The Australian screen industry in February 2020 was about to have the best year of its life

The numbers for the Australian screen industry heading into 2020 are, by any reasonable measure, excellent. Total production expenditure for the 2018-19 financial year reached $1.93 billion, the highest on record. The 2019-20 year, based on projects already in production or pre-production, is tracking higher. Crew employment is at capacity in Sydney and the Gold Coast. Melbourne’s Docklands Studios is booked through the middle of the year. South Australia’s Adelaide Studios has a waitlist.

The production pipeline is full in both directions. Domestic production is strong, with 34 Australian features in various stages of production and a television slate that includes new seasons for the ABC, SBS, Stan, and Foxtel. International production is stronger, driven primarily by the federal government’s Location Incentive, which offers a 13.5 per cent tax offset to foreign productions that spend more than $15 million in Australia.

The Location Incentive is working exactly as designed. Since its expansion in 2018, it has attracted productions including Thor: Love and Thunder (filming in Sydney), Shang-Chi and the Legend of the Ten Rings (also Sydney), and several Netflix and Amazon titles whose budgets alone would have constituted a significant year for Australian production in the previous decade. The flow-on effects are measurable: crew wages are rising, post-production facilities are expanding, and there is a genuine skills shortage in departments like visual effects, construction, and grip.

The domestic slate

On the domestic side, the figures are encouraging without being spectacular. Screen Australia’s production data shows 34 Australian features in production during the 2019-20 year, which is consistent with the ten-year average. Budgets range from under $1 million (low-budget genre and documentary features) to over $12 million (the larger co-productions and Screen Australia-backed dramas). The median budget sits around $4.5 million, which has been the median for most of the past decade and which describes both the stability and the constraint of the local market.

Television production is more robust. The ABC commissioned 14 new drama and comedy titles for 2020. Stan’s original slate has expanded to eight titles. Foxtel, despite persistent questions about its subscriber base, continues to invest in prestige Australian drama. SBS maintains its niche with a smaller budget and a sharper editorial identity. The combined television pipeline represents approximately $420 million in production spend, the majority of it flowing through Australian crews and facilities.

The crew economy

The crew shortage is worth examining because it tells a story the headline numbers do not. When international productions arrive on the scale of a Marvel film, they absorb hundreds of local crew members for months at a time. This is good for those crew members and good for the broader industry in terms of skills development and wage growth. It is less good for the domestic productions that compete for the same talent pool.

A gaffer who can earn $3,200 per week on a Marvel shoot is not easily persuaded to take $2,100 per week on a Screen Australia-backed feature. The same applies across departments. The result is a two-speed crew economy: international productions paying international rates, domestic productions paying domestic rates, and a gap between the two that is widening as the Location Incentive succeeds.

This is not a crisis. It is a market adjustment. But it is worth noting because the current optimism about the industry’s trajectory rests on the assumption that international and domestic production can coexist at current volumes. That assumption has not been tested under stress.

What the numbers say

The numbers say 2020 should be a record year. Production expenditure will almost certainly exceed $2 billion for the first time. Crew employment will remain at or near capacity. The Location Incentive pipeline includes at least four major international productions scheduled to begin filming in the second and third quarters of the year. Domestic production is steady. The exhibition sector, while facing the same streaming-driven challenges as every other market, recorded $1.16 billion in box office revenue in 2019 and shows no signs of structural collapse.

The Australian screen industry, in February 2020, is in the strongest position it has occupied in its history. The infrastructure is built. The incentives are calibrated. The crews are trained. The pipeline is full. Everything is lined up for the best year the industry has ever had.