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What is the Motion Picture Act about?

21 March, 2006 - filmhu
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Films have the most powerful communication force, regarding that besides recognizing them as an independent art branch they can also be considered as entertainment industry enterprises.
Background to the new film profession regulation coming into realization by the II. Act of 2004.

The necessity of the act

Today, a significant part of people?s spare time is spent with consuming motion picture culture or products of the motion picture industry such as movies, television, video, and DVD, computer and any other medium for broadcasting in the future. On the one hand it is an industry, emerging for its producer as the subject of his enterprise, on the other hand it is a communication opportunity, for, besides the film creators, the parties contributing creatively to its forthcoming and for the states supporting film production.

Motion pictures, at the same time - in addition to the detached-from-nations, multinational characteristics of the business activities that involve their production and screening - are persistently attached to nations, given their artistic distinctiveness, therefore they can, in almost all cases, be connected to some country's or peoples culture, tightly joined with their national identities. Films, as such, are efficient and publicly understandable culture mediators, thus they are one of the most appropriate means for a country to show or shape the image of itself before the eyes of the world as well as to keep its name and culture on agenda or to enrich those between the cultural communication of countries.

Small countries - because of the limited capacity of their own market - are not able to bring into being affluent and internationally compatible motion picture culture solely with the collaboration of the private sphere without state subsidies. Upon acknowledging that there is a call for Hungarian motion pictures - with which it is possible to appear on the world's cultural market - then the fact that there is need for the state's participation must also be acknowledged. In order to be able to define the method and extent of this participation one must regard the double-sided - concurrently artistic and industrial - characteristics of the motion picture culture. Although business and market considerations do prevail in other domains of the culture as well, the economic results induced by motion picture and the more widely taken audiovisual industry surpass the similar effects of other art fields. As a consequence, it is in this sphere that the necessity for relatively enormous state support can be contrasted to the largest scale of economic and state budget utilization for the state.

The accessible, beneficial economic effects, however, cannot lead to the inconsiderate use of state subsidies and public finances and to slackened inspection. The government deciding over the subsidies and the professional organizations carrying out the distribution process need to account for the amounts used by the sector according to strict rules, presenting the cultural and economic utilization of the funds. Thus the state has to guarantee sources for the film industry in such a way that it simultaneously ensures the autonomy of art and the efficient use of public funds. This is where the supervising role of the state lies and it is the legal and organizational fundamentals of this supervising role that the act on motion picture is intended to define.

Film classifications, interpreting decrees

One of the most basic questions of national film funding systems is how to define the concept of the national films qualified for subsidies in a given state. The significance of this question, however - since film production on the unified market of the European Union is considered an economic activity - is more and more diminishing especially if we think of the integrated European audiovisual market and co-production collaboration. States support their own film industry in a high priority manner while the Union?s own associations are attempting to tear down national borders and protective decrees in this area as well.

The Hungarian model in its core following and somewhat extending the European Co-production Treaty applies the point system-based film classification. The advantage of this being, beyond defining the classification of actual national or co-produced pieces, that it is suitable for presenting the scale of Hungarian participation in the pieces to be classified. The latter having significance at determining, for example, the rate of subsidies.

The three categories applied by the motion picture act (Hungarian film production, co-production with Hungarian participation, other productions with Hungarian participation) are primarily important from the perspective of accessing subsidy types. According to the already functional practice in the international co-production treaties, a law declares that co-production with Hungarian participation is entitled to the same subsidies as Hungarian productions. The third classification category comes into effect when applying indirect subsidies such as tax exemptions. Those productions in which Hungarian participation does not reach the level required by the law can only expect indirect subsidies except if they can qualify as financial co-production based on an international contract.

Through the point system employed by the act it is possible for a production to be classified as a Hungarian production even if the producer is foreign, on condition that the Hungarian participation in the production (writers, talents, production locations) is high enough to achieve the necessary points to qualify as national film.

The fundamentals of the act

During the pre-cross checking process, a definite demand surfaced from the part of the film industry for the extensive and detailed descriptions of the act's goals, as sort of a guarantee that any government in power - maintaining the independence of the profession - would recognize the values of the Hungarian culture and consider it important to preserve and increase those. The operational problems of the distribution procedure so far, in addition to the already mentioned professional independence and on a theoretical level between the fundamentals of the act ? and later with detailed regulation as well - have forced the authors of the act to keep the everyday politics out of the source distribution and institution system.
The experiences of the past years have shown that the Hungarian film industry does not have the capability to survive and will not be compatible internationally without excessive state funding. Yet, the authors of the act hope that significant private funds will sooner or later find their way into the industry following the initiative state intervention. Therefore, in the opening paragraphs of the act all the objectives and fundamentals that shape the structure of state participation and which could serve as guidelines when applying the act in practice are established.
When defining the theoretical rules of allocating subsidies there were three objectives the authors were guided by: firstly to increase the accessible financial sources, secondly to appropriately split these according to the distinctiveness of the film industry and thirdly to be able to oversee the utilization of the funds from the point of assigning them to the clearing of accounts.

Keeping these three purposes in mind the act creates new institutions and augments the already existing ones to the rank of law. The tasks and exact definition of the operation of associations falling within the law usually happens in a lower ranking decree. The main reason for this is that, as hoped, with the changing of economic conditions, more and more participants will join the national motion picture industry and the authors of the law did not wish to impediment this with a rigid legal environment.

The subvention concepts rely on the dynamic cooperation of those giving and those receiving the subsidies: associations providing the funding need to abide by exact regulations and notions declared in the act, whereas the market partakers have to aim for satisfying all conditions (administrative, material etc.) necessary for qualifying for subsidies in a professional way.

Adjoining the appropriate rates of normative and selective subsidies brings balance between the predominance of economic and artistic points of views. With normative subsidies, among other things, the act is attempting to encourage the makers of the so-called 'blockbusters' to produce further pieces that will be just as successful among the audience, whereas with selective subsidies the opportunity arises for the state to support those films that are less frequently visited by the public but possess more significant artistic values. Through the motion picture act even the new across-the-border Hungarian film productions can profit from the funds guaranteed by the Hungarian state and the already completed pieces can have the benefit of protection.

The subsidy system rests on two pillars: the direct and indirect state funding. Although the latter one is regulated by other laws - primarily the tax laws - it was necessary to declare in the motion picture act that the indirect subsidies are essential and inevitable components of improving the motion picture profession.

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