Feature Film Production

Screen Australia’s Feature Film Production Program aims to assist the creation of a diverse range of successful Australian films that resonate with audiences. Marketplace attachments are required, but the marketplace by itself is not the only criterion for determining what to invest in.

The program is open to films of any budget range, including low-budget non-Offset projects, ie films with QAPE below the threshold of $1 million, as well as to Offset-eligible projects. Where relevant, applications for large-format projects or theatrical documentaries can be made under this program.

Low-budget feature films: For feature films which could, in the opinion of Screen Australia, reasonably be produced with a total production budget under $1.5 million, Screen Australia may exercise flexibility in the application of these guidelines, particularly where they refer to market components.

Post-production completion funding: Projects seeking post-production funding must apply using the Production Investment application form available on this page and are considered in the same way as applications for production investment. 

Application process and decision-making

Screen Australia prefers that applications under the Feature Film Production Program go through a two-stage process.

Applicants are urged to first apply for a Letter of Interest in order to receive an indication as to whether or not Screen Australia is interested in supporting the project.

Following a successful application for a Letter of Interest, the producer can then secure the project’s financial structure and apply for production investment.

Projects with complete financial structures do have the option of applying directly for production investment without first applying for a Letter of Interest. However, applicants who take this course of action risk spending significant time and resources only to find that the project is not one which finds investment support.

Investment Committee: All feature films applying to Screen Australia for production support – including those seeking Letters of Interest or completion funding – are considered by a committee of Screen Australia executives and industry specialists as required.

External readers’ reports: Screen Australia commissions external consultants to write reports for all feature film projects applying for funding. Applicants will be advised of the name of the consultants used on a regular basis in order to avoid any serious conflicts of interest. However, the name of the script consultant used on particular projects will remain confidential

Application for a Letter of Interest

A Letter of Interest is an indication to the producer and the marketplace that, subject to finalisation of an acceptable creative and financial proposal, Screen Australia is interested in supporting the project. However, it is not a commitment from Screen Australia to invest in the project.

Producers are strongly urged to apply for a Letter of Interest for a project as soon as the required market attachments are in place (see below), and the film’s creative elements are as strong as possible. The Letter of Interest can be an effective tool to help the producer finalise the project’s finance plan in the marketplace.

To be able to apply for a Letter of Interest, the producer must have:

• An acceptable level of proposed Screen Australia investment (see Level of Funding below) and
• The following market attachments:
  An offer to theatrically distribute the project in Australia (including basic commercial terms) from an appropriate domestic distributor;
  or
  An offer to be the Rest of World sales agent for the project (including basic commercial terms) from an appropriate sales agent;
  or
  Firm letters of interest to acquire the rights to the project from both a domestic distributor and Rest of World sales agent, both of which must be appropriate for the project.

The Investment Committee will consider applications against the investment criteria and decide whether to present projects to the Board for further consideration. Screen Australia will advise applicants of whether or not their project will be presented to the Board, providing a brief statement of reasons. If the Committee decides not to put a project forward to the Board it cannot be reconsidered for 12 months from the date of consideration.

The Board will then decide whether to grant projects a Letter of Interest, with the following conditions:

• If an application for a Letter of Interest is rejected, the project cannot be reconsidered for 12 months from the date of consideration;
• If a decision is made to offer a Letter of Interest, that letter remains valid for 12 months.

Application for production investment

To be able to apply for production investment the producer must demonstrate that, subject to the approval of Screen Australia funding, the project has a complete finance plan, which must include (but is not limited to):

• An acceptable offer to theatrically distribute the project in Australia (including basic commercial terms) from an appropriate domestic distributor; and
• An acceptable offer to be the Rest of World sales agent for the project (including basic commercial terms) from an appropriate sales agent; and
• An acceptable level of Screen Australia investment (see Level of Funding below).

The Investment Committee will consider applications against the investment criteria and decide whether or not to present projects to the Board for further consideration.
Where the Committee rejects an application for production investment and the project does not have a Letter of Interest, the project cannot be reconsidered for 12 months from the date of consideration.

If the rejected application is for a project which does have a Letter of Interest, it can be reconsidered by the Committee inside the 12-month period if, in the opinion of Screen Australia management, sufficient improvements to the project have occurred. Otherwise, such projects cannot be reconsidered for 12 months.

The Board will decide whether or not to approve projects presented to them by the Committee for production investment, with the following conditions:

• If a project is approved by the Board, applicants will receive a Letter of Offer detailing the level of Screen Australia’s commitment and the timeframe of the offer (usually six months), as well as any applicable conditions.
• If a project is not approved by the Board, the project can only be re-submitted if and when, in the opinion of Screen Australia management, circumstances have materially changed.

Investment criteria

Screen Australia will take the following into account when considering projects for Letters of Interest, production investment or completion funding:

• The project’s potential to reach its intended audience according to: (i) whether or not there is a clearly identified target audience for the film; (ii) the marketing and distribution strategy for Australia; (iii) the international distribution strategy; and (iv) the cross platform strategy.
• The creative team responsible for the project (producer, director, writer) according to: (i) their track record – past successes, relevant experience and achievements; and (ii) their demonstrated creative, technical and managerial capacity to deliver the project.
• Creative potential for the project according to: (i) the strength and distinctiveness of the idea and its cultural merit; (ii) the quality and readiness of the script; (iii) the creative team’s vision for the film; and (iv) the proposed cast and heads of department.
• The project’s commercial potential according to: (i) the financing and distribution arrangements in Australia and internationally; (ii) the budget in relation to projected returns; and (iii) Screen Australia’s recoupment position.
• The project’s viability according to: (i) the appropriateness of the budget size given the stated goals and vision for the project, the experience of the creative team and the level of marketplace attachments; (ii) the viability of the proposed financing structure and production schedule.
  

Applicants may be interviewed by members of the Committee to assist with consideration of the project.

Other factors, including availability of funds and diversity of slate, may also contribute to Screen Australia’s funding decisions.

Level of funding

Screen Australia will not generally invest more than $3 million in a single feature film, and will not exceed this threshold other than in exceptional circumstances. As of 1 July 2010, the cap will reduce to $2.5 million. Limits also apply to the level of funding as a proportion of the project’s budget; these are set out in Screen Australia’s Terms of Trade.

Budget notes

Screen Australia, in consultation with the completion guarantor, where applicable, will examine a producer's schedule and budget to ensure that the production values in the script can be realised. Screen Australia will require access to the quotes and costings that support the budgeted amounts.

Budgets must be presented in the A-Z Budget format, available to download here.

The cost of production, both above and below the line, should reflect the level of recoupment that the project can reasonably expect to earn.

Fees should comply with industry norms. They will be considered in the context of the budget and track record of the personnel.

Screen Australia reserves the right to look at the whole package, including budget and target audience, in determining whether individual above-the-line fees, including cast fees, are appropriate.

Screen Australia will have approval over any variation in budget items that are exclusions under the completion guarantee (eg, music, cast and all above-the-line items).

The budget should include the following:

• Production company overheads to be calculated as five per cent of the total of the company's total film expenditure on the project, or A$500,000, whichever is the lesser amount.
• Development costs breakdown including any development funds, general development investment (GDI) or producer fellowships from state agencies, Screen Australia or its predecessor agencies, and state agency administration fees (if applicable).
• Publicity during production;
• Foreign currency hedging mechanism to allow for currency fluctuations where applicable;
• The cost of captioning for theatrical release and DVD (Screen Australia requires that feature films it finances be captioned to provide access for the hearing impaired);
• Allowance for Screen Australia and NFSA delivery items;
• Marketing and promotional materials comprising the ‘quarantined marketing budget’ (QMB). This includes (but is not limited to) budgeted amounts for:
• trailer
• poster key art;
• EPK/DVD materials;
• cross-platform elements;
• the cost of a test screening.
• Any other applicable delivery items

If producers have any questions when preparing a budget, they should contact Screen Australia's Sydney or Melbourne offices.