This week, the European Audiovisual Observatory (EAO) published a new study titled “Fiction Film Financing in Europe: Overview and Trends 2016-2020”, authored by Manuel Fioroni.

The report aims to provide “insights on the development of budgets and financing structures of European theatrical live-action fiction films over the time period 2016-2020 from a big-picture, pan-European perspective”, while for the first time providing “an analysis of the year-by-year development of financing structures over the five-year timespan”.

The two main questions tackled by the study are: “How did the typical budget of a European live-action fiction film evolve?” and “How did the financing structures of European live-action fiction films change over time?”

The report is based on a data sample including detailed financing plans for 2,490 European live-action fiction films, including domestic productions and majority-led co-productions, theatrically released or slated for a release over the five-year timespan. Overall, it covers a cumulative financing volume of €8.12 billion, with financing plans being provided by national film agencies anonymously. Notably, the data sample is estimated to cover 48% of the total number of European fiction films released over the five-year period.

The first key finding shows that almost two-thirds of European films released between 2016 and 2020 had a budget of less than €3 million, whilst “median budgets of films produced in small markets increased noticeably over time, significantly reducing their gap with median budgets of films produced in medium markets”.

Zooming in on financing sources, the document underscores how direct public funding consistently decreased over the five-year timespan (from 29.4% in 2016 to 24% in 2020). Even though public funding remains the largest source, the EAO also notes how the share of production incentives increased significantly, from 9.6% of total financing in 2016 to 17.8% in 2020. According to the report, this increase “stemmed primarily from the growing role of production incentives in medium and large markets”.

As a result of the growing importance of production incentives over direct public funding, the financing share of total public support increased from 39% in 2016 to 41.8% in 2020. In particular, films budgeted at over €5 million recorded the highest increase in public support.

Finally, the report indicates that the importance of broadcaster investments as a financing source declined in large markets, affecting “first and foremost films budgeted at over €3 million”, whilst the impact of pre-sales and producer investments “remained comparatively steady over time”.

The full document can be accessed here.