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The median average budget of a European theatrical fiction film stands at €2.01 million ($2.2 million), according to new research from the European Audiovisual Observatory (EAO).

Based on an analysis of 576 European live-action films from 2017 with a combined budget of €1.85 billion ($2.03 billion), the report also found that the two largest financing sources were direct public funding and broadcaster investments, representing 26% and 24% of total financing respectively.

The report calculated that the average mean budget of a European film was €3.21 million ($3.53 million). However, the EAO said that, given the substantial impact of a few high budget films, the median figure of €2.01 million ($2.2 million) is more representative for the majority of European films.

Average budgets differed widely among countries, and were higher in larger markets and lower in countries with lower box-office potential, as exploitation in national markets remains key for most films.

The median budget of a film originating in the larger markets of France, Germany, Italy, Poland or the U.K. was €3.2 million ($3.5 million) in 2017 compared to €1.5 million ($1.64 million) for a medium-sized European market and €0.9 million ($1 million) for small markets.

The report also found that, in 2017, the financing of European films was primarily based on five different financing sources: direct public funding (26%); broadcaster investment (24%); producer investment (18%); pre-sales (15%); and fiscal incentives (12%). Other financing sources included private equity and debt financing.

However, the percentage of direct public funding in film financing decreases with increasing market size. Comprising only 21% of total financing in the five largest markets, public funding accounted for 43% in medium-sized and 54% in small markets.

In contrast, the importance of pre-sales as a financing source decreases with market size. Pre-sales tend to be most important in large markets, where they accounted for 17% of budgets in 2017, compared to 10% in medium-sized and 6% in small markets.

Production incentive-related financing appears to be particularly important for high-budget and medium-budget films, but less so for films below €1 million ($1.1 million).

The EAO said the data sample is estimated to cover 49% of the total number of European fiction films released in 2017, making it likely to be the largest pan-European data sample available to date for the analysis of financing of European fiction films.