The film industry severely affected by the corona pandemic

– Now we have documentation on how hard the film and cinema industries have been affected by the pandemic. Fortunately, so far it seems that the industry has managed to maintain operations and production, and avoided bankruptcies. This proves how important it has been with the initiatives we have put in place to keep Norwegian film production running. It also means that audiences can keep on enjoying Norwegian films and TV series in the near future, Director Kjersti Mo of the Norwegian Film Institute says.

Revenue decrease

According to the new Menon report called “The impact of the corona crisis on the film and computer game industries", the film industry has seen large losses in all segments: production, distribution and screenings.
Menon has estimated that many operators have seen a severe reduction in turnover compared to a normal year:

• Producers of feature films have seen a turnover decrease of 30 percent
• Producers oriented towards drama series and TV production have seen a turnover decrease of close to 20 percent
• Film distributors have seen a turnover decrease of 35 percent, but would have experienced a decrease of 50 percent without government compensation initiatives
• Cinemas have seen a turnover decrease of 30 percent, but would have experienced a decrease of 80 percent without government compensation initiatives

In total, Menon estimates that the film industry has lost 35 percent of revenues during the period from March to August.

The report is based on an investigation in the Norwegian film industry that was initiated on 19 June and received 47 responses. An important feature characterising the film industry is its project economy with revenue and costs that might vary a great deal from year to year, depending on the phase in which the film production finds itself. For many operators, this distinguishing feature made the general government initiatives not hit well enough.

NOK 14 million for development

As soon as the lockdown was a fact, the Norwegian Film Institute's first action was so set aside extra funding for development of a total of NOK 14 million. Development work can be done even though everything is locked down, and good development work can help aggressively positioning Norwegian films in the near future. This was rearranged within the film fund. The funding went to screenplay and production development within all formats, and given on a running basis without application deadlines and with a processing maximum of 3 to 4 weeks.

NOK 85 million for corona costs

Furthermore, before Easter the Norwegian Film Institute rearranged NOK 85 million from the existing funding initiatives as a standby amount for several newly created initiatives, because it became evident that the crisis would play out over an extended period of time. The funding was compensated for by the Norwegian Ministry of Culture in the Revised National Budget in June, to ensure that the initiatives would not lead to a full stop in production funding for the rest of the year. To a large degree, this funding was prioritised into an initiative called Production 2. The film productions that applied for Production 2, a total of 33 projects, have received funding in order to carry out production. They include sixteen feature films, six drama series, six documentaries and five short films. See the list of recipients here (in Norwegian). These corona-affected projects received a total of NOK 54.6 million in funding from the NFI.

So far no abandoned productions or production companies have been registered due to the pandemic.

New release funding

The NFI also introduced in March an initiative for second-time release of Norwegian theatrical films, for a new release when cinemas opened again or for immediate digital release. The initiative is targetting films that were released or planned to do so in cinemas during the period of January to May 2020. Per 21 August 2020, NOK 1.6 million was granted for second-time release, to seven of this autumn's films. See list of recipients here (in Norwegian)

For Norwegian films released in the second half of 2020, the NFI has changed the release initiative and increased the amount so that the limit for a maximum release funding has been increased from 50 to 75 percent of approved, accounted-for costs, with a ceiling of NOK 3.2 million. Because of this initiative, the NFI is going to use about NOK 10 million more for release funding in 2020.​​​​​​

Initiatives for movie theatres

In the middle of September, the NFI decided to give NOK 3.5 million in funding for a nationwide, one-year campaign to get audiences back into cinemas. The campaign is a co-operative effort, including the industry organisation Film & Kino, Virke Produsentforeningen and The Norwegian Film Distributors Association.

The need for stimulus in the time ahead

One of the big challenges for the film and series producers in the time ahead is an inability to be insured for events caused by the pandemic. Uncertainty connected to carrying out productions is nothing new in the film industry and a great many projects are therefore executed with production insurance that secures the productions financially against events outside the producers' control. Insurance companies for films are not willing to include corona-related insecurity in their arrangements, since it would be very difficult to quantify this risk. Because of this, Norwegian film projects go into production without any formal financial security against disruptions and other disturbances caused by the corona pandemic. It is not improbable that contagion and illness may lead to disruptions or cancellations of projects, which again may lead to bankruptcy for production companies.

The Norwegian Ministry of Culture has signalled that from October they will phase out the compensation initiative for cultural events and replace it with a stimulus arrangement which will make economic sustainability possible for events despite the fact that contagion measures will limit the size of audiences. There is also a signal that the Norwegian Film Institute's initiatives will play a part in the further stimulus of the film industry.