Building sustainable film businesses: the challenges for industry

Section 6.0  

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  Success factors for Public Support Systems

6.3

Where broadcasters are mandated to 

invest in independent content 

In several countries television broadcasters 

(particularly public service broadcasters) are 

required to invest in independent film production, 

through the mechanisms of both license fees and 

equity participation. This approach has reaped 

considerable success in markets like France and 

Denmark, for example, and in the former it has 

resulted in a number of major television companies 

setting up successful film production activities. 

Studio Canal is a prime example of this.

There are even better examples of this strategy 

working well for independents, namely in television 

production. Where public service broadcasters 

have been required to show a minimum amount 

of domestic content, a market opportunity is 

immediately created and local television producers 

working with broadcasters have benefitted. This 

has resulted in real security for those independent 

television companies that have been able to 

establish themselves as reliable broadcaster 

suppliers. The additional benefit of this approach, 

particularly for film, is that it forces producers and 

broadcasters to work together at the development 

stage, increasing the producers’ understanding of 

the commercial audience he or she is producing for. 

However, as film consumption increasingly takes 

place online there are questions as to whether 

traditional broadcasters will have as much on-going 

relevance for the film market, or whether they will 

be displaced by over-the-table (OTT) video-on-

demand or subscription-video-on-demand (SVOD) 

movie services. 

6.4

Uses of levies and quotas 

There are a number of other factors seen in film 

support systems around the world which involve 

heavy regulation but which could contribute, over 

time, towards company sustainability. 

Levies  

   

Levies at the consumption stage, for example on 

ticket sales, are useful for rolling funding back into 

feature film production. In particular, by using 

the funds from levies to support the independent 

sector, it is possible for independents to benefit 

from the success of Hollywood films, rather than 

being kept out of the market by the US studios. 

Domestic, independent and very ‘cultural’ films, 

which usually struggle to access markets, are 

helped into production and this approach, crucially, 

benefits public agencies supporting film since the 

programme is self-funding rather than requiring 

new public investment. 

However, one drawback to levies is that, at present, 

it is unclear how they could be applied to new 

technologies such as video on demand, SVOD and 

other digitally distributed content. In addition, 

while levies have been used at different times and 

in different countries for many years, selling the idea 

of a new levy to politicians can be difficult as the 

companies suffering the levy might also own other 

media which puts them in a position of significant 

influence in the political domain.

Quotas

   

Quotas are another method of securing 

sustainability for film businesses at the production 

end of the value chain, ensuring that a minimum 

level of domestic production is commissioned or 

shown in cinemas. These quotas could be enforced 

either among exhibitors – cinemas are mandated to 

show a minimum number or proportion of locally-

produced films – or among broadcasters, which 

similarly are required to show a minimum amount  

of domestic content. 

China currently only allows 20 foreign films to be 

imported each year, although the country recently 

agreed to allow a further 14 Imax or 3D titles into 

the country annually. South Korean exhibitors are 

required to reserve 20% of screen time for locally 

produced films and in fact the quota was until a few 

years ago even higher than that. 

Building sustainable film businesses:

the challenges for industry and government

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A quota for cinemas is a less popular and useful 

mechanism, since it is designed specifically to distort 

the market in favour of a particular kind of product.

6.5

Systems that combine well with those 

in other countries 

A crucial consideration of all for public sector 

support for film businesses is that whatever support 

is offered must be designed to be easily combined 

with support offered in other countries because 

most independent film are funded through a 

variety of international co-producers and other 

networks. This means that co-production treaties, 

and memoranda of understanding, are crucial to 

enabling local companies to build international 

business partnerships and access funding required 

to make films for international markets. Where 

this simple mechanism is not in place local film 

businesses could be severely restricted in the level 

of growth that can be achieved. 

Section 6.0  

l

  Success factors for Public Support Systems

Building sustainable film businesses:

the challenges for industry and government

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