South African Cultural Observatory

Report Highlights

BY 30.06.22

In this edition we highlight key findings from our recent reports. The reports are: a chapter from the Mapping Study that gives the provincial profile of the cultural and creative industry and the South African’s Animation Industry: Ecosystem Analysis.

In our last edition we published highlights of some of the key findings from our key bi-annual report, the Economic Mapping of the Cultural and Creative Industries in South Africa 2022 or The Mapping Study in short. In this edition of the Cultural Observer, we thought it was important to focus on and provide highlights key findings from the perspective of the provinces. The study estimates the contribution that CCIs make to the economy at a provincial level, including Gross Value Add (GVA) or GDP, employment, and international trade.

The report shows that Gauteng contributes 36.3% to South Africa’s CCI Gross Value Added which is the highest contribution from any province. The other two provinces that are substantial contributors are the Western Cape (17.4%) and KwaZulu-Natal (15.6%). All provinces, including these three, have the potential to increase the production of the CCIs and their contribution to the provincial economy.

The three leading provinces in terms of production of CCIs are also the three provinces that export the most. The Western Cape is responsible for approximately 53% of South Africa’s CCI exports, followed by Gauteng (32.4%) and KwaZulu-Natal (10.9%).  Below are highlights of the CCI’s economic contribution per province.

Eastern Cape

The CCIs’ contribution to the province’s GVA was just under R10 billion (constant 2015 prices) and this represents 3.3% of the province’s total GVA. The Eastern Cape contributes 7.5% to South Africa’s CCI GVA, ranking the province fourth in terms of its contribution to South Africa’s CCIs.

The Eastern Cape has the fourth highest percentage of cultural occupations in South Africa, and the number of cultural occupations grew between 2017 and 2019 despite a decline in provincial growth rate. Visual Arts and Crafts and Intangible Cultural Heritage domains account for 85% of people in cultural occupations in the Eastern Cape.

In international trade in cultural goods, of South Africa’s nine provinces, in 2019 the Eastern Cape had the fourth highest cultural goods exports of R129.9 million which represented 1.4% of South Africa’s total cultural goods exports. In 2020 cultural goods exports for the province dropped to R118.2 million (1.2% of South Africa’s total cultural goods exports). The Eastern Cape’s largest export domain by far is Cultural and Natural Heritage.

Free State

In 2020 the Free State’s GVA was R195.4 billion (constant 2015 prices) and contributed approximately 5% to South Africa’s GVA. The CCIs’ contribution to the province’s GVA was R5,6 billion (constant 2015 prices) and this represents 2.8% of the province’s total GVA. The Free State contributes 4% to South Africa’s CCI GVA, ranking the province seventh in terms of its contribution to South Africa’s CCIs.

The Free State has one of the lowest proportions of cultural occupations in the country, but the sector did show job creation between 2017 and 2019. The largest cultural employment domains are Visual Arts and Crafts and Intangible Cultural Heritage.

Of South Africa’s nine provinces, in 2019 the Free State had the eighth highest cultural goods exports of R40.5 million which represented 0.4% of South Africa’s total cultural goods exports. In 2020 cultural goods exports for the province dropped to R38.6 million, that stood for a share of 0.4% of South Africa’s total cultural goods exports.

Gauteng

In 2020 Gauteng’s GVA was R1 377.4 billion (constant 2015 prices) and contributed approximately 34.8% to South Africa’s GVA. The CCIs’ contribution to the province’s GVA was R60 billion (constant 2015 prices) and this represents 4.5% of the province’s total GVA. Gauteng contributes 47% to South Africa’s CCI GVA, ranking the province first in terms of the size of its contribution to South Africa’s CCI production.

Gauteng has the highest percentage of cultural occupations in South Africa, which increased between 2017 and 2019. While the Visual Arts and Crafts and Intangible Cultural Heritage domains employ the largest percentage of cultural workers in the province, there is also evidence of clusters in Design and Creative Services and Books, Information and Press.

Of South Africa’s nine provinces, in 2019 Gauteng had the second highest cultural goods exports of R3.8 billion which represented 40.9% of South Africa’s total cultural goods exports. In 2020 cultural goods exports for the province dropped to R3.1 billion, making up 32.2% of South Africa’s total cultural goods exports. Gauteng’s largest export domain is the Cultural and Natural Heritage domain.

KwaZulu-Natal

In 2020 KwaZulu-Natal’s GVA was R633.9 billion (constant 2015 prices) and contributed approximately 17.1% to South Africa’s GVA. The CCIs’ contribution to the province’s GVA was R18.9 billion (constant 2015 prices) and this represents 3% of the province’s total GVA. KwaZulu-Natal contributes 14% to South Africa’s CCI GVA and this ranks the province second in terms of its contribution to South Africa’s CCIs.

KwaZulu-Natal has one of the highest percentages of cultural occupations in South Africa, and there is evidence of job creation in the sector between 2017 and 2019. As in other provinces with larger rural areas, the most important employment domains are Visual Arts and Crafts and Intangible Cultural Heritage.

Of South Africa’s nine provinces, in 2019 KwaZulu-Natal had the third highest cultural goods exports of R931.1 million which represented 10.2% of South Africa’s total cultural goods exports. In 2020 cultural goods exports for the province actually rose to R1.1 billion, making up 11.6% of South Africa’s total cultural goods exports.

Limpopo

In 2020 Limpopo’s GVA was R258.4 billion (constant 2015 prices) and contributed approximately 6.4% to South Africa’s GVA. The CCIs’ contribution to the province’s GVA was R6.9 (constant 2015 prices) and this represents 2.7% of the province’s total GVA. Limpopo contributes 5% of South Africa’s CCI GVA, ranking the province fifth in terms of its contribution to South Africa’s CCIs.

Transversal: Education and Training is the largest contributor to Limpopo’s CCI GVA while the largest domains are Audio-visual and Interactive Media (26%) and Design and Creative Services (25%).

Limpopo has the fourth highest percentage of cultural occupations in South Africa, and the number of cultural occupations grew between 2017 and 2019. However, cultural occupations in the province are dominated by Visual Arts and Crafts and Intangible Cultural Heritage domains, and employment is quite precarious with higher levels of freelance and informal work than cultural workers at a national level.

Of South Africa’s nine provinces, in 2019 Limpopo had the fifth highest cultural goods exports of R65.2 million which represented 0.7% of South Africa’s total cultural goods exports. In 2020 cultural goods exports for the province dropped to R62 million (and dropped to sixth position), making up 0.6% of South Africa’s total cultural goods exports. The province’s largest export domain is the Cultural and Natural Heritage domain.

Mpumalanga

In 2020 Mpumalanga’s GVA was R260.9 billion (constant 2015 prices) and contributed approximately 7.4% to South Africa’s GVA. The CCIs’ contribution to the province’s GVA as R6.2 billion (constant 2015 prices) and this represents 2.4% of the province’s total GVA. The province contributes 5% to South Africa’s CCI GVA, ranking the province sixth in terms of its contribution to South Africa’s CCIs. The largest domains are Audio-visual and Interactive Media (28%) and Design and Creative Services (27%).

The province accounts for one of the lower proportions of cultural occupations in the country, and the number of cultural occupations fell between 2017 and 2019. Visual Arts and Crafts and Intangible Cultural Heritage domains account for 85.5% of people in cultural occupations in Mpumalanga.

Of South Africa’s nine provinces, in 2019 Mpumalanga had the sixth highest cultural goods exports of R63.6 million which represented 0.7% of South Africa’s total cultural goods exports. In 2020 cultural goods exports for the province actually rose to R68.3 million (and rose to fifth position), making up 0.7% of South Africa’s total cultural goods exports.

Mpumalanga’s largest CCI good exports domain is Cultural and Natural Heritage, which accounted for more than half of the province’s cultural goods exports (58%).

North West

In 2020 the North West’s GVA was R210.8 billion (constant 2015 prices) and contributed approximately 5.4% to South Africa’s GVA. The CCIs’ contribution to the province’s GVA was R5.3 billion (constant 2015 prices) and this represents 2.5% of the province’s total GVA. The North West contributes 4% to South Africa’s CCI GVA, ranking the province eighth in terms of its contribution to South Africa’s CCIs. The largest domains are Audio-visual and Interactive Media (29%) and Design and Creative Services (27%).

North West has one of the smaller proportions of cultural occupations in the country, and the number of jobs fell between 2017 and 2019. The largest cultural employment domains are Visual Arts and Crafts and (unusually) Design and Creative Services.

Of South Africa’s nine provinces, in 2019 the North West had the seventh highest cultural goods exports of R57.2 million which represented 0.6% of South Africa’s total cultural goods exports. In 2020 cultural goods exports for the province dropped to R55.6 million, making up 0.6% of South Africa’s total cultural goods exports.

The North West province’s largest CCI export is the Cultural and Natural Heritage domain, making up more than 80% of cultural goods export earnings.

Northern Cape

In 2020 the Northern Cape’s GVA was R80.1 billion (constant 2015 prices) and contributed approximately 2.1% to South Africa’s GVA. The CCIs’ contribution to the province’s GVA was R1.9 billion (constant 2015 prices) and this represents 2.4% of the province’s total GVA. The Northern Cape contributes 1.5% to South Africa’s CCI GVA, ranking the province ninth in terms of its contribution to South Africa’s CCIs. The largest domains are Audio-visual and Interactive Media (28%) and Design and Creative Services (26%).

The Northern Cape has the smallest percentage of cultural occupations in South Africa, but the number of cultural occupations grew between 2017 and 2019 despite a decline in provincial growth rate. As found in other fairly rural provinces, Visual Arts and Crafts are one of the largest cultural employment domains, but the Northern Cape also has a surprisingly large percentage of cultural occupations in the Books, Information and Press domain, which warrants further research.

Of South Africa’s nine provinces, in 2019 the Northern Cape had the ninth highest cultural goods exports of R2.7 million which represented 0.03% of South Africa’s total cultural goods exports. In 2020 cultural goods exports for the province dropped to R1.9 million, making up 0.2% of South Africa’s total cultural goods exports. The Northern Cape’s largest export domain is the Cultural and Natural Heritage domain.

Western Cape

In 2020 the Western Cape’s GVA was R563 billion (constant 2015 prices) and contributed approximately 14% to South Africa’s GVA. The CCIs’ contribution to the province’s GVA was R16.5 billion (constant 2015 prices) and this represents 2.9% of the province’s total GVA.

The Western Cape contributes 12% to South Africa’s CCI GVA, ranking the province third in terms of its contribution to South Africa’s CCIs.

The largest domains are Design and Creative Services (32%).and Audio-visual and Interactive Media (19%).

The Western Cape has one of the highest percentages of cultural occupations in South Africa, although there was some evidence of decline between 2017 and 2019. There is also evidence of clusters in particular domains, such as Design and Creative Services and Audio-visual and Interactive Media.

Of South Africa’s nine provinces, in 2019 the Western Cape was the top cultural goods exports of R4.1 billion which represented of 45% of South Africa’s total cultural goods exports. In 2020 cultural goods exports for the province rose to R5.1 billion, making up 52.7% of South Africa’s total cultural goods exports. The Western Cape’s largest cultural goods export domain is Cultural and Natural Heritage.

The second study we highlight is the South African’s Animation Industry: Ecosystem Analysis.  The key objective of the study was to produce a visual map delineating the structure and relationships and value chains that characterise the South African animation sector, with an emphasis placed on tracing what is most relevant to the production of films and series. 

The world is said to be in a grip of an “animation boom” largely as a result of an increase in the consumption of digital content in the wake of lockdowns caused by the covid-19 pandemic. The South African animation sector has not been able to exploit this situation.

The sector is small and is struggling to break into longer-form original content creation. The report identified 69 animation studios in South Africa, the majority of which were established after 2010. Only a small percentage of the studios are producing animated films and series. These studios tend to be the larger ones with the highest profiles, evincing the industry to be one that conforms to the ‘winner takes all’ model. The production of animated films and series is dominated by three major players; Triggerfish, Mind’s Eye Creative and Sunrise Productions. 

Sixty one percent (61%) of companies claimed to be involved in the production of animated films and series, yet only 29% of studios have produced animated films or series in the last decade. Since 2010, 44 original animated products were released, 59% of these were series and 41% were films. Most of the animation products that are being made are aimed at TV or online streaming audiences. 

The majority of animation companies focus on client-based work for commercials and marketing purposes. Difficulties involved in securing funding or partnerships to realise original animated content has seen most studios offer a wide range of services to generate an income. Just over 30% of the animation companies state that they offer ‘visualisation’ services, which often pertains to explainer videos and other educational filmic products. Only 16% of companies produce animation for or are involved in the gaming industry. 

An assessment of the state and depth of available public funding for the South African animation industry (both government and non-profit) revealed that there is limited funding available for the sector. This has severely constrained the growth of its ecosystem. Local studios can’t compete with those in other countries that are subsidised by their governments. About 58% of the funding made available to South Africa’s animation industry comes from private sector and self-funding by animation studios while the government and the public sector account for 28% of the total funding. 

Changes made by the DTI in 2018 to incentives aimed at the film industry at large have made eligibility criteria difficult to meet and are exclusionary on racial and citizenship grounds. Unpaid tax rebates by the DTI to companies that do qualify are sometimes not received or unexpectedly withdrawn. 

While BBBEE ratings appear (for the film industry at large) to be at 51%, it appears from anecdotal observations that the animation industry remains dominated by white males in terms of ownership. Government policies aimed to address racial transformation of the industry have impeded its growth and have further forced some market leaders to base some of their operations outside the country. 

Custom conditions tailored to the film and animation industry need to be made to the Basic Conditions Employment Act that take into account that working hours, conditions and other work-related conventions in this industry are particular to it. 

There is a shortage of highly experienced animators in South Africa – and elsewhere in the world. Some South African owned animation studios outsource production to studios in other parts of the world due to this shortage of talent, but it also proves to be cheaper. The recurring sentiment from more established professionals in the animation industry is that the graduates entering it are woefully unprepared. This is largely attributed to the fact that education and syllabus offered by Animation schools and departments is not in sync with the current working practices and technologies. Education professionals argue that poor visual and computer literacy at school level puts most of their students at a disadvantage and has shaped syllabus to compensate for this and limits the level they should be reaching after a three year course. Most institutions that offer Animation studies offer three-year degrees or diplomas in Animation. The average cost of an NQF 6 three-year qualification in Animation is R69 000 per year. 

The majority of animation companies and educational institutions offering a qualification and training in animation are located in Gauteng (38 companies and 11 education institutions) and the Western Cape (30 companies and 6 education institutions) where they have formed clusters. 

South Africa’s public broadcaster (SABC) has not been actively commissioning animation products nor has it been on their list of priorities. Nor have private satellite television companies such as Multichoice, which already have agreements with other international distributors of animation such as the Cartoon Network. 

Disruptions to the value chain have been made by online streaming platforms as they are commissioning directly from animation studios, cutting out the middlemen that included distributors. There are financial benefits for all parties in doing so, however, this means that animation studios cannot appeal to a third-party to market their ideas or products. TikTok and YouTube have provided animators with new tools to market their ideas, brands, characters, build audiences and self-publish original content. However, revenue for doing so is not sufficient for these tools to disrupt the status quo. 

Most animation studios were not as badly impacted by Covid-19 as live-action film ones were, as they were able to continue working from home. Remote working combined with trends in short-term contracts may have increased the number of freelancers servicing studios. As they tend to be independent, it is impossible to quantify this group or where they might cluster. 

The decreasing value of the rand has made outsourcing animation production in South Africa attractive to foreign companies and partners. Conversely, being able to earn foreign currencies by working remotely for studios based outside South Africa is attractive to a pool of highly specialized freelance animators, contributing towards a shrinking group of suitably qualified animators to service local studios.

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