This recognition marks a turning point of sorts for the Italian industry, with the European Film Market (EFM) naming Italy as this year's 'Country to Watch'.
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Italian industry is becoming increasingly international. In recent years, there has been an increase in investment by international groups such as Fremantle in Italian production companies such as Lux Vide, The Apartment and Wildside.
The streamer is also investing more in Italian content, backing titles such as: good mothers (Disney+) and super sex (Netflix). Italy is also co-producing with more countries, with an Anica and APA study recently reporting a 51% increase in the number of films and TV series produced with international producers. For example, Italy and France co-produced 73 films and TV series between 2020 and 2022.
attractive incentives
The main factor driving this growth was Italy's generous tax deduction, which was raised from 30% to 40% in the wake of the coronavirus pandemic. It has proven to be a huge draw for international shoots, such as Edward Berger's films. conclave Roland Emmerich's gladiator-themed series, etc. people who are about to die Joe Wright's Mussolini Limited Series M. Son of the Century.
Recently released figures show how tax credits have boosted Italian film production, with 355 films produced in 2022, above pre-pandemic levels. This number includes 253 100% Italian films and 63 co-productions.
In fact, the tax credit has been so successful that the government is working to reform it amid concerns that too many productions are claiming relief. Of particular concern is that of the hundreds of Italian productions supported by tax credits, relatively few have managed to secure meaningful distribution.
This is partly because Italian box office revenues have not yet recovered to pre-pandemic levels. Attendance remains 23% lower than in 2017-19. Since the advent of streamers, movie-watching habits have changed significantly. Box office success is There's still tomorrow Despite the surge in local production, this is more the exception than the norm.
Traditional Italian comedies aimed at older audiences have fallen out of favor. Additionally, many of the films eligible for the tax credit are documentaries (for documentaries, he only needs 15 theater screenings to qualify).
The success of the tax credit had further ramifications. Increased demand has increased crew wages and facility costs, driving up domestic production costs. The Ministry of Culture has been inundated with applications for tax credits, but some say it lacks the resources to process them, creating a backlog and making cash flow planning difficult, especially for small and medium-sized businesses.
Last summer, Lucia Borgonzoni, Undersecretary of State at the Ministry of Culture, said: screen international The government said it is working on tax credit reforms to “improve the quality” of projects that secure tax credits. She expressed her concern that few Italian productions supported by tax credits were seen by movie audiences. “The tax credit is automatic, but we would like to see that tax credit go towards higher quality production,” she said.
At the moment, few details have been released about how the tax credit will be reformed, but many within the Italian industry agree that the government is right to fix it. .
Roberto Stabile, Head of Special Projects at the Cinema and Audiovisual Directorate of the Ministry of Culture, Cinecittà, highlighted the successes of increasing tax credits to support the industry during the pandemic. “Two years into the long pandemic period, the health of our audiovisual industry is very good,” he says. “However, this type of support risks becoming like a drug to the market.”
He insisted there was “no significant reduction” to the headline 40%, but insisted the government was working to find an appropriate level of state support.
Carlo Cresto-Dina, Producer and CEO of Tempesta – Tempesta is behind all Alice Rohrwacher's feature films and Berlinale Competition films. Gloria! — also says it is important to recognize the success of tax credits in strengthening Italian industry — but the review is the right move.
“Everyone keeps repeating that too many movies are being made because tax credits have made it easier for a lot of low-budget films to be made that never make it to the market or film festivals,” Crestodina said. To tell. “That’s true, and I believe we need to find a way to give them eligible access to tax credits so that public funds can be spent on movies that can actually be seen and enjoyed.”
But it is equally important not to create barriers to entry and to ensure access to public funding and tax credits “even for start-ups that bring innovation and ideas,” the producer added. He pointed out that some “large companies and groups” were financing production worth tens of millions of euros, or even tens of billions, through tax credits. “This is all well and good. In my opinion, this is a sign of our industry's ability to grow,” says Krestodina.
One of the proposals is to impose new conditions on the receipt of public funds, which Crest Dina favors. “They can demand that a significant part of the rights created by tax credits remain the property of Italian companies, they can demand guarantees of employment, gender equality and quotas for employment of disabled people; They could also require the adoption of truly effective steps for the sustainability of the fund, rather than the greenwashing practices that some funds seem to be compromising on,” he suggests. “In short, make sure your investments improve not only the balance sheets of large international groups, but also the quality of our industry.”
Other ideas for reforming tax credits include capping the fees actors, directors and screenwriters can be charged. Whatever changes are ultimately approved, Italy currently has a right-wing government led by Prime Minister Giorgia Meloni and the Italian Brothers party, elected in 2022, with coalition partners including Prime Minister Matteo Salvini's far-right party. Some producers are concerned about what will happen next, given that the right-wing League and the late Silvio Berlusconi's centre-right Forza Italia.
a worrying trend
Many producers say the new government has a completely different attitude towards Italian industry than the previous leadership. Concerned people fear that government control over the media is creeping in through the appointment of right-wing figures to head state-controlled institutions such as broadcaster Rai, the film school Centro Perimentale, and the Biennale (parent organization of the Venice Film Festival). It points out that The state-run David di Donatello Academy.
Some have expressed concern that the Italian government will water down the investment obligation for streamers such as Netflix and Disney+ to invest 20% of their revenue in independent Italian productions.
Like many producers, Andrea Occhipinti, CEO of Lucky Red, a major Italian producer and distributor, is concerned about how long tax credit reform will take. “We're caught between the old rules and the new rules when it comes to tax credits,” he says. “This, combined with the risk that the government will grant requests from streamers and broadcasters to reduce investment requirements for independent production, has led to a dramatic slowdown in production.”
Last year, film crews were fully booked, but in 2024, the number of unemployed people will increase, and many small and medium-sized production companies will find themselves in financial difficulties, he said. “[The government does not] It made us understand how important the stability of the rules and the protection of independent producers is to our industry,” Occhipinti said, adding that Lucky Red was set to co-produce the feature film at Rome's Cinecittà studio. It pointed out. Because of the uncertainty, we have to shoot in other countries. ”
Simone Gattoni, CEO of major Italian production company Cavac — works on films by director Marco Bellocchio, etc. kidnapped And Marco Tullio Giordana's upcoming works The Life Apartment — says uncertainty about tax credits is also impacting his business. Kabak made five films last year and moved forward with making the feature film within the old tax credits because he “didn't want to expose the company to uncertainty in 2024,” he said. Gattoni says.
As a result, Kavac will not be producing any films this year and will only be producing one television series. Gattoni believes production in Italy will decline in the first six months of 2024 as a result of the uncertainty. He emphasizes how important tax credits are to film production, describing them as “a real funding tool.” But he added that the tax credit could be seen as too generous for television and instead acts as a “discount for streamers and broadcasters.”
Actor and producer Pier Giorgio Bellocchio, who runs the Beta Film-backed production company Montprasem with directors Marco and Antonio Manetti, also said there is no distinction between films and TV series in the 40% tax credit. , points out that this has boosted production levels (and costs) across the Italian industry. Bellocchio likened this to the “doping” of the film industry over the past four years. His colleague Marco Manetti acknowledges that reforms are needed to help the film industry, but is also concerned about future “quality” standards that films will have to meet to access credit. ing. “What happens if you make a film against the government?” Manetti asks.
“It's complicated,” he continues. “I know this is not a popular opinion. But as a film industry, we should learn to be a little less dependent on the state and find other ways to look for audiences, buyers and international cooperation.” is.”
