On May 1, the European Union welcomed eight former communist states as well as Malta and Cyprus into their club. The recruits have already begun to integrate their film industries with those of western Europe.
In exchange for the chance to attract EU coin and tap into the lucrative box office of western Europe, these new states offer easier access to their rich cinematic traditions, fresh talent, unspoiled locations , low-cost studio space and experienced crews.
A common market means no more hassle with import duties and working visas within the European Community. Yet Euro employment and safety policies are likely to add a different sort of red tape. “But the effect of these European policies seems to be more bureaucratic rather than financial,” emphasizes Matthew Stillman, founder of the Czech production outfit Stillking.
Indeed, adopting the cross-border currency, the euro, is still out of reach for these countries.
Stillking leads the Czech Republic’s healthy production sector, which continues to attract large-scale productions with its state-of-the-art facilities, flexible labor laws and low production costs. Servicing foreign productions makes up 80% of the Czech film industry’s business; in 2003, it hosted 12 U.S. shoots.
Although Stillman stresses that until now Czech prices have remained stable, he anticipates that they “will go up once the Czech Republic (adopts) the euro in 2010, because people tend to round up their costs when they make the euro switch.”
Already, the weak dollar has meant that filming in the Czech Republic has become more expensive to U.S. producers. The Czech government offers no incentives and keeps local subsidies at a meager $3.8 million a year.
The Czech Republic, along with Italy and Germany — which all sell their top-of-the-line studios to overseas producers — face another threat from Hungary, with its 20% tax rebate.
Hallmark’s “A Christmas Carol” was the first U.S. production to receive the tax credit and will be a test case for the new scheme. Should the system turn out to be workable, “Hungarian prices will effectively be 10% cheaper than costs in the Czech Republic,” says Stillman.
In order to build up its crew ranks, Hungary has started new training programs. Also, an enormous studio complex in Etyek near Budapest will be completed in mid-2005.
But at the moment the Czech Republic still has an advantage over Hungary and other low-cost countries like Romania or the Baltic States, which also offer studio facilities. More than a decade of experience with Hollywood has created a solid infrastructure, which might be more expensive than operations in other parts of Eastern Europe, but eases the penalties for mistakes and mishaps.
Malta, too, has attracted high-profile pics such as “Troy” and “Gladiator.” The island is not only interesting for producers because of its low income tax rates but also because its Mediterranean Film Studios houses one of the biggest water tanks in the world.
Poland, in contrast, is displaying little interest in attracting Hollywood coin. Polish production costs tend to be about one-third lower than in Western Europe, but the head of the Polish Filmmakers Assn., Jacek Bromski, insists: “We’d rather make more Polish films, so we don’t have to invite foreign investors.”
Reflecting this attitude is that there is no Polish film commission.
Polish audiences, as in the Czech Republic where Czech films take up 25% of the box office, display a healthy appetite for homegrown cinema: Local films have an average market share of 17%.
After an annus horribilis in 2002, when subsidies were cut substantially, the Polish film industry has risen — again — from the ashes and produces around 20 features a year, with the average budget being about $1million.
Digital technology has nurtured a new generation of Polish filmmakers, who did not grow up under communism and look at modern Poland with fresh eyes. Also, state subsidies for local productions have been increased by 50% to $7.8 million and Bromski hopes that funds will be raised further.
Filmmakers in the Baltic states are similarly upbeat. With true postcommunist entrepreneurial spirit, they make use of their scarce production subsidies by fostering international co-productions with other European countries. Indeed, one of Latvia’s five animation studios is producing the $2.6 million Danish-U.K.-Latvian co-prod “The Three Musketeers.”
Lithuanian producer Robertas Urbonas of the Baltic Film Group stresses that apart from subsidies there’s private equity available in the Baltics: “Now that we’re part of the EU our economy is developing extremely fast and people are starting to invest into movies.”
International co-productions seem to be an ideal solution for countries with limited funds, including Slovakia, Cyprus and Slovenia. All the new members are already part of the European Media Program, a subsidy scheme that supports development and distribution, and most have joined Eurimages, which helps with co-productions, distribution and exhibition.
However, many find the subsidized European co-production systems very difficult, according to Czech producer Pavel Solc, who is trying to put together the German-U.K.-Czech and possibly Slovak co-production “Loving Hell,” helmed by Alice Nellis. “All the co-producers want their own national aspect and there’s the danger that the story disappears,” he says.
Bromski adds: “A lot of the time a co-production actually doesn’t make sense because costs in West European countries are much higher than in Poland. We’re currently thinking about withdrawing from Eurimages.”
The problem with international co-productions is that none of the new member states has much money to bring to the table. But what they do have is talent. In Poland, the Czech Republic and Hungary, a new generation of filmmakers is emerging that is influenced by a drastically changing society as well as an imposing cinematic heritage.
Whether it’s Nimrod Antal (“Kontrol”) and Benedek Fliegauf (“Dealer”) in Hungary; Magdalena Pierkorz (“The Welts”) in Poland; Jaak Kihni (“Revolution of Pigs”) in Estonia; or Jan Hrebejk (“Up and Down”), Alice Nellis (“Some Secrets”) and Ptr Zelenka (“Year of the Devil”) in the Czech Republic, the new Milos Formans and Krystof Kieslowskis are no longer on the other side of the curtain.