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Business trends
Income and expenditure

Income and expenditure for businesses in the film and video production and post-production services industry, 1993/94, 1996/97, 1999/00, 2002/03 and 2006/07

Next update to be advised

The 2,492 businesses in the Australian film and video production and post-production services industry generated an overall income of $2,028.1 million in 2006/07, up 22.3 per cent from $1,658.2 million in 2002/03, according to the Australian Bureau of Statistics Service Industry Survey. The increase was due to growth in income from production and the provision of post-production services or PDV (post, digital and visual effects). Income from the provision of production services to other businesses, such as producers’ and directors’ fees, decreased.

Income earned from overseas businesses accounted for around 26 per cent ($527.3 million) of total production and post-production services income in 2006/07: $321.6 million from production, $119.8 million from post-production and $85.9 million from production services. This not only includes work on foreign production but also foreign sales and pre-sales, royalties, overseas private investors, and overseas public investment contributions.

See Sources of income for more details.

Expenditure by film and video production and post-production services businesses totalled $1,857.4 million in 2006/07, up from $1,551.8 million in 2002/03. The most significant item of expenditure – labour costs – comprised a third of total expenses in 2006/07.

A total of $356.1 million (19.2 per cent of expenses) was paid to other businesses for production services in 2006/07, up 58.1 per cent from $225.3 million in 2002/03. Payments to other businesses for post-production services increased in 2006/07 to $104.1 million (5.6 per cent of expenses) from $91.6 million in 2002/03.

In 2006/07, the film and video production and post-production industry recorded an operating profit before tax of $173.9 million, giving a profit margin of 8.8 per cent, up from $106.4 million or 6.6 per cent in 2002/03. By comparison, the average profit margin across all industries in the Australian economy was approximately 10.8 per cent in 2005/06, according to the Australian Bureau of Statistics.

Profitability in the production and post-production industry has increased since the ABS began surveying it in 1993/94 (in that year a loss of $98.1 million was reported). Between 2002/03 and 2006/07, for example, operating profit rose by 63.4 per cent. A significant contributor has been the growth of the PDV sector since 1996/97: see Focus on PDV > Operating profit.

Historical comparisons are problematic, however, because 2006/07 and top-line 2002/03 figures include significant non-employing businesses whereas previous years do not.

Income for film and video production and post-production services businesses

Graph: Income for film and video production and post-production services businesses, 1993/94 to 2006/07

Expenditure for film and video production and post-production services businesses

Graph: Expenditure for film and video production and post-production services businesses, 1993/94 to 2006/07
  1993/94 1996/97 1999/00 2002/03 2006/07 % change 02/03 to 06/07
Average annual Total
Operating profit or loss before tax ($m) -98.1 r-77.0 ^76.5 ^r106.4 ^173.9 13.1% 63.4%
Operating profit margin -21.0% r-0.1% ^5.4% r(^6.6%) ^8.8%    
No. businesses at end June 1,179 r2,004 1,975 r2,638 2,492 -1.4% -5.5%
Income ($m)
Production income1 361.0   r852.2 849.9 r811.4 1,132.4 8.7% 39.6%
From provision of production services to other businesses2 82.2   r122.3 233.1 r364.0 ^343.7 -1.4% -5.6%
From provision of post-production/film laboratory services to other businesses3 101.8   r146.6 ^262.6 r375.0 427.6 3.3% 14.0%
Other income 62.7    r63.4 128.2 ^107.9 124.5 3.6% 15.4%
Total income ($m) 607.7 r1,184.5 1,473.8 r1,658.2 2,028.1 5.2% 22.3%
Expenses ($m)
Labour costs (including wages and salaries)4 203.6  n.a. 426.6 r470.5 620.1 7.1% 31.8%
Payments to other businesses for production services 5 104.5  r199.8 ^250.8 r225.3 356.1 12.1% 58.1%
Payments to other businesses for post-production services 6 62.5    r83.6 ^88.3 r91.6 104.1 3.3% 13.6%
Other expenses4 335.2 r642.5 632.2 r764.3 777.1 0.4% 1.7%
Total expenses ($m) 705.8 r1,261.6 1,397.9 r1,551.8 1,857.4 4.6% 19.7%
  Proportion of total
1993/94 1996/97 1999/00 2002/03 2006/07
Income (%)
Production income1 59.4% 71.9% 57.7% 48.9% 55.8%
From provision of production services to other businesses2 13.5% 10.3% 15.8% 22.0% 16.9%
From provision of post-production/film laboratory services to other businesses3 16.8% 12.4% 17.8% 22.6% 21.1%
Other income 10.3% 5.4% 8.7% 6.5% 6.1%
Total income 100% 100% 100% 100% 100%
Expenses (%)
Labour costs (including wages and salaries)4 28.8% n.a. 26.7% 30.3% 33.4%
Payments to other businesses for production services 5 14.8% 15.8% 17.9% 14.5% 19.2%
Payments to other businesses for post-production services 6 8.9% 6.6% 6.3% 5.9% 5.6%
Other expenses4 47.5% n.a. 49.0% 49.3% 41.8%
Total expenses 100% 100% 100% 100% 100%

Source: Australian Bureau of Statistics (ABS), Television Film and Video Production and Post-production Services, 2006/07; Television Film and Video Production, 2002/03; Film and Video Production and Distribution, 1999/00; Film and Video Production and Distribution, 1996/97 and Film and Video Production and Distribution, 1993/94 (cat. no. 8679.0).

Notes:
Includes employing businesses mainly engaged in film and video production and post-production services. Does not include television broadcasters or subscription television channel providers. Significant non-employing businesses are included in 2006/07 and revised 2002/03 figures only. See About the data.
Proportions are Screen Australia calculations based on ABS data.
^ Estimate has a relative standard error of 10–25 per cent and should be used with caution.
r Revised estimate. The ABS published revised top-line figures for 1996/97 in 1999/00 and for 2002/03 in 2006/07. See About the data.
1. Includes distribution advances and presales, minimum guarantee payments, program licence fees, public and private investment, and royalties from film and video production.
2. Includes producers’ fees, line production, directors’ fees, cinematography and other production services, rental of facilities and/or equipment with crew, production services provided to overseas businesses, and fees received by self-employed or freelance businesses.
3. Includes post, digital and visual effects services such as visual editing, sound editing, duplication, film/video conversions, film laboratory services, rental of facilities and/or equipment with crew, post-production services to overseas businesses, and fees received by self-employed or freelance businesses.
4. Labour costs include staff-related costs such as wages and salaries (including money paid directly through the payroll to freelancers without an ABN), fringe benefits tax and payroll tax, employer contributions to superannuation, workers’ compensation premiums and provision expenses for employee entitlements. The ABS originally reported labour costs for 1996/97 of $351.7 million. In 1999/00, it published a revised figure for wages and salaries of $335.7 million (previously $328.1 million) but did not issue a revised figure for total labour costs, instead incorporating staff-related costs other than wages and salaries into other expenses. Together, labour costs and other expenses accounted for 77.5% of total expenditure.
5. Refers to payments made to businesses or freelancers/contractors for services (e.g. producers, directors, cinematographers, casting, lighting) and rental of facilities and/or equipment with crew.
6. Refers to payments made to other businesses or freelancers/contractors such as animators and CGI specialists, for post, digital and visual effects.

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