|Name of partner||Type of entity|
Film Center Serbia
Serbian Film Commission “Film in Serbia,”
Civil Society Organization (CSO)
Ministry of Culture and Information,
Serbian Chamber of Commerce
The Scientific Research Center of the Faculty of Economics, University of Belgrade, at the request of the Serbian Film Commission “Film in Serbia” conducted an “Economic Impact Analysis of the Audiovisual Production Sector and the Efficiency of the Ministry of Economy’ Incentives for Audiovisual Content Production in Serbia 2016-2019.” The analysis’ findings and recommendations are summarized in the table below:
Serbia shows a growing trend of international productions of audiovisual content that use incentives, and this positive trend correlates with the positive growth trend of the total budget allocated for the purpose of incentives.
It is necessary to clearly define the expected level of incentive budget increase (or the level at which the budget will be maintained) for at least two years, but preferably for at least five years, in order to improve Serbia’s competitiveness and visibility in the global market and contribute to the positioning of the country as a desirable destination for international clients.
The percentage of the utilized budget intended for incentives for the production of audiovisual content is at a high level of 92% to 95%.
In order to maintain or increase the utilization rate, it is necessary to further improve the administrative procedures for applying for funds and approving funds.
Serbia is characterized by excellent destination portfolio diversification in the sector of audiovisual content production. This allows for more precise market and geographic targeting. The incentive structure is designed in such a way that it fosters portfolio diversification: movies, commercials, series, and post-production are all covered equally.
It is necessary to maintain the established level. This means that the incentive system in this sector should be oriented towards further fragmentation and “new” areas of audiovisual content production in order to broaden the potential market of international clients (e.g., video games, web series, VR, etc.).
Stimulating productions in formats such as commercials and post-production has allowed Serbia to stay out of competition in the film market, which is currently beyond its capacities, and to advance its capacities (both infrastructural and human) through a large number of advertising and post-production projects, which contribute to the growth of the number of completed international productions in a shorter period.
It is necessary to maintain the current system, level, and criteria for granting incentives for a longer period in order to contribute to the sustainability of the destination portfolio, but also to influence specialization for projects in new areas of production (e.g., video games, web series, VR, and the like), as well as projects in advertising and post-production, where the initial budgets meet the Ministry of Economy’s minimum requirements.
70% of projects that have benefited from incentives have a total budget of less than 300,000 EUR, and the smallest number of only 3% falls into the budget size category of 400,000-500,000 EUR.
It is necessary to maintain the criteria for providing incentives at the current level for a longer period, because it contributes to raising Serbia’s competitive advantage in the global market and its visibility in the wider market of potential international clients.
The amount and structure of the budget of subsidized projects further confirm that the creators of the incentive policy have succeeded in positively influencing the diversification of the product portfolio in one more way.
It is necessary that the implementers of the incentive policy, but also the users of the incentives, maintain the established market balance, with an equal focus on all present formats of audiovisual content production.
The direct return on direct investment by the state in the form of subsidies is 2.4.
For every 1 unit of paid incentives for the production of commercials, films, and series, on average 2.4 units are directly returned to the budget.
The total return on investment by the state in the form of subsidies is 5.38.
For every 1 unit of paid incentives for the production of commercials, films, and series, an average of 5.38 units are directly returned to the budget.
When “leakage effects” is excluded, every unit of incentives paid for the production of audiovisual content attracts an average of 5.2 units of total consumption.
Over the following period, it is necessary to compensate for this decrease, which amounts to an average of 0.2 EUR, by increasing the capacity of national stakeholders, so that these services are not “bought” abroad.
The number of employees in the sector in 2019 increased by an average of 57% compared to 2016.
The increased number of employees in the sector is a consequence of the increased efficiency of the sector, and support through subsidies is certainly one of the factors increasing its attractiveness.
There are over 11,000 full-time employees (FTEs).
In addition to making a significant fiscal direct and total contribution, the audiovisual content production sector employs a significant number of people. Following the reduction of administrative procedures, the effects on this sector of the economy are likely to intensify.
The total market for the production of audiovisual content on an annual level is on average 15 times larger than the number of projects subsidized by the state.
It is necessary to view the level of incentives as a sort of accelerator for the entire sector, but understanding the effects of incentives should not be limited to a small number of projects that have applied.
The number of projects that used incentives is ¼ the number of international productions, which means that national companies for each subsidized project implement an average of four additional projects for international clients.
The entire sector is evolving thanks to incentives, and it is clear that each supported project is accompanied by additional four projects for international clients.
It is necessary to preserve the criteria and transparency of the process in order to maintain or increase this ratio; the increase can be achieved by reducing administrative procedures.
The total contribution of international productions to the development of tourism in Serbia is measured by the figure of 44,889 overnight stays and the contribution of 3,680,898 EUR.
It is necessary to continue the system of “film-friendly” destinations and hotels, in order to improve communication with potential productions and provide appropriate destination support, especially for projects involving large teams and a large number of overnight stays in a short period.
Total taxes paid on VAT, contribution tax, and annual income tax amount to 11,567,613 EUR in the analyzed period.
It is necessary to observe the contribution of the entire sector to the country’s economic development based on total activities, which is measured based on the amounts of paid taxes. It is clear that this contribution is at a very high level based on all activities of companies in the sector, and not only based on subsidized projects.