The Czech Republic has seen big budget foreign productions mostly dry up in 2009 following a long decline. In 2003, Hollywood and European filmmakers spent more than 5 bilion crowns in the Czech Republic. In 2008, the amount of the foreign investments dropped to only CZK 700 million as Hollywood production move to Hungary, Romania, Bulgaria, and even the Ukraine driven away by the Czech Republic's lack of tax incentives.
In numerous European countries and American states, Hollywood filmmakers can expect a rebate of up to 20% of every euro spent in that territory.
"We love the Czech Republic for its exteriors and its filmmakers. But the problem of tax incentives becomes more and more important for every big Hollywood production, including Narnia," Mark Johnson, executive producer of The Chronicles of Narnia: Prince Caspian, said to FNE last year. Walt Disney´s $200 million smash hit by director Andrew Adamson, shot and produced in New Zealand, Slovenia, and the Czech Republic in 2007-2008, was one of the last big budget Hollywood productions shot in Czech Republic. The third part of the Narnia series is not coming back to Czech Republic.
In late October, the Czech approved a proposal for a tax incentive system in 2010, with a rebate of up to 20% of the amount spent in the country. The Czech Ministry of Culture (ww.mkcr.cz) has budgeted 400 million CZK for rebates in 2010 which is awaiting final approval and could go into effect as soon as January 2010.
Domestic films, particularly comedies, continued to outperform Hollywood at the box office in 2009.
FNE Visegrad Country Focus: Czech Republic 2009
As 2009 draws to a close the Czech film industry is poised for a "make or break" new film law that if approved would set up a government backed plan to lure foreign productions back into the country with a 20% refund of their expenses.
Czech Prime Minister Jan Fischer has already approved the plan but the budget has to be passed by the Czech parliament at the beginning of December for the rebate scheme to go into effect.
In the 1990's foreign productions shooting in the country pumped millions into Czech studios and production services companies but between 2003 and 2008 the industry shrunk by 50% in terms of revenues and over 80% in the numbers of productions coming into the country. And 2009 looks set to be even worse as big productions shop for tax rebates in neighbouring countries such as Hungary. Under the new law production companies shooting in the Czech Republic could apply for a rebate of up to 400 m CZK starting in January. Many Czech industry professionals believe that without these new measures the industry in the Czech Republic is finished, at least from the point of view of big international productions and coproductions.
Czech funding for local production has been on a rise since 2007 when Czech filmmakers secured an additional 6m Euro a year from the Ministry of Culture for funding Czech film through 2011 from a windfall from digital TV licenses. This is in additional to 222m CZK (about 9m Euros) in subsidies from the Czech ministry of culture in 2009.
A record 38 Czech films were released in 2008 and 2009 looks like 35 to 40 local features will be completed if feature length docs are included. While local production budgets averaged 1.2m Euros local productions remained strong at the local box office especially comedies.
Czech films took three of the top four spots at the national box office in the first half of 2009. The box office was dominated by You Kiss Like God, directed by Marie Poledňáková and produced by Falcon, a.s. (http://www.falcon.cz/) which earned CZK 86.6 million (3.4 million Euro) with 852,000 admissions, nearly three times as much as the second place film, Angels and Demons (US). Third place was held by the fairy tale Hell With the Princess, directed by Miloslav Šmídmajer and produced by Bio Illusion (http://www.bioillusion.com/) which earned CZK 19.7 million with 247,000 admissions. In fourth place was Thawing Out, directed by Viktor Tauš and produced by Pragofilm a.s. (http://www.pragofilm.cz/) with the participation of NOVA, SPI International, UPP with 243,000 admissions and 23.3 million in box office. Czech films claimed 32% of all admissions in the first six months of 2009.
FNE VISEGRAD FORUM: Czech film production and releases
Domestic films, particularly comedies, continued to outperform Hollywood at the box office in 2009.
On average 20-25 Czech full length feature films are released in Czech cinemas, most are supported by grants from the Czech Ministry of Culture´s State fund for support and development of cinematography. In 2009 support for film production and distribution was CZK 222.6 m about the same as in 2008.
FNE Visegrad Focus: Foreign productions in the Czech Republic
The Czech Republic has seen big budget foreign productions mostly dry up in 2009 following a long decline. In 2003, Hollywood and European filmmakers spent more than 5 bilion crowns in the Czech Republic. In 2008, the amount of the foreign investments dropped to only CZK 700 million as Hollywood production move to Hungary, Romania, Bulgaria, and even the Ukraine driven away by the Czech Republic's lack of tax incentives.
FNE VISEGRAD FORUM: Czechs host Institute of Documentary Film
For the past nine year, Prague's Institute of Documentary Film has been reaching out to CEE documentary directors and producers, promoting and enabling the rise of documentary films from across the region.
FNE Visegrad Country Focus: Slovakia 2009
Slovakia made a giant step forward in 2009 with the adoption of the Euro as its national currency and long awaited audiovisual legislation that established a new Audiovisual Fund. The results are already apparent even though the new Fund headed by Martin Smatlak will only start giving grants in 2010.
The small country is already overtaking its larger Czech neighbour in terms of international coproductions and film funding infrastructure. The adoption of the Euro and the insurance it brings against currency losses when raising financing in Euros has already caused several film companies such as Poland's Apple Film (http://www.applefilm.pl/) to consider opening daughter companies in Bratislava.
Under the new legislation funding for the audiovisual industry is expected to almost double compared to previous years under the Ministry of Culture with around 240 m SK in 2010. The budget for film funding in 2009 was approximately 112m SK.
The renaissance of Slovak film was already underway in 2009 with 12 coproductions with Slovak participation produced including this year's box office hit Janosik. A True Story, directed by Agnieszka Holland and produced by Apple Film (http://www.applefilm.pl/) as the best example of Polish-Slovak-Czech-Hungarian co production. There were 15 Slovak feature films produced in 2009 including 4 feature length docs.
The Slovak box office also experienced a very good year. During the first seven months there were 2.35 million admissions compared with 1.75 million for the same period in 2008, a 34% increase, according to the Slovak Union of Distributors (http://www.ufd.sk/). Soul at Peace directed by Vladimir Balko and produced by Forza Production House (www.forza.sk), which premiered in January and had 115,000 admissions.
For detailed information about the new Slovak audiovisual law and an exclusive interview with Natasa Slavikova, Director General of the Audiovisual Department of the Slovak Ministry of Culture ..... Read more
FNE VISEGRAD FORUM: Coproductions in Slovakia
Slovakia's filmmakers have participated in an impressive 12 coproductions in 2009 -- four of them with a Slovak majority share. The number could rise to 13 before the end of the year.
{mosimage} "The film industry system does not yet have a tax rebate system that might attract more foreign productions and coproductions," said Alexandra Strelková, the director of the National Cinematographic Centre (www.sfu.sk), "we are still in the process of establishing the industry here in terms of services and other infrastructure."
It also lacks a well equipped local film studio since the privatization of Koliba Studios (www.kolibaproduction.sk/) which is now occupied by commercial broadcaster JOJ television (www.joj.sk/).
The rising trend toward Slovak majority shares in the films, is due to stronger financial support for Slovak audio-visual projects in the recent years.
{mosimage} Most Slovak coproductions are coproduced with the Czech Republic. Coproductions within V4 (the Visegrad Four countries: Poland, Czech Republic, Slovakia, and Hungary) are increasing Janosik. A True Story, directed by Agnieszka Holland and produced by Apple Film (http://www.applefilm.pl/) the box office hit of this year in Slovakia is the best example of Polish-Slovak-Czech-Hungarian co production.
Strelková said: "It is necessary for Slovak producers to join together, to organize and lobby in order to achieve tax rebates, just as it works in Hungary."
FNE VISEGRAD FORUM: Slovakia transitions from Audiovisual program to Audiovisual Fund
In 2009 the Slovak film industry saw one of its most relevant transitions: the creation of an independent audiovisual funding body.
FNE VISEGRAD FORUM: Slovak film and the global financial crisis
While commercial Slovak television, led by CME's Markiza TV, has seen a dramatic downturn in advertising revenues due to the global economic crisis, the Slovak film industry has so far been unaffected.
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.
FNE: What was the most important development in your country's film industry over the past year?
Ferenc Grunwalsky: The most remarkable day is just coming now, this Thursday. In July 2007 at the Fót Stúdió the Huszárik room burned down, and 1000 m2 of sets were completely destroyed. We were able to reconstruct it, so it's modern, brand new. The Motion Picture Public foundation of Hungary (MMKA) managed to pay all of the construction costs from its own resources, without any external sources or suppport, which is a huge accomplishment in these financially difficult times.
FNE How important are European coproductions for the development of Hungary's film industry and what opportunities do you see for cooperation with neighbouring countries in film production, education and distribution?
F. G.: Coproductions are increasingly important. When the MMKA was first established, we had to fund 100% of the films' costs. Today we give only 33-40% of the total amount, the rest comes from coproductions and resources of the investors. The young generations' mentality has adjusted to the new situation; for them it's getting more and more natural to plan their films as coproductions, in cooperation with others. This process is also supported by the EU. Actually we have the same level of cooperation and coproduction from Eastern and Western Europe. I don't see big differences.
FNE: What is the role of film in Hungary's cultural identity?
F. G.: The Hungarian film industry is a stabile, reliable institution, acknowledged abroad, which is not natural at all in this country, if compared to the state of other arts institutions. Our films are presented at every major and important festival, and we introduce young filmmakers to the world every year, which is so much better than if we had just one big hit from time to time. This reliability counts for a lot.
FNE: How does the recognition of Hungary's film internationally promote not only your country's film but also Hungary as a country?
F. G.: Continuity is precious. We have a permanently high standard of filmmaking, and we always have new initiatives - the world has to pay attention. Hungarian film has important traditions and its own particular style, which comes from our history, our mentality, the high culture of Hungary.
FNE: Looking back over the past five years what are the major achievements and what do you consider still needs to be done?
F. G.: We have to continue our way. The direction is good: talented generations appear at festivals, the average level is high. Only one really big thing is missing. We have to increase cooperation and coproductions, we need more international stars, and fruitful connections. The film industry has to be able to be completely independent. I appreciate that the four year agreement we made two years ago, which fixed the state sources for the film industry until 2010, and it can't be changed. Other important negotiations were made with EU: finally the commission accepted the Hungarian motion picture law, and the finance and rebate system. We had to adjust the system to their requirements, but finally we reached an agreement in 2008, so it's also fixed until 2013.
Despite the economic crisis, 2009 was a strong year for Polish film production. with 48 features completed.
While down from the 60 produced in 2008, this year's productions included big international projects and several internationally acclaimed titles. An additional 22 films are in the post production.
FNE VISEGRAD FORUM: Coproductions in Poland
Despite a lack of tax rebates, Poland is becoming more open to coproductions, usually with one or two partner countries.
Polish producers usually apply for national grants provided by the Polish Film Institute, (http://www.pisf.pl/) with coproductions receiving the same level of support as domestic films.
While the global financial crisis is affecting film production, 2009 is shaping up to be a record year for Polish distribution, with over 31.5 m admissions to date.
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