trends in public film support - gilles fontaine

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

4

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

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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)

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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

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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

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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