09-02-2010

FNE Visegrad Country Focus: Hungary 2009

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FNE Visegrad Country Focus: Hungary 2009

Hungary has become one of Europe's international coproduction hubs over the past five years since the passage of important legislation that set up a tax rebate system that allows producers to get back up to 25% of the cost of the production.

This year despite the global financial crisis which has battered the Hungarian economy and the Hungarian forint about 30 to 35 international coproductions were shot in Hungary. While the crisis has made funding harder to raise for local producers and feature film budgets have definitely shrunk 25 to 30 Hungarian features are expected to be completed in 2009. These include Benedek Fliegauf's 1.5m Euro The Womb produced by Inforg Studio (http://www.inforgstudio.hu/) and Bela Tarr's Horse of Turin produced by T. T. Filmmuhely (This email address is being protected from spambots. You need JavaScript enabled to view it.) both of which are international coproductions. The Eagle of the Ninth by Kevin Macdonald and The Pillars of the Earth from Sergio Mimica-Gezzan are two of the big budget foreign productions that shot in Hungary in 2009.

The continued success of Hungary's tax rebate system has sparked a film studio building boom with eight new facilities presently under construction in addition to existing facilities at Mafilm, Sterm and Korda Studios. The still state owned Mafilm Studios (http://www.mafilm.hu/) opened a new studio complex near Fot in November replacing the one destroyed earlier by fire with a modern new facility. The new facility was financed by The Hungarian Motion Picture Foundation (MMKA) (http://www.mmka.hu/)

The tax rebate system in Hungary sounds a bit baffling at first but basically a coproducer must have a Hungarian partner who applies for the tax rebate certificate which if approved - and it usually is - results in the producer being able to get between 20 and 25% of the total production budget from a third party partner who writes the corresponding amount off on his taxes. The producer does not have to wait for the production to finish to get the money back. The rebate can even be paid out on a monthly basis while shooting is going on.

Hungarian producers and production services houses such as Fokus Fox Studios (http://www.fokusfox.hu/) have reported that since the passage of the tax rebate law their total turnover has increased by over 60% over pre-tax rebate times.

The financial crisis has also had an impact at the box office with HUF 8 011 774 529 for Q1-3 of 2009 and admissions 7 693 879 compared to HUF 8 739 511 891 and 8 949 872 admissions for October 2007 to November 2008. Admissions have remained steady at around 800 000 a month in 2009 which means admissions will be about the same as 2008 but with a weak forint during most of 2009 distributors who have to fork out Euros for films have lost money.

Hungarian film is as much about culture and national identity as it is about film as an industry. The greatest proof of success for Hungarian films is the number of international prizes at festivals won by Hungarian directors around the world year after year. In 2009 Hungarian auteurs Gyorgy Palfi, Bela Tarr, Benedek Fliegauf bring home to Hungary prizes from international festivals every year.

The central body for funding Hungarian film is the Hungarian Motion Picture Foundation (MMKA) which is presided over by one of Hungary's most distinguished film directors Ferenc Grunwalsky. MMK which is supported by the government as well as various film industry organizations works with film promotion, funding, training and coordination of professional bodies supported the Hungarian film industry with grants totaling around 3bin forints in 2009. While the financial crisis has definitely bitten into public financing the Hungarian film industry has felt it much less than some of its neighbours because of Grunwalsky's success in getting the Ministry of Education and Culture to sign a 3 year contract with MMKA guaranteeing financing in 2007.

Pubcaster MTV doesn't play such a large role as a backer of feature films as in most other European countries but reduced funding from commercial broadcasters as well as cuts at MTV has meant that Hungarian producers have had a tough year in terms of film financing. With political changes probably on the horizon in 2010 the outlook for the future is unsettled.