Financing and Production Model Issues in the Australian Screen Industry Report 2022

Running head: ISSUES IN AUSTRALIAN SCREEN INDUSTRY
Financing and Production Model Issues in the Australian Screen Industry
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ISSUES IN AUSTRALIAN SCREEN INDUSTRY
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Table of Contents
Financing and Production Model Issues in the Australian Screen Industry....................................0
Introduction:....................................................................................................................................2
A Description of the issues:.............................................................................................................2
Increasing taxation rates:.............................................................................................................3
Debt financing issues:..................................................................................................................3
Increased competition from overseas film industries:.................................................................5
A discussion and analysis of the data collected:..............................................................................7
Conclusion:......................................................................................................................................8
Recommendations:..........................................................................................................................8
Foreign expansion:.......................................................................................................................8
Investment in technology:............................................................................................................9
References:....................................................................................................................................10

ISSUES IN AUSTRALIAN SCREEN INDUSTRY
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Introduction:
Australian screen industry is an integral part of Australian culture and one of the most
profitable sectors in the country. The Australian screen industry, as per an article released by the
Guardian in 2018, contributed more than 3 billion of revenue to the economy. The sector
exported films worth $m 250 to the overseas markets and generated over 25000 jobs
(Broinowski 2018). The Australian screen industry allows the actors, directors, producers and
technicians to present their talent on the global stage. The production showcases aspects of
Australian culture and lifestyle in Australia as well as abroad (www.arts.gov.au. 2019). The
industry comes slowly under the impact of the macroeconomic contexts both within Australia
and overseas. These macro contexts are like ever-evolving technological platforms and changing
taxation laws. The several stakeholder groups like government bodies, viewers (individual
customers), film distributors (business customers) and technicians take this into supervision. The
aim of the Report would be delving into the financing and production model issues which
the Australian screen industry is facing. The research would primarily take into account the
funding and production models which are in use. The Report would also take into account
market threats like a competition which the Australian screen industry faces from its overseas
counterparts, the impact of demographic changes in the country and technological advancements.
The research would come to a close by recommending measures which could help deal with the
issues
A Description of the problems:
The following are the main issues which the Australian screen industry is facing in terms of
financing and production:

ISSUES IN AUSTRALIAN SCREEN INDUSTRY
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Increasing taxation rates:
The Australian screen industry is facing a high rise in costs of film making owing to increase in
taxes which the Government of Australia imposes on it. The Report on the inquiry into the
Australian film and television industry is published by the House of Representatives
Standing Committee on Communications and the Arts. It mentions that the taxation
structure, which is in practice in Australia constitutes for ten years. The taxation structure
provides a rebate of 40 per cent on cinematic productions, and 20 per cent on television shows
output. The report further mentions that the cost of production of both films and television shows
have increased and that the prevailing taxation structure is no longer profitable
(www.aph.gov.au. 2019). Government financing is one of the essential financing models
which is utilized by the screen production house. Thus, one can point out that the lack of
appropriate government financing and tax rebates would increase the cost of film making. This,
in turn, would impede the financial liquidity of the production companies.
Debt financing issues:
The second issue the film production houses are facing is increasing the cost of debt financing.
The film production companies to bear the immense value of production, usually borrow funds
from private companies. Debt financing model consists of five categories, namely, presales
model, television presales, negative pickup deal, slate financing and individual investors.
The first category of debt financing model, namely, the presales model refers to providing
financial assistance to film making based on the script and cast of the film. The filmmaker, in
this case, sells the distribution rights of the movie even before the shooting of the film is
completed. The television presales model refers to selling the distribution rights of television
shows even before the directors shoot the movie. These two categories of models of debt