South Africa has a young, vibrant film and television industry. The industry is defined by original stories that explore the different nuances in each of the country’s cultural groups. While facing a sharp decline in economic impact during the COVID-19 pandemic, it is recovering with forecasts suggesting R5,2 billion in revenue for 2026, driven by international investment in local production.
The presence of local content producer Multichoice and international studios such as Netflix has injected much-needed financial and cultural capital into the local industry. However, there is still a need for more local production companies to help create more localised content, generate higher revenues and create jobs for film students.
In this article, we look at what a production company is, what it takes to open one and where to find funding for your production company.
What is a Production Company?
A production company is a business that produces content; sometimes in a variety of media, including film, television, music, video games, etc. However, the term is most often used to refer to film production companies.
What Do Production Companies Do?
Production companies perform and facilitate the task of producing content. The companies work on the entire content production process from pre- to post-production. Production companies also:
- Develop scripts with in-house and external writer(s)
- Secure intellectual property
- Perform market research
- Pitch to distributors
- Facilitate casting
- Contract hair and makeup, costuming and production design
- Buy or rent camera equipment
- Licence music/contract composers
- Manage editing/mixing of content
Types of Production Companies
There are several types of production companies, all of which serve different purposes. This is what each type of production company is and what it does.
1. Film Production Company
This type of production company makes the film and hires the on-screen and off-screen talent. This includes writers, musicians, location scouts, a team for pre-production, post-production, legal and a whole lot more.
2. TV Production Company
Much like film production companies, TV production businesses also deal with the same aspects, but with the additional pressure of working with a broadcaster, too. Also, these companies have to hit a specific timeframe for the end duration of their programmes, usually under half an hour or an hour for non-commercial channels such as news channels.
3. Commercial Production Companies
A commercial production company is usually equipped to produce a wide variety of videos, typically from lower-end work like screengrab videos to fully developed TV advertisements. Additionally, these companies also make explainers, brand films, awareness videos, training videos, and even creative projects like music videos and short films.
4. Post Production Companies
Post production involves editing, special effects, colour correction, sound mixing and music composition. Typically, in post-production companies, the talent is separated into different rooms and pieces together raw footage to create new content.
5. Animation Production Companies
Animation production companies use computer-rendered animation, however, stop motion animation and even hand-drawn styles are still used. An example of an animation production company is Pixar.
6. Niche Production Companies
A niche production company usually does one type of content. Typically, this can be sector-specific or a particular style of filmmaking. An example is ‘tabletop’ production companies that specialise in shooting footage of food being prepared through the use of special micro cameras.
Starting Your Own Production Company
Starting a production company in South Africa has many compliance requirements. Here are the steps to help you develop your own.
Step 1: Legal Requirements
If you want to open a production company, these are the key legal requirements:
- Company registration: Register your company with the Companies and Intellectual Property Commission (CIPC). Register as a private company (Pty) Ltd and submit a Notice of Incorporation and a Memorandum of Incorporation (MOI).
- Tax registration: You will need to register for income tax as a legal entity.
- Banking: As a registered business, you will need a business bank account.
- Intellectual Property Protection: Register your company name and protect your film/content copyrights.
- Register with the FPB: The Film and Publication Board (FPB) is a government entity that regulates the production, creation, possession, broadcast and distribution of films.
Remember, even production companies are governed by strict laws and regulations. The Companies Act governs the registration, management, and corporate governance of production companies. The Film and Publications Act mandates classification of content and regulates distribution through the Film and Publications Board (FPB), including online content. Lastly, the Copyright Act governs intellectual property rights in cinematograph films.
Step 2: Type of Production Company
Once you have fulfilled all your legal obligations, you will need to outline what type of production company you have. As outlined above, the different types of production companies all have different specialities. Pick the one that suits you best and develop a robust business model.
Step 3: Access Funding
Production companies in South Africa can access funding from government, statutory bodies, and incentives designed for film/TV development, production, and marketing. Here are some of the funding opportunities available for production companies:
South African Film and Television Production Incentive
The objectives of the incentive are to support the local film and television industry to enable it to contribute towards employment creation, local procurement, and enhance the international profile of the South African film and television industry while increasing the country’s creative and technical skills base.
Eligibility Requirements
- Productions must have a minimum Qualifying South African Production Expenditure (QSAPE) of R1,5 million for all qualifying production formats and a minimum of R500 000 for documentaries
- At least sixty percent (60%) of the principal photography must be filmed in South Africa
- At least fourteen (14) calendar days of the principal photography must be filmed in South Africa
- For productions with a minimum QSAPE of R50 million, the sixty percent (60%) and fourteen (14) calendar days’ requirements may be waived, and such discretion will consider the budgetary implications of the decision made
- The QSAPE must account for at least seventy-five percent (75%) of the total production budget (TPE)
- The majority of intellectual property must be owned by a South African citizen(s) and the copyright must be registered with the CIPC
- The Director must be a South African citizen and be credited for this active role in the production
- The top writer and producer credits must include South African citizens either exclusive or shared collaboration credits
- The majority of the five (5) highest-paid performers must be South African citizens
- The majority of heads of departments and key personnel must be South African citizens, with at least twenty percent (20%) of the Head of Departments (HODs) on core production functions being Black South African citizens
- The production company must achieve at least a level three (3) B-BBEE contributor status in terms of the B-BBEE Codes of Good Practice
- The SPCV must achieve at least a level four (4) B-BBEE contributor status in terms of the B-BBEE Codes of Good Practice
The National Film and Video Foundation (NFVF)
The NFVF is a South African statutory body and agency of the Department of Sport, Arts and Culture, tasked with spearheading the equitable growth, development, and promotion of the local film and video industry. The organisation provides funding for:
- Feature films
- Short films
- Documentaries
- Made for TV movies
- Web series
- TV pilots
You can apply for funding on the NFVF website.
Industrial Development Corporation (IDC)
IDC’s offering for Youth in Film helps talented young South African filmmakers. The programme aims to support those who seek to do the following:
- Production, post-production, and broadcast studios
- The creation and acquisition of platforms across TV, radio, and digital media
- The development of new or alternative distribution systems for content
- The funding of gaming and interactive media
- Projects or initiatives that support the more significant media industry along the value chain, such as equipment rental
Qualifying Criteria
- Available to South Africans and permanent residents up to and inclusive of the age of 35 years at the time of final approval
- Youth shareholding should be at least 26%
- Youth operational involvement in the business
- Applicant can be a start-up or an expansion within South Africa
- Cost per job of up to R800 000 for the duration of funding — calculated using total project cost
- Applicant to meet the BBBEE requirements of the IDC — level 4 or have a plan to achieve this within 24 months
- Own contribution will be determined by the financial capacity of the entrepreneur and the cash flow profile of the business
National Empowerment Fund (NEF)
The NEF’s Film and TV Fund was established to support black-owned South African film production firms to promote the growth of the local film sector by providing affordable loans to producers determined to display their work across the small and silver screens. Funding is in the form of a cashflow facility and starts from R250 000 to R50 million.
Qualifying Criteria
Applications for funding are assessed in accordance with the following criteria:
- Minimum 51% black ownership
- Must be registered for tax, be in good standing with SARS and have a valid tax clearance certificate
- The Department of Trade, Industry and Competition (DTIC) grant must be secured
- To spread the risk, the NEF typically co-funds with other financiers, including DFIs and commercial lenders
- A letter of intent from a completion guarantor must be supplied
- Revenue projections must be supported by independent sales estimates
- The applicant will be required to contribute towards the production costs, and this can be through the deferral of his/her producer/director fees
