19/01/2007

The new Film Law, voted on 6/30/2005 and enforced since 8/19, is a turning point for film financing in Poland. As all Polish film professionals hope, it is the beginning of a new era for the industry and the market. Indeed, from the end of WW2 until the very end of the 1980s, it was impossible to even talk about the Western concepts of industry and market in relation to the Polish cinema. During the communist era, all films were produced in big state-financed studios: WFFiD (Studio for Fiction Features and Documentaries), Zodiak, Tor, Zebra, Parspektywa. Even when the political conditions were at their worst, Polish cinema proved great, thanks to the work of such masters as Andrzej Wajda, Jerzy Kawalerowicz, Wojciech Has, Krzysztof Zanussi, Krzysztof Kieślowski. Yet, film production was never free —nor was anything artistic— since it was wholly financed by the state. Thus, production, sales and acquisitions, participation to festivals and international exchanges were thoroughly controlled by public authorities and subject to censorship.

Contrary to what was expected after the Berlin wall fell down, the political change and the transition towards market economy did not help the Polish cinema develop rapidly. The 3d Republic had other priorities, mostly economic (privatising, organising politics at home and handling foreign affairs, health, education, agriculture, etc.), and the cultural sector was one of the last things the government tried to deal with until now. Cultural activities remained marginal, with less than 1% of the annual budget. Three agencies attached to the Ministry of Culture handled film financing: Agencja Scenariuszowa (script development agency), Agencja Produkcji Filmowej (production agency), and Agencja Promocji (promotion agency). In the period 1991-2000, the state would spend 1.6 (1991) to 5.9 million euros (1998) per year on film production. The number of films produced thanks to this national support varied from 13 per year (on 42 supported audiovisual projects including documentaries, features, animation films and educational ones) in 1996 to 24 in 1991 (on 39 supported films). The 21th Century started on a crisis due to the limited support (cf. interview Andrzej Zulawski): in 2001, the state spent only €2.9M euros (on 44 projects including 21 fiction features) and in 2002, the budget was down to €1.5M (for 34 projects including 13 fictions). The year after, the State gave nearly three times this amount (€4.3M) and in 2004, this sum reached €5.3M. The average budget for a Polish film is 525,000 euros.

Creation of the Polish Film Institute

The law voted last Summer created the Polish Film Institute, ensuring that its budget will be as high as the amount spent in 2004 (around €5.2M from the Ministry of Culture). The Institute is in charge of implementing governmental policies concerning cinema, that is, of 'creating the best conditions to develop productions and co-productions, inciting and supporting the development of all cinematic genres, especially artistic ones, supporting beginners and helping young filmmakers develop their artistic skills, providing financial support to new projects, production, distribution and promotion'. The €5.2M should however represent only 20% of the budget of the Institute (€25.4M). The national fund dedicated to promoting culture will add 1.5M but the main financing source of the Institute is the 1.5% tax on all benefits made compulsory by art. 19 of the law for all exhibitors, distributors, TV channels, digital platforms, and cable TV channels which should bring 18.7M. This article is actually controversial: private investors vehemently denounced it as a proof of 'bureaucratic state protectionism'. It was quite uneasy to find a compromise between the artistic operators, in favour of this article, and the investors. After months of hot debate, a large information and promotion campaign launched by the Minister of Culture Waldemar Dąbrowski and supported by artist and intellectuals finally led to the drafting and approving of the new law (read news of 13/7). However, in spite of the fact that the law is compatible with the European system, its most stubborn opponents decided to take it to the Constitutional Court for an alleged violation of two constitutional rights —freedom and equality of all individuals and all business-people.

This argument against the law is mostly based on the fact that old state-studios and private investors (who have existed for fifteen years at most) do not have the same economic potential. Besides their regular activities, studios receive copyright money for all the films produced over five decades and sold to TV channels and they derive great real-estate advantages from the fact that they use premises partially taken care of by the state, which saves them a lot of money. As far as private investors are concerned, their economic potential has not exactly be measured yet, which makes them doubt their capacity to cope with the new fiscal scheme, except for TV channels who are definitely the strongest private operators and should therefore, according to the others, pay more.

The creation of the Polish Film Institute entailed the liquidation of the three agencies attached to the Ministry. The fact that they all passed on their responsibilities to a single institution worries some of the Polish film operators, but Agnieszka Odorowicz, who was appointed in October by Minister Dąbrowski to direct the Institute, uses the economic argument to contradict the pessimists: the Ministry's financial input will only be of 1 million euros, that is, much less than the sum the three agencies used to receive.

What bothers some members of the film industry is not the concentration of all the responsibilities within a single institution so much as the power vested in its director. Indeed, as the investors who will have to pay the new tax underline, the law gives them not way of controlling expenses. It is true that five of the eleven members of the Board of advisors are these investors' representatives, but they are only consultants —the director eventually makes all the decisions.
The other thing the law does not quite make clear is the definition of an 'artistically ambitious film', which according to the text gets higher support (up to 90% of the total budget). Polish producers also criticise the vagueness of the definition of a 'Polish film', saying that, interpreted in a certain way, it could lead to giving more money to multilateral co-productions for which Poland is only a minority partner (cf. infra).
The question of whether state-owned structures (especially studios) should be privatised is a different, but crucial, issue. There again, the new law is ambiguous. Finally, the other problem at stake is of a political nature: the law and ensuing recruitment campaign to complement the staff of the Institute seemed a little overhasty. Wasn't this zeal related to the following October 2005 elections and the change of leaders?

Despite its alleged defects, the vote and enforcement of this law was a necessary response to a critical situation: the Polish film industry was nearly bankrupt and really could not wait. The new law levels things out, at least in principle, and gives Polish filmmakers roughly the same resources as their European colleagues.

Details of the new law

According to the new Film Law, a film is considered 'Polish' if the producer or one of the co-producers has its main office in Poland and fulfils at least one of the following set of conditions:

The author of the script or the novel the script is based on, the director and one of the leading actors are Polish citizens; the level of participation of the producer based in Poland is 100% and at least 80% of the production money is spent in Poland; the first copy is in Polish;
The author of the script or the novel the script is based on, or the director, or one of the leading actors is a Polish citizen; the level of participation of the co-producer based in Poland is at least 20% if the co-production is bilateral and 10% if there are more partners; at least 80% of the production money is spent in Poland; the first copy is in Polish;

The request for subsidies to develop, produce, distribute and promote a film can be sent by any citizen of Poland or of the EU or of the EFTA (European Free Trade Association) who is a film professional. Subsidies are subject to refund, provided the supported project makes profit.

The sum provided by the Polish Film Institute cannot exceed:
1. 50% of the total budget and
4 million zlotys (1 million euros) for a fiction of more than 70 minutes designed to be screened in film theatres;
500,000 zlotys (125,000 euros) for a documentary;
2 million zlotys (500,000 euros) for a full-length documentary designed to be screened in film theatres;
500,000 zlotys (125,000 euros) for an animation film;
3 million zlotys (750,000 euros) for a feature-length animation film (70 minutes at least) designed to be screened in film theatres;

2.90% of the total budget and
. 2 million zlotys (500,000 euros) if the film is 'artistically ambitious';
.1.6 million zlotys (400.000 euros) if it is a 'low-budget' movie.

For other projects which concern cinema (infrastructural investments, film promotion, distribution, script development), the granted sum cannot exceed:
50% of the budget if the request comes from a company,
90% of the budget if the request comes from a non-profit institution.

The amount granted cannot exceed 3 million zlotys (750,000 euros).

Training programs

With new talents in mind, last June, TVP, the Ministry of Culture and the Polish Directors' Association agreed to launch the '30 minutes' programme to grant 250,000 euros (a million zlotys) to young directors for their first fiction films (of up to 30 minutes - read news 6/15). This initiative elaborated at Andrzej Wajda's staging school consists in supporting up to ten short films by young filmmakers per year. The candidates (who do not have to have graduated at a film school) can get up to 25,000 euros (100,000 zlotys). TVP Kultura (the cultural public channel) handles the distribution and promotion of the selected projects.

While this programme is primarily designed to make up for a lack of short films in Poland, another programme, also created at Wajda's school and entitled EKRAN, focuses on the production of features by authors who have already made one or several short films. EKRAN is technically a training programme but in practice, by providing artistic assistance from the writing of the script to the actual production, it indirectly participates to the financing process (read news 11/2). In fact, like many training programmes supported by MEDIA, EKRAN is a cheap way of developing a project very nicely!

Operators out of the industry

The success of novel adaptations, such as Ogniem i mieczem ('by fire and swords') by Jerzy Hoffman (€25.1M benefits and 7 million tickets) and Pan Tadeusz (Pan Tadeusz – 'when Napoleon crossed the Niemen') by Andrzej Wajda (€20M benefits and 6 million tickets), convinced Polish banks (especially Kredyt Bank, PKO bp) to invest in film production. However, this attempt did not last after the commercial failure of the most expensive movie in the history of Polish cinema, Quo Vadis by Jerzy Kawalerowicz, an adaptation of Henryk Sienkiewicz' novel. This feature earned 17.2 million euros and sold 4.3 million tickets but the production budget was of €14.8M. The project Quo Vadis temporarily attracted national companies such as Poczta Polska (Polish post), who, since then, never invested again in films, and Telekomunikacja Polska (telecommunication) who only invested once after that (in Artur Więcek's Anioł w Krakowie - 'the angel of Cracow' in 2002).