By Fiona Mayo
|
Saturday 1st December 2001 |
Text too small? |
Four years ago, Otara wideboy Pauly Fuemana penned a little beauty of a song, "How Bizarre". This simple paean to cruising South Auckland's mean streets is estimated to have earned New Zealand up to $15 million since then in international album sales.
Back in 1997, Fuemana's star shone brightly. "How Bizarre" hit number one in Australia, Ireland, Canada, Austria, Slovenia and South Africa, and made the top 10 in many European countries. It even cracked that most difficult of musical markets, the US top 100, becoming the most played song in America that year. Even the venerable Rolling Stone magazine called it a "summer-defining single that actually sounds great".
It'll earn much more through royalties during its lifetime of rotate on stations with classic hit formats around the world. Talk about return on investment.
Music, as you've probably gathered, can be a tidy little earner. The Australasian Performing Rights Association (APRA) collects about $100 million in royalties out of Australia and New Zealand each year. New Zealand's cut is about 10%. Most of the royalties Kiwis earn come from sales in Europe, says New Zealand representative on the APRA board Arthur Baysting. And it's possible, says APRA director of operations Mike Chunn, for a musician to earn more than $500,000 a year if their music is played on a TV series that's screened on a mainstream station like the BBC or ITV.
While $15 million may be financial small fry compared with other sectors, the value that cultural kudos adds to Brand New Zealand is unlimited. Governments around the world are attempting to put a price on creative industries in recognition of this, as many nations make the shift from primary manufacturing to value-added, knowledge-based economies. Many believe it's high time the creative industries stood up and took a bow for the unsung role they've been playing.
Helen Clark is one of them. The government's "cultural recovery package" - an initial payment of $86 million last year plus three additional payments of $20 million over the next three years - was as much a positioning statement to the arts community as the charm offensive she launched to win the hearts and minds of those in business.
Earlier this month the Prime Minister committed $9 million over two years to maximise leverage off two big events - the release of The Lord of the Rings trilogy and the Americas Cup regatta. Funding will be split evenly between the two. Just under $500,000 was earmarked for the premiere of the first film of the trilogy, The Fellowship of the Ring. Helen Clark said the films present a unique opportunity to New Zealand, with potential spin-off for the tourism, computer software, filmmaking, wine and food industries. The funding is over and above the almost $1.65 million already earmarked for the trilogy by other government agencies, such as Tourism New Zealand and Trade New Zealand.
The fact that the Prime Minister also took on the Arts Culture and Heritage portfolio, says Creative New Zealand's chief executive Elizabeth Kerr, is an indicator we're increasingly valuing the arts. "For the first time, New Zealand has a tourism strategy that recognises cultural tourism. There are some proposed changes to local government legislation in which part of the purpose includes local government making a contribution to culture."
Earlier this year Tourism New Zealand committed to a three-year financial assistance programme for the World of Wearable Arts (WOW), formerly known as the Nelson Wearable Arts Festival. Clark called it a "superb example of cultural tourism". Tourism New Zealand is promoting WOW to its worldwide markets as an attraction for international visitors.
Cultural kudos is one thing; the other is what all this creative energy is worth in dollar terms. Rob Arlidge, chair of the creative industries working group in government, estimates the creative industries contribute $5 billion a year to New Zealand's GDP - that's about 5%, slightly outranking the tourism sector's 4.9%.
Statistics New Zealand says employment in the creative industries outstrips overall growth in the economy. From 1994 to 1999, paid jobs in the creative industries grew just over 16%, compared with 11.2% for the rest of the economy.
Take, for example, the money generated by the New Zealand Festival (formerly the International Festival of the Arts). An economic impact report found total "new spend" generated by last year's festival was $39.7 million. Thirty-one percent of its income comes from sponsorship and grants, with 62% coming from the box office. "That means 93% of our income is defined by commercial interests. This is really unusual for an international arts festival. Overseas festivals are normally about 60% funded by central government," says festival marketing manager Simone Ellis. It is also unusual to make a profit, she says. Last year's festival delive-red a net surplus of $2.17 million.
Nobody does it better
Clark's cultural recovery package falls short of what her British counterpart has been up to. About the time our Fuemana was hitting the big time, British Prime Minister Tony Blair established a creative industries task force. Its brief was to raise awareness of these industries and the economic contribution they make. A year later the task force produced a seminal and detailed mapping document. Here's what it found.
The creative industries brought the UK:
The big increase in the figures is attributed to better data on the software and design industries. Even better, the report says the export figures are probably an underestimate, while the employment figures remain stable. The question is whether New Zealand's creative industries are doing as well.
The cutting edge
New Zealand fashion has become the pin-up girl of the creative industries. Karen Walker, Nom D, Zambesi and World first trod the catwalks of London Fashion Week in 1999, introducing Kiwi fashion to the world. World alone has experienced between 20% and 25% export growth annually since then. And Trade New Zealand says UK media coverage after London Fashion Week was valued at about $1.7 million in equivalent advertising value. Now, that's a cost-efficient branding exercise.
The apparel sector - including designer clothing, sportswear and casual lifestyle clothing and shoes - earned this country $247 million this financial year. Australia, Europe and Japan accounted for 80% of exports. Kiwi fashion designers have been generating interest, even if the export figures still seem small.
Karen Walker, Nom D, Kate Sylvester and Zambesi have been regulars at the Australian Fashion Week. Since Madonna wore those Karen Walker pants, the Auckland designer has featured in Vogue magazines around the world. International buyers are interested in these designers because they bring a fresh perspective. Seen in general as more cutting edge and design-focused than the Australians (sexy, flirtatious, girlie), World, Karen Walker, Nom D and Zambesi sell in London, New York, Hong Kong, Singapore and Paris.
While many of our top designers have been around the block, it's interesting to note that New Zealand had its first international fashion event only this year, the L'Oréal New Zealand Fashion Week in October. It drew the international media, and an Ernst & Young Cap Gemini economic impact report estimated anywhere between $5 million and $13 million could be made in foreign exchange from the event.
Trade New Zealand assisted our designers at the London shows because its prime mandate is foreign exchange. "Fashion is an area we're prepared to invest in because high fashion helps profile New Zealand fashion generally and there are positive downstream spin-offs - $247 million's not bad," says account manager Anne Chappaz.
Unfortunately, our size and geography can put international fashion buyers off. "It works against us. Freight is a big barrier, duties, timelines … It's like, you're from New Zealand - are you going to be able to make this order? Buyers are taking a real risk. They're hard-nosed people and not easily impressed," says World's Denise L'Estrange-Corbet. Yet she says our small size and location can work for us. It's become the cliché that defines New Zealand to the world, but the No.8 wire culture works in our creative favour.
Ad value
A celebration of this can-do culture can be seen in our advertising industry - succinctly expressed in the "bugger" ads created by Saatchi & Saatchi. "What did that say about us? That we don't take ourselves seriously, we're understated and quite self-effacing, we're down to earth and above all humorous. The ad epitomised what we're about. People like people who don't take themselves seriously. That's a universal message," says Saatchi's New Zealand managing director, Mike Hutcheson. The ad won the Gold Lion award at Cannes for best TV commercial in 1999. (For more creative ideas see "They're playing our game over there", page 53.)
Advertising, says Hutcheson, is the nexus between art and commerce. He eschews the idea that artists need extra assistance and says advertising is a good example of a commercial imperative driving a creative industry. "The local film industry is supported by TV commercials and that's the way it should be. Most [producers and directors] make commercials for their bread and butter [Lee Tamahori, director of Once Were Warriors, is a case in point] but have plans for film."
On screen
The New Zealand film and television industry is booming - thanks, in part, to Peter Jackson's The Lord of the Rings trilogy. Jacksons combines New Zealand's bleak, black humour with commercially appealing stories that have earned him the respect of international production companies like New Line Cinema, the trilogy's producers.
Latest figures for the film industry are encouraging. The Screen Producers and Directors Association (SPADA) screen production survey released at the end of October finds the industry on a roll, with company turnover reaching $1 billion for the second year running. Foreign exchange earnings increased almost 7% to close on half a billion dollars, while sales of film and television programmes nearly doubled to $34 million. SPADA chief executive Jane Wrightson says the survey shows the impact of The Lord of the Rings with employment soaring to 31,000. Regions have benefited too, with $199 million spent in the Auckland region, $243 million around Wellington, $18 million in Queenstown, $12 million around Christchurch, $11 million around Dunedin and over $20 million in other New Zealand locations.
A Colmar Brunton screen production survey released late last year reported our total foreign exchange for film generated $455 million in 1999/2000. Some 14,000 jobs were created in the industry during this time, thanks again to Jackson and Vertical Limits, a big-budget action flick filmed here. Production financing for New Zealand was around $497 million; of that, about $343 million was from foreign funding.
Here Jane Campion's film The Piano must stand up and take a bow. It showcased "destination New Zealand" to the filmmaking world in 1993. Eight years on, six New Zealand feature films (Rain, Crooked Earth, Magik and Rose, The Price of Milk, Snakeskin and Stickmen) screened at Cannes this year.
And while the Aussies might hate our airlines, it seems they quite like our television. Street Legal, a gritty law and crime drama was sold to Channel 7 earlier this year. Producer South Pacific Pictures has made $10 million in foreign sales this year from drama series including Mercy Peak, Shortland Street and Being Eve, as well as investment in the feature film Whale Rider, says managing director John Barnett.
Shortland Street is sold to about 20 countries. "People are buying these programmes because they are different. A lot of our programmes don't have much sex and violence, and there's a demand for quality kids programming around the world, " he says.
Barnett's company has just joined forces with Australian tele-vision company Beyond Distribution (Australia's biggest international television sales agent). The joint venture, Beyond New Zealand, should give local producers better access to world markets.
Design-led business
While film, fashion, music and advertising are the glamour girls of creative industries, take a look around. You could own an award-winning fridge, write with the King of pens or be throwing away a work of art on your milk carton.
Recently the crème de la crème of New Zealand's designers gathered in a not-so-glamorous tin shed on a rainy night in Auckland to celebrate excellence in the design world. Winners in the Best Design Awards included a watch designed for blind people, the interior of the Air New Zealand lounge in Sydney Airport and a "stylish animal vaccinator".
John Baker, managing director of AGM (which publishes Prodesign, one of the Best Design Award's sponsors), says many businesses have yet to recognise the bottom-line benefits good design brings to business.
"Take Fisher and Paykel. Both its whiteware and healthcare products have advanced industrial design that's given them an advantage in export success. [They've had] enormous commercial and export success [and are] one of the most successful commercial stories in recent years. Without an internal commitment to improving design, that wouldn't have happened." He cites wetsuit manufacturer Orca as another example. The winner of the design-led business category at the awards, the company produces wetsuits that dominate the triathlon market. Sixty-four triathletes, out of a field of 101, were wearing the Orca predator suit at the Sydney Olympics.
Baker wants more recognition for the role design plays in contributing to the economy. "When I talk about designers I'm not talking about artists. This is the prejudice we are actually trying to overcome." He believes designers should get more recognition for their contribution to the economy. "Tax deductibility of research and development does become an issue because design is, or should be, an integral part of new product development."
Grunt machine
It is Rob Arlidge's job to assist creative sectors in business development and to "move them from the fringes to the mainstream" in his other role as sector specialist at Industry New Zealand. He says the sectors providing the most export grunt in the creative industries are computer software (with exports totalling $113 million last year) and publishing (our Book Publishers Association estimates their export sales earned $150 million last year).
Getting a cohesive picture of New Zealand's creative industries is no easy task. Britain's creative industries task force provided a mapping document for government to more clearly track the economic contribution of these industries. Arlidge says the work Britain has done has inspired Industry New Zealand's approach. It is looking to improve its databases and information across the creative industries.
Film, music, computer software and design are the sectors most likely to contribute to more rapid growth in our economy, Arlidge says. A 1997 Business and Economic Research (BERL) economic growth report showed that "the copyright industries are the fastest growing sectors in New Zealand trade". In other words, it may just be time to dust off that unfinished screenplay or novel and get to work.
They're playing our game over there
A creative approach to advertising on a shoestring budget saw a campaign created by Saatchi & Saatchi Wellington become the most awarded interactive programme across all categories at Cannes this year, winning a Gold Lion and two Silvers.
The Adidas Beat Rugby campaign harnessed the internet to create interest around the All Blacks and their sponsors, Adidas. It also proved Kiwi creatives can beat the world at their own game.
The ad agency created an internet-based rugby game where players around the world competed to join the virtual All Blacks. The "Beat" is the universal internet time created by Swatch, where the 24-hour clock is replaced by 1000 beats. The game kicked off at intervals of 100 beats, with three stages - practice, trials and test match. The campaign was timed to coincide with the All Blacks' tour of France at the end of last year.
Adidas International spent just £50,000 to book paid advertising on five major rugby sites. Interest was built through viral marketing such as chat room infiltration using "agents" to covertly develop interest, the creation of "shamateur" (an invention of the ad agency) sites and media releases to key targets.
During the three-month rugby season, over 120,000 people visited the site; of those, 43,000 downloaded the game and played in the competition. The site also attracted 40,000 new visitors - traffic that is spilling over to Allblacks.com. The final 15 winners came from the UK, Canada, the US, South Africa, Australia and New Zealand. They got to visit the All Blacks here and spent a week with them in training.
"Beat Rugby opened a huge opportunity. It leap-frogged Adidas into a new way of looking at marketing. We were awarded the Soccer World Cup campaign [the worldwide online advertising campaign, and other mediums for the Asia-Pacific region] because of the success of Beat Rugby," says account director John Foley.
"We pitched head to head against Adidas's traditional European agency and won."
Fiona Mayo
fiona_mayo@idg.co.nz
No comments yet
PGW Guidance Update
CNU - Commerce Commission releases draft expenditure decision
Spark announces departure of Product Director
TGG - T&G appoints new Director
April 18th Morning Report
SKC - APPOINTMENT OF CHIEF EXECUTIVE OFFICER
Devon Funds Morning Note - 17 April 2024
Consultation opens on a digital currency for New Zealand
TWL - TradeWindow's $2.2 million capital raise now unconditional
April 17th Morning Report
© Copyright 1997-2024 MoneyOnline Ltd - All Rights Reserved
See IRG research reports
