Why are cash rebates needed?

The film companies say that the cash rebates are essential for productions to come to Finland. Without it, the productions will go to other countries, no question about it. This is because making films is very expensive, and any help producers can get with managing the budget is needed. Thus, the better production incentives a country offers, the more likely it is to receive major productions. It is simple economics.

What is imperative here is that the production incentive is reliable and available for future years. It takes years to plan major productions, and if any country has issues with its rebates, they won’t be considered. Thus, it is important for the Finnish government both to keep and grow the production incentives we offer. It will ensure success as the productions shift to Finland in the coming years.

Film industry utilizes dozens of other sectors

One could argue that what is so special about audiovisual productions that they are worth subsidizing compared to other sectors, such as logistics, banking, retail, or others? While other industries would surely benefit from such cash rebates, film productions are also unique because they require a large workforce across dozens of industries. Not only filmmakers benefit from the cash rebates, but also travel, logistics, accommodation, entertainment, restaurants, shops, and others. Thus, the argument is that by supporting the AV sector, the government indirectly supports many other businesses, too.

Inari, a village in Finnish Lapland, has been filming in early 2023 one of Finland’s biggest international TV series. A series called Constellation is a psychological thriller directed by Michelle Maclaren, known for several high-profile productions, including The X-Files, Game of Thrones, and Breaking Bad. About 220 film professionals are involved in producing the series in five countries, including Finland. Production is estimated to bring about EUR 1.7 million for local service providers as the production utilizes various services such as accommodation and catering. An important reason for selecting Lapland as a filming location besides scenery was the Finnish AV production incentive, which attracts international film and television productions to Finland.

What have been the benefits of cash rebates to countries offering them?

In Finland, there have been around 20 productions per year that receive the incentive. While the size of the cash rebate has varied a lot per production, the average has been roughly half a million euros per production. The incentive has been very important for these companies receiving it, enabling them to do bigger productions. According to an industry survey, 60 % of production companies have said the incentive has significantly impacted bringing production to Finland instead of elsewhere. And therefore, all this money would have been spent elsewhere, too. Thus, production incentives clearly impact increasing revenue in the AV sector and helping companies grow.

The estimations are that each euro spent on the incentive has brought back x2-3 more money into the region. This comes through staff accommodation, catering, logistics, leisure activities, etc., required in productions.

From a quality perspective, the significant added value of the production incentive has been the experience acquired through international co-productions. The professionalism of the AV industry has grown as a result. The incentive makes it possible to hire more local talents with the best professional skills. Naturally, foreign productions want to recruit the best employees in Finland, such as production managers and assistant directors. As a result, know-how has strengthened across Finland faster than before, as the local AV industry has been able to work in bigger productions.

What is in it for Finland?

The key objectives set for the production incentives in Finland include:

• Moving productions from other countries to Finland (i.e., increase the demand for AV services with foreign clients)

• Increase jobs in the AV industry

• Getting more Finnish AV start-ups in the market

• Improve the quality of services offered

• Bring foreign money into Finland

To make the above goals a reality, foreign production companies must collaborate with Finnish co-producers or production coordinator companies such as Kajawood Studios. Also, any production applying for the production incentive must have at least 25 % of the total budget in foreign cash. This is to ensure that foreign money comes into Finland.

With the cash rebates given out, estimated 4000 people have been employed annually in the industry. Another positive impact has been that the production companies can hire more permanent staff instead of project-based. This creates job stability in the AV sector. Also, companies utilizing the cash rebate have seen an average of 59 % revenue growth, while others in the same sector have only seen a 12% increase. This shows that cash rebates positively impact the national economy through the AV industry. Some estimations show that for each job in the film industry, there are 1,87 people employed through the multiplicative effect.

Incentive plays a major role

In summary, the production incentive has played a major role in getting and keeping the productions in Finland. Many productions that received the incentive would not have been realized without the cash rebate. 80 % of production companies say that production would not have happened without the incentive, and 60 % say that the production incentive had a major impact on bringing production to Finland. Thus, cash rebate has made it possible to move productions previously filmed abroad to Finland and the implementation of completely new productions in Finland. Therefore, the Finnish government must continue supporting and growing the cash rebate incentive.