A good news government story

The South African government, specifically the Department of Trade and Industry (dti) often comes under fire for not supporting South African entrepreneurs. But one production and animation company has a different view. by Morgan Barnard

The department understands how the animation industry is growing in South Africa and it is engaging with us, The Flying Circus producer Andre van der Merwe tells Moneyweb. He adds that government is actively trying to find ways to possibly change existing - or start new programmes to help develop local film entrepreneurs.

Primedia started the business life of The Flying Circus with nine people in 2013, with the main focus being motion capture (capturing the movement of people for film). When we started the studio we thought we would do primarily service work for agencies, but there has not been a lot of animation stuff made for TV commercials in the last few years. From a timing perspective it probably wasn't ideal, says CEO Ronald Henry.

The company decided to build its own content rather than service that of clients and focused on children's content with a small, but experienced team. We are unique in the fact that we have developed a very innovative production workflow with the motion capture system as one of the main tools. In of itself motion capture is just a piece of technology, but integrated and used in a specific way it allows us to produce much much faster than using the traditional methods, Henry adds.

The Flying Circus has since grown to 80-strong and is in negotiations for the roll-out of an animated project called Silly Seasons which began production in October 2014. Once it is finished, the company will have produced the most hours of 3D animation in South Africa.

One of the features of The Flying Circus is its relationship with the South African government which it describes as incredibly encouraging. It was just a few weeks after The Flying Circus launched in March 2013 that the dti approached the team, seeming very interested to ignite a development relationship.

Says Van der Merwe: The dti has a handsome and generous film and TV centre in place to really help build this industry and we're taking advantage of this incentive. The department appreciates the potential of South Africa's animation industry and has been involved in other animation projects, such as Triggerfish's successful film Khumba and The adventures of Zambia.

We have made an effort to keep the dti up to date on our progress and we give them feedback on a regular basis, says Henry, adding that the company is determined to maintain the relationship. We have no complaints from the government, they have supported us well.

The dti offers three incentives to entrepreneurs in the film and television industry. These are:

The Foreign Film and Television Production and Post-Production incentive to attract foreign-based film productions to shoot on location in South Africa and conduct post-production activities.

The South African Film and Television Production and Co-Production incentive, which aims to assist local film producers in the production of local content.

The South African Emerging Black Filmmakers incentive, a sub-programme of the South African Film and Television Production and Co-production Incentive, which aims to assist local emerging black filmmakers to nurture and grow them to take up big productions and create employment in the sector.

The South African Revenue Service (Sars) is also coming to the party to help with these incentives, according to the National Film and Video Foundation which says that Section 120 of the Income Tax Act in 2012 provides for an incentive in the form of a tax allowance to stimulate film production. In order to qualify for the tax allowance, taxpayers must meet the following criteria:

Income must be derived from a film

The film must be approved as a local film or co-production

Income must be allocable to the initial investors

Income must be derived from exploitation of rights

Income must fall within a ten-year period

Despite all these incentives, it remains to be seen as to why entrepreneurs are not taking full advantage of the opportunities available to them.

Henry comments: This is often the case because it requires a lot of discipline. I think that's been a stumbling block for a lot of small business because if you are only a company of five or ten people how do you get everything [in place] in order to access these programmes?

The framework is specific and requires structures in place to comply with it, as well as effective corporate governance and managing vast levels of bureaucracy and paperwork.

Just to claim money for an overseas trip entails filling in a 50-page document to get your money back, says Henry.

This year The Flying Circus team entered Miami's The Big Pitch' - the design equivalent of reality TV show Dragons' Den - where entrepreneurs are given the opportunity to pitch their business ideas to potential funders. The company was one of only two selected to pitch to more than 500 industry professionals with moderators from film powerhouse Disney and Dreamworks among others.

The team gave an initial five-minute then three-minute pitch and received constructive feedback from moderators. The Silly Seasons project received positive feedback.

We had just got back from Miami and an overseas studio sent us a show bible for a children's show which they have been developing. They had seen us at Kidscreen and liked our approach, and wanted to explore whether or not we would be interested in co-producing the show with them.

The Flying Circus had a similar enquiry from a Canadian distributor/producer as well. Although it is still early to tell whether or not any of these opportunities will actually materialise, Henry says that its a gre

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