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INDUSTRY / MARKET Croatia

Croatia explores the prospect of building a film studio

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- The Croatian Audiovisual Centre has presented two studies that show that building a studio would be feasible and beneficial to the economy, tourism and culture in the country

Croatia explores the prospect of building a film studio
Head of HAVC Chris Marcich (left) and Olsberg SPI's Jonathan Olsberg presenting the findings of the studies

Last week, the Croatian Audiovisual Centre (HAVC) held a press conference at which it presented the two business studies conducted by the country's Institute of Public Finance and Olsberg SPI on the feasibility of building a film studio in the territory. Both studies reached the basic conclusion that the increased level of international production in the country warrants the existence of a studio, and highlighted the undeniable positive effects it has had on the national economy, tourism and culture.

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At the presentation, head of HAVC Chris Marcich pointed out that the idea of opening a film studio complex in Croatia has existed for some time. “The two studies commissioned by HAVC demonstrate the great potential of investing in the AV sector, since every euro of state subsidies and incentives awarded generates on average more than two euros of returns, while every euro invested in incentives to foreign production generated a tenfold return,” said Marcich.

"Besides positive fiscal impacts, investment in Croatian film naturally also creates an immeasurable contribution to Croatian culture. International productions contribute to the employment of Croatian film workers, have a favourable effect on Croatia’s branding and promotion, and impact other sectors, especially tourism.

"Opening a film studio complex will additionally boost the export of film services; however, it will also be important for Croatian filmmakers to have access to the studio,” stressed Marcich, adding, “There is investor interest in the project, with the possible investment totalling €80 million.”

Irena Klemenčić, from the Croatian Institute of Public Finance, presented the research data demonstrating that every euro of public money invested in the audiovisual industry generates an average return of €2.40. When it comes to incentives for international productions, every invested euro brings back €11, and as much as half of this amount goes directly back into the state budget.

Between 2012, when the incentives scheme was introduced, and 2018, the state invested €17 million, which generated local spending amounting to €90 million. The direct economic impact totalled €30 million, exceeding by 76% the amount of funds awarded to the projects via subsidies. In addition, Game of Thrones alone attracts 60,000 visitors to Croatia annually. Between 2012 and 2019, its impact on Croatian tourism amounted to up to €400 million.

The Olsberg SPI study, which was presented by Jonathan Olsberg, demonstrates that public investment in the form of incentives for film and TV productions leverages three to four times the amount invested.

While a film studio complex based solely on local production would not be feasible, foreign productions would be able to spend more time there and generate considerably greater financial benefits for Croatia. When in need of a studio, foreign producers turn to other countries in the region, such as Bulgaria, the Czech Republic, Romania or Serbia. On the other hand, Greece and Italy compete with Croatia with their coastal locations.

According to Olsberg’s financial approximations, the estimated annual income from a studio complex would amount to circa €2 million in the second year, while this amount would double within five years.

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