Business
Move Over Hollywood. Here Comes Fiji's Follywood
The potential's substantial, says FAVC's Dan Bolea
Is there interest in Fiji's nascent audiovisual industry? There most certainly is, if the feedback from the first couple of marketing promotions by the Fiji Audiovisual Commission (FAVC) is anything to go by.
According to the Chief Executive of the statutory authority, Taniela Bolea, Fiji is a known quantum in both Bollywood (where Fiji is one of the bigger foreign markets for Indian films) and in Hollywood, where Cast Away, Blue Lagoon, and other film and television productions have attracted much attention from cinemagoers.
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Fiji is not so well known in mainland Europe where the African and Caribbean seem to be the popular tropical locations.
Bolea said the potential market is quite substantial. Just as an indication of the orders of magnitude involved, he said, that after just two marketing trips abroad, the FAVC has identified about 20 film projects with real interest to shoot in Fiji.
"If we take into account the current average cost of a Hollywood movie of US$50 million, we are talking about a substantial market here. And we have not even started to target television, video, music, and information technology and e-commerce — sectors that come within the ambit of the FAVC," said Bolea.
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"Each of these film projects identified has a producer, budget, a film name, and a proposed date of production. Several of them are actually about Fiji, so there is a higher probability of these projects being realised," he said. Fiji has got a very attractive tax incentive regime offering up to 150% tax deduction to Fiji taxpayers who invest in audiovisual productions with significant local content. On top of that the first 60% of revenue is also tax free. So local and overseas producers can access the tax incentives available to Fiji taxpayers to fund their projects. Other significant incentives include the provision for tax-free income for audiovisual companies and for individuals including computer and technology experts, film stars and international sports personalities — who wish to reside at the Studio City in Yaqara.
However, Bolea said the incentives are not of direct benefit for example to Bollywood and Hollywood producers and taxpayers from India and the United States, as their tax benefits in Fiji are not transferable to these countries.
At the moment many countries are targeting this lucrative annual multi-billion dollar industry in Œrunaway productions' that looks for other locations other than Hollywood.
Fiji is offering a diverse tropical location that can be used for a wide variety of scenes; lower costs; better exchange rates to make the United States dollar go further; well-trained labour force conversant with English and Hindi — and even Chinese; good legal, financial and technological infrastructure; easy accessibility to international air travel, etc.
But Bolea said most countries are in fact offering similar attractions. At the moment Canada gets about 81 percent of the runaway, Australia gets 6 percent and 1 percent is distributed between New Zealand and the rest of the Pacific. To make it more attractive, countries such as Australia offer — in addition to tax deductions — rebates of 12.5% and direct subsidies from federal and state agencies of well over AU$500 million.
For Fiji to get a share of the market it should also offer some form of well-targeted rebate schemes to fully funded foreign productions to attract foreign investment here. Fiji does not offer any such backing to the fledgling industry as yet. For those projects looking for funding from Fiji taxpayers, it must be ensured that there is an industry-standard level of protection against risk that would make it sensible for Fiji taxpayers to take a punt in an audiovisual project, rather than just paying their tax. The details of this are still being negotiated.
Many countries are eager to attract audiovisual projects because of the high-skill/high remuneration benefits available to such knowledge industries of the 21st century. There is a definite multiplier effect to every dollar spent in this industry.
Latest estimates in Australia put it at 2.6 whereas Hong Kong generates $2.50 for each $1.00 spent in the industry. Economic models so far developed for the local industry also point at a positive multiplier.
According to Bolea, the importance of minimising red tape and administrative bottlenecks cannot be overemphasised. "At the moment projects that may have taken the FAVC a couple of days at the most to process and approve have been bogged down in the bureaucracy for many months. While a learning curve is expected for such new industries, the inordinately long delays cause nothing but frustration for investors.
"There is a narrow window of opportunity between a project getting the greenlight and the commitment of funds, casts and other resources, and the production to actually start rolling," he said. The project will just go elsewhere if we are not ready — and there are many countries willing and ready to receive the projects, he said.
Fiji is one of the very few countries that have recognised the convergent media inherent in the audiovisual industry and included it in a national strategy.
The laying of the Southern Cross Cable right up to Yaqara is going to make the transfer of large amounts of data fairly straightforward. The cable has a potential at this stage to transfer several 90-minute feature films per minute along this big digital pipe to the United States, Australia, New Zealand, etc.
In a previous interview with Islands Business (then Pacific Magazine), the late FINTEL chief executive, Timoci Ledua, had said that Fiji lacked an extensive audiovisual business to fully utilise the Southern Cross Cable bandwidth and if "we had one we wouldn't be looking to sell bandwidth capacity abroad".
The Studio City, which sits on 2200 hectares of state and native land will be themed on a technology park concept with state-of-the-art facilities in information technology, sound stages and studios, hotel resorts, recreational amenities, marina, and other supporting infrastructure. Its development will depend on demand.
Executive chairman of the locally registered Paradise Entertainment Limited (PEL), Philip Gerlach, has the mammoth task of seeing the continuing development of Studio City. The plan is ambitious but the company feels it can turn the sprawling ranch land into a significant international technology hub of this century. One of the factors that will ensure that the industry takes root and grows in Fiji is that there must be a home-grown base of technologically savvy practitioners working in technically advanced environment. "We have to grow the local skills."
Last year Gerlach established Tahila Pasifika Communications Ltd, another Fiji company. With Tahila, meaning Number One in the Nadroga dialect, Gerlach aims to "stimulate production in music, film, TV and IT".
Tahila's project slate is growing. And the idea is to produce them in Fiji, the development of which is done largely with local partners.
Bolea said there is some understandable ambivalence towards the new audiovisual industry. "But some of our main resource-based industries are in decline. And there is not that much value-adding involved.
"The audiovisual industry is the type of future we would like to see our children involved in. It therefore needs everyone's support to make it work," Bolea added.
