The Hungarian film industry is booming: the total value of registered film projects expanded by 30% in 2021 and then by a further 20% to exceed $690 million in 2022, a year when more than 300 productions were staged in the country, mainly in its capital. “Budapest is now the second-biggest film production hub in Europe after London,” exclaims Csaba Káel, film commissioner and chairman of National Film Institute Hungary (NFI), the organization tasked with promoting and developing the country’s film, television and moving image industry.
Recent winners of Oscars, Golden Globes, Emmys and BAFTAs have been made in Budapest. “A great example is Denis Villeneuve’s ‘Dune’ for Legendary Pictures and Warner Bros., which won six Oscars in 2022,” Káel states. “Major movies are being shot here by the biggest production companies and Hollywood studios, as well as TV mini-series from the likes of Netflix, Amazon and HBO,” he adds.
Hungary has risen to global prominence in the sector in just the last decades, but its heritage in the industry goes back much further, as Káel explains: “Film, music and arts are very much rooted in Hungarians’ DNA and the country has hosted a professional movie industry for 122 years. Over that time, we’ve fostered huge talents. For instance, at the beginning of the last century, two of our important filmmakers left Hungary for Hollywood: William Fox, who founded Fox Film Corporation, and Adolph Zukor, who set up Paramount Pictures. The actors Bela Lugosi and Zsa Zsa Gabor were also Hungarian, as was the composer Miklós Rózsa and Michael Curtiz, who started his directing career here with silent movies and then became famous with ‘Casablanca’. There are many others.”
Despite this wealth of talent, Hungary was unable to realize the creative potential of its domestic audiovisual sector until after the fall of the communist regime in 1989. “It then took us 30 years to completely reform our film industry. We began by establishing a national film fund with funding that was guaranteed by the government in order to start financing certain productions. The next step was developing film-business infrastructure, and so on. Today, 20,000 people in Hungary are working in the film industry. It was a fascinating process, because the work was done in parallel by the government and the private sector,” he says.
The culmination of this process came in January 2020 with the launch of the NFI to support the production of movies, TV films, dramatic miniseries, documentaries and animation in Hungary. “As in all European countries, the industry is subsidized by the government, but my plan with the NFI was to combine the promotional and developmental efforts of the public and private sectors in one organization,” notes Káel, who is himself a lauded director and a regular face at the top international film festivals, where he and his team offer comprehensive information about Hungarian films and their creators, and explain why Budapest has become a leading destination for international productions.
The reasons for that are plentiful, he states: “Among the main ones are economic factors. Every European country offers a tax rebate, but Hungary’s tax incentive is one of the strongest. What’s also important is that it’s guaranteed.” In reality, the financial incentives may be the best on the continent, with a 30% tax rebate available for pre-, during or post-production expenses plus above- and below-the-line wages, financing costs, administration, insurance, accommodation and more. On top of that, the government has set no caps on the incentives and claimants receive their rebates much more rapidly than in other countries as well. Coupled with the tax benefit, overall production costs are low: it is about 25% cheaper to make a film in Hungary than in the UK and 35% cheaper than in the US, for example. In addition, the entire administration process is streamlined, with a single window available that covers everything from tax, to legal registration and location permits.
Then there are all the attractions of the Hungarian capital itself, comments Káel: “Budapest is unique as a local cosmopolitan city. New York is a global cosmopolitan city, but Budapest is a peculiar cultural metropolis of the Central European region, you can really feel the influence from places like the Balkans, Germany and Italy here. It has a wonderful cultural mix that includes opera, theaters, concert halls, museums, galleries, fine food and wine. It’s also a very safe and livable city, because it’s not big, which means international stars who stay in the city center can reach the main studios in 20 minutes, including the NFI’s state-owned national film studios. That’s why Budapest is so special and it’s why people in the film business like to be here.”
The city’s cosmopolitan past and present is reflected in the vast diversity of its fabulous historical, contemporary and industrial architecture, enabling Budapest to stand in for any city in Europe or further afield at any point in history, from classical times to 2023 and beyond. And there are incredible location possibilities in the rest of the country too. “Hungary offers broad historical heritage. For instance, we have plenty of castles, which are great for shooting — you can find English, Hungarian, French and many other styles of castle. It also has stunning natural environments, including amazing forests, lakes, mountains and you can even shoot the desert here. It’s an extremely rich and diverse country,” he discloses.
If Hungary’s cities, towns, villages and countryside cannot provide the right backdrop for a production, the backlots of its film studios can. “There are five large studios in the Budapest area, four privately owned plus NFI Studios. We’ve recreated part of Paris’ Notre-Dame cathedral, a Midwest American street and an old Hungarian castle in our backlots, while scenes in ‘Blade Runner 2049’ were shot in our water tank, the largest outdoor tank in continental Europe. It’s a very special place,” Káel asserts.
NFI is currently expanding the facilities and services at NFI Studios to cater for the ever-growing demand to film in Hungary. Due to be completed next year, four new soundstages are being constructed over 10,000 square meters, which will quintruple the site’s studio space. In addition, 3,000 square meters of office buildings, new catering facilities and a vast warehouse are being built, while NFI Studios’ existing buildings are being renovated and modernized to incorporate, for instance, renewable energy.
This investment was essential for Hungary to remain competitive in the European film industry, Káel says: “It was difficult to reach second place after London and it will be difficult to keep it. That’s why the studio development is important and that’s why continually investing in new digital post-production technologies is also vital.”
The NFI Filmlab is Hungary’s most experienced film laboratory and offers a full range of digital services. It is also one of the strongest analog film labs in Europe. “Analog has become very fashionable again. A lot of movies that were shot in digital are being copied back to film, because it is a great material for saving content. The NFI has a wonderful film archive, which is the biggest in Central Europe, and our Filmlab is also responsible for reconstructing and reviving old Hungarian films, such as Michel Curtiz’s movies from the silent age,” comments Káel. Once restored, NFI makes those films available to viewers through channels such as the hugely successful Budapest Classical Film Marathon festival and FILMIO, a unique streaming service in Europe, offering only Hungarian movies.
Káel would like to bolster the country’s post-production activities, he says: “Typically, international productions shoot here, then pack up and leave. But nowadays, post-production can easily take place in Hungary via internet connection. Also, the country offers enormous opportunities in post-production sound. We have eight symphony orchestras in Budapest and we have extremely talented creatives, composers and music writers.”
As he points out, a further advantage for productions in Hungary are its skilled creative and technical workforces that speak English and are prepared to put in long hours. “We have trained, talented professionals for all phases and fields of film production, including set and costume design and construction, as we have people with extensive backgrounds in fine arts and theater working in our industry. All of our specialists are highly professional and people like working with them. For instance, Ridley Scott, who has directed three films in Budapest, told me he really enjoys shooting here because everyone is warm, friendly and professional,” Káel reveals.
To ensure the country continues to develop its talent ecosystem for the industry, NFI works in close collaboration with Hungarian film schools and runs its own training and mentoring schemes. Among these are training programs that aim to eliminate skills shortages across the sector and its internship program, which connects students and film school graduates with producers looking for interns.
Since it was founded in 2022, NFI has also taken over responsibility for the public funding of domestic productions. It provides grants amounting to a total of around $47.5 million a year for the development, pre-production, production, marketing and distribution of film and television projects, including documentaries and animations. Foreign projects can apply for this support through registered Hungarian production companies and the NFI is authorized to finance up to one-third of a local-international coproduction budget.
“We have to open our minds and our practice toward coproductions because they can generate higher income and we can reach much larger distribution markets through our international coproduction partners,” states Káel; “Hungary’s tax incentive, location, infrastructure and strong industry knowledge have opened our doors to big international productions. Now, we would like to use our creativeness in the field of collaborations. Hungarians have many unique stories to tell and I would like to invite American producers to collaborate, as they also have incredible DNA in movies. This is the way forward!”
A substantial number of the major international projects filmed in Budapest to date have chosen Origo Studios, one of the leading private-sector players. Over 90% of its productions come from the US and its partners include names like Warner Studios, Legendary Entertainment, SONY Pictures, Netflix Studios, Amazon Studios, Lionsgate, StudioCanal, Skydance, Gaumont, TNT, Paramount Pictures, Alcon Entertainment, Disney, FOCUS Features, Columbia Pictures and Twentieth Century Fox.
“We’ve worked with some of the biggest names in the industry, including Denis Villeneuve, who returned to Origo Studios to film his multi-million-dollar adaptation of ‘Dune’, and we’ve played a role in some of the most significant recent global productions, such as Marvel’s Disney+ show ‘Moon Knight’, the upcoming ‘Dune’ sequel and the video-game adaptation ‘Borderlands’,” says Márta Fekszi, CEO of Origo Film Group, the studio’s parent organization.
No more than 20 minutes from Budapest’s center and 30 minutes from its airport, Origo is Hungary’s largest and most versatile movie studio complex, notes Fekszi: “We’re the second-most-preferred studio in Europe because we can serve all of our clients’ different needs and demands. Our Hollywood-standard complex is fully equipped and includes 10 soundstages covering 18,000 square meters, post-production facilities, shooting and other equipment, offices, warehouses, backlots, trailer parks and the largest trailer fleet in Central Eastern Europe.”
Origo’s facilities and equipment are state of the art: not only are its high-ceiling studios sound and echo proofed, but it has the capacity to suspend hefty props like tanks, helicopters and planes from the top of its largest stages. “We’ve also managed to support 8 tons of pressure for productions like Ron Howard’s ‘Inferno’, which required a huge water tank during shooting,” she states. Origo’s post-production services are similarly cutting edge and it has in-house capacity for 16mm and 35mm negative processing, 2K and 4K dailies, plus final finishing support for feature film, TV and commercial projects.
Fekszi points out that Hungarian tax regulations allow for only post-production or separately ordered screening services to be eligible for the sector’s generous rebate: “Importantly, the film industry’s tax rebate is also independent of any other bilateral taxation agreements and productions can reclaim VAT as well.”
Origo has a proven track record in delivering a comprehensive range of best-in-class, flexible and professional services that meet and exceed its clients’ expectations. “It’s this level of commitment that makes them return to us time and time again. We’re constantly evolving and adapting to new production and post-production requirements,” declares Fekszi.
One illustration of this is how it has adjusted its procedures to address challenges emerging from the recent growth in TV-series projects from global streaming platforms, she explains: “These platforms often need longer-term contracts lasting several years. We offer flexible terms starting with the first season, we prioritize prolonging their contract and presence in our studio, and we grant an affordable ‘holding period’ for their set in our soundstages. In addition, streaming productions rely heavily on our post-production services and require more storage capacity, so we have invested in a highly scalable information technology system to support this.”
There are a number of other attributes that make Origo stand out. These include the fact that its focus on lowering its carbon footprint has made it a ‘green studio’ and it is the only studio in the world with a mobile laboratory for COVID tests. For Fekszi, it is little details that make Origo unique: “For example, casts and crew are welcome to bring their furry friends to our dog-friendly site. We’re committed to ensuring our clients have an enjoyable and memorable filming experience.” While Hungarian projects represent a small percentage of Origo’s schedule, it treats them with the same level of care and Fekszi believes that its hosting of so many major international productions has had a positive impact on the domestic industry: “We’re creating opportunities for Hungarians to work alongside the best in the world.”