International Co-production - History and Benefits

History and Benefits

Following the Second World War, US film companies were forbidden by the Marshall Plan to take their film profits in the form of foreign exchange out of European countries. As a result several film companies started studios and production companies in nations such as the United Kingdom and Italy to use their "frozen funds".

To use these profits in England, film companies would set up production companies using the required amount of British film technicians and actors to qualify as British Productions in order to take advantage of the Eady Levy.

At the same time, US citizens working outside the country for 510 days during a period of 18 months would not be taxed on their earnings by the Internal Revenue Service. Though this scheme was developed for the aid of American humanitarian workers redeveloping nations destroyed in World War II, agents discovered that Hollywood actors, directors, and screenwriters would qualify for the tax break by working outside the US for the same period.

International film co-production was very common in the 50s, 60s and 70s between Italian, Spanish and French production companies, as exemplified by most of the Spaghetti-western and sword and sandal movies being Spanish-Italian coproductions, typically directed by an Italian, played fifty-fifty by Spanish and Italian actors and shot in southern Spain landscapes. Due to the worldwide popularity of Hollywood stars they would be used to guarantee a respectable audience around the world as well as the United States. The relatively low production costs and high box office return of these films often led to direct Hollywood investment to the non-US studios and producers such as Dino DeLaurentis. An example of such pan-European coproductions was Treasure Island (1972), a British-French-German-Italian-Spanish film, starring US Orson Welles.

To qualify as an Italian film a film needed either an Italian director or cameraman plus at least two Italian featured players and an Italian film laboratory to process the film. Actor and director Mel Welles recalled that in the 1960s and 1970s the government of Spain would producers funds based on the budge of the film whilst Italy would give producers funds based on the box office results of the film, however the government could interfere with production if they chose to

Due to the expense of filmmaking, many films made outside the United States are international co-productions. For example, Amelie is set in France and stars French actors, but many scenes were shot in a German film studio and the post-production work was undertaken by a German film company. International co-productions open new markets for films and television programs and can increase the output of high quality productions through the sharing of equity investment.

Official co-productions are made possible by agreements between countries. Co-production agreements seek to achieve economic, cultural and diplomatic goals. For filmmakers, the key attraction of a treaty co-production is that it qualifies as a national production in each of the partner nations and can access benefits that are available to the local film and television industry in each country. Benefits may include government financial assistance, tax concessions and inclusion in domestic television broadcast quotas. International co-productions also occur outside the framework of official co-productions, for example with countries that do not have an agreement in place, or projects that do not satisfy official co-production criteria.

In many cases, co-productions are a response to the challenges of internationalisation by countries with small production sectors, as they seek to maintain a viable production industry and produce culturally-specific content for national audiences. However, these dual goals also produce tensions within national film and television sectors. Although a co-production agreement may make available more resources, an international production risks being less relevant to its target audiences than purely local productions.