Pressure on Cape Town’s film industry is rising beyond the threats by the mercurial US President Donald Trump to impose tariffs on films produced outside America.
Artificial intelligence is giving creators the ability to synthesise landscapes that would otherwise require productions to be on location, leading to a decrease in the number of productions opting for location shoots, and consequently the number of shoots taking place in South Africa.
“Some of the feedback I have had from clients in terms of what is happening in the industry is that big clients that they have had in the past – like Audi – have gone fully AI,” said Julia Finnis-Bedford, founder and MD of Amazing Spaces, a Cape Town-based property agent focused on the film industry.
Large films and TV series are not the only forms of content production that South Africa benefits from. Ad campaigns meant to cater to various markets around the world are also shot in Cape Town. Finnis-Bedford said one of the city’s key advantages is that it offers a variety of locations that can simulate different environments and which are within easy reach of each other.
Examples of companies that have embraced AI in their advertising include Coca-Cola and Virgin Voyages. Virgin Voyages’ 2023 Jen AI campaign, featuring Jennifer Lopez, was made fully using generative AI tools. The Jen AI campaign was a sensation for Virgin, boosting social media interactions and driving cruise sales, too. However, according to Finnis-Bedford, not all AI-generated campaigns are well-received by consumers.
Less business
“Customers don’t want to see generative AI when it comes to certain brands, but the reality is it’s affecting what people are spending in this country and there is a lot less business coming in,” said Finnis-Bedford.
The film industry is a big revenue generator for Cape Town, and by extension, South Africa. Productions stimulate downstream economic activity through hotel bookings, equipment hire, set rentals and hiring local skills in the production process.
Read: Beyond Trump tariffs: the real threat to Cape Town’s film industry
Finnis-Bedford said the skills side of production is one where South Africa can capitalise on its competitiveness. She said the skills offered by the local market to international production houses is world-class and affordable. Since future productions will likely use a mix of on-location and AI-generated content, having those skills available locally will continue to make South Africa an attractive option, she said.
Although the impact of generative AI is already felt in the industry, the threat of tariffs by the US on films made on foreign soil continues to loom large. US President Trump in September threatened a 100% rate that could effectively double the cost for US productions filmed overseas.
Finnis-Bedford said these threats show the need for clearer government policy to support the sector as well as more competitive subsidies. Responding to a query from TechCentral regarding the tariffs, Triggerfish Animation CEO Stuart Forrest said how they are implemented will determine their impact.
“It’s a bit soon to be commenting as there is no official plan yet on which to comment, and there are a lot of questions about how the tariff would be implemented. Films are considered a service industry, not goods, so it’s unclear how the tariff would be applied since there isn’t a port of entry, which is traditionally where tariffs on goods are collected,” Forrest said.
In earlier US proposals on placing tariffs on foreign-made films, the suggestion was that only the portion of the film that was subsidised by a foreign tax incentive would be subject to the 100% charge – essentially reversing the benefit of shooting abroad because of foreign government subsidies.
Read: Lights, camera, tariffs: Trump declares war on foreign flicks
If it turns out that this is the case, it could level the playing field for South Africa, as the country competes well on price but struggles to compete globally on subsidies. “If this is the case, South Africa would become more competitive globally,” said Forrest. – © 2025 NewsCentral Media
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