Starting tomorrow, cinemas across America will roll out Hellboy II: The Golden Army, the first major motion picture to be shot primarily at Korda Studios, the recently-completed movie-making complex in Etyek, just outside Budapest. If the film’s opening weekend is a success, it will be the second big boost for the Hungarian film production industry in a month, following the passage in early June of a revised film law which reinstated a 20% tax credit many believe is the only hope for the sector. But even if the second installment of the comic book-based story is boffo at the box office, and producers around the world learn that the latest Hollywood hit was happily “lensed” in Hungary, there are plenty of reasons to fear that the local film production business is sitting on a major bomb.
The new film law, which was passed on June 9, is designed to offer as much in the way of targeted tax breaks to the film industry as possible without running afoul of the European Commssion, which forced suspension of the old incentive program late last year. According to a follow-up piece published by index.hu after the law’s passage, the reinstatement of the incentive system has again rekindled the interest of Hollywood types in Hungary, despite drawbacks including poor language skills among potential hires, somewhat backwards technical and financial services, and generally lower prices in neighboring Romania and nearby Bulgaria.
The portal also points to the seemingly endless interest by investors in new production facilities. In addition to Korda and the smaller Stern Studios complex, also on the city’s outskirts, the 2,000 square-meter Mafilm studio will be renovated soon, while the Orco property group and an American investor are planning another new facility in the eastern Budapest neighborhood of Rákospalota, and two additional projects have apparently been “greenlighted” in Szentendre, up the river from the capital, and in the breezy southern Hungarian capital of Pécs.
If it all sounds too picture-perfect to be true, my guess is that’s because it is.
First, there is the unresolved issue of the long-term prospects for the incentives package. According to this piece in Hollywood trade paper Variety, the government side seems to think the EC won’t void the new attempt. But I simply don’t see how the EC will acquiesce in a law which gives one EU member’s local businesses a decisive advantage over their competitors in other EU member states. And without major incentives, Hungary loses much of whatever comparative advantage it may have as a place to shoot movies, as is indicated by the fact that, at the time the new law was passed, neither Korda nor Stern had any major productions for the balance of the year.
More disturbingly, there is the question of how competitive Hungary can be even with these unpredictable state-granted inducement. As the forint continues to hit new records against both the euro and the dollar, it is rapidly becoming a seriously expensive place for any foreign enterprise to do business. Etyek or Rákospalota may remain cheaper than Los Angeles or London, but when a producer gets off the plane and sits down to his first mediocre $22.40 Budapest hamburger, he or she may quickly get second thoughts.
Then there is talent. No doubt there are plenty of highly-skilled and eager people lined up to work on a major (or minor) film should it be produced in Hungary. But it’s silly not to recognize that it takes many years for a country to develop a deep pool of human resources in a specialized industry like filmmaking.
Finally, it should be remembered that the global film business – and especially the bits run from America’s “Sunshine State” – is itself under a very dark cloud, as both pirating and an ongoing explosion in rival forms of entertainment continue to weigh on all forms of revenue. If these trends cannot be reversed or artfully “managed,” it’s hard to see where the demand will be for lots of new places to shoot films.
As a guy who has a significant amount personally invested in Hungary’s future, and an unabashed fan of movies good and bad, I would love all this to end as happily as the sappiest Hollywood romantic comedy. But I instead fear that what we’re about to see is something closer to one of those 1970s-era Irwin Allen epics, complete with a big cast of stunned survivors wandering around wondering why they hadn’t foreseen the looming disaster that should have been obvious to everyone.