Judging from the scant number of Ukrainian films that have hit the big screen in recent years, the once-powerful industry is now more dead than alive.
Filmmaking’s good times ended in 1991, with the collapse of the Soviet Union, which provided generous financing and had an enormous infrastructure and cinema network.
President Viktor Yanukovych’s administration has promised to revive the film industry through incentives. He has already signed one law to help finance films, dubbed “revolutionary” by its authors, and further legislation is planned.
But market players aren’t as excited about these efforts, saying that everything depends on how these laws will be implemented, and that tax incentives alone can hardly make any difference. What the industry really needs, they argue, is broad financial, political and logistical support.
In the years before 1991, annual movie output came to more than 500 documentary, animation and scientific movies, nearly 30 fiction movies and 60 films for television. Production fell off a cliff in the 1990s, and showed little sign of revival in the 2000s, peaking at 40 films in 2008, and only 13 in 2009, of which only a few were distributed widely.
State funding for the industry slumped from an already modest Hr 48.5 million in 2008 to Hr 4.3 million in 2009 as the economic crisis hit the budget hard.
Oleh Kokhan, owner and producer of Sota Cinema Group, which has produced internationally acclaimed movies, said that the past 20 years of stagnation have not only seen the loss of a huge wealth of ideas, professionals and skilled personnel, but also, crucial interest from the audience.
Now, however, officials are convinced that a solution to get the industry back on its feet has been found.
“The first revolution has happened this year and the second will happen in 2011,” said Hanna Chmil, former head of the State Cinematography Service and one of the coordinators of the reform process since 2007.
Amendments to legislation passed in March introduced a new system of national filmmaking financing and provides tax incentives for producers and distributors, which will be in place from the beginning of next year.
The new legislation foresees the creation this year of the Support Council for National Cinematography, formed in equal parts by the government and the National Filmmakers Union. This Support Council will decide which films qualify for fiscal relief and financial support, which can be up to 50 percent of a fiction movie’s budget and 100 percent for animation, documentary and educational films.
The second major innovation in the law is a tax incentive. Until 2016, filmmakers will be exempt from paying tax on land use and all operations connected with distribution, demonstration and production of certain films will be exempt from value added tax.
This is the first step in a program aimed at increasing state support for the film industry.
The next part of the reform process will involve flooring new legislation in parliament setting up a system of collecting duties used to fund filmmaking. The provisions of this law, if passed this year, would be included in the budget for 2011.
The authors of the reforms expect that money for filmmaking will be formed from several new duties: two percent on the sale of tickets at cinemas, sales of videos and DVDs and the purchase of television broadcasting rights for films, as well as one percent on cable television and internet provider services. The State Cinematography Service estimates that all together these duties will bring in up to Hr 80 million every year.
Film lobbyists are also pushing for an even bigger funding boost from a one percent excise duty on alcohol and tobacco.
“That’s kind of a dream. We could get nearly Hr 480 million annually,” said Chmil.
The plans have been cautiously welcomed in the industry. “The amendments to the law build a good platform for the revival of film industry, but only if further reforms are done and if they are properly implemented,” said Serhiy Trymbach, head of National Filmmakers Union, an independent organization of film industry workers.
But for some, the reforms are not broad enough.
Sota Cinema Group’s Kokhan says that to revive industry and to produce quality films, a comprehensive approach to the problem is needed.
“Certain types of reforms will give birth to the kind of movies that nobody wants to watch,” he added.
To receive the backing, films will have to prove they are so-called “national films.” That means “made by a Ukrainian producer in the Ukrainian language, shot in Ukraine and its rights belonging to a Ukrainian company,” explains Sergij Zlenko, a lawyer at Odessa Film Studio.
Zlenko said that this can only be proved after the film is shot, but the funding and tax incentives are needed during production. More regulatory work is therefore needed for these new opportunities to bring benefits to filmmakers, he added.
Another problem for filmmakers is the lack of cinemas to show their product in. There are only 275 cinemas in Ukraine, which works out at 1 for every 200,000 city residents. The ratio in France is 15 times higher.
“We need to have at least 1,500 cinema halls throughout the country for film distribution to be profitable,” said Serhiy Antonov, producer at Film.UA Group, a major producer of films for television.
“Filmmaking for television makes much more economic sense, because television channels always ensure profits – unlike film distribution,” he added.
Kokhan said the Ukrainian film industry will need a more fundamental and wide-ranging overhaul if it is to become profitable, prolific and, critically, successful.
It’s not just about creating good movies with interesting plots and ideas, but also supporting distribution within and outside the country, reviving film education and supporting film festivals.
Even if all these measures are taken at once, Kokhan argues, it would take up to eight years for Ukrainian filmmaking to become self-sustaining and work effectively.
Kyiv Post staff writer Olga Gnativ can be reached at [email protected].
