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How filming incentives drive global movie-making

Filming incentives drive the globalised production industry. KFTV takes a look at the main international hubs and how they attract the biggest shoots.

Tax credits and cash rebates are among the most popular forms of filming incentives offered by countries, states and provinces around the world.

Filmmaking is such an inherently risky enterprise that big-budget productions now rarely base themselves anywhere that does not offer considerable financial support – the basic economics simply do not make sense otherwise.

“Incentives are discussed early on during the scouting and research process,” says Becky Brake, whose recent credits have included working as a supervising location manager for the past few years on both the Star Trek and Mission: Impossible movie franchises. 

“The producers usually have an idea of where the production should or could be based out of and that is definitely incentive-driven. The initial scout is very story- or visually-driven, while keeping in the back of our minds that we will make every effort to bring as much work as possible back to the incentive state or country.”

Jared Connon is a New Zealand-based supervising location manager who worked on Peter Jackson’s Hobbit trilogy (pictured below) and the live-action Ghost in the Shell (pictured above). He agrees with Brake: “Generally speaking, producers are well aware of the incentive long before they reach out to me to discuss locations.”  

California may be the home of Hollywood, but in the last year the Golden State has chosen to focus heavily on supporting TV shoots rather than big-budget feature production. Location filming has risen since Sacramento boosted the state film fund, but it is low-budget shoots that proliferate and most productions still don’t secure tax credit support at all.

Big-budget Hollywood productions have very limited location options in the US. Most states do offer some kind of incentive support, but while tax credit and rebate percentages may look reasonable, available film funds are generally very small. A tax credit of 20% of eligible local spending is an attractive figure, but the percentage means little if the fund backing it has only five or six million dollars available.

Atlanta, New Orleans and New York have become among the only feasible US options for big-budget Hollywood films and high-end TV shoots. Each offers a generous filming incentive, alongside world-class studio facilities and a growing crew base. Marvel has based many of its movie productions in Atlanta and films its high-end TV dramas in New York through a rich deal with online platform Netflix.

Canada is of course the closest geographical competitor to the US. Generous filming incentives in British Columbia and Ontario make Vancouver and Toronto among the busiest production hubs in the whole of North America, let alone Canada.

“When we started the scouting process for Mission: Impossible – Ghost Protocol (pictured below), we knew our base was LA or Vancouver and ended up in Vancouver due to the available incentives,” Brake says. “Additionally we shot most of our Russia scenes in Prague, driven by incentives.”

The UK has become a leading production hub by offering rich filming incentives for both big-budget shoots and high-end TV dramas. Marvel has shot several movies in London and the rebooted Star Wars franchise is currently based at Pinewood Studios.

Britain is generally the benchmark against which production industries across Europe measure themselves. Many of the UK’s neighbours offer filming incentives of one kind or another, but, similar to the US, most lack the backing funds and infrastructure to truly compete internationally. 

Italy is emerging as a European contender with a reformed incentive. Germany has a high profile but could use a more unified financial support programme of its own to improve its global impact.

Klaus Darrelmann is a location manager based in Germany. His credits include Wes Anderson’s The Grand Budapest Hotel (pictured below), for which he won a Location Managers Guild International Award in 2015. He explains that Germany’s filming incentives have helped offset higher production costs, but intense competition from neighbours like Hungary means Germany has had to ensure it can offer a flexible library of locations.

The Grand Budapest Hotel

“One direct impact of German filming incentives on location work in general is the need to offer locations in Germany that can replace other countries and cities around the world,” Darrelmann explains.

“This is all based on the fact that the films asking for these locations took advantage of the financial benefits to film in Germany while using the existing studio facilities, mainly at Studio Babelsberg.

“I think that most movies today decide on their European production [centre] based on the money that can be sourced in the relevant country [rather than] the available locations.”

On the other side of the world, New Zealand and Australia dominate the production landscape in the southern hemisphere. Both countries need strong filming incentives and infrastructure to counter the psychological impact of their distance from the rest of the world. 

Australia is arguably in a stronger position at the moment, offering multi-pronged financial support. The process is complemented by a formalised system of one-off payments to help deliver the biggest Hollywood productions, including Marvel, which is set to visit for the first time with superhero sequel Thor: Ragnarok

“Sometimes incentives are ‘created’ by the particular countries that are chosen for the visual in order to make a budget work and keep more of the filming in that country,” Brake explains.

New Zealand has struggled to compete internationally since Peter Jackson’s Hobbit films wrapped, but boosted its incentive offering in mid-2014 and as a result will host James Cameron’s Avatar sequels (pictured left) over the next couple of years.

“The increased incentive has definitely helped put New Zealand back at the top of the list when these larger-scale international productions are considering their options,” says Connon.

“Our incentives are pretty clear cut, so it’s easy for them to compute the potential for financial forecasting. What they are really interested in is understanding the cost of physical production services here in New Zealand.”

South Africa and Morocco are the production hubs on the African continent, with the latter having managed to sustain a high profile internationally despite having only recently launched a formal filming incentive. 

On the other side of the Atlantic, South America has considerably less international incentives appeal. Netflix secured a $2m incentive to film the cartel miniseries Narcos in Colombia to tell the story of notorious drug lord Pablo Escobar, but otherwise South American incentives are generally local in scope. The continent is choosing to instead look to the wider world through co-productions, while lower production costs have helped to stimulate a thriving commercials industry that attracts global brands.   

Filming incentives divide opinion and are sometimes thought of as representing the global production industry’s ‘race to the bottom’. However, the numbers are everything and tax credits and rebates are set to continue driving international shoots for the foreseeable future.

 

Hobbit image: Warner Bros. Picture / Metro-Goldwyn-Mayer Pictures

Mission: Impossible - Ghost Protocol image: Paramount Pictures

The Grand Budapest Hotel image: Fox Searchlight Pictures

Avatar image: WETA / Twentieth Century Fox



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