Tax incentives – do they work? The answer to that question depends not only on whom you ask, but also on how you define success.
For producers, tax incentives ‘work’ when they help get a film financed and made -- in a location that works creatively and logistically for the film.
For craft professionals, an incentive system that ‘works’ means just that – it helps them get work (and hopefully ‘good’ work in terms of both pay and creative satisfaction).
For a local or national economy, tax incentives can be deemed successful if they bring in more revenue than they pay out to attract that revenue – which can be highly contentious and surprisingly difficult to measure.
(Here is a good description – from outside the industry -- of how politically contentious that processes can be in the U.S.).
There are also the ancillary businesses that can accrue to an economy from the presence of the film industry. (New Zealand’s big budget gamble on tying the tourism industry into the Hobbit franchise is a high profile example, but regional film boards the world over deal with this on a smaller scale.)
For a community or society, tax incentives can serve the aim of fostering local talent and local creative voices. In countries with the means, this can be the most important desired result of an incentives system.
But not surprisingly, these goals aren’t always in alignment.
It’s likely that in most cases the attraction of big budget Hollywood/international productions support the technical betterment of local craft professionals.
But when it comes to supporting local creative voices, do such productions create a trickle-down effect? Or simply homogenize the art form and raise the cost of filmmaking to a level that crowds out independent producers working on projects with locally specific content?
I am particularly interested in the ways that this dynamic is playing out in emerging economies and emerging film industries. Next week I’ll be traveling to the Durban FilmMart in South Africa. South Africa is fertile terrain for these questions because it has an active national funder, an incentives structure at least partly geared towards attracting big money studio films, and a sometimes uncomfortable co-existence between government-funded local talent initiatives, big-budget international films, and local films made and distributed on shoestring budgets.