Teresa Vena
Europe has many resources that can make it competitively viable for film production on an international level.
After the Second World War, public funding programmes were set up in order to counter the dominance of US films on the market and to revitalise film production in Europe. In 1946, the Centre national du cinéma et de l’image animée, or CNC for short, was founded in France, with other countries following suit in the course of the 1950s, resulting in the emergence of their own film industries. Even today, state funding still plays an essential role. Film has always been regarded as a hybrid product between artistic aspiration and the creation of economic value. From a certain production size onward, a large number of companies and service providers operating outside the actual film sector are involved in the production of a film. Studies analysing the added value of audiovisual production confirm that every euro or franc invested in a film is reinvested into the economy at a ratio of at least 1:1.5. If corresponding incentive models are in place, this figure can rise to 1:3 or even 1:4. Most countries recognise this potential and assign their allocated funds from both cultural and economic promotion.
Financial incentive systems
Keeping domestic productions in the country and attracting foreign ones requires the creation of favourable framework conditions. The granting of financial benefits in the form of tax breaks (“cash rebates” and “tax shelters”) or direct subsidies is widespread. This type of funding for film location support was introduced in most European countries during the 2010s. A certain competitive situation has emerged, with the result that the subsidies can amount to between 20 and 70 % of the production costs incurred in the respective country.
Spain offers the highest percentages under this subsidy model. If you film in the Canary Islands, you can get a return of up to half the costs incurred there. If you opt for the Basque Country as a filming location, you can get up to 70 % back. The more intensively the production engages with the region itself, for example, by involving local talent and experts or using Basque as the film’s language, the higher the grants. In Germany, this method of attracting production to different parts of the country by offering financial support is long-established, with the hope that this will enhance the cultural and economic value of these regions. Filming outside of metropolitan areas also offers various efficiency advantages and inspiration for new material.
Choice of location
Following the introduction of the incentive system described above, the countries recorded an increase in film industry-related tax revenue of 20 to 25 % and registered clear growth in the industry as a whole. In Hungary, for example, where foreign productions can be reimbursed up to 30 % of their costs, the figure was 18 %. Within a very short time, major film and series projects have emerged there. The demand is so high that the country maintains several studios - Origo, Korda and NFI. A similar situation can be observed in Serbia, which has established the Firefly studios, which are among the most modern in Eastern Europe and are booked out more than six months in advance for productions from the USA, the UK and other parts of Europe.
Generally, the choice of location usually depends on the material that is being produced, but such financial incentives can carry a lot of weight. This means that a higher wage level in one’s own country can be offset by relocating the production site. Aside from the fact that many European cities can pass for similar, more prominent ones – for example, Vilnius as a filming location for Paris, Berlin, London or Washington – and European regions can pass for others – such as Puglia for Africa or the Middle East and Malta for Israel or Italy – studio shoots can be handled with complete flexibility.
Strengthening resources
In addition to financial incentives, a film-friendly institutional environment is also needed to counteract the migration of domestic production. Investment in training and further education contribute to ensuring that professionals can keep up and remain competitive. Ideally, providing equal opportunities between genders and social classes, as well as space for innovation and research, promotes a flourishing working environment. In order to build a long-standing successful production landscape, these elements must work together in an overall strategy.
Attracting foreign production can be helpful with this development. If production volume grows, the use of existing infrastructure increases. Since, as a general rule, a local producer must always be involved in a foreign production applying for financial incentives, the system inevitably promotes professional exchange. Thanks to the widespread and proven practice of co-production at European level, knowledge and experience can be exchanged, which benefits all sides. This mobility makes Europe as a whole an attractive location for film production in the long term.
State incentive systems and promotional work by parastatal organisations such as film commissions ensure the visibility of different regions and countries. In the long run, working conditions in many different countries are becoming increasingly similar. As such, the decision in favour of a production location will eventually not only depend on financial incentives but also on other characteristics: for example, expertise in the field of animated film, as is currently the case in France; the introduction of standards for ecologically sustainable production, as in Italy or Germany; or the expansion of virtual production, as in the Netherlands.
Image: SRF/Pascal Mora