Struggling Czech film industry seeks state backing

The 2006 James Bond remake Casino Royale is becoming an endangered species. The film was mainly shot at Prague’s famous Barrandov studios and used Prague and Karlovy Vary as a backdrop for many scenes. But Casino Royale is one of a dwindling number of blockbusters which have recently come to the Czech Republic. Revenues from foreign films have tumbled in recent years. That has put the spotlight on whether the government should fall into line with other countries and provide incentives for bringing them back.

Ludmila Claussová is head of the Czech Film Commission, one of whose main tasks is to bring foreign filmmakers to the country. She charts the slide in international film production revenues in the Czech Republic:

“If we compare it with one of the good years which was 2002 or 2003, when foreign film spending was about 5.0 billion Czech crowns – in 2008 it was about 700 million. So it is a drop of 86 percent over five years between 2003 and 2008. So it is really critical”

This year looks as though it will be just as bad as 2008, or even worse. Claussová says she only knows of one major foreign film being produced in the country this year.

The causes for the slump are varied. For one thing the Czech industry has lost its shine because of the rocketing advance in the value of the crown against the dollar, the international currency of the silver screen. This has meant dollar costs doubling for foreign film makers over the last decade. Added to that are the recession and tight financing for making films.

But the world has also moved on since the Czech heyday. Many countries around the world have got wise to the fact that the film business is very mobile and can set up wherever the local know-how and conditions as well as the financial incentives are attractive. As regards incentives, the film commission’s Claussová says the Czech Republic has not been following the industry plot.

“It is a business and it needs support because of the conditions abroad, the conditions around the Czech Republic have changed. Everybody introduced incentives and the Czech Republic did not and now the Czech film industry can not help itself.”

Everywhere that pretends to be anywhere for the film business now offers incentives to bring the foreign film crews apart from the Czech Republic.

“Germany and the UK offer incentives. France introduced them. Those are countries with developed film infrastructure. In the US, I do not know, almost 40 states of the union offer incentives, in Canada, the regions or the states again do so. In Australia there are different regional and federal incentives; in New Zealand and South Africa as well.”

Poland, Ukraine and Slovenia are also now looking at bringing in film incentives. These are not countries that that have grabbed the international film limelight in the past but neither did one of the new star locations, Hungary, before it got its incentives act together. The relative newcomer has now elbowed out the Czech Republic to grab a large part of the foreign film action thanks to incentives.

At the strange mixture of modern office, 20th century concrete blocks and wooden shacks that makes up Prague’s Barrandov studio complex high above the capital, Matthew Stillman, the founder and boss of Stillking Films, confirms the current gloomy situation for the Czech industry. Stillking handles around 70 percent of foreign productions in the country.

“This year we will have done two Japanese films and a tv series for Fox tv and a tv series for NBC. So there is not actually an English-language feature film we are doing this year. So it is tv and foreign language films and they paper over the cracks of what is a much more serious situation that these projects can also go to other places. It is just they are a little slower to see some of the benefits or be able to take advantage of them.”

Stillman says that the Czech side of the business is just about ticking over with this and the shooting of ads which are unaffected by the competition skewing film incentives.

In fact, Stillking Films, in spite of its Czech roots and the fact that it is still based in Prague, has taken a leaf out of the page of the competition. It has been forced to follow the rest of the film business out of the country.

“We are making films in other places, we have to. We started here and this is where we want to make our films but we are shooting two now in Budapest because we can not justify shooting them here as the finances won’t allow them to shoot here, more the latter. So we are forced to look for other avenues and other places to produce,” said Mr Stillman.

But Mr Stillman’s stark analysis is that the local film industry will not survive as an international player without incentives that match what other countries are offering. He says the current signs of contraction are alarming:

“There is a brain drain either to other industries in the Czech Republic or just out of employment in the Czech Republic or to other countries that are making the productions. So there is a very, very skilled Czech labour force in film production – perhaps there is only one or two places in the world that can rival that. These people are either being lost to other businesses or lost to employment or they are leaving the country.”

Matthew Stillman
At the same time, the spin-off advantages of hosting an international film business are also being lost. For every crown or dollar spent directly it is estimated conservatively that at least another crown or dollar is pumped indirectly into the local economy as well.

There is also the more intangible bonus of the international prestige stemming from having a city or country as the backdrop of a major blockbuster. The Czech Film Commission’s Claussová says this argument, especially for a city like Prague which wants to be an international draw for tourists, seems to have fallen on deaf ears.

“They do not understand the connection between film and tourism. I have seen all around the world there are always film and tourism conferences and they talk about it. And there are millions of examples how a film or even a tv series raised tourism in one region or one city. I have examples of this, but here they are not so developed as countries in the West somehow on this kind of thinking.”

The good news for the film industry is that the two main Czech political parties and the current caretaker government now appear to be taking the film industry’s plight seriously.

The Ministry of Culture is drawing up a draft proposal for a film incentive programme which should be put before the government for approval in September. Mr Stillman – who has had a hand in drawing up the proposal - prefers the term rebates because a proportion of film industry spending already incurred is refunded so there is no actual government money up front.

Culture ministry officials should meet with colleagues from the finance ministry this week to try and square any last minute problems. The Ministry of Finance is seeking guarantees that there will be a ceiling on the government funds that might be spent.

As it is, the proposal – which is likely to borrow heavily from that already existing in Hungary together with elements from the similar British and German programmes – is a fairly modest one. It seeks to offer incentives or rebates on 20 percent of local film production for 2010 only as a sort of emergency measure.

Once the dust of the October elections has settled, it is hoped the incentive could be put on a firmer legislative basis. Here, both the right-wing Civic Democrats and left-wing Social Democrats are now making positive noises about incentives for the film industry. For the Civic Democrats in particular this is definitely a turnaround. Incentives seemed in the past to be a dirty word in their vocabulary.

Mr. Stillman says a properly framed incentives programme will at least stop the Czech Republic slipping further down the ranking of international film locations. The film commission’s Claussová argues it could be the prelude to a much needed comeback.

“If we can compete we will get part of the business back. I’m almost certain that I can say for sure that they still know about the quality of the crews they can find here. It is not that the producers forgot about Prague.”