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The price of protection - New Zealand classification fees now and in the future

Posted on 23 February 2016 by Henry

New Zealand's classification system is a public service that most New Zealanders rely on all or some of the time. Our recent research found that 81% of New Zealanders would always, or almost always, be guided by classification labels when making viewing and gaming choices for young people [1].

The purpose of the system is to prevent the likely harm to New Zealanders that would result from the unrestricted availability of films, games and other publications, while also providing guidance about the suitability of content. Like any public service, New Zealand's system for rating, classifying, and labelling movies, games and other publications doesn't come free. The cost to the public is small however - it amounts to less than 50c per person per year. [2]

This blog post covers:

Classification costs for distributors

Commercial distributors of entertainment content are required to pay a fee for a film or game to be rated or classified before being supplied to the New Zealand public, however these costs are considerably lower overall than for comparable jurisdictions such as Australia and the UK (see table below).

This is because New Zealand employs a novel approach whereby unrestricted-level content (films and other content likely to be classified G, PG or M) is rated by an industry-run organisation called the Film and Video Labelling Body (FVLB). The FVLB sets fees necessary to carry out its functions and reviews these regularly.

The fee for rating a film is small by international standards ($480+GST for examination in a cinema and $160+GST for examination in other formats, up to a running time of two hours), However the most significant cost-saver is that films classified G, PG or M in Australia (or U, PG or 12/12A in the UK) can be 'cross-rated' for just $125+GST for cinema, $20+GST for DVD/Blu-ray or $15+GST for online films (in addition, individual classification labels cost 6 cents+GST each). Altogether, cross-rating accounts for about 85% of the market.

Image of Australian, UK and NZ unrestricted labels
Movies and TV shows assigned unrestricted classifications in the UK and Australia are 'cross-rated' in New Zealand for a small fee

Costs are higher for restricted-level films because they require examination by the Office of Film and Literature Classification. Unlike the FVLB, the Classification Office fees are set by regulation (and fees for classifying films and games have remained the same since 1996, aside from GST increases). The base fee for having a film classified is $977.80+GST,

However, we can waive up to 75% of this fee in cases where distribution is small-scale and the full fee would be 'unduly burdensome'. We can also group a collection of films together for fees purposes (this is usually done for short films). Fee waivers are often granted to film festivals (a portion of the waived fee may be required if the film subsequently gets a wider release).

Table: Comparison of classification costs

Australian dollars and UK pounds sterling are translated to their New Zealand dollar equivalents as at 5 February 2016. All amounts in NZD are rounded to the nearest dollar. (Amounts exclusive of GST or VAT.)

Country Standard fee for classification label - DVD/Blu-ray disc
New Zealand
  • NZD $20 for cross-rating, regardless of running time.
  • Base fee of NZD $160 for FVLB rating which increases according to running time. The fee for a 3½ hour DVD would be NZD $280.
  • NZD $978 for examination by the Classification Office, regardless of running time.*
Australia The base fee is AUD $550 (NZD $589) which increases according to running time. The fee for a 3½ hour DVD would be AUD $1090 (NZD $1168).
United Kingdom Submission fee of GBP £76 (NZD $165) plus GBP 6.08 (NZD $13) per minute of running time. The fee for a 3½ hour DVD would be GBP £1352.80 (NZD $2935).

* Only a small proportion of titles require examination by the Classification Office. Most titles are unrestricted and can be rated or cross-rated by the FVLB.

How should a classification fee structure work in future?

Overall, compliance with classification requirements in New Zealand is considerably less costly than in Australia and the UK, and is not a significant burden on major distributors. The combined yearly revenue from cinematic releases, DVD/Blu-r ay, video games and online video on demand services in New Zealand is approximately $600 million dollars [3]. By comparison, the combined cost to distributors of having films and restricted-level games rated or classified in New Zealand for 2014/15 was approximately two million dollars, or less than half of one percent of overall industry revenues.

However the Classification Office believes the fees system needs to be modernised for the following reasons:

  • Its one-size-fits-all nature - whereby the base fee for a small, independent film is the same as for a Hollywood blockbuster - is unfair and is a potential limiting factor on New Zealanders' access to the widest possible range of entertainment content.
  • The 'piggy-backing' problem - the initial submitter of a film is generally liable for the full fee, while subsequent distributors can then use the classification for a much smaller fee (regardless of the scale of distribution).

A future fees system would ideally link the fees charged for classification services to the commercial value of a film or game. This would require distributors with wider audiences to contribute their fair share to the upkeep of a system that provides trusted guidance and protection to their New Zealand customers, while ensuring a lighter burden on smaller distributors in order to facilitate New Zealanders' rights to freedom of expression - including the right to view and play the widest variety of entertainment content.

The Government is currently undertaking a wide-ranging review of how media entertainment is regulated in New Zealand, which is outlined in the discussion paper Content Regulation in a Converged World (published 25 August, 2015). This document - and our responding submission - is available on our website:

Blog post: Submission on the Government discussion paper Content Regulation in a Converged World

Let us know what you think

We'd love to hear what you think about this research. If you have any feedback you can find us on Facebook and Twitter, or contact us by phone on 0508 236 767, or by email at info@classificationoffice.govt.nz.

Henry works in the Information Unit at the NZ Office of Film and Literature Classification. His views do not represent those of the Chief Censor or of the Classification Office. The Information Unit provides information to other staff, to the public, and to industry members - they are not involved in assigning classifications. Keep up with our blog posts by following us on Facebook and Twitter.

Footnotes

  1. Research: Attitudes towards classification labels - 2015.
  2. Public funding for the Classification Office is $1,960,000 p/a. Statistics New Zealand population estimate as at 30 June 2015 is 4,600,000 = 43 cents per person per year.
  3. The revenue from cinematic and DVD/Blu-ray releases in New Zealand for 2014 was over $183 million and The Interactive Games and Entertainment Association (IGEA) reported revenue of $346,000,000 for the same year. This gives a combined revenue for motion picture and games distribution of over $530 million. Regarding online video on demand services, an estimate based on survey data from Chorus (September 2015) suggests revenue of around $50 million in New Zealand.

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