Prague’s run as a mecca for international film production has had its ups and downs. Recent figures show the industry in bad decline, however, putting inward investment and jobs at risk. The Czech Republic’s reputation as a film location began to rise after the fall of communism. One of the first Hollywood producers on the scene was Rick McCallum, who arrived in early 1990 to shoot episodes of The Adventures of Young Indiana Jones. “It was a gold mine. It was the cheapest place with the greatest film culture, the most extraordinary locations,” McCallum said. “I paid USD 500 a night to [shoot] in the National Museum.”
Rumours of greedy local contractors on Brian de Palma’s Mission: Impossible blighted the Czech image briefly, but the country quickly cleaned up its act and developed a reputation for highly skilled crews, diverse locations and world-class infrastructure – all at a fraction of the costs of shooting elsewhere. A boom started in 2002 and brought in such big-budget productions as Blade II, The Bourne Identity and Hellboy. Soon to follow were Wanted, Casino Royale and The Chronicles of Narnia: The Lion, The Witch and the Wardrobe.
Now Czech crews and facilities are again in the doldrums. The industry was worth CZK 7.6 billion in 2003, but by 2008 it had shrunk to CZK 3.5 billion. What’s more, the sector has shed more than 1,500 jobs since 2003 – 1,200 of those in the last year alone. At Barrandov Studios, a production facility synonymous with Czech filmmaking, year-on-year profit fell more than 50% to CZK 22 million in 2008. Sales were down CZK 40 million to CZK 600 million. “The figures are tragic,” said Pavel Strnad, president of the Audiovisual Producers Association (APA). “They could hardly be any worse.”
“It has been one of the hardest years I can remember,” said Prague-based producer Kevan Van Thompson, whose credits include Babylon AD and the upcoming release Solomon Kane. “I have started work on several movies without any of them actually getting up and running.”
The cause of the problem is threefold. One, the global financial crisis has restricted lending in all industries, and filmmakers rely on outside financing. Two, the value of the US dollar, the currency of the international film industry, has plummeted against the crown. On July 15, 2000, USD 1 bought about CZK 38; nine years later, it’s worth CZK 18.6. So while the rise in prices for film-related services in the Czech Republic have seldom outpaced inflation, foreign producers have the impression that prices have doubled. Three, the market for productions has become more competitive. Hollywood has always used offshore locations to save money: William Wyler, for example, shot Ben-Hur in Italy. More and more territories are seeking to attract these so-called runaway productions and the investment they bring. “Anything I bring here really helps the economy, because it is work and money that would not otherwise come into the country,” Van Thompson said.
Until recently, the Czech Republic offered producers the best deal for their money. But in recent years, Australia, France, Germany, Hungary, Italy, and many other territories, including individual US states, have created financial incentives to lure runaway productions. Broadly speaking, there are two kinds of financial incentives: funds and rebates. Germany is among the territories that have funds that directly contribute to the budgets of selected productions. The German Federal Film Fund invested EUR 118.5m in productions in its first two years. These funds have attracted such major movies as Valkyrie and Speed Racer to Germany, where they and other films have poured nearly EUR 1 billion into the economy.
Other territories offer producers tax rebates that entitle them to a refund of a portion of the money they spend. In 2005, Hungary introduced a rebate that allows producers to get up to 25% of production-related costs back. As a result, the annual spending by productions increased tenfold: from HUF 5.8 billion in 2004 to HUF 59 billion in 2007. Films that have benefited from Hungary’s rebate include Hellboy 2, The Secret of Moonacre and the upcoming Season of the Witch. These films might have been shot in Prague were it not for the Hungarian and German inducements. “In a world without incentives, the Czech Republic would still be the one of the top locations for international productions,” said Ludmila Claussová, of the Czech Film Commission, which promotes the country as a location for movies. “Our crews and facilities are among the best in the world. When we lose films to Germany, Hungary or the UK, it’s not because we’re not good enough. It’s because those countries have incentives and we don’t.”
Despite the success of incentives elsewhere, the idea has not been popular with Czech politicians until now. During the recent Karlovy Vary International Film Festival, former Prime Minister Mirek Topolánek (ODS) and former Culture Minister Vitezslav Jandák (ČSSD) acknowledged the need to help productions. “The Czech film industry needs some kind of stimulus,” Topolánek said on the political talk show Otázky Václava Moravce (Questions with Václav Moravec). “We should encourage cinema like we encourage business.”
Film industry professionals are now working with the Finance and Culture ministries to create a plan to be presented to the government after the summer break. “What’s significant now is that leading politicians from both the left and right agreed on the need for incentives for the Czech film industry,” Claussová said. “They know that there are billions of crowns and thousands of jobs at risk.”
The view from outside of the country is not always sentimental. London-based producer Paul Berrow worked with Van Thompson on Solomon Kane, shot at Barrandov Studios in 2008. He says it would be impossible to shoot the film in the Czech Republic under the current conditions. “I think incentives are absolutely essential in this marketplace,” Berrow said. “Any [politician] who’s blind or silly enough not to recognize that shouldn’t be in the job, frankly.”
The challenge for filmmakers has been to get broad support for their cause, and toward that end they are working with other sectors that benefit from productions. The Audiovisual Producers Association estimates that each crown spent directly on filmmaking means another crown spent elsewhere.
Hospitality is one such closely connected business. Roman R. Straub is general manager of Vienna International’s Prague hotels: Diplomat, Angelo, Anděl’s and Anděl’s Suites. “We all have the common goal of getting more movies to come to the Czech Republic,” Straub said. “Our biggest issue is to get incentives like they have in Hungary or Germany.” Straub said his hotels get considerable business from filmmakers, especially those locations in Smíchov, close to Barrandov Studios. “The second Narnia movie brought us more then EUR 3 million,” he said.
McCallum is sensitive to the plight of Czech filmmakers, some of whom he has worked with for nearly two decades and who can no longer find jobs locally. In Prague this spring to shoot Red Tails for Lucasfilm, he likened the industry to a midsize brewery. “If that were to shut down, it would an unequivocal disaster. It would be on the front pages. There’d be protests,” he said. “But the three to five thousand people [in film] that are basically being squeezed to death here, that have for all intents and purposes no future whatsoever, won’t even make a little blip.”
The film professionals who lose their jobs in Prague have to look elsewhere for an opportunity to use their skills. “Every day I hear of crew members who are either leaving the industry, or the country,” Van Thompson said. “With the [Czech] currency so strong, and no legislation to bring in the foreign movies, there will be a much reduced workforce.”
Pavel Policar is a special effects expert who has worked on AvP: Alien vs. Predator, Babylon AD and the Narnia films, among others. “This year and last have been very difficult,” he said. “Many of my colleagues and film experts had to quit their film careers and find work in a different business. Foreign productions are choosing other countries, and it is destroying our film infrastructure, which took decades to build.”
McCallum echoes many in the industry who do not see why the Czech government would continue to resist creating incentives. Lucasfilm wants to shoot a long-running production of a Star Wars TV series in Prague, but only if the government offers incentives. “If I wanted to open a widget factory and I came to the Czech Republic and said, ‘I’m going to spend $150 million in the next four years, but I need some tax incentives to get me here. I will employ 250 people for the next four to seven years, guaranteed. I will dump $150 million in your economy,’ they would do anything in the world to get me – to stop me from going to Hungary, Germany or anywhere else,” McCallum said. “But when it has to do with the film business, absolutely nothing.”
Policar said his economic future is at risk if incentives are not created, but he remains optimistic. “I’m sure, APA will be successful with the new government in the autumn,” he said. “The politicians will approve the incentives, and I hope the next year will be one of the best year for the film industry in the Czech Republic.”
Others warn of the consequences if no action is taken. “Unless there is a drastic change, the industry will die a very quick death,” Van Thompson said. “That is something I truly want to help avoid.”
Local production
While the larger industry suffers, Czech-language film is booming; investment in production quadrupled in the past five years to reach CZK 880 million in 2008. Thirty Czech feature films were release in 2008, and 11 of those were among the top 20 earners at the box-office.
Industry professionals are proud of local film traditions, but say Czech-language film is only a small bright spot in a larger gloomier picture.
“Czech movies don’t offer many possibilities to experiment with creativity,” Policar said. “Budgets for Czech movies are calculated around CZK 15 million to CZK 25 million. Foreign projects spend this in one or two working days.”
“Czech films largely are made on money from the government, TV and local companies, so the money is already here,” Van Thompson said. “But long live the Czech movie, because it is so important culturally.”
