16/03/2005

What are the recent developments in the film industry? According to several film producers, it is quite difficult to be optimistic. In Europe, obstacles and difficulties seem to be more prominent. A number of things have happened in recent years. On the market itself, there has been considerable change. Several big companies – the “European majors” – disappeared, and very few genuine European majors were left. The Polygram company disappeared, Kinowelt went bankrupt, Kirch Group collapsed and Canal Plus, a touchstone for the French industry, faced enormous difficulties, changed structures, and ended up very weakened. Gaumont, another French major, is branching off and diminishing in size. There have also been major changes concerning television. As the result of several mergers involving pay-TV companies, recession in advertising, and the large preference for reality shows which make fiction comparatively very expensive, television is much less involved in financing feature films.

The pre-sales market has largely collapsed. Independent films (low-budget films, films by an unknown director, or without a particularly high-profile cast) have become very difficult to pre-sell. The regulation that states that TV-channels must spend money on fiction is being enforced less and less.

This context makes public funds even more important, although they are also changing, especially in Northern countries. There, public funding tends to connect films to the market more closely than any subsidy has ever done in the past. Now, public funding structures select projects according to their potential appeal to the market. The UK Film Council asks producers to estimate what a sale-agent would expect his or her films to be worth on the market before subsidizing them. Subsidies operate in an increasingly commercial way; they relate more to production and aim at a higher level of control. Subsidies have lost their primary function which was to support different, novel, and risky projects.

However, there are a few new financing programs. For example, there has been a very significant rise in tax-based funding schemes in various European countries. This tax money tends to be a purely industrial type of money. It is not directly connected to the quality of the film, nor to its distribution. It is connected to its economic repercussions in a specific place. Most of these tax-funds are designed to stimulate a defined activity in a region or a country. Usually, these funds take the form of tax- credits. In Luxemburg for example, 27% of what a producer spends in the country is remitted to the producer.

Subsidies that are not connected to the market have strong local cultural concerns, mostly linguistic concerns. A producer cannot receive substantial support from a select fund in France unless the film is shot in French (with some exceptions).

In this context, regional funds are becoming a crucial support for European producers. Almost half of the European films benefit from the support of regional funds. Local action takes different forms, depending mostly on whether the country is Northern or Southern-European. At one end of the spectrum, there are the structured “Film Commissions” which offer facilities, crews, technical and logistical services to producers. At the other end of the range of possibilities, there are the Regional Funds, real investment funds based on regulations aimed at encouraging regional economic development.

Recent initiatives indicate that the two regional systems (Film Commissions and Regional Funds) will eventually converge and cooperate. Some major European Funds and Film Commissions have already signed cooperation agreements at a European level.

The first to do so was Cine-Regio, created as an incentive to the sharing of experiences and practices between regional funds regarding their investment policies. According to Daniel Zimmermann, Financial Director of Cine-Regio, “Cine-Regio can help assessing what is needed to support European co-productions, which makes the fund both attractive and necessary. This comes at a time when regional funds are an increasingly significant resource to finance film production while, at the same time, national funds are getting scarce.” Cine-Regio gathers thirteen regional public structures from Austria (FilmFonds Wien), Belgium (Wallimage), Denmark (the Westdanish Film Fondation), Finland (Poem), France (Provence-Alpes-Côte d’Azur), Germany (MFG Filmförderung Baden-Württemberg), Italy (La Provincia di Lecce), Spain (Consorcio Audiovisual de Galicia, Institut Catala de les Industries Culturals et IVAC - La Filmoteca), Sweden (Film i Väst), the Netherlands (Rotterdam Fonds voor de Film en Audiovisuele media) and the UK (Screen South).

The second cooperation agreement is worth mentioning; it concerns four European Regions: Île de France, the Madrid Film Commission, Medienboard Berlin-Brandenburg and the Lazio Film Commission. The agreement is aimed at making it easier to shoot in all four regions as well as reinforcing coproduction opportunities and exchange of information.

This report, a common project of Le Film Français and Cineuropa.org, the reference website for European films, focuses on the most interesting film production opportunities and regional funds in six major European countries.