As Europe’s multitude of film agencies prepare to plant their flags atop Cannes’ pavilions, a host of public servants are mindful that they face an existential crisis in the bruising battle for cinema’s hearts, minds and future political support.
Under attack from Ministers of Culture (Germany), losing top box office status in their home markets (France) and most recently an acknowledgment of institutional racism at the British Film Institute (U.K.), the guardians of the European filmmaking ecosystem valued at more than $3 billion is facing a reckoning like never before.
The timing is acute. A powerful array of streaming platform and studio-driven streaming commissioners have been muscling into Europe for a long time. The scale of commissioning engulfing larger European territories was illustrated by Netflix’s recent revelation that it will have spent $6 billion in just four years in the U.K. by the end of 2023. And in a recent talk that will have jangled the nerves of European funders, Netflix chair Reed Hastings claimed that the streamer is the “biggest builder of cross-European culture” as European subscribers overtook North American ones with 76.7 million next to 74.3 million revealed in the streamers’ last quarter results.
Streamer stats and statements like Netflix’s attract gushing praise from European politicians, but all too often are followed by a simple question: Is there a need for public funding for film in this day and age? The conundrum facing Europe’s film sector is that it has long been dependent on a complex mix of art and cultural funding mechanisms and interventions in an attempt to sustain national cinemas, first and foremost, under the onslaught of Hollywood’s powerful export machine. Now those systems are under pressure to coexist and potentially combine with the global streamers and avoid obsolescence.
Weaponizing the term “subsidy” has long plagued the debate. One MEDIA Eurocrat back in the 1990s — when a round of cultural trade talks between the EU and the MPAA had reached boiling point — claimed that European film “was sick and needed to get off the drugs and addiction of subsidy.” Milos Forman, the Czech director, went further, explaining at the time that in former Eastern Europe “you were in a zoo with a cage and roof over your head and someone fed you everyday; in the U.S. it’s the jungle — you’re free to go where you like but everyone is trying to kill you.”
Yet the issues at stake are far from binary. A deep dive under the roof of the European funding systems reveals a highly complex set of relationships between a range of artistic and cultural stakeholders, navigating myriad rules and regulations. And Europe is not some homogenous super-state, rather a complex continent of different races, histories, languages, proud traditions and cultural specificity. Nowhere is that diversity more potently on display than in stories captured for the big screen.
The birthplace of none other than Swedish director Ingmar Bergman has given rise to the most detailed study on European public funding for decades. Tomas Eskilsson, author of the Film i-Vast in-depth report into “Public Film and AV Policies and Funding at a Crossroads” (first edition launched at Cannes 2022, the second is due at Venice and the third at Cannes in 2024), is an advocate for change. After more than 725 interviews with industry practitioners for the first report (including 250 producers), along with key pan-European and industrywide organizations across the value chain for the second, Eskilsson has an informed view of the challenges at stake.
“The study is based on the fact that the digitization and globalization of the sector have reshaped the ecosystem and supporting business and operational ideas throughout the value chain. The second study is about the future purpose of such funding,” he explains.
Part of the issues are, inevitably, political. What the research shows is that many agencies see themselves at the direction of politicians, which has added a further level of reactive rather than proactive decision making and scant informed direction of travel.
“Public funds need to define where they can be important, but that is easier to identify in smaller territories than larger, where political tensions are higher,” says Eskilsson.
In 2022, for the first time in French cinema’s history, no national film reached the top 10 box office, triggering alarms despite the overall percentage of domestic market share remained steady at 40%.
A nine-strong French focus group assembled for the second report tried (and failed) to reach agreement on key protocols, demonstrating internal divisions and disagreements over even simple industry definitions. However, the one factor the French agree on is that the rest of Europe should stand in “solidarity” with them despite its industry suffering from overproduction and a disappearing audience.
Experienced industry observers disagree. “The levy and inflated producer income levels resulting from regulatory investment obligations are scandalous. The system supports a 250-films-a- year output — half of which are completely non-performing — and is run by a French industry tribe that is incredibly entitled,” explains a French analyst and widely published industry expert who asked not to be named. “Producers are able to leverage the existence of statutory windows to achieve deals that bear no relation to the success or otherwise of their content. The model is under intense pressure.”
France is not the only major state under attack. Germany’s $640 million-per-year film-funding system has come under the spotlight of Claudia Roth, the German culture commissioner. Speaking at Berlin festival in February, Roth hammered into the country’s complex web of federal and regional programs, arguing that they are too slow, unpredictable and inadequate. One larger uber-agency might be on the cards, but streamers will be expected to “make a greater contribution to the overall success of the funding system.”
According to Film i-Vast’s upcoming second report’s draft executive summary, shared exclusively with Variety, there are clear signs of a “subsidy race/incentive war” across Western and Southern European countries. The report suggests that the motives are either aggressive or defensive, driven by “the desire to become a leading European production hub of local and international audio visual works, and/or the desire to counteract the risk of losing production to other countries.”
The intense discussion about the future of European incentives revolves around seven core issues, including:
1. The need for both Europe in general and specific territories to work with a more complex purpose that is more clearly linked to film and AV policy.
2. Basic rules need to be applied to who can benefit from incentives as per traditional film and AV funding.
3. The need to link incentives more clearly to the fact that they also deliver cultural values.
4. The need for the EU to regulate incentives by maximizing the percentage and total amount an individual project can receive.
5. How best to prove economic effects when virtually all countries in Northern Western and Southern Europe have major capacity problems and associated inflationary cost issues;
6. The real power over film and AV policy is shifting from the cultural sphere to the economic (finance/tax) in countries where incentive funding works with greater funds than the traditional public system (e.g., the U.K., Ireland, Spain, Belgium and Italy and a range of countries in Eastern Europe.