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Film Production in Prague

Film Production in Prague

Will Hollywood Come Back To Czech Republic? takes a look at the state of foreign film production in CR

Film Production in Prague

Film Production in Prague

Will Hollywood Come Back To Czech Republic? takes a look at the state of foreign film production in CR

Published 12.07.2010
Last updated 19.07.2010

Get out your light meters, ladies and gentlemen; it´s time once again to make movies in the Czech Republic!  At least, such is the collective hope of the film community after the CR film incentive package was finally approved by the European Union - the last step in a torturous bureaucratic journey.

For years, the Czech Republic was a hot destination for foreign film productions.  This all changed gradually over the past half dozen years as worldwide economic conditions deteriorated and CR was slow in establishing government support for the film industry, making it lag in competitiveness behind countries like Hungary.

One of the major hurdles in passing an incentive package has been the perception that incentives are somehow a giveaway of state funds.  It took the interim government coming to power to find ears that would listen differently.  

“It was hard to explain that film is also business,” said Ludmila Claussová of the Czech Film Commission. “There was this idea of film as culture, not business.”  The proponents of the incentives were sent to varying ministries, given the proverbial runaround.  They needed to prove that film was an industry that the country could profit from.  

David Minkowski, Head of Film Production for Stillking Films (production company of GI Joe, Casino Royale, Wanted, Alien Versus Predator, Bourne Identity, among many others) believes that “it has been proven in many countries and by many governments and private studies that the ‘knock on effect´ is many times greater than the investment.  If the government invests one dollar in film incentives, it will make several times more than that in tax revenue generated from what films spend locally.  It means jobs, increased tax revenue and infrastructure investment.”

Additionally, as Claussová pointed out, the secondary benefit is the promotion of the country.  “Foreign film production contributes to a picture of the country as business friendly and open for business.”

Dan Frisch, the president of IPC (production company that made Solomon Kane, League Of Extraordinary Gentlemen, Hostel 1 & 2, and others) agrees: “In addition to employing many people and investing large sums of money into the economy, what we do and where we do it is a visual business card to the world.  It´s all about perception, and thankfully, the Czech Republic has what it takes to back it up; it's as good as advertised.”

Such positives notwithstanding, there were many in the government who found the idea of incentives to spur on economic growth antithetical to their fundamental beliefs. 

They felt as if the Czech government would be giving away money, but as Tomáš Krejčí, executive producer for Milk and Honey Films and owner of Prague Studios (where XXX, Van Helsing, Hellboy, Alien Versus Predator, Wanted, Red Tails and more were shot) illustrates, “if the incentives will not be in place; foreign films will not venture into the Czech Republic and spend their money.  This is not a Czech Republic freebie to foreign producers - it's a well-calculated business which works in Hungary, Bulgaria, Germany, France, and UK.”

Claussová mentions another common misperception: “The incentive is not just for foreign filmmakers.  A Czech producer with a Czech film can fulfill the requirements and will get the incentive too...we need to keep the infrastructure busy if we want to have Czech films too.”

These solid reasons did not persuade the government, however, and the battle to pass an incentive package dragged on for years.  In the meantime, according to the figures from the Czech film commission, production volume generated by the Czech film industry directly and indirectly has dropped by roughly half from 7.17 billion CZK (in 2002) to 3.52 billion CZK (in 2008).  This includes a drop from 4.54 billion CZK to 705 million CZK brought in by foreign films that shot in CR, which used to account for 80% of the overall film industry.  At the same time, there was increase in economic impact of Czech movies, from 390 million CZK to 880 million.  This reflects increasing budgets and amount of produced Czech movies.  Overall, employment in the industry from 2003 to 2008 still experienced a 38% drop.  Figures for the past year are not yet available, but are sure to be even starker as foreign production was all but absent in 2009.

“Film business in the CR has been diminished to the point that every single production company, film supplier and vendor is affected by the lack of work,” laments Krejčí.

Frisch of IPC reflects an all-too-common theme. “Even though we have submitted budgets/bids for films that can compete with Hungary, without a Czech rebate, the perception was that places like Hungary, Bulgaria, Luxembourg and Romania are cheaper than the Czech Republic.”

Tyler Gooden, an expat who´s lived in Prague for more than seven years and who worked on many of the foreign film productions found himself moving to another part of the industry. “I'm still working, luckily, but in postproduction,” he said. “Other expats I know are picking up pieces, either from commercials, or through foreign contacts they made when Prague was booming.  So a lot of them are working abroad, have relocated temporarily, or left Prague altogether.  But the film industry is like a depraved circus.  If you want to survive you have to go where the action is.  That will never change.”

What will change now that the incentive package has been approved? Film production companies will compete on a first-come-first-served basis to get a 20% rebate on expenditures in CR.  To partake of the allocated 400 million CZK, the companies will need to pass a cultural test which rewards projects (features, docs, TV films, serials) that feature or benefit European culture.  To get the rebate, companies will have to submit an audited statement at the end of production and the money will be paid out in the form of cash grants.  Now that the program is approved, it can last as long as the government wants it (while it is of course in the power of the next government to change the terms or cancel the whole thing altogether).

“We need a law,” Claussová said. “It will be more stable than a government program [which needs yearly approval].  We start working on that now.”
So will this philosophy of “if you pass it, they will come” work? Will Hollywood come knocking?

Claussová is hopeful. “Now we start again...the interest of the producers was there...they couldn't use us because they needed these we are back among the other players but we won´t instantly get back to business from five years ago...other countries (like Hungary) didn´t have the infrastructure CR had...but by now CR has lost that advantage.”

Frisch´s thinking is that the films will come back “most definitely and probably immediately.  To make a film today is like choosing an airline - you have many choices and options, but it is always nice when you can choose your favorite, and unfortunately price plays a major role in the decision.  The Czech Republic to me is one of the best places in the world to make a movie and the passing of the rebate will help making movies in the CR possible again.”

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ldh(Guest) Published: 06:52:26 02.08.2010
In answer to the question posed in the headline...Of course the work will come back if the numbers work, if we remain financially competitive, and if the powers that be have the foresight and savvy to understand that much damage has been done and it will take time to rebuild what we have will take commitment....the kind of commitment that Hollywood and other foreign productions can bank on. In addition there needs to be investment in more modern facilities such as what Raleigh Studios did by spending 85million to build a state of the art sound stage and backlot complex in Budapest. Prague is falling way behind Budapest in Stage facilities. This a big issue when it comes to attracting stage heavy films like Hellboy or Xmen etc which need large modern stage space and the incentives to go with them. Another result of allowing places like Hungary to catch up and take the lead.
ldh(Guest) Published: 06:42:09 02.08.2010
Nuno CostaYoure missing the point in all of thisOndrej touched on this briefly in his responsein that its not about whether or not the film industry is profitable in the Czech republic or if the film industry deserves gov asst.its that there is profit and jobs to be had/kept and a long established infrastructure which would continue to benefit by encouraging and engendering foreign productions to film in the Czech Republic. In addition there are many many other ancillary gains to having productions coming here on a regular basis to make films. Clearly places like Hungary,Romania,Bulgaria,Germany etc have proven this to be the case, as did this country before it lost its edge to other places offering incentives. Every major and even smaller studio in L.A. has a physical production dept. with a staff of people crunching numbers on hundreds projects in various stages of development and pre-production. They collect data and send Line Producers,UPM,Prod Designers on scouts to all the potential places that might suit a particular film both economically and creativelythey may find one place suits the creative better than another but in most cases the bottom line will be the number. The business of making movies can and historically has been very profitable and looking for more affordable places to shoot is all part of studios and producers seeking ways to ensure that profitability continues. Its a very portable industry it travels well and the fact that Hollywood and larger indy prods are always on the lookout for a better deal is the reason why the vast majority of projects came to this country in the first placethat and the fact that there was a solid infrastructure that had little competition in the region. That has all changed for years prior to the slow down in foreign production here, producers were warning this country that if they didnt soon put in place incentives to compete with nearby burgeoning film centers (Budapest,Bucharest,Sofia,even Berlin) that production would soon take its business down the road, even though it may prefer to shoot hereand that is exactly what happened. Places like Budapest now boast stage, post production, equipment, crew, and many other service facilities that equal or in some areas surpass what Prague has on offer and they did this in a period of 5 or 6 years. I know personally of two studio features one for FOX and one for Warner Bros. (one of which I worked on) which very much wanted to shoot here this year but could not get the number to work so they went straight down the road to Budapest who were more than happy to take their moneyand make things work for them. The film industry is no different than any other industry the government might want to attract or offer incentives to do business here. The issue has been that the government in the past has not seen any benefit to engendering foreign production by way of some form of incentive programas they have with other industriestheyve always seen the film industry as small potatoesnot really an industry at all. They maintained that the films always came here in the past without incentives so why would we need them now. We needed them to remain competitive with other films centerscenters which at the time had far less infrastructure and experience yet were be looked at seriously by Hollywood and other major foreign productions because they were offering significant financial advantages. By being asleep at the wheel and not remaining financially competitive, this country has allowed nearby film centers to build the infrastructure, crew expertise, and service capabilities that previously did not exist there and which now are at a level whereby even with tax incentives the Czech Republic will have a very tough time competing with. They left thousands of film workers and vendors high and dry and shot themselves in the foot by losing out on profit and allowing upstart but savvy competitors to leave us in the dust.
Fx Martinez(Guest) Published: 12:23:56 13.07.2010
I worked for the Colorado Film Commission in the U.S. and the circumstances were similar: neighboring states passed tax incentives and Colorado did not and we fell behind in production. We even showed the legislature how money from film production rippled through the economy when we asked companies to pay their per diems in $2 bills (still a rarity and easily spotted in the States). They showed up everywhere in every business throughout the state. But still Colorado lawmakers said no to tax incentives. (New Mexico and even Canada then "stole" all the business with their generous incentives.) But the film business thrived in Colorado after we spent time building up the infrastructure for locally produced and funded films. When we became less reliant on outside production and focused on on developing home grown projects, the business flourished, without government intervention. I believe Prague needs to do the same. When you're waiting for just foreign production, you may not survive. But a strong, local, self-reliant international industry with a good business model can sustain a film community not only for Czech films, but movies for world-wide consumption.
Ondřej(Guest) Published: 12:18:30 13.07.2010
Ideologically I am on the same page as Nuno Costa. But there is the fact that these incentives are available in other countries. That means it's cheaper to shoot THERE. So if we want filmmakers to come HERE, to spend money and to teach us something new, we should offer incentives as well, in my opinion. But, in general, it WOULD be nice to live in a world without gov't incentives, yeah.
Nuno Costa(Guest) Published: 11:32:35 13.07.2010
according to your article, Tom Krejč, executive producer for Milk and Honey Films said "if the incentives will not be in place; foreign films will not venture into the Czech Republic and spend their money". I truly believe that if a business requires government incentives to be profitable, the business model is not good, and the business owner should instead shut the door and find another job. If a business is made profitable, does not need any government incentives.