stock physically held for the purpose. Adjustments involving goods and services tax Published dollar values exclude GST. Most respondents give GST-exclusive figures. We adjust the rest when we process the data. Data collection The screen industry release includes information from data sources such as the Screen Industry Survey, Linked Employee-Employer Data (LEED), and the Annual Enterprise Survey. Screen Industry Survey We mail the Screen Industry Survey to all known businesses that meet our population selection criteria. Additional population selection To ensure that as much of the target population as possible is covered in the survey, we supplement the selection from ANZSIC classifications above with businesses listed in The Data Book (New Zealand’s screen production directory) and match them to businesses on the Business Frame. See The Data Book. 15 The publisher of The Data Book provides us with a snapshot of online listings on a set date each year. This gives us time to create the population, and reduces any risks that a change in publishing date for The Data Book could cause. Linked Employee-Employer Data (LEED) We collected information on employees in the screen industry from LEED to provide more detail on the staffing situations of the businesses in the Screen Industry Survey. This screen industry information included:        number of people employed number of jobs earnings from jobs distribution by age groups distribution by sex percentiles for earnings from jobs percentiles of wages earned by people. See Linked Employer-Employee Data for more information about LEED. Annual Enterprise Survey (AES) We collected information on value added to the screen industry from the Annual Enterprise Survey (AES). See Annual Enterprise Survey for more information about AES. Data processing We check the data to assess any inconsistencies between questions. If we find inconsistent data, we correct it based on existing information, or follow up with respondents. The following outlines the imputation methodology we use in the Screen Industry Survey. Unit non-response: occurs when businesses in the survey do not return the questionnaire, or do not answer all the predefined key questions (whether they are a producer, contractor, distributor, exhibitor, or broadcaster). We compensate for non-response by using weight adjustment. This 'weights ups' the responding firms, to compensate for the non-responding firms in the same weighting cell. We multiply initial selection weights by a non-response factor to give the adjusted weight. Weighting cells are based on ANZSIC06, annual GST turnover, and region. We create separate weighting cells for key units within each ANZSIC group. We use historical imputation where weight adjustment significantly over- or underestimates a unit that otherwise has little variation in its previous survey data. In these cases, we may impute the values from the previous return for the current year to account for the missing data. Item non-response: responding businesses that do not complete one or more questions that they should have are treated as item non-responses, and have their missing variables imputed. 16 Imputation cells and merging: businesses are assigned to imputation cells for us to calculate and assign a new weight. Imputation cells are based on the main activity of the business, annual GST turnover, and region. We create separate weighting cells for key units within each ANZSIC group. To ensure robust calculations are applied, minimum constraints allow groups to merge imputation cells until sufficient responses are achieved, or constraints met. Imputation of numeric variables: we use weighted mean imputation and donor imputation. For totals and other key numeric variables, we calculate a weighted mean from linked responding units for each numeric line code within each imputation cell. We then impute data for non-responding businesses with the weighted mean for their imputation cell. Donor imputation randomly selects a donor from within each imputation cell. The nonrespondent's data is then imputed with the value(s) from the donor. We use donor imputation to impute components and percentages so the distribution is maintained. Imputation of categoric questions: for categoric imputation, we use donor imputation. We randomly select a donor within each imputation cell and the non-respondent is imputed with the value(s) from the donor. Quality of data As the Screen Industry Survey is a census rather than a sample survey, the data is not subject to sample variability, and there is no sample error. However, other inaccuracies, such as nonsampling errors, may affect the data. Non-sampling errors occur for reasons such as respondent error, interpretation variations, frame quality, and errors in processing. We impute data for non-respondents, which may introduce errors. While every effort is made to minimise these types of error, they may still occur. We can’t quantify their effect. We reduce the risk of non-sampling error by careful design and thorough testing of questionnaires, efficient operating systems and procedures, and appropriate methodology. We compare the survey data with annual reports, websites, trade data, and other indicators we publish. Where the survey results differ substantially, we study the data in more detail. Exact comparisons are not always possible, due to differences in timing or definition. Interpreting the data Sector breakdown In this release, the screen industry is classified to the following groups: production and postproduction, broadcasting, distribution, and exhibition. We determine classification in these groups by revenue activity (including expenditure activity in the production and post-production sector). 17 Structure of screen industry We can further define the production and post-production sector by the relationship of the business with the work being created. Producing is activity carried out on works that are the endto-end responsibility of that business. Contracting is activity carried out on works being produced by another business. This means that a business may generate revenue from producing (work on its own productions) and contracting (work contributing to another business’ production) in the same year. Business counts for those involved in producing or contracting may change from year to year as business activity changes. Revenue as a measure of industry activity Total revenue is the measure we use to define activity in the screen industry. We ask each business to report their revenue in each sector, including the production and post-production sector, exclusive of their relationships to other businesses. While revenue is a valid measure of activity, it does not account for the relationships between businesses within the industry. In an industry with many contracting and sub-contracting relationships, there is a high likelihood of some double-counting in the totals. Consistency with previous releases Contracting: is activity that contributes to a work that another business has production responsibility for. This includes the contracted supply of services related to any aspect of production or post-production activity. It also includes the contracted supply of industry-specific equipment or facilities. In previous releases, we defined this as the business type ‘contracting businesses’. However, a business may undertake both contracting and producing activities in a single year. Referring to the activity, rather than the business type, is more accurate. Producing: is activity on a work for which the business has end-to-end responsibility. This does not prevent the company from subcontracting parts of that work. In previous releases, we 18 referred to this as ‘screen production company’ activity. This could mislead data users to believe that the total revenue of these businesses was limited to the amounts in this column. Referring to the activity, rather than the business type, provides a more accurate picture of the revenue sources and activity in the industry. Regional business location: we derive a regional-base location is derived from the data to give an idea of the regional distribution of businesses in the screen industry. We determine this by using the reported physical location of each business. Where a business has more than one location, we use the location with the largest rolling mean employment count. This means a business generating screen activity from more than one location has all that activity recorded against one location only. Confidentiality Data published from the Screen Industry Survey must conform to the provisions of the Statistics Act 1975. Statistics NZ must publish data so that no individual can be identified. See information about privacy, security, and confidentiality of information supplied. The confidentiality process may cause a total to differ slightly from the sum of the contributing cells. More information Statistics in this release have been produced in accordance with the Official Statistics System principles and protocols for producers of Tier 1 statistics for quality. They conform to the Statistics NZ Methodological Standard for Reporting of Data Quality. Liability While all care and diligence has been used in processing, analysing, and extracting data and information in this publication, Statistics NZ gives no warranty it is error-free and will not be liable for any loss or damage suffered by the use directly, or indirectly, of the information in this publication. Timing Our information releases are delivered electronically by third parties. Delivery may be delayed by circumstances outside our control. Statistics NZ does not accept responsibility for any such delay. Crown copyright© This work is licensed under the Creative Commons Attribution 3.0 New Zealand licence. You are free to copy, distribute, and adapt the work, as long as you attribute the work to Statistics NZ and abide by the other licence terms. Please note you may not use any departmental or governmental emblem, logo, or coat of arms in any way that infringes any provision of the Flags, Emblems, and Names Protection Act 1981. Use the wording 'Statistics New Zealand' in your attribution, not the Statistics NZ logo. 19 Contacts For media enquiries contact: Jason Attewell Wellington 04 931 4600 Email: info@stats.govt.nz For technical information contact: Jason Mackiewicz Wellington 04 931 4600 Email: info@stats.govt.nz For general enquiries contact our Information Centre: Phone: 0508 525 525 (toll-free in New Zealand) +64 4 931 4600 (outside New Zealand) Email: info@stats.govt.nz Subscription service: Subscribe to information releases, including this one, by completing the online subscription form. Correction notifications: Subscribe to receive an email if a correction notice is published for Screen Industry Survey. Unsubscribe to correction notifications for Screen Industry Survey. Subscribe to all to receive an email if a correction notice is published for any of our information releases. Unsubscribe to all if you change your mind. 20 Tables The following tables are available in Excel format from the 'Downloads' box. They provide breakdowns of screen industry activity at the national and regional levels. If you have problems viewing the files, see opening files and PDFs. Screen Industry Survey: 2013/14 – national tables N1 N2 N3 N4 N5 N6 N7 Gross revenue of screen industry businesses, by sector Screen industry businesses, by sector Distribution of businesses in the screen industry, by gross revenue range and sector Location of screen industry businesses, by region Number of completed screen industry works, by production format International co-production partners, by country or region of partner International co-productions completed Gross revenue of production and post-production sector businesses, by production format N8 and business activity Production and post-production sector businesses, by production format and business N9 activity Gross revenue received by production and post-production sector businesses, by N10 country/region and business activity N11 Post-production revenue, by post-production activity N12 Post-production revenue, by source country/region and business activity N13 Location of production activities, by region N14 Gross revenue from producing, by type of revenue N15 New Zealand funding and financing received for producing, by source N16 Financing and funding received for producing, by production format N17 Sales by producers, by production format and source N18 Expenditure on producing, by production format N19 Expenditure on producing, by region N20 Digital technology used by broadcasting, distribution, and exhibition sectors Purchase or upgrade of equipment and facilities by screen industry businesses, by main N21 use N22 Perception of cost movements over the last financial year, by sector N23 Relationship between sectors, by sector N24 Number of people employed in the screen industry, by industry sector N25 Number of jobs in the screen industry, by industry sector N26 Earnings from jobs in the screen industry, by industry sector N27 Distribution of age groups in the screen industry, by industry sector N28 Percentages of males and females working in the screen industry, by industry sector N29 Number of jobs and people in the screen industry, by industry sector N30 Percentile earnings from jobs, by industry sector N31 Percentiles of wages earned by people in the screen industry N32 Screen industry value-added, of responding units by main sector Screen Industry Survey: 2013/14 – regional tables R1 Gross revenue of screen industry businesses, by sector and region 21 R2 Screen industry businesses, by sector and region Gross revenue of production and post-production sector businesses, by production format R3 and region R4 Production and post-production sector businesses, by production format and region R5 Financing and funding received for producing, by source and region R6 Post-production revenue, by post-production activity and region R7 Post-production businesses, by post-production activity and region Next release The Screen Industry Survey: 2014/15 will be released in April 2016. 22