The SA film industry is in good shape and well-equipped to face uncertain times ahead, argues the SA Film Corporation’s Richard Harris.

This is a remarkable moment for the South Australian production industry.

As I write, The Babadook, produced by SA producer Kristian Moliere, is smashing early box office numbers in London, and the team behind Filmlab film One Eyed Girl is returning from Texas, having just won a prestigious award at the Austin Film Festival. These are just two of the successes from what has been an amazing 12 months for South Australian filmmaking talent.

On top of this critical success, production levels are up. Since the Adelaide Studios were completed South Australia has witnessed an unprecedented boom in production, both in television and feature film.

READ MORE: This article is a response to this warning about the future of the industry, published by InDaily on Wednesday.

The Studios’ first year presented some challenges, however, since 2012 the stages have been consistently booked, with very little downtime between productions. Just as importantly bookings from The Babadook through to ANZAC Girls and Deadline Gallipoli and finally the Rolling Stones, have meant that the Studios have well and truly exceeded their revenue expectations. As anyone with passing knowledge of the film industry would acknowledge, this an exceptional result. Production cycles are notoriously lumpy and it is an absolute rarity for stages and production facilities to be so well subscribed for two years in a row.

But the SAFC is not just a studio manager, as its overall objective is to drive and support production in the state. So while the SAFC is keen to see the Studios used as much as possible it is important to remember that – like the roads that lead to the mines – at their core they are simply the infrastructure that underpins the growth and development of the sector.

So the really good news is that the high level of work through the Studios over the past few years has underpinned record production levels in the state. Screen Australia’s drama production report calculated South Australia’s 2012/13 drama expenditure at $50M, the highest number since the federal agency began tracking this in the early 1990s. It is expected that when Screen Australia releases its 2013/14 report that SA will record a strong number once again.

Without doubt, there are uncertain waters ahead, and the SAFC and the local industry that it supports will need to be on its game to navigate them.

This high level of production is reflected in the SAFC’s financial results over the past few years, which have unfortunately been misinterpreted by a number of media commentators. It is important to understand that the SAFC’s annual financial statements can only take account of revenue and costs from that year. What this means is that every time its board decides to use retained earnings to top up its investments, every dollar that it commits contributes to a technical “deficit” in that year. In 2012/13 for example, despite the fact that organisation made an operational surplus, the high level of demand on its investment funds meant that it posted a $2M deficit. This deficit was fully funded from cash held over from previous years, and reflected the high amount of production activity being supported by the SAFC in that year.

In short, rather than being seen – as some have – as a problem for the SAFC, it was in fact merely a sign of the rude good health of the industry and the willingness of the SAFC to support it.

This is not to say that there are not challenges ahead in 2015 and beyond. Attempting to retain the momentum of the past few years will not be easy.

The SAFC is not a producer itself but rather partners with producers both in and outside the state, which means that there are a myriad of forces outside of the SAFC’s control that determine whether projects will actually happen and, if they do, whether they will ultimately be produced and post-produced in the state. A further complicating factor is the balance that the SAFC is constantly seeking between imported production, which provides important critical mass of production activity, while also supporting the development of local talent and businesses.

And there is little doubt that there is trepidation about the waters ahead, with genuine concerns about the funding reductions at Screen Australia as well as the continuing uncertainty about the ABC’s funding levels, just to name a few.

In light of this uncertain future, the SAFC’s strategy to attract and generate this production has continued to be multifaceted, but with an increasing focus on backing local production companies. So in its role as a production attractor, the SAFC has continued to track production opportunities with the aim of bringing production and post-production to the state, and is currently following up a number of active Australian and international leads. However, it has redesigned its guidelines to provide real incentives for co-production with local SA producers, with The Babadook and Wolf Creek 2 providing great examples of what the SAFC is seeking to achieve.

At the same time it has supported both emerging local talent via programs like FilmLab, which it is looking to extend based on its success so far, and to back local screen businesses via its Seed program, which provides multi-year development to production companies with strong track records and well developed business plans. These are all long-term plans and cannot be judged on looking at production activity in a single month.

Backing local companies also means taking advantage of opportunities such as production initiatives such as the joint ABC/SAFC initiative The Factory. While there has been some commentary about the initiative, the SAFC sees The Factory as an unqualified success – it provided a number of local companies with a unique opportunity to step up to make prime-time factual series for the national broadcaster. And the results were impressive, with both Race to London and Croc College playing well to national audiences. The ABC has confirmed its intention to transmit Jillaroo School in the near future.

How the ABC funds initiatives such as this is not a matter for the SAFC, but one for the ABC itself. If the ABC offers another similar initiative for local talent the SAFC will be the first on board. The longer-term focus should not be on attacking initiatives such as this, which can only be good for South Australia, but continuing to pressure the ABC to back regional production in the future, whether it be in-house or independent.

In the words of Derek Zoolander, South Australia is so hot right now.

At the opening of the Ausfilm LA event that I am currently attending with a number of South Australia producers and post-production companies Rising Sun Pictures and Kojo, Screen Australia CEO Graeme Mason lauded South Australia’s recent success and creative talent.

SAFC-supported productions have had films at every major festival for the last year, and won a swag of prizes. We have been pumping out great productions across the board, including ANZAC Girls, which has been the ABC’s biggest ratings winner this year. And companies like Kojo and Rising Sun Pictures have been kicking major goals in the post and visual effects businesses and are preparing for a bumper 2015. These are things to celebrate.

Without doubt, there are uncertain waters ahead, and the SAFC and the local industry that it supports will need to be on its game to navigate them. But South Australia is well-placed to face the challenges. We have always had great locations and great crews.

Now we have a range of both established and emerging talent, a diverse range of production companies, world class post and VFX companies and, of course, state-of-the-art studios that are the envy of the rest of the country.

The South Australian industry can truly face this future with confidence.

Richard Harris is the CEO of the South Australian Film Corporation.