Slide1 : IAN SUTTON Chief Executive Winemakers’ Federation of Australia (Inc) 1990 - 2003
Slide2 : Prepared by: IAN SUTTON on behalf of The Australian Screen Council Working Party, Gold Coast 14 August, 2005 SPAA Conference 2005 Unifying for Success
Slide3 : This presentation is in two parts
First I want to show how an Industry that is a major competitor of The Australian Screen Production Industry got it’s Act together and became successful.
Then I will outline a proposal that has substantial and far reaching implications for this Industry and those in this Industry who strive to succeed and prosper.
So to commence, I would like to tell you the story of how the Australian Wine Industry got it’s Act together and moved over a decade from an Industry in crisis to a global success.
Slide4 : Why is this relevant?
Consider this: Discretionary / Leisure time / sustainability / fashion
Tax Proposals
Composition – big companies / medium / large artisan sector
Historical – both historic Industries
The principles of Industry unity and strategic development are consistent regardless of it’s product
Slide5 : Cask wine dominant
Beer sales increasing, wine decreasing
Seen as a ‘quaint cottage industry’
Exports predominantly influenced by $A fluctuations
Vine Pull Scheme
WST – 10% 1986, 20% 1988
Four bodies purported to represent industry In the 1980’s the Australian Wine Industry was anything but a success.
Product Standing 1/10 : Product Standing 1/10
Slide7 : Industry was vulnerable and in 1990 united in a renewed sense of self determination around the table of the W.F.A.
I well remember opening our doors in a disused Ice Rink accompanied by a couple of stray dogs and skateboarders.
The impact of unification however was immediate and monumental as the chart demonstrates.
Slide8 : Australian Wine Industry
… and so in 2005 The Wine Product Standing : … and so in 2005 The Wine Product Standing
Slide10 : Wine Product Standing
Slide11 : This is only half the story and it is the other half that differentiates the success of the Australian Wine Industry from other Industries, regardless of the product, the principles are consistent and yet often neglected.
I am referring to how an Industry manages it’s Industry.
Slide12 : Wine Industry Status
Slide13 : It has to be recognised that in order for Producers in an Industry to be healthy, the Industry itself must be healthy.
The Industry is itself a product and has to be nurtured, nourished, protected and driven with the same sense of passion, professionalism, vision and control as any product it produces.
Only a strong unified body can shift Government policy to remove barriers.
Create level playing fields, reduce cost imposts, develop strategic direction, attract substantial new investment, lift product demand and profitability, deliver R & D dividends, attract the brightest, most creative innovative, deliver an Industry in which all Australians feel a strong sense of pride and ownership.
Slide14 : Does the Industry know where it wants to be in 15-20 years?
Does it have a sensible, achievable step by step strategy to achieve its growth and success?
How does it shift its product quality to be highly competitive?
What strategies does it apply to successfully compete for Capital Investment?
How does it become profitable?
Is its’ R & D strategically, or Provider driven? First we asked a number of questions and in assessing any Industry’s status these questions are relevant:
Slide15 : Does the Industry have a consistent and effective policy making process?
Does it have a sustained influential advocacy voice with government in Policy Development - where is it in the queue of status against other Industries – is it in the inner or outer sanctum of Canberra?
Is the Industry positively reported in the media?
What are the impediments to growth (eg. Taxation) and how can they be removed?
Slide16 : How can Export Market access and a level playing field be guaranteed through bi-lateral multi-lateral Trade Agreements?
How does the Industry increase demand, increase quality, increase profitability?
How does the Industry attract the brightest, most innovative young people?
How can the Industry take on World Markets and succeed?
Slide17 : In this paper I have given a brief response to these questions but they are still too lengthy for the time we have.
The paper is available for anyone, but I will select just a few responses, starting with …
Slide18 : A thirty year Plan Strategy 2025, launched in 1996 set the following goals:
* Total Annual Sales of $4.5 B.P.A.
- Achieved 21 years early in 2004.
* Vineyard Plantings of 60,000 ha.
- 100,000 achieved in 2001.
* Capital Investment of $6B by 2025.
- $9B achieved in 2005.
No growth element required more than 3% growth p.a. Strategic Development
Slide19 : Made wine fashionable – food/health related – wine moved from ‘stuffy’ to ‘sexy’. Positioning
Slide20 : Investment Attraction Strategic direction creates analysis/investors interest. dedicated Analyst constantly briefing Financial Analysts.
Annual Outlook Conference.
Positive environment encourages shareholders.
30 Year target of $6B new investment achieved 20 years early, currently $9B.
Impact on Mum and Dad investors.
BRL Hardy experience
Slide21 : Remove impediments / Create positive market environment. Wound tax back by $900M.
Focussed R&D on efficiency / quality.
Promote culture of innovation.
Wine Australia.
Increase demand.
Collaborative Export Promotion.
Slide22 : Developed R&D Strategy, won CRCV and additional $20m in R&D funding. Ensure R&D Corporation adopt strategic direction. R&D Strategy
Slide23 : Established Canberra office / Secretariat.
Employed Senior Policy Director (ex Government).
Employed Senior Trade Director (ex Government).
Promoted by Prime Minister and Cabinet Members / Senior Bureaucrats as ‘Model Industry’.
Worked daily with Government / officials on key issues such as Trade negotiations. Political Influence
Slide24 : Regularly held Briefing sessions with Senior Editors / Chiefs of Staff / Senior Writers – worked closely with Canberra Press Gallery.
Hosted visits of International journalists.
Conducted wine flights out of UK.
Quick to respond to negative press, etc. Media Influence
Slide25 : Industry signed Bi-lateral Treaty in 1991, MPA with US in 2000 – actively engaged in International Industry Trade Bodies – Trade Desk established in Canberra. Trade Development / Level Playing Field
Slide26 : Build excitement around the product – enlist third party influencers, make the product ‘sexy’ – wine rode in on Café Society, multi-cultural - quality of life - Association with good food – health/lifestyle.
Slide27 : Structure specialist Tertiary / Degree courses.
Build on career opportunities and rapid promotion to play an influential role.
Collaboration formerly delivered through unity:
Australia promotion within which brands are promoted
Brand promotion, 40,000 tastings, eg. Lords Cricket match. None of these activities, and there are many more could have been achieved unless driven by a single, unified body.
Each of these individual strategic elements incrementally contributed to a substantial lift in the Industries status.
Slide28 : Wine Industry Status
Slide29 : So in putting these two pillars together.
Slide31 : Their collective strength represents the health of any Industry. They are separate strategically but interdependent in terms of growth and success.
In terms of the Australian Screen Production Industry Product and Industry Standing, I would ask you to reflect on how you think the product and the Industry are viewed and regarded by the World outside the Industry.
Slide32 : Potential Status of Screen Production
Slide33 : It is not for me to judge, but I would put it to you that if in both cases, if it is not an eight or a nine, then there is substantial opportunity for development for the advantage of all.
If the Wine Industry can do it, why can’t the Screen Production Industry.
What could be the steps forward? The following is a classic model used by many Industry and other professionals, including Union Organisations, but for the sake of example I will base the discussion on the National Farmers Federation model which looks something like this …
Slide35 : What is particularly important in establishing a new body such as The Australian Screen Council is to learn from the experiences of NFF and develop some constitutional disciplines around representation, voting and scope of activities.
For example, the ASC Structure could be …
Slide37 : Each Representative Body (Electoral College) is invited to nominate one Industry member to the Executive Council. Whilst each Representative Body is strongly dedicated to its constituency and pushes hard for its policy propositions at the Executive Council, all decisions should be made in the best interests of the whole Industry.
100% consensus agreement has to be reached on all issues.
Inability to reach consensus would result in the Council having no policy position and hence no comment but does not stop the Electoral College from pursuing this issue in its’ own right the status quo.
Slide38 : Scope of Operations
Slide39 : The Council deals only with big picture issues, those that impact on the total Industry, forging solid working relations with Directors who might be at each others throats on below the line issues.
So how could this work for the Screen Production Industry?
Slide40 : The objective is to have representation from each of the sectors in the Screen Production chain.
This does not mean there will not be close formal engagement with other sectors and agencies by the Council.
Some have also said there’s no way these sectors can work together, but already there is strong evidence through the working party that they are, bearing in mind they are focussing on an initiative that has substantial potential benefits for all in the Industry so they feel a sense of obligation to make it work on behalf of their constituents.
Slide41 : In other cases in which I have been involved, discussions on unity constantly takes place when an Industry is in crisis and funds are short.
The principles for funding I suggest therefore:
Funding The A.S.C. requires adequate funding to demonstrate to the Industry it is delivering substantial benefits from which the A.S.C. could be ultimately funded, eg. In tax alone the Australian Wine Industry was relieved of $900M over 12 years.
– W.F.A’s levies totalled around $2 M.P.A.
– Starting levies in 1990 around $350K.
Slide42 : Electoral Colleges should provide funding to establish formal participation but should be minimal.
A newly unified Australian Screen Production Industry body is an exciting marketing proposition and various “hollow logs” are available to attract Start Up / Project funding.
A Cocktail of funding including Government and Institutional funding would be sought.
Funding thus sought should not be merely a re-distribution of ear marked Industry funding.
Ideally the first three years of operations would be underwritten early in the Councils development.
Slide43 : First six months concentrate on identifying those major issues that if delivered would result in substantial benefit to the whole Industry.
This period would also establish a long term, say 15-20 year vision, for the Industry identifying barriers to be removed through Government Policy change and opportunities for development by the Industry for the vision to be achieved. First Stage
Slide44 : Such a Strategic / Issues / Policy orientated approach would annouce to all important sectors – government, media, investment, International, general community, that the Industry has set a clear new direction to achieve steady growth and success in a renewed sense of self determination and authority.
… And so in closing I would like to put to you a few What If’s in terms of what that initial Policy Issues Program might contain.
Slide45 : What if the Australian Screen Council was able to argue for and achieve the following outcomes? ABC
What if the industry was able to ensure that the ABC was both resourced and obligated to deliver at least the same level of Australian programming as delivered by commercial free-to-air broadcasters?
What if the Industry was able to achieve, as part of this package, a commitment from the ABC that it would give reasonable terms of trade to independent producers, in order to allow the production industry to reinvest in future development, production and training?
Slide46 : II. Terms of Trade
What if the Industry established open and competitive tendering processes with commercial broadcasters, increased overall licence fees, and limited the broadcasters’ ability to own commissioned work?
Slide47 : III. Australian Content Regulation
What if the Industry was able to increase the mandated levels of Australian drama and documentary programs on commercial free-to-air and pay television?
Slide48 : IV. Trade
What if the Industry was able to get a commitment from the Government that it would make no concessions in respect of audiovisual services in any future trade negotiations?
Slide49 : V. Investment
What if the Industry was able to raise the level of private sector investment in the Industry by 400% (four times) over the next ten years (by 2015)?
Slide50 : VI. Taxation
What if the Industry was able to deliver greater certainty regarding tax deductibility to potential investors in the industry.
Slide51 : VII. Reinvestment Strategy
What if the Industry convinced all Federal and State government film agencies to maximise the revenue entitlements of producers, in order to allow them to reinvest in future development and production?
Slide52 : VIII. Rental terms
What if the Industry was able to negotiate a level playing field with distributors and exhibitors to ensure that Australian films were given the same basic terms as imported films?
Slide53 : IX. Marketing
What if the Industry was able to pool the various funding schemes currently made available by Government to market the Industry and was able to both use those funds, and find other funds from other Government sources (such as Tourism), to develop and market a coherent “Brand Screen Australia”?