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 As streaming giants Amazon, Netflix and Hulu prepare to splash
out on their next fantasy blockbusters and dystopian dramas,
Central European countries are slugging it out to get a grab a
slice of their bumper production budgets.
Experienced crews, lower labor costs and generous production
incentives have long attracted international filmmakers to the
Czech Republic and Hungary but other countries in the region are
now getting into the game.
The Czechs and Hungarians are both considering raising their
incentives after Romania approved a production rebate of up to
45 percent in 2018 and Poland introduced a 30 percent cash
rebate in February to keep pace with its neighbors.
A new European Union directive due to come in this year is also
expected to spur investment as it will require video-on-demand
platforms selling to European audiences to ensure at least 30
percent of their catalogs are European works.
"This is a new era," said Agnes Havas, chief executive of the
Hungarian Film Fund told Reuters, noting that the Netflix series
"The Crown" and Amazon Prime Video's "Hanna" were shot in
Hungary.
"What we see is we started at 30 percent (incentives) and now we
are looking at the other countries in Europe and we will
evaluate the situation and see whether we should potentially
think about raising it again in the future."
BITG media analyst Rich Greenfield estimates Amazon will spend
$5 billion to $6 billion in 2019 on content with Netflix laying
out about $15 billion - and a significant portion of the Netflix
budget will flow overseas.
"We are aware there is a shift in global production and you
can't ignore the big streaming companies," Anna Dziedzic of the
Film Commission Poland told Reuters. In 2018 Netflix filmed
"1983" in the country, the company's first original Polish
Netflix series.
"They are one of the biggest players now. You have to adjust to
the changing environment and you have to have them in mind,"
Dziedzic told Reuters.
Amazon and Netflix declined to comment on their plans in the
region.
GAME OF THRONES EFFECT
A landscape dotted with castles and rolling countryside makes
central Europe a versatile setting for increasingly popular
historical and fantasy shows looking to cash in on the success
of series such as "Game of Thrones".
"The types of shows being shot have dramatically changed," said
David Minkowski, head of production at Stillking Films, which
co-produced Amazon's neo-noir fantasy "Carnival Row" and Hulu's
historical series "Das Boot", in the Czech Republic.
"Call it the Game of Thrones effect. A lot of it is fantasy or
historical that naturally gravitates to this part of the world,"
he told Reuters, adding that the company was now working on
fantasy drama "The Witcher" for Netflix. "The typical production
centers are bursting at the seams."
Dziedzic at the Film Commission Poland said she has also
received requests from international companies wanting to use
post-Soviet locations and brutalist Communist architecture for
science fiction series.
This has helped push international investment in regional
production to record highs, leaving studios booked a year in
advance and crews forced to turn away work, industry
professionals say.
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"There is now an ever increased premium on local crew
relationships and good access to infrastructure and studios
which need to be planned up to 12 months in advance of
production," added Stillking's Managing Director Matthew
Stillking.
"It's a boom time ... likely to last several years as the sector
becomes more competitive with a perfect storm of increased
consumer viewing demand and more platforms needing content to
compete for customers."
'IT WILL ROCKET'
Foreign investment in the Czech film industry leapt nearly 1.2
billion crowns to a record 4.8 billion ($210 million) on 1,072
shooting days for 38 foreign series and films in 2018, according
to the Czech Film Commission.
Investment is expected to remain at that level or higher this
year, though Czech plans to increase cash rebates on offer for
film makers from 20 percent now could be a game changer.
"It will rocket once the incentives are raised," Pavlina Zipkova,
head of the Czech Film Commission, told Reuters. "The government
has not increased it yet but we strongly believe it will happen
later this year."
In Hungary, spending on a total of 333 productions last year
amounted to 110 billion forints (385 million), with 84 percent
of the investment coming from international productions
including Hollywood blockbusters "Terminator: Dark Fate" and
"Gemini Man."
This was up from 108 billion in 2017, when "Red Sparrow" and
"Colette" were made in Hungary but Havas at Hungary's Film Fund
expects the new EU rules to accelerate the streaming-fueled
production boom.
The rise of streaming services has also shifted the types of
productions in the region. Hungary attracts more blockbuster
films these days while episodic series tend to gravitate towards
the Czech Republic, said Tomas Krejci, founder of Milk and Honey
Pictures and Prague Studios.
This helped Prague Studio's turnover jump more than 50 percent
in 2018 - and Krejci predicts demand will remain strong as top
notch crews shooting historical shows are more than a third
cheaper than in rival countries such as Spain.
"The demand for historical shows is getting stronger," Krejci
said whose company has produced "Haunted" for Netflix and
Amazon's "Patriot" and the second season of "Lore."
"Here it's not just the phenomenal historic architecture but
also the vast amount of props, costumes and local talent that
make it cheaper and easier to make these kinds of shows."
($1 = 22.8160 Czech crowns)
($1 = 285.6800 forints)
(Reporting by Michael Kahn; editing by David Clarke)
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