As Lucija Spiljak/Poslovni Dnevnik writes on the 26th of November, 2020, by the middle of 2022, the very first Croatian film studio will come to be as was recently announced by the Croatian Audiovisual Center (HAVC), and it is an investment of half a billion kuna. The construction of the Croatian film studio should start in the first half of next year, and details about the study, construction, investments and economic effects were presented in a conversation between Poslovni Dnevnik and HAVC director Chris Marcich.
When did you recognise the need to build a study complex in Croatia and what exactly are we going to get out of it?
HAVC has been working on the idea of building a modern Croatian film studio on the model of the once mythical Adriatic (Jadran) film for years, and it is also one of the goals of the National Programme for the Promotion of Audiovisual Creativity. It’s a project of national interest and it brands us and makes us globally competitive.
The studio proved to be very necessary when the Incentive Programme, better known as Filming in Croatia, was launched back in 2012, which created the preconditions for attracting foreign productions to Croatia. If we want to develop this industry, remain competitors on the international market and create better conditions for Croatian production, a modern studio is imperative in this day and age. We want to enable Croatian and foreign productions to fully complete their projects here in Croatia. There’s a great demand for content, a lot will be recorded and we need to seize this opportunity. Currently, projects that are filmed at locations across Croatia are produced in studios in Budapest, Prague, Belgrade, London… our goal is for Croatia to be able to deliver the finished product itself.
The Croatian film studio complex will function as a hub for the audiovisual industry, which, in addition to producing film, television and content for online platforms, also includes the gaming industry. To start studying, we must prepare ourselves by educating young people to work in attractive and well-paid jobs.
How much would be invested in building it, where did the money come from?
Investor interest does exist, and the investment itself is estimated at 60 to 80 million euros. There is also room for Croatian investors who are already showing interest. Our goal is for the state to also be involved in the design of the project, because the participation of the state in the project (through land or some other model) allows access to the studio for Croatian audiovisual production, which was announced to investors as a sine qua non for us.
How much would the investment pay for and where would the new Croatian film studio be located?
Olsberg’s study predicts that the Croatian film studio itself would be commercially viable, and even with conservative assumptions about occupancy, it could generate significant revenue, in the second year of operation alone it could generate about two million euros, and in the fifth year – more than four million euros. Capital investments aren’t being included in this calculation, so the return on the investment primarily depends on the amount of capital investment of the investor and the earnings on ancillary services.
The final choice of location is up to the investor, but research conducted by Olsberg SPI provides a clear framework of what location criteria for the studio must meet, such as criteria related to noise and traffic connectivity, primarily with the airport. Since Olsberg did this study, other localities such as Koprivnica, Split and Lekenik have also expressed their interest.
What kind of studio would it be and what kind of opportunities does it open up?
Olsberg’s research recommends the construction of a studio complex with six studios, ranging from 1,394 to 2,787 m2 (a total of 10,684 m2), with a height of 12 to 15 m, so that structures for recording and lighting of suitable size can be installed in them. The studios should also have accompanying facilities. The biggest opportunities open up for the production of high-quality television content. For example, the filming of the Game of Thrones series in Croatia was one of the drivers of launching the Incentive Programme. We all know the impact the series had on the promotion of Croatia around the world. It’s a multidimensional project, a combination of technology and a creative cluster that will be used by other sectors such as gamers.
What would the construction of the studio bring to Croatian production and what benefits would the state budget have?
Of course, the Croatian film studio complex must be commercial, but our goal is to provide access to Croatian productions that usually have smaller budgets. This would be possible, for example, as part of a smaller study, which would be built as part of a complex, and for which some of our producers are already expressing a level of interest. This space could also be used for educational purposes, and we’re already facing a shortage of skilled labour. The state budget would primarily benefit significantly from foreign productions and employment of Croatian employees, but our producers are currently forced to “import” people because we lack studio space, and often the necessary equipment, too. Why shouldn’t we become the ones who export these services, and at the same time satisfy Croatian production?
Are there similar studios in the region? How competitive would a Croatian film studio actually be?
Large film studios exist in Hungary and the Czech Republic, followed by Bulgaria, Romania, Serbia… Greece has increased its incentives to 40% (the Croatian incentive is 25% and 30% for shooting in areas of below-average development), and late last year the construction of collaborative studios with NU Boyana Film Studios was announced, on top of that, this year tax relief of 30% was introduced for investments in audiovisual production in Greece.
The situation in Croatia is simple, there’s no studio. This automatically takes us out of the competition for projects for which a studio is one of the conditions for production. We were among the first in the region to launch the Incentive Programme. So far, with the Incentive Programme, we’ve put our efforts into God-given locations and hardworking people. Building studios, along with the locations we already have, represents the most natural development of the industry. A step higher. We have to move on, because others won’t just wait around for us.
What sort of the reaction has the Ministry of Culture and Media had to it?
The Ministry of Culture and Media has been a partner in the project from the very beginning. It’s a co-sponsor of the study conducted by Olsberg SPI. They’re aware of the need, in addition to maximally supporting Croatian production, which was especially evident this year when additional funds were provided for projects that were moving and that will start filming.
How much did the ”Recording in Croatia” measures help the AV industry?
In Croatia, from the launch of the Incentive Measures Programme back in 2012 until the end of 2019, a total of 70 productions were filmed under the Incentive Programme and that all achieved local consumption of more than one billion kuna, and only in 2019, which was a record year, did it realise consumption which exceeded 340 million kuna.
When the costs of the paid taxes, contributions and fees are compared with the amounts of received incentives, it can be concluded that the entire amount of paid incentives for the production of AV work was directly returned to the state budget through those very channels of paid taxes and contributions. In addition to employment and education, industry and the country have experienced great promotion. Croatia is being branded not only as a destination but as a modern and attractive country. In the most conservative version, the Institute of Public Finance estimates the overall positive effects of the Game of Thrones series on the Croatian tourism sector in the entire period from 2012 to 2019 at a minimum of 2-3 billion kuna.
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