Current trends in public film support and perspectives on impact Gilles Fontaine Head of Information on Markets & Financing European Audiovisual Observatory Montenegro Presidency Workshop, Podgorica, 11 June 2015
Current trends in public film support and perspectives on impact
Gilles FontaineHead of Information on Markets & Financing
European Audiovisual Observatory
Montenegro Presidency Workshop, Podgorica, 11 June 2015
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Current Trends
Impacts
Conclusions
1
2
3
3
Current Trends
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Direct public funding is only one form of public film support
Different possibilities for national film policy makers
to support the financing of film and audiovisual production
Fiscal Incentive Schemes
1
Direct Public Support
through Film Funds
2
Regulating investments in
production by broadcasters
and other stakeholders
3
5
2009: 262 funds
2014: 254 funds
2004 2009 2014
Evolution of the number of film funds in Europe (36), 2004-2014
Source: OBS KORDA
195
262 254
The total number of funds declined slightly
6
The number of fiscal incentive schemes more than doubled in 10 years…
Source: SPI
New schemes introduced Schemes closed Total active schemes
1 1 1
53
1 12
5
1 1 12
1
12 12 12 12
17
2021
2022
26
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Timeline: Fiscal incentive schemes becoming operational in Europe 2005-2014
7
UK Italy
…But direct public funding remained fairly stable
France Germany
8
The launch of new fiscal incentives in France did not represented a reduction of the allocation for the existing ones
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20140
20
40
60
80
100
120
140
160
180
200
CIJV (2008)
C2I/ TRIP (2009)
CIA (2006)
CIC (2005)
SOFICA (1985)
French fiscal incentives, 2004-2014
CIC CIJV C2ICIA
EUR
mill
ion
Source: CNC
9
Impacts
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Limitations of impact measurement
Causality between different film policy measures and effectsExample: Production investment is increasing, but to which extent can this be linked to direct public funding and to which extent is it linked to additional fiscal incentive schemes?
Lack of dataMany countries do systematically collect the data which would be required to properly analyse impact of public support measures
Limited comparability between European markets… due to different methodologies impossible to have a comprehensive “pan-European” analysis.
… but also between indicators: no “global” indicator… as impacts take many different forms. And the methodology how to measure impact differs accordingly from one indicator to the next.
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Indirect & induced economic impacts
Exploitation related economic
impacts
Cultural & societal impacts
Direct production related economic
impacts
Potential impacts of public film
support
Many impacts areas
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Direct production related economic impacts …
Growing film production volume
Sector employment
growth
Growing film production
spendStimulate
international cooperation
Develop film & AV
sector
GDP / GVA contribution
Attract portable
productions
Impacts of public film
support
13
The increase of public supportcan play an important role in increasing
production volume and budgets…
…provided that infrastructure, talent and crews match this increase (otherwise it will
only result in an increase of production costs)
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Case Study Importance of public support as financing source for European films
Share of public support in total production costs
Sources: NFF, SFI, CNC, FIAPF, IVF, IFTA, OBS
In %.
48% 48%
14%
33%40%
28%
17%11%
37%
35% 42% 49%
NL SE FR Amour A Royal Affair
Carnage
Producer / Private investments
In selected markets (2013) In selected films
Public support (national and international
Other
Broadcaster (co-prod & pre-sales)
15
Case Study Impact on production volume
Turkey – Number of films produced 2000-2014
Sources: Antrakt, OBS
In units.
0
20
40
60
80
100
120
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Re-establishment of public production
support
108
20
16
2009 2010 2011 2012 20130
2
4
6
8
10
12
14
16
Case Study Impact on production spend
Croatia – Production spend 2009-2013
Sources: Croatian Audiovisual Centre, Olsberg SPI
In EUR mio (2013 prices).
Introduction of fiscal incentive scheme
20
Production spend
Direct public funding
17
Public funding has the potential to stimulate
international co-productions …
and is a decisive factor in attracting portable productions,
…but this is hard to quantify
18
Key findings from Olsberg study on fiscal incentive schemes suggest that …
Sources: Olsberg SPI
… Public support - particularly fiscal incentives - can have a positive impact on the ability of countries to become attractive co-production partners. This tends to be the main reason for productions moving between European countries.
… In addition, international portable productions generally flow into Europe rather than out of Europe, attracted by fiscal incentive schemes and direct public support schemes
… Keep in mind: Public support (direct or through fiscal incentives) is only one of many factors affecting the production location decision
Qualitative research shows …
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Public support is considered to stimulate
employment growth in the film and audiovisual sector
…but, again, this is hard to quantify
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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
5243 44 46
5156 59 61 58
63 65 63
3
3 3 3
44
44
44 5 5
Case Study Impact on employment
France – Employment in French film production 2001-2012
Sources: EY/CNC, Olsberg SPI
In 1 000s.
Freelance
Permanent
Direct public support+ SOFICA
Direct public support+ SOFICA+ Crédit d’Impôt
Direct public support+ SOFICA+ Crédit d’Impôt+TRIP
48 50048 500
68 000
+38%
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Key findings from Olsberg study on fiscal incentive schemes suggest that
Sources: Olsberg SPI
… Alongside production levels and impacts, incentives also stimulate significant employment growth
… There is also evidence that these workforces are mobile, moving between adjacent countries to fill needs
… This contributes to regional development of the sectors, an increase in co-production activity and especially contributing to skills development
… and qualitative research shows …
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Growthin film and AV production
drives growth in wider areas of the economy …
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Exploitation related economic impacts
DVD / BluRay sector
Cinema exhibition
Distribution
Impacts of public film
support
VOD
TV
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Multiplier & spillover effects
Induced impact
Indirect impact
Impacts of public film
support
Film induced Tourism
Trade promotion
Growth driver for
other creative sectors
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Film Tourism
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Case Study Impact on film tourism
Examples for film tourism impact in destinations
Sources: Turizam Volume 17, Issue 1: Film Tourism: A Contemporary Resource for Promoting Serbia
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Case Study Impact on film tourism
Croatia – Tourism arrivals 2005-2014
Sources: Bloomberg Markets
In millions.
Game of Thrones starts in April 2011
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Merchandise
29
Case Study Impact on merchandise sale
UK – Economic impact of film induced merchandise sales in UK 2013
Sources: Olsberg / Nordicity analysis based on data from Oxford Economics
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Trade promotion
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Case Study Impact on brand promotion
UK – Economic impact of film induced UK brand promotion 2013
Sources: Olsberg / Nordicity analysis based on data from Oxford Economics, BFI, Rentrak, MPAA, HIS and ONS
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Cultural & social impacts …
Cultural diversity
National / European identity
Awards
Impacts of public film
support
Heritage awareness
Public diplomacy
(Soft power)
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Public funding for award winning films
Source: OBS
DK / SE / CZ
40%
FR / DE / PL / ES PL / DK FR / DE / AT
28% na 33%
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3. CONCLUSIONS
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Goals Impacts
Impact evaluation
Up front methodology
The need for goals hierarchy and impact assessment
«Soft Power»
Heritage Awareness
Economic Growth
Consumer Interest
Employment
Direct
Exploitation
Cultural
Indirect & induced
1
360
100
200
300
400
500
600
700
800
900
1 000
2012 2013 2014 2015 2016
20.0
21.0
22.0
23.0
24.0
25.0
26.0
27.0
28.0
29.0
30.0
2012 2013 2014 2015 20165000
5200
5400
5600
5800
6000
6200
6400
6600
6800
100.0
300.0
500.0
700.0
900.0
1 100.0
1 300.0
1 500.0
2012 2013 2014 2015 2016
Theatrical will stagnate
GBO @ EUR 6.3 bn
Admissions @ 910 mio
Traditional TV revenues to decrease over time
EUR 27.7 bnTV advertising
Physical video will continue to drop
EUR 6.6 bn
Digital video will grow but not compensate
EUR 27.7 bnTV advertising
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
2012 2013 2014 2015 2016
EUR 1.9 bn
Overall revenues to film industry likely to decline…2
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2. …Public support could become proportionally even more important
France – Public contribution to total production investment 2010-2014
Sources: CNC, OBS
In EUR million.
15%11%
14% 14%
18%
1 4391 389
1 3421 255
994
209160 183 173 176
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
0
200
400
600
800
1 000
1 200
1 400
1 600
2010 2011 2012 2013 2014 est.
% share Total investment in French film production Direct public funding + Fiscal Incentives
Public Funding for Films and Audiovisual Works in Europe
An update of the OBS report on film funding in Europe will be released in 2016
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It will include European as well as country-by-country figures on:
• Funding body population
• Income by type of source
• Spend by activity
• Trends in recent years