3 December 2022 The Irish Film & Television Network
     
Economic Impact of Film Production
08 Apr 1999 :
The following is an extract from the preface by Tommy McCabe , Director of The Audiovisual Federation, and the executive summary of the report on The Economic Impact of Film Production in Ireland 1997 compiled by the IBEC Research Information Service which has just been released.

The value of production of the Irish film industry in 1997 increased by over 25% compared with the preceding year, bringing the total to over £123 million. Expenditure in Ireland, the key to generating domestic employment and income, was an absolute record at £88 million. Flowing from that, direct Irish employment (in terms of full time equivalents) was 1,450, while indirect employment resulting from spending on goods and services by the industry and its employees, totalled 1,902. Both were record figures.

The productions included in the report embrace a wide range, from international 'block busters' like 'Saving Private Ryan', part of which was filmed in Ireland, to further instalments of popular TV series such as 'Ballykissangel' and 'The Ambassador'. Indigenous drama productions included Jim Sheridan's 'The Boxer', John Boorman's 'The General' and Pat O'Connors 'Dancing at Lughnasa'.

As in previous years, Film and Major TV Dramas accounted for the largest part of the total, amounting to £105 million or 85%. However, Independent Productions for TV also recorded an increase in 1997 rising from £15 million in 1996 to £18 million. This sector is now almost twice the size it was in 1994, reflecting the arrival of TnaG and the outsourcing policy at RTE. On the other hand, a major disappointment was the virtual disappearance of Animation production. In 1994, this sector accounted for nearly £12 million and was higher than the production of the Independent Productions for TV. In 1997, output of Animation was estimated to be £0.1 million. Measures to help restore the health of this sector of the industry are urgently needed.

On the funding side, Irish finance accounted for over 60% of the total, a slight decline on 1996. But of this, films benefiting from Section 481 amounted to £53.9 million, which was a record for that form of finance. Other important sources of Irish finance were TnaG (£7.4 million) and RTE (£5.6 million), the Irish Film Board (£2.6 million) and 'other' Irish investors (£6.6 million).

Maintenance of a high and rising volume of activity in the audio visual industry is critically dependent on supportive Government policies. Of these, the most important is Section 481 which allows investors to offset 80% of their investment in eligible productions against their income tax. Declines in the rate of income tax and improved state support abroad have reduced the value of this incentive. The Federation therefore, has been campaigning for a restoration of the allowance form 80% to 100%. At the time of writing, the future of Section 481 was under consideration by government awaiting the report from the Think Tank on the film industry set up by the Minister for the Arts, Heritage, Gaeltacht and the Islands, Síle deValera. The Audiovisual Federation believes it is imperative that Section 481 is renewed up to 2010 to ensure the long term viability and development of the sector.

However, in its submission to the Think Tank, the federation argued not only for a continuation of Section 481, but for its expansion to cover the development and marketing aspects of the film business. Such an extension would help develop a truly indigenous industry, in which projects by Irish film companies would be originated and owned, as well as produced in Ireland. Indigenous production along these lines would enhance the employment and income generated by the industry.

Meanwhile, the Federation looks forward to the development of initiatives which were started or which developed during 1998. These include Screen Training Ireland, which is increasing the range and quantity of its programmes and the Screen Commission of Ireland, an agency with an important role to play in attracting productions to Ireland. Enterprise Ireland has also become more involved in the development of the industry by supporting and encouraging small independent production companies. The Irish Film Board continues to play an important role in the future of the industry in it's support for development as well as production. The arrival of TV3 is also a welcome development in the sector.

The report and previous reports published in 1993-97 have been compiled from statistics obtained from a database which has been created by the IBEC Audiovisual Federation. All companies carrying out productions which receive Section 481 funding, are required to complete an Economic Database Input Form detailing funding, expenditure, and other economic data. These forms are then collected by the funding bodies involved with the financing of productions and forwarded to the Federation on a confidential basis for analysis. The establishment and development of the database has been guided by a steering committee comprising representatives of the Audiovisual Federation, the Irish Film Board, RTE, TnaG, Film Makers Ireland, the Animation sector, the Revenue Commissioners and the Department of Arts, Heritage, Gaeltacht and the Islands.

EXECUTIVE SUMMARY

1. The report analyses the economic impact of a total of 105 audiovisual productions completed in 1997 with a combined production value of £123.4 million. The number of productions was slightly lower than in 1996 (110 productions), but in value terms there was an increase of 23.3 million from the £100.1 million of production which took place in 1996.

2. From the viewpoint of the economic impact of the industry, expenditure in Ireland in 1997 was £88.5 million or 72% of total expenditure, an increase of £26.7 million over that which was recorded for 1996. The Irish proportion of total expenditure at 72% is the highest proportion shown since IBEC began recording information for this sector in 1993.

3. The proportion of funding originating in Ireland was 62%, again, showing a slight fall over 1996, when this figure was 64%. Within the total, Section 35 was the most important single source, contributing £53.9 million. Other important sources of Irish funds were RTE, TnaG and private equity. Amongst non-Irish sources, US investors were the most important (£20.5 million)

4. Total Irish employment in terms of placements rose by 71% from 11,251 in 1996 to 19,279 in 1997. In terms of full-time equivalents it is estimated that 1,450 were diretly employed in the industry in 1997 compared with 1,187 in 1996. Irish direct employment numbers as a percentage of total employment fell slightly from 94% in 1996 to 93% in 1997.

5. Benefits to the Exchequer from the audiovisual industry are estimated to have amounted to £31.15 million in 1997. This includes direct benefits in all forms of tax, including VAT and excises, when account is taken of the multiplier effects of investment in audiovisual production. The cost to the Exchequer of Section 481 (previously Section 35) is the tax foregone on the £53.9 million which was invested under Section 481 and is estimated to have been £20.7 million in 1997.

For further information contact:

IBEC
Confederation House,
84/86 Lower Baggot Street,
Dublin 2

Tel: 353 1 660 1011
Fax: 353 1 660 1717
Email: audiovisual.fed@ibec.ie
WWW: www.ibec.ie



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