Hungarian Film Production on Course for Record Year in 2024

Analysis

Károly Radnai, managing partner of Andersen in Hungary.

Last year, the domestic film industry was hit hard by the months-long strike of U.S. screenwriters and actors, with the shutdowns effectively breaking the year in two. However, since January, the industry has experienced a boom due to the replacement of canceled and postponed foreign productions.

Current trends indicate that 2024 could be the first year in which the volume of Hungarian productions exceeds USD 1 billion.

Hungary is currently one of the top 10 filming locations in the world. The main profile is servicing overseas studios; only the U.K. film industry represents a greater volume in Europe. According to industry estimates, the sector employs nearly 20,000 people in Hungary.

Two decades ago, the total amount of work-for-hire film productions in Hungary was around HUF 3 bln-4 bln a year. After the Hungarian Film Act entered into force in 2004 and the introduction of automatic tax refunds, this had increased tenfold to nearly HUF 30 bln within three years. By the second half of the 2010s, the Hungarian film industry had made an additional quantum leap: in 2019, the industry spent HUF 200 bln, with a record of HUF 300 bln set in 2022.

Following the trends of 2022, 2023 got off to a strong start, with reasonable expectations of seeing another record-breaking year. However, a strike by U.S. screenwriters in early May, followed by U.S. actors in mid-July, broke the momentum. While the former indicated only a mid-term slowdown, the latter led to an immediate halt for almost all significant productions: without major players, filming could not be resumed in any meaningful way.

In the second half of the year, filming in Hungary was limited to lower-budget European and independent film productions, causing industry spending eventually to peak at around HUF 200 bln.

Strong Upturn

After the end of the strikes, a strong upturn was expected in 2024, which was confirmed by the first few months of the year. Given their volume and current trends, industry spending is expected to exceed the USD 1 bln mark for the first time this year.

In light of how the scheme works, this will likely cause disruptions in the payment of the 30% cost reimbursement. The available funding is determined in the annual budget, close to HUF 70 bln in 2024. This will certainly not be enough, meaning there will be a queue for the allocation of grants.

Although we are not there yet, without developments and further progress, it will be close to reaching its limit. At the same time, demand is growing internationally, with major film production companies and streaming service providers increasing their appetite for content. If Hungary starts preparations early enough, it could reap even more benefits from this process.

On the one hand, this requires infrastructural development. Investments of this nature are underway at the NFI Studios and Astra Film Studios in Fót and Mogyoród. There are also plans to build new studios, but in professional terms, modernizing and expanding existing facilities makes more sense.

There is also a need to increase the added value of the work completed and tasks performed in Hungary. There is a clear improvement in this respect, as exemplified by the increasing involvement of Hungarian crew members in foreign productions. This is confirmed by the gradual focus shift from physical work to film post-production. It is a promising sign that, in recent years, several Hungarian post-production studios of high professional standards have been established, acquiring valuable references.

This article was first published in the Budapest Business Journal print issue of May 17, 2024.

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