As Hollywood Fizzles, Central Europe’s Film Industry Sizzles

Alexandra Ivanoff

 

“If I don’t get work soon, I’ll be homeless” is a frequent post on many Facebook groups for Hollywood workers, quoted to me by a film editor who is a member of IATSE, the trade union for editors, cinematographers, and art directors. Or, in a more typical post: “Hi, I just arrived in Hollywood. How do I get work?” — to which hundreds of people now reply: “Go to school and learn plumbing.”

 

The Los Angeles Times’s headline on September 18: “California’s film industry is in crisis. Can it be saved?” is facing the unfortunate facts. After a string of union strikes in 2023 and ‘24 by writers, actors, and tech crews, the industry (previously estimated to be 20 percent of the Los Angeles population) has taken a substantial downturn — a double-digit percentage drop in TV and film production — despite having negotiated new labor contracts. During the strikes and the Covid era’s shutdown, a great number of Hollywood workers have seen their jobs disappear and their unemployment insurance expire; thus, it has become impossible to pay rents or mortgages in expensive L.A. As a result, labor unions are unable to collect the workers’ dues, which pay for their health insurance policies.

 

As this dire situation continues, the Times, which faithfully reports on Tinseltown topics, has created an emergency ‘Hollywood Help Line,’ manned by a psychologist. This service, along with local volunteer food pantries and disaster relief grants, is aiding this community with the crises of mounting financial losses, the evaporation of long-standing careers, and the growing occurrence of deep depression.

 

TV producer/executive Gretchen Kinder’s story of recent personal and professional struggles is especially sobering. This glut of personal catastrophe has also created an exodus of studio workers, as this LA Times article illustrates. In another article, an art director admits: “The new normal is leaving California to get jobs in Georgia, Texas, Montana and even Hawaii.” (In June, Netflix announced that it’s building new production studios in New Mexico.)

 

 

Meanwhile, across the Atlantic

Spotting Hollywood actors like Will Smith, Brad Pitt, Benedict Cumberbatch, Angelina Jolie, or Ryan Reynolds walking around Budapest is normal. Visiting stars, on work breaks from film shoots, often remark to the local press that they enjoy rare moments of privacy here. Some even buy real estate in the city. This is the result of what’s been percolating in five Central European cities during the past 20-plus years.

 

Budapest, Belgrade, Prague, Sofia, and Vienna have quietly developed an immensely profitable industry: film production. Since the fall of the Berlin Wall in 1989, this region’s economy has been amplified by a plethora of studios for foreign and regional producers who need affordable and well-equipped facilities for months of film shooting. Productions from Los Angeles, New York, and London have been the most frequent clients since the mid-‘90s. The scripts may be written in Hollywood, but they are brought alive in Central Europe.

 

Blockbuster films like Academy Award-winner Poor Things, Blade Runner 2049, Dune (sequel), Mrs. Harris Goes to Paris, and the new biopic Maria were recently produced (or co-produced) in Budapest’s studios. All five cities offer complete facilities with multiple sound stages, sets and tech crews, camera equipment, and lighting. Locally, separate production service organizations connect clients to casting directors and dialect coaches to work with international casts. Budapest alone has five large-capacity studios, five production companies, and 11 casting offices.

 

For producers and filmmakers, the economics of this is sweet: Generous tax rebates and significantly cheaper overall costs, are a bargain compared to the West’s inflated rental prices, taxes, and unionized labor. But the biggest bargains are the cities themselves: They become giant outdoor film sets that reveal centuries of history. Most are restored from past war damage and thus can function as perfect backdrops for prewar stories. For postwar films, the bullet holes from World War II and the Hungarian Revolution of 1956 still remain on the facades on several of Budapest’s buildings.

 

 

La La Land’s dilemma

Starting in the U.S. around 2000, major changes in film technology took place -- namely, the slow shift from celluloid film to digitalization and the redesign and manufacture of digital cameras, as well as the adoption of new editing methods. What followed later was largely internet-driven: the advent of streaming and AI, and new independent media platforms (like YouTube), which compete with the established studio system for profits. The mounting reliance on IP (Intellectual Property) block-buster branding began reshaping the Hollywood film output profile into a predominantly CGI-influenced superhero/apocalyptic production mill.

 

In 2017, the #MeToo movement upset the ruling apple cart. In 2020, the severe Covid lockdown resulted in the complete consumer switch to digital streaming. This almost obliterated the L.A. entertainment industry within two-and-a-half years despite the perceived mini-boom in streaming production delivered to a locked-down, out-of-work population. This was a magnum-sized disaster from which the entire industry is still recovering. Last year’s screenwriters’ strike struck some dissonant chords: “Animated productions have switched from hiring staff writers to freelancers,” according to Madison Bateman. This means the producers can pay less, and the freelancers wait longer for their pay. “Our motto: ‘Survive to ‘25’.”

 

In July, a Bloomberg report revealed that Hollywood’s profits plummeted 12 percent last quarter and that three legacy studios were cutting back to reduce streaming costs. That same month, a Fortune article stated: “...[M]oney talks in Hollywood, and banks affected by the global financial crisis began pulling back from high-risk movie deals.” The commercials sector has radically sliced their fees for actors, as this Tik-Tok video reveals in a wider view of the ongoing fizzle. Public television is also having its downsizing woes. California initiated a state tax credit for the industry in order to halt the “runaway productions” to other states or countries; so far, it hasn’t been the cure for L.A. The Wrap’s report on September 25 affirms the latter alternative: going abroad.

 

 

The gold mine across the pond

Across the Atlantic, Central Europe’s film scene is truly thriving, says Maya Kvetny, an American casting director based in Prague. “The industry here has been popping since the late 1990s. Barrandov Studios, our iconic film hub, has been alive with major features, TV series, and indie projects since 2002. This historic location was originally established in 1931, was taken over by Goebbels for German propaganda in 1939, and later used for communist propaganda films,” she explains. “Now, the film industry is making an exciting move to Central and Eastern Europe. Stars, directors, and crew members often fall in love with Prague, with some even choosing to make it their second home.” Additionally, international film and TV productions here can benefit from cash rebates of up to 20 percent on their local spending, with extra incentives for hiring international talent.

 

Vienna, and most of Austria, is a stunning, dreamlike Hollywood set. Its government knows this, and rewards film production in their seven medium-size studios with state subsidies “ranging from 20 percent to 100 percent,” according to the Austrian multi-award-winning actor, director, and filmmaker, Christian Schiessen. “Mission Impossible was filmed in Vienna, and it was hugely profitable,” he said, “as well as basically an ad for the city.” The Film Academy Vienna is also generously funded, “and even takes new filmmakers’ works to film festivals for streaming,” he added. The state sets the pay scales for actors and writers, and despite Austria’s high tax rate (50 percent), Schiessen admitted he would settle for a lesser amount for a film role “if it’s a cool production that I want to be in.”

 

 

Canadian-American indie sci-fi filmmaker Jeffery Lando reports that Bulgaria has consistently fulfilled his production needs. “These workers, some from the communist era of film production, knew exactly what they are doing. Film is in their blood.” he says. “And not only are they grateful for the work, but we don’t have to deal with the West’s [current socio-political] requirements. We are away from the microscope.”

 

Sofia’s Nu Boyana studio, owned by its CEO and producer Yariv Lerner, is the largest of three studios in the city, and according to Ryan Reynolds’s statement on its website, “It’s on par with anything you’d find in L.A. or New York.” Nu Boyana’s contributions to Bulgaria’s profile and economy helped Sofia win the UNESCO designation as City of Film 2014.

 

In Serbia, the only non-EU country in the group, Belgrade is similarly progressive. Contrast Studios, one of six production companies in the capital, created and produced the recent multiple award-winning Heroes of Halyard that features a multilingual cast.

 

Adam Davenport, an American actor and acting coach in The International Acting Studio, played a role in the film and continues to train Serbian actors. “[There] I started working on studio films and getting supporting roles in independent films,” he says. “These opportunities weren’t as readily being presented to me in the states. As an acting teacher, I was the first person to introduce the Oscar-winning Chubbuck technique to Serbia and Hungary, and the first to open an English-language acting studio for film and TV in the region. I was given citizenship in Serbia because of these contributions. A letter from the Ministry of Culture states “because in the past he has been a good (economic and social) influence for Serbians... [and he] has greatly influenced progress for Serbian artists.”

 

Currently, each country offers tax rebates from 20 to 35 percent to foreign productions that register to reside on site. Local production companies assist in the sign-up process and ---facilitation of rebates. Hero Squared, a production company with offices in Budapest and Zagreb, is owned and operated by two Americans, producer/director Jonathan Halperyn and Daniel Kresmery. Their services include all production needs, additional financing, assuring VIP client comfort, and navigating the rebate process.

 

Radically cheaper prices for local crew hires are enticing for producers from the West who can get qualified workers without needing to contend with unionized labor rules. In Central Europe, the lack of Western-style collective bargaining agreements in the arena of casting, contracts, and payment guarantees, is an ongoing issue for on-screen performers. Syndicates, guilds, and loosely styled labor associations exist, but their protocols are not modeled after the U.S.’s labor protection rules.

 

(Origo Studios)

 

Booming Budapest

“The Hungarian film industry estimates its profits to be $1 billion by the end of 2024,” a Budapest newspaper published in August. Csaba Káel, the chairman of the Hungarian Film Institute, and the government commissioner for the development of the Hungarian film industry, says: “2025 will mark the 125th anniversary of the Hungarian film industry.” As Continental Europe’s biggest production hub, it has reached $910 million direct film production spend, a fourfold increase in volume in the past five years.

 

Hungary is already among the leaders in soundstage capacity in Europe. The ongoing expansion of the NFI Studios and Astra Studio will increase the studio capacity in Hungary by 22 percent in 2024. Budapest’s largest studio complex is Origo, named “The Film Capital of Europe,” which has scored alongside London’s Pinewood Studios on the 2024 shortlist for “Best Studio.” It has hosted 50-plus films over 14 years, and is the only one that offers state-of-the-art German-designed scanners that can send, without quality damage, unlimited image data to Los Angeles and New York.

 

During Covid, under Káel’s leadership, the Hungarian government decided that enlarging the studio capacity would help the country’s economic recovery — a crucial investment to maintain the competitiveness of its screen industry. “But now we must push ahead with more co-productions with a new kind of content, because films have to compete with smartphones and internet platforms that have captured the attention of the kids,” he said in a telephone interview. “We also need to build a better distribution system — this is critically important for Europe.”

 

 

Healing Hollywood?

Perhaps taking a cue from the European model, IATSE and 11 other media industry unions have launched a new policy agenda: Reimagining Federal Support for the Arts and Public Media,” to encourage financial support for the U.S. cultural media sector. While this may uplift employment, it doesn’t identify the heart of the dilemma. Davenport’s perspective is one of simple optics: “I don’t want to see the same 50 people in every movie over and over again....In a risk-averse market, audiences will likely get bored of the limited offerings being presented to them in an oversaturated way.” And Halperyn adds: “It’s disappointing that the ratio of quality films is so out of balance. While every production requires the blood, sweat, and tears of the crew, it feels like only 5-10 percent of films are great, while the rest are simply product. Film is (or should be) an art form born of passion, and if we put our hearts and souls into the scripts, make deliberate creative choices, and really work to make something special, we are on the right track.”

 

Author Bio:

Alexandra Ivanoff is a bicontinental arts journalist who lives in Los Angeles and Budapest. She has published articles in the New York Times, Musical America, Time Out magazine (Istanbul), Bachtrack (London), Slipped Disc (London), Harmonie (Prague), HungaryToday and Papageno (Budapest).

 

For Highbrow Magazine

 

Photo Credits: Courtesy of Alexandra Ivanoff; Depositphotos.com

 

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