Streaming platforms will have to allocate 3.5% of their revenues to Czech content and more incentives funding will available to international productions, as part of planned audiovisual reforms by the Czech government.
Under reforms to the country’s Audiovisual Act, a combination of a levy and direct investment obligations will be mandated for streaming platforms.
Streamers operating in the Czech Republic will pay a 2% levy of their revenues directly to the Czech Film Fund, which will invest the money in both Czech films and TV series.
The streamers will be obliged to spend another 1.5% of their revenues directly on Czech content that they choose to commission, or they can contribute the additioanl 1.5% to the Czech Film Fund for a total contribution of 3.5%.
The reform will increase the Czech Film Fund’s resources, half of which have traditionally come from levies on the revenues of cinemas, commercial TV and local VOD platforms. The government then contributes a ‘mirror’ amount – equal to the amount collected from the levies. Until now, however foreign platforms have not had to pay into the system.
The Czech Film Fund estimates the levy on platforms, cinemas and TV will generate CZK 250m (£9m), meaning its funding budget will rise to CZK 500m (£18m) when the government ‘mirrors’ the levy funding.
Many other countries in Europe have introduced either levies and / or direct investment obligations on streaming services, which they are allowed to do under the EU’s Audiovisual Media Services Directive. Denmark recently announced plans to introduce a 5% levy, while the Dutch Parliament last month approved a bill that requires streamers to invest at least 5% of revenues directly in Dutch films, series and documentaries.
Incentives reform
The amount of money available to international production will also increase as part of amendments to the country’s Audivisual Act.
The Czech Republic is a popular location for international shoots and offers a 20% rebate on Czech spend, with a CZK 150m (£5.4m) cap. The third series of Apple TV’s Foundation is shooting in the country, while season two of Amazon’s Wheel of Time, AMC’s Interview With A Vampire, Robert Eggers’s remake of Nosferatu, and Netflix’s Extraction 2 have recently completed production. According to Czech producers association, the APA, international productions spent £413m in the country in 2022 amid record levels of production in the country.
This year the government has has allocated a record CZK 1.4bn (£58m) to the Czech Film Fund´s incentives budget. Each year, the Czech Film Fund has to negotiate with the Ministry of Culture and the Ministry of Finance to agree an incentives budget, creating an element of uncertainty about the system.
At the start of each year, the Czech Film Fund is deluged with registrations from productions looking to access the incentives system, which is based on a first come first served basis. This year 56 international projects applied for incentives within the first 12 hours of registration being opened.
Faced with high demand from productions wanting to shoot in the country, the government has agreed a new funding formula for the incentives system. The total incentives budget will be calculated at six times the amount of money raised by the streamer/TV/cinema levies and the government’s mirror funding – which the Czech Film Fund estimates come to CZK2bn (£72m) a year – an increase of £14 million compared to 2023.
Speaking to Screen at the Karlovy Vary Film Festival, Czech Film Fund CEO Helena Frankova said that principles of the streamer levy and incentives reform had been agreed by the government and the industry, and that legislation would now follow. It’s likely that the reforms will take effect from 2025/2026.
APA president Vratislav Šlajer said he was “optimistic” about the proposed reforms and that everyone, including international streaming services, would now be “chipping in but also benefiting” from the new system.
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