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Annual Review 2015: Czech Film Industry Overcomes Crisis

Annual Review 2015: Czech Film Industry Overcomes Crisis

The annual review by the Audiovisual Producers’ Association (APA) members’ revenues in individual areas of the film industry demonstrates growth in Czech film production for six years in a row – compared to 2014, earnings of Czech production companies who are members of APA grew by 13%. And in contrast to the disastrous year of 2009, Czech producers’ earnings have even doubled. They are thus gradually returning to their previous levels -- before film production incentives were introduced in other countries, especially Hungary, which dragged Czech film production companies into a deep crisis. Czech producers’ profits are returning to their turn-of-the-century levels when our film industry was sufficiently competitive, even without incentives.

Unmistakably, the industry workhorses continue to be international commissions and commercials, which are also primarily international. In 2015, following a few lean years, independent producers also registered success in Czech film and television production.

Compared to 2014, Czech production companies’ earnings from advertising grew from CZK 1,96 billion, to CZK 2,2 billion, reaching a 12% increase. Next to expenses processed by Czech production companies, their international clients of commercials spent another 5% of foreign investment volume on travel and daily allowances for their international crews. Like last year, the main reason for Czech producers’ profit increase is an improved economy and, not negligibly, the pro-export fiscal policies of the Czech National Bank (CNB).

In the area of television and film commissions, the Czech film industry is gradually returning to previous levels, last seen at the height of Czech film production at the turn of the century. Since the slump of 2004 – when film incentives were introduced in Hungary – in 2014 earnings in the Czech Republic reached CZK 3,7 billion  – a 10 % increase. Since the introduction of incentives here in 2010, there was a fourfold increase in profit, and from 2008 even a fivefold increase in commissions, according to APA statistics. Above the aforementioned CNB pro-export policies, another contributing factor was the stabilization of financing of the system of film incentives at CZK 800 million (approx $US 33 million) by the State Fund for Cinematography for 2014 and 2015, and international crews’ positive past experiences while filming in the Czech Republic. Aside from the so-called tax-deductable expenses that are thoroughly audited, and from which international producers get back 20%, additional costs of international film companies in the Czech Republic reached 5% of returns average, according to APA statistics.

Based on the latest data available from the Czech Film Commission, international production companies spent an estimated 1,100 shooting days here last year, which translates to an average 39 shooting days per project, and an average expenditure of CZK 3,9 million (Czech projects average expenditures are approximately CZK 800k – 900k). Regarding quantity of projects, the ratio remains fairly unaltered from years past – about 67% international to 33% Czech projects. As for money spent, 90% of expenditures are generated by international productions and 10% by their Czech counterparts.

Last year a large number of big-ticket and period projects were made. Incentives are increasing for television productions, both in made-for-television film and series. It is custom television productions that best illustrate international producers’ satisfaction with Czech crews: producers for Crossing Lines and The Musketeers keep coming back; both productions shot all seasons here, including last year’s third.  Lakeshore International invested the largest sum of money here last year, with its project Underworld: Blood Wars (investment in the Czech Republic was CZK 861,7 million, incentive payout was CZK 126 million); Crossing Lines III (CZK 394 million; incentive payout CZK 64,5); and The Musketeers III (from tax-deductable expenses of CZK 347 million, CZK 64 million paid out).

The international project that received the highest paid out incentive last year was the second season of the series Musketeers. In 2014, by way of Czech Anglo Productions, the BBC invested more than CZK 300 million while shooting the continuation of the popular series. Czech Anglo Productions also picked up the second largest paid out incentive with Unlocked, shot here in the fall of 2014, with Michael Douglas and Orlando Bloom. The third highest incentive went to producers of the movie The Ottoman Lieutenant – more than CZK 125 million invested through Barrandov Studios.

The most significant change in comparison to last year is a considerable market recovery in Czech film and television production. APA member earnings grew from CZK 646 million in 2014 to CZK 852 million in 2015 - almost by a third. The main reason for the recovery is the State Fund for Cinematography, which, after the new audiovisual law was approved, has more resources at its disposal to back original Czech production. After a slump in 2014 caused by the shift to the new system, the new law’s impact was first registered in 2015. We can safely assume that the new Fund’s systematic support, and especially this year’s increase in its budget, will continue to have more positive effects on Czech film production in coming years.

Another important resource in funding Czech productions is Czech Television (CT) where, in contrast, external production decreased.  This fact is influenced by a new approach where CT’s external productions are commissioned programs and co-productions only, managed by independent producers.

Czech Television external production share (not including sports, newscasts and acquisitions):

  2012 2013 2014 2015
External production share 39% 39% 38% 29%

(source: Czech Television)

Box office broke records, but Czech films registered a decrease

In 2015, Czech cinemas presented 262 premieres, 51 of them domestic productions: 24 feature films (31 in 2014), 18 documentaries (24 in 2014) and 5 animated films.  Also shown were three premieres of digitally restored movies from the National Film Archive. The Museum of Karel Zeman presented for distribution a restored version of Jules Verne’s Deadly Invention. Czech movie theatres attracted 12,958 million moviegoers in 2015, the second highest attendance since 1989, a 1,4 million-audience increase (12% growth) compared to the previous year. According to Union of Film Distributors (UFD) data, box office reached a record CZK 1,669 billion (14% increase from 2014), despite a cinema ticket increase of 2% since last year.

Comparison in Czech cinema attendance between 2014 and 2015:

Year Screenings Viewers Net Earnings Avg Ticket Prize
2014 438 405 11 558 586 CZK 1 462 670 233 CZK 126,54
2015 457 327 12 958 099 CZK 1 669 176 581 CZK 128,81

Last year’s audience interest was untraditionally low when it came to domestic productions: for the first time not a single Czech movie was among the top 10 most frequented. The most successful domestic production – Zivot je zivot (Life is Life) came in 12th, with only 258 thousand tickets sold.

Movie results – TOP 10 in 2015

  Title Distributor Premiere Production Audience Receipts
1 Minions CinemArt 25.6.15 US 830 984 109 864 017
2 50 Shades of Grey CinemArt 12.2.15 US 557 291 78 299 967
3 Star Wars: The Force Awakenes Falcon 17.12.15 US 478 261 75 471 857
4 Spectre Forum Film 5.11.15 BR 420 420 59 870 212
5 Hotel Transylvania 2 Falcon 24.9.15 US 344 981 45 056 276
6 Jurassic World CinemArt 11.6.15 US 344 871 51 751 224
7 Avengers: Age of Ultron Falcon 30.4.15 US 338 170 50 740 926
8 The Fast and the Furious 7 CinemArt 2.4.15 US 309 864 40 526 558
9 Inside Out Falcon 23.7.15 US 294 883 37 138 758
10 Martian CinemArt 1.10.15 US 289 146 43 211 475

The following table lists film titles that were at the top of audience attendance charts in the past -- a Czech film drew the highest number of audiences in nine years out of the past 11.

Titles that drew biggest audience attendance in the Czech Republic from 2005-2015

Year Title Cinema Attendance
2015 Minions 831 k
2014 Tři bratři 661 k
2013 Babovřesky 652 k
2012 Ice Age 4: Continental Drift 671 k
2011 Muži v naději 852 k
2010 Ženy v pokušení 1 232 k
2009 Líbáš jako bůh 905 k
2008 Bathory 912 k
2007 Vratné lahve 1 254 k
2006 Účastníci zájezdu 788 k
2005 Román pro ženy 551 k

In 2015 cinema attendance of Czech movies reached a total of 2,3 million, and Czech films made CZK 282,8 million at the box office. In comparison to 2014, the attendance share for domestic productions decreased from 23.8% to 18.4%, which means it is the first time since 2002 that the share of Czech films was less than 20%. Among European countries, the Czech Republic thus went from 11 to 12 place regarding attendance of domestic productions.

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