A Comparison of the Production Costs of Feature Films Shot in Ten Locations Around the World
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A Comparison of the Production Costs of Feature Films Shot in Ten Locations Around the World A Report for the Office of the British Film Commissioner September 2008 © UK Film Council. All rights reserved Olsberg|SPI 4 Junction Mews London W2 1PN T: 020 7402 1300 F: 020 7402 6111 [email protected] www.o-spi.com A Comparison of the Production Costs of Feature Films Olsberg|SPI Table of Contents Key Points ......................................................................................................................................................3 1. Executive Summary ..................................................................................................................................6 2. Nature of the Assignment .....................................................................................................................13 2.1 The Brief.............................................................................................................................................13 2.2 History of the Assignment..............................................................................................................13 2.3 Methodology......................................................................................................................................13 2.4 Calculation of the Incentives..........................................................................................................17 2.5 The Process........................................................................................................................................17 3. Department by Department Analysis .................................................................................................19 3.1 General Comments...........................................................................................................................19 3.2 Department Analyses.......................................................................................................................20 4. Fiscal Incentives ......................................................................................................................................37 4.1 Connecticut........................................................................................................................................37 4.2 Canada................................................................................................................................................38 4.3 Australia..............................................................................................................................................40 4.4 South Africa.......................................................................................................................................42 4.5 Germany.............................................................................................................................................43 4.6 Hungary..............................................................................................................................................44 4.7 Ireland.................................................................................................................................................45 4.8 UK.......................................................................................................................................................46 4.9 Fiscal Incentive Comparison Chart ..............................................................................................47 5. Territory by Territory Analysis .............................................................................................................49 5.1 Los Angeles........................................................................................................................................49 5.2 Connecticut........................................................................................................................................49 5.3 Canada................................................................................................................................................49 5.4 Australia..............................................................................................................................................50 5.5 South Africa.......................................................................................................................................50 5.6 Germany ............................................................................................................................................51 5.7 Hungary .............................................................................................................................................52 5.8 Czech Republic ................................................................................................................................52 5.9 Ireland.................................................................................................................................................53 5.10 UK.....................................................................................................................................................53 Appendix – Guide ......................................................................................................................................54 Appendix 1 – Comparative Top Sheets ..................................................................................................55 Appendix 2 – Notes on Section 2 ............................................................................................................62 Appendix 3 – Notes on Section 3 ............................................................................................................72 Appendix 4 – Incentives Key Features Summary .................................................................................75 Appendix 5 – The Consultants .................................................................................................................88 Appendix 6 – Consultation List ...............................................................................................................89 September 2008 2 A Comparison of the Production Costs of Feature Films Olsberg|SPI Key Points About this Study: • The Study described in this report demonstrates that, despite perceptions to the contrary, the UK is in an extremely competitive position for attracting international film production. • In this Study the cost of filming two hypothetical US major-originated feature films (budgeted at approximately $100m and $20m) has been compared in ten territories, ranging from established centres of production such as Los Angeles, London, Vancouver and Sydney to low cost countries such as the Czech Republic and South Africa. • The hypothetical high budget film is a futuristic thriller. The hypothetical mid budget film is a contemporary thriller that could be shot equally well in each of the territories. • This Study is based on the comparison of twenty full-scale budgets which have been established with the collaboration of, and verified by, a number of line producers local to the territories considered. It therefore takes into account local skills levels (and the varying needs in each territory to import crew) and 'hidden' costs in each of the territories (such as particular work practices and local service charges). • This Study assumes that shooting takes place in a single territory. This is a simplifying assumption which allows us to compare 'like for like' in each territory. It is more probable that, in the 'real' world, films of this scale would involve multi-territory shooting. • The Study, naturally, is based on a number of assumptions, which are detailed in this document. The costs obtained are also the result of the budgeting approach taken. For example, our budgeting philosophy has been to maximise local physical and crew resources. Results might differ slightly if a different set of assumptions were made or if a different approach had been taken. • The principal period of research for the Study was the last quarter of 2007 and the first quarter of 2008. The exchange rates used are the average for the first quarter of 2008. Different rates would give a different answer. In fact, since this time, the pound has weakened against the dollar, making the UK more financially attractive. September 2008 3 A Comparison of the Production Costs of Feature Films Olsberg|SPI Key Findings: • Before the application of incentives, the UK offers some savings both in the high and the mid budget case. • In the high budget, on a purely cash cost basis, the most expensive territories, Los Angeles and Connecticut, are 13% and 16% more costly than the UK. The least expensive territories, Hungary and Czech Republic, are 17% and 16% less expensive. • In the mid budget, on a purely cash cost basis, Los Angeles, Connecticut and Canada are 3%, 15% and 5% more costly than the UK. Hungary and Czech Republic are 20% and 19% less expensive. • After the application of fiscal incentives in the eight territories that offer them, the competitiveness of the UK is dramatically increased. The UK Tax Credit is one of the most generous incentives in the world. • In the high budget, after the application of the incentives, Los Angeles is 33% more expensive than the UK. Only Hungary and Czech Republic are less expensive than the UK, by 8% and 1% respectively. • In the mid budget, after the application