Building sustainable film businesses: the challenges for industry

Because government interventions play such an 

important role in helping film businesses become 

sustainable, we wanted to look at a couple of 

key areas where such support is undergoing 

developments, experiencing changes or  stresses  

of various kinds.

5.1

Current trends in incentive ‘rivalry’

Although there are no macro trends in public 

support for film – apart from certain screen agencies 

facing continual pressure on their budgets because 

of global economic difficulties – there are micro 

trends focussed on certain areas of intervention, and 

production attraction incentives is one area where 

there is a remakable amount of current activity.

Many territories are engaged in a kind of production 

incentive ‘arms race’ as to which country can most 

successfully attract portable production. Because 

film spends so much money employing so many 

people in a short space of time, governments have 

recognised the trickle-down economic benefits of 

hosting film production, let alone the tourism and 

country brand benefits noted above. 

Countries including Croatia, Abu Dhabi and Malaysia 

have all recently launched their own new incentives 

for film and many of these schemes also apply to 

domestic productions. The following table shows 

some examples:

Public support  

for film

Section 5.0

Country 

Maximum

Rebate (%)

Czech Republic  

20

France  

20

Germany  

20

Hungary  

20

Ireland  

28

Italy  

25

Malta  

22

United Kingdom (large budget) 

20

Non-Europe 

Australia (international) 

16 ½

Singapore  

40

South Africa 

20

South Korea  

25

Figure 2 

A comparison of selected rebate incentives 

targeting international mobile productions

Building sustainable film businesses:

the challenges for industry and government

19

---

5.2

Tendency to focus on projects  

over companies

Although from a relatively low level of current 

support, screen agencies are increasingly 

recognising the importance of company 

development as opposed to simply project 

financing. 

A prime example of innovative support is Screen 

Australia’s Enterprise Development Program which 

since 2009 has provided corporate finance soft 

loans. The mission statement of the program is 

‘assisting in the development and creation of viable 

screen businesses’, in particular through:

l

  Supporting existing businesses to grow to the 

next stage

l

  Encouraging new business partnerships and 

alliances

l

  Developing a strong presence in the international 

marketplace

l

  Encouraging the development of new revenue 

streams

l

  Facilitating increased development of quality 

projects and talent

l

  Encouraging development, production and 

marketing strategies which address new 

opportunities in digital media and online.

Companies that do not yet have the capacity 

to access private capital were prioritised in the 

program’s first year of operation in 2009. Soft 

loans of up to AS$350,000 (€274,285) per year 

for three years were available. The 2011 funding 

round awarded A$3 million (€2.35 million) to four 

companies. The Enterprise Program has awarded 

A$15 million (€11.8 million) to 21 companies in  

total to date. 

A proportion of the Enterprise funds are treated 

as a recoupable loan, with the exact amount and 

repayment mechanism negotiated on a case-by-

case basis. 

The scheme operates an application process that 

opens once a year and applicant companies must 

present a strong business plan which addresses 

many of the elements described in the Investment 

Ready definition of sustainability that is referred to 

in section 2.

Crucially, the Enterprise Program insists on many of 

the points raised in this report as a precondition of 

making a loan, such as having at least one company 

director with a minimum of five years’ experience on 

the board (‘Strong, entrepreneurial leadership’). 

Reviewing the first two years of the Enterprise 

Program, external assessors (of which SPI is one) 

noted some common factors of applications that did 

not succeed: continued overreliance on production 

fees for income rather than downstream revenue 

potential; a dearth of joint ventures or corporate 

linkages; a lack of input from business/financial 

mentors and experienced non-executive directors; 

lack of research/analysis into what the market 

wants (excess of ‘supply-push’ strategy as opposed 

to ‘demand-pull’) and a lack of up to date market 

intelligence. 

Reviewing other support measures discloses that 

the Swedish Film Institute can award up to €110,000 

for corporate development while Film i Väst meets 

four times a year to review strategies and structures 

supported by the regional screen agency through its 

Business Audit scheme. 

What these bodies believe is that helping 

production companies diversify their revenue 

streams by expanding into new areas as well as 

overseas is a key plank in creating a sustainable  

film industry.

Notwithstanding these examples, there are relatively 

few national support initiatives which are targeted 

specifically at achieving or supporting corporate 

growth for film production companies. Instead 

there is a strong bias towards funding for individual 

projects, the development of project skills, or for 

infrastructure projects such as studio developments. 

The training on offer for creating sustainable film 

business is also relatively hard to locate. Some 

academic institutions such as the National Film 

and Television School (NFTS) in the UK and the 

Australian Film Television and Radio School (AFTRS) 

offer courses in the business aspects of producing, 

as does the Peter Stark Producing Program at USC 

in Los Angeles. This September the London Film 

School is launching an MA in Independent Film 

Business with Exeter University in England. 

The problem is however that often producer 

business training is about how to convert projects 

into production and distribution. What is generally 

lacking is support for owner/managers who wish 

to strategically grow and build companies, for 

which they need training in strategic company 

development and achieving Investment Readiness. 

Section 5.0  

l

  Public support for film

Building sustainable film businesses:

the challenges for industry and government

20

---