Small European Film Markets: Portraits and Comparisons

Flanders

Flanders’ film production is competitive and adept at finding routes for international distribution to international markets (see: Export markets and international distribution). While digital distribution and video on-demand services have presented challenges for cinema attendance in Flanders, they have also contributed to the international circulation of Flemish fiction. However, digital distribution tends to favour series more than films.

The Flemish ecosystem reflects dynamic evolution, underpinned by a policy toolkit that strives to adapt to the shifting audiovisual landscape and to increase the competitiveness of the Flemish sector. The policy measures put emphasis on creating commercial opportunities for financing Flemish films and supporting a sustainable production environment. The Belgian tax shelter, established in 2003, has opened doors for more commercially oriented films.

As shown in the visualisation, the average share of domestic admissions for Flemish films produced in the period 2014-2022 accounted for almost 20% of total admissions. The international share of total admissions accounted for an average of 41%. In 2022, according to VAF, 1,827,175 cinemagoers went to see Flemish films, with an increase of 180,080 visitors from films released in the previous year.

  • Continuous struggle for visibility of Flemish film in cinemas: the annual success of Flemish cinema relies heavily on a small number of titles.

  • Film distributors hesitant to take risks: cinema attendance in Flanders has been gradually declining over the years, which is partly attributed to the rise of streaming platforms and the declining willingness of mainly young consumers to pay for film consumption. Furthermore, the uncertainty of income has made distributors hesitant to take the risk of contributing sufficiently to the production of film in the form of pre-financing/minimum guarantees. This is partially offset by global streamers acquiring distribution rights (Delaere et al. 2021).

  • Fragmentation of the production sector: the sector has a fragmented structure, with a very small number of large players and a very large number of relatively small players (Delaere et al., 2021). Many recent discussions have centred around the imbalance between independent production companies and other production companies that find ways to bypass regulations and secure access to public funding. 

Established in 1964, the Flemish support system has been fundamental in enabling Flemish feature films to reach the production stage. In 2002, the 1964 film support system was replaced by an autonomous fund, the Flanders Audiovisual Fund (VAF) (Willems et al., 2020). The legal structure governing VAF is outlined in the VAF Decree, further detailed by management agreements between VAF and the Flemish government, alongside the General Terms and Conditions. For the economic fund Screen Flanders, the guiding framework is established by the Screen Flanders Decree and other legislation.

Based on the trade reports of the Belgian film industry, American films constituted between 60% and 70% of the films released in Belgian cinemas in the 1930s. Over the years, the position of Hollywood films in Belgian cinemas has remained strong (Biltereyst, 2007). Still, Flemish films have achieved top positions at the domestic box office, as seen with Zillion (BE, NL 2022) which was ranked third in 2022 (see: Top performing films).

The combination of uncertainty regarding audience demand and the small market size traditionally leads to limited private investment in Flemish titles, resulting in a substantial reliance on various forms of public funding. On average, Flemish cinemas see the release of 14 full-length Flemish films each year (see: Production volume). Most of the films are VAF supported projects. There is only a small increase in the number of films without VAF support. About one third of the films lack VAF support (Delaere et al., 2021).

Flanders is an attractive market for inward film productions, due to the economic fund Screen Flanders and the Belgian tax shelter, resulting in a relatively high number of minority-Flemish co-productions and producers specialised in service co-productions. The priority co-production partners of the Flemish Audiovisual Fund are the Netherlands and the French Community of Belgium.

In 2022, cinema attendance for Flemish films witnessed a 41% rise when compared to 2019, as reported by VAF. The total number of cinema visitors in Belgium was 30% lower than in 2019. For the arthouses this decline was 15% lower. 

Most film production companies are small SMEs that engage in both film and TV production.

The film, television and game sectors are interconnected through a policy support framework that governs their operations. In particular, the Flanders Audiovisual Fund (VAF) supports the Flemish independent audiovisual and game sector. There are three funds under the umbrella of the VAF: Film Fund, Media Fund, and Game Fund – each has its own management agreement with the Flemish government. According to the VAF Film Fund Management agreement (2022-2025), the VAF has the ambition to enhance the cultural image and reach of Flemish films, series, and games. The annual budget of the VAF Film Fund for scenario, development and production support for fiction films for the period 2022-2025 totalled around €17.7 million. The total annual budget of the VAF Film Fund for 2022 was about €25.8 million, encompassing various forms of support, including creation, promotion, and talent development. 

Calculating the total public funding for Flemish productions is not straightforward. According to a 2021 study, an estimated €123 million was channelled to Flemish audiovisual productions in 2019, in the form of subsidies, indirect tax measures and via incentive schemes (Delaere et al., 2021).

Since 2019, global streamers have been required to invest in local works, either through direct investment or by paying a levy to VAF. Flanders was among the first small markets in the EU to introduce investment obligations for VoD providers targeting Flemish audiences from other EU Member States (Kostovska et al., 2023) The policy mechanism with an option to choose between direct investment obligation or levy, previously applied to distributors, was extended to VoD providers. The Flemish government has instigated a change in the investment obligation, entailing an increase in the rates. According to the draft decree amending the Media decree, streamers with turnover above €30 million will see their contribution rise from 2% to 4% of their turnover. Also, streamers and service providers will have the option to allocate a portion of their investment obligation towards feature films and documentaries, in addition to series. Video-sharing platforms may also be required to make financial contributions for their audiovisual offerings.

The Belgian Tax Shelter, introduced in 2003, offers tax incentives for Belgian productions as well as qualifying international co-productions with Belgium. The tax shelter is now considered a fundamental element of the Flemish policy toolkit, both for domestic productions and majority and minority co-productions, and for all audiovisual genres. The Tax Shelter can offer additional funding, covering 25-30% of the total qualifying expenses in the European Economic Area (EEA). It enables financing of up to 40-45% of the eligible expenses in Belgium.

The economic fund Screen Flanders, with an annual budget of €4.5 million, supports national and foreign audiovisual productions that spend part of their budget in the region. It aims to strengthen the competitive position of Flanders relative to other regions. Belgian producers can apply to receive up to €400,000 of refundable advances by way of economic support to cover their audiovisual expenses in Flanders. Non-domestic producers interested in applying for the fund can co-produce with a Belgian producer. According to VAF, of the supported film and TV projects in the period 2012-2022, fiction comprised 76%, documentaries made up 4%, and animation productions accounted for 20%.

In Belgium, four international distributors distribute the bulk of commercial films: Universal Pictures International, Sony Pictures, Walt Disney Motion Pictures, and Warner Bros. (see: Distributor market shares). In addition, there are another 25 large and small distributors, some of which operate in the Benelux region. The largest player in Flanders is the Belgian Kinepolis Film Distribution, which is part of the Kinepolis group. Cinéart, Lumière and Imagine are some of the main art house distributors. Pre-financing via minimum guarantee (MGs) is mainly limited to larger productions to which well-known talent is associated. 

In 2022, of Belgium’s 492 cinema halls, Flanders comprised 236 (Landschapsschets Publiek, 2022). The Flemish Region accounted for 46% of cinema spectators, the Brussels Region for 17% and Wallonia for 37% in 2021 (Statbel). VAF statistics report a total of 47 cinemas operating in Flanders. Three chains are active in Flanders and Brussels: Kinepolis Group, UGC and Pathé, which together operate 218 screens and take up almost 70% of the total Flemish and Brussels cinema landscape.

Except for multiplex cinema chains, in Flanders there are also independent profit cinemas (41 screens) and arthouse cinemas (28 screens). Depending on the profile and business model of the arthouse, emphasis is placed on more commercial crossover films in addition to offering arthouse films. Arthouse cinemas in Flanders experienced an upswing in visitors until 2020, disrupted by the Covid-19 pandemic. Ticket sales increased from about 300,000 in 2009 to over 500,000 in 2019, an increase of 66% in a decade. Figures from 2023 show a post-pandemic recovery, but audience attendance has not yet reached the levels of 2019. The main structural problem for most arthouse cinemas and independent small profit cinemas is the need for large-scale structural renovations (accessibility, new seating, screens, etc.) and increasing rent and energy costs. Arthouse films can also be seen at several other non-profit cultural exhibitor initiatives, often in second run. Additionally, large and loyal film audiences are also attracted by cultural centres. In Flanders, there are 29 cultural centres that screen films on a weekly basis, 11 on a biweekly basis, and 40 monthly. Cultural centres often pay special attention to Flemish productions in their programming. Overall, there is a need to increase the availability of screens for artistic films in Flanders. The current limited number of screens also narrows the range of film offerings, with artistic films facing restricted distribution opportunities (Landschapsschets Publiek, 2022).

The domestic SVoD alternative to Netflix – Streamz – was launched in 2020. The service is jointly operated by the leading pay-television distributor Telenet (which also owns private broadcaster SBS) and the private broadcaster DPG Media. As the volume of local content remains insufficient to satisfy the needs of the customer, Streamz has also added a wide offer of top international series. An exclusive licence deal with HBO allows Streamz to include HBO’s high-quality titles.

In 2022, Netflix retained the highest market share (50%, +1), but left the growth jump to Disney+ (19%, +3) (ImecDigimeter, 2022). Streamz is in third place according to market share at 12% (+1). About 55% of Flemish people have access to a paying video streaming service (an increase of 5% compared to 2020 and 10% compared to 2019). Broadcasters have developed their own online platforms: VRT MAX (VRT), VTM GO (DPG Media), and GoPlay (SBS).

For Flemish feature films, VoD offerings are relatively fragmented, with initiatives for quality cinema (Sooner, a TVoD/SVoD service part of the French Univerciné), Mubi, Dalton (mostly for documentary titles) and MyLum (a portal hosted by producer/exhibitor/distributor Lumière).

Flanders and Brussels have around 35 film festivals with different sizes and missions. Three festivals have a more ‘generalist’ approach: the International Film Festival Ghent, the Film Festival Ostend, and the Brussels International Film Festival. Key festivals for specific genres include Fantastic Film (Brussels), Anima (Brussels International film animation festival), International Short Film Festival Leuven, and Docville for documentaries.

No Belgian festival has the reach of major film festivals such as Berlin, Cannes, or Venice, where screenings and awards may determine the international success of a film. The Ghent film festival is widely renowned, however, for its World Soundtrack Awards, which each year brings together and celebrates the most prominent soundtrack composers. 

Flemish fiction and documentaries have achieved recognition at international film festivals through nominations and awards. Most recently, Lukas Dhont’s film Close (BE, FR, NL 2022) secured the Grand Prix award at the Cannes Film Festival and was nominated for an Oscar for Best International Feature Film.