Background to this report
This annual report is the fruit of a major collaboration project between the European Audiovisual Observatory, part of the Council of Europe in Strasbourg, and the European Film Agency Research Network (EFARN). It aims at providing concrete figures on how European theatrical fiction films are being financed, offering a big-picture, pan-European perspective, and complementing work done at national levels.
Based on the actual budget analysis of 448 European live-action fiction films released / scheduled for in 2021, this is probably the largest pan-European data sample available to date on the financing of European fiction films for this year. The report provides unique fact-based insights on a wide variety of research questions, from the quantification of the average budget of theatrical European fiction films, to the importance of individual financing sources.
Financing structure of European theatrical fiction films
In 2021, the financing of European theatrical fiction films continues to be primarily based on five different financing sources:
- Direct public funding,
- production incentives,
- broadcaster investments,
- producer investments and
- pre-sales (Broadcaster investments combine co-production investments by broadcasters with pre-sales made to broadcasters based in any of the co-producing countries. Pre-sales combine national and international pre-sales; pre-sales in the country of origin).
The single most important financing source clearly was direct public funding, which accounted for 26% of the total financing volume tracked in the analysis. Direct public funding was followed by production incentives which accounted for 21% of total financing while producer investments (excl. broadcasters) accounted for 18% of total financing slightly ahead of broadcaster investments (17%). Pre-sales (excl. broadcasting rights) accounted for 13% of total financing. Other financing sources, including private equity, debt financing or in-kind investments are negligible from a cumulative perspective.
However, there appear to be significant structural differences among countries concerning how theatrical fiction films are financed. Some of these differences are apparently linked to market size. Two obvious differences concern direct public funding and production incentives. The data clearly suggests that the weight of direct public funding in film financing decreases with increasing market size and vice versa. While comprising only 18% of total financing in the four large sample markets, direct public funding accounted for 44% in medium-sized and 63% in small sample markets.
In contrast, the financing weight of production incentives seems to increase with market size, growing from only 3% in small markets, to 14% in medium-sized markets up to 24% in large markets (25% excl. French films). Also, the significance of producer investments as well as pre-sales appears to be comparatively low in small and medium-sized markets when compared to large markets.
