30. June 2010

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A new system of incentives for filmmakers working in the Czech Republic should boost the domestic film industry and bring hundreds of millions of crowns annually into the economy, industry insiders say. The Film Industry Support Program, passed by the government last October, was approved by the European Union June 18, allowing film incentives to be immediately put into practice. The program is targeted at foreign and domestic filmmakers and allows a rebate of up to 20 percent of a film's total budget to be paid out of 400 million Kč earmarked by the Culture Ministry in the 2010 budget. The ministry's stated goal for the program is to return the Czech film industry to a competitive international level. The incentives program has achieved widespread support by film industry representatives, who say the government is finally recognizing the benefits of a strong film industry.

"A government that is smart can use its film industry to market the country to an international audience," said Ludmila Claussová, director of the Czech Film Commission (ČFK). "When someone shoots a film in the Czech Republic, they spend money here, and they employ local people. When people see that there are films being made here, they think of the Czech Republic as a country that is up-to-date and attractive." Government support for the domestic film industry is also expected to boost the economy. EEIP, an investment firm, has compiled a study on the positive effects of the film industry on the greater economy, concluding that filming incentives should add hundreds of millions of crowns to the state budget each year. Because filming infrastructure is already in place, there is no necessity for investment to prepare for the entry of investors.

"Moviemaking is a high-tech and highly competitive industry, so supporting it increases the competitiveness of the country while creating new jobs for both highly skilled and unskilled workers," said Jana Chvalkovská, associate director of EEIP. "In previous years, despite the fact that the Czech Republic had a large number of moderately priced, highly skilled workers, we simply couldn't compete with countries that didn't have the workers but had subsidies."

The previous lack of Czech filming incentives triggered an exodus of filmmakers to more cooperative countries, causing the amount spent by foreign filmmakers in the Czech Republic to drop from 5 billion Kč in 2003 to 700 million Kč in 2008, according to Film New Europe. The Czech support program is different from many other filming incentive programs in Hungary, for example, which are essentially tax-rebate certificates that a production company receives after it has completed a film. The average budget of a Czech feature film is 30 million Kč ($1.4 million/1.2 million euros), whereas a European feature film could have a budget as high as 5 million euros or more, according to Claussová. Under the support program, filmmakers would be eligible to receive up to one-fifth of their domestic spending back, providing they pass a culture test that shows that their film promotes European or Czech cultures and traditions, or that there is a significant number of European crew working on the project.

Despite the uniqueness of the Czech style of film incentives, Claussová said the program will send a message to the international filmmaking community that the Czech film industry "has always been on equal footing with the world in terms of locations and skilled crews, and now we are back on the map on the financial side, as well." "At the moment, we know of a number of projects from Europe, the United States and India that are interested in coming to the Czech Republic to shoot. This makes it clear that filmmakers never forgot that we have huge crews and infrastructure here. They were always interested in filming here," she added.

Dušana Chreneková, spokeswoman for Barrandov Studios, the largest film studio in the country, said that since the program was announced, "we have received only positive reactions from film producers." "Compared with other countries, the previous lack of filming incentives had an abjectly negative effect on the Czech film industry," she added. The Czech film industry is known internationally to have high-quality studios and skilled film crews. The industry experienced a massive boom in the 1990s, as foreign filmmakers discovered the Czech Republic was a low-cost filming destination where quality did not have to be sacrificed to price.

Galja Vajagic, creative researcher at Dawson Productions, a Prague-based company that most recently produced the Czech film Three Seasons in Hell, said the Czech film industry changed dramatically over the past two decades, as foreign filmmakers found cheaper destinations that offered filming incentives. "In the early '90s there were fantastic opportunities. There were bigger budgets and many more jobs. But the whole mood has changed from a very creative atmosphere to something less interesting today. Now people are mostly concerned with their budgets and are happy to get any projects at all," she said. Film industry representatives have unanimously lauded the incentive program, as they unanimously berated previous governments for not putting an incentive system in place. Vajagic said it will take some time for the new incentives to repair the damage done to the Czech film industry's international reputation. "Over the past few years, all these production companies got used to looking for other countries besides the Czech Republic, and getting them to come back will not be an immediate process," she said.