The political changes in Bulgaria in the autumn of 1989 transformed the governmental cultural policy in such a way that it complied with the new public and political reality. In the beginning of the reform in 1991 its principles were formulated: pluralism and non-interference in creativity, free practice of artists and cinema professionals, introduction of producer principle in financing and production, governmental support for the best film projects, self-support of film enterprises. During the first years of the reform it had to comply in terms of institutions with the existing Law of Cinematography of 1948, which had established a governmental monopoly in all activities in the field of filmmaking.

The Bulgarian Cinematography Creative and Economic Association, directly subordinated to the Council of Ministers, was a powerful organization with a complete structure covering all production studios, film distribution and theaters – state-owned and public. The Association used to carry out the importation of foreign movies and exportation of Bulgarian pictures abroad, as well as to promote Bulgarian cinema at international festivals. The organization was building a unified system of fundraising from admissions (32% of the gross revenue of theaters), from sale of films abroad, and governmental subsidy. These funds were distributed among filmmaking, renovation of theaters and studios and purchase of foreign pictures. The system was strongly centralized. Uncontested it allowed to be achieved full control and censorship over everything created and shown in Bulgaria. Cinema was one of the priorities of the cultural policy at that time and enjoyed powerful governmental and public support. In the decade from 1975 to 1985 the following was financed: 22-25 full-length motion pictures, about 145-160 short pictures and 45-65 cartoons. Apart from the motion pictures, Boyana Studio produced 20-25 motion pictures ordered and financed by Bulgarian Television. 1985 was the beginning of a deepening economic crisis and the number of films began to decrease. In 1989 1,300 theaters were closed, mainly in villages. In numbers it looks like this:

Produced films and invested funds (in million BGL) in the period 1986-1991

/Theater network and admissions/

Bulgarian screening 1980-1991

In the beginning of the democratic changes at the end of 1989 the national film industry, united with the Bulgarian Cinematography Association was as follows:

Central Directorate with 80 employees;

Boyana Film Studio – 1,614 artists and technical specialists;

Vreme Studio for Documentary and Science Films – 217 employees;

Sofia Cartoon Studio – 191 employees;

Film Laboratory – 290 employees;

Film Distribution – 358 employees;

Bulgariafilm (import-export company) – 35 employees;

28 regional offices uniting all state-owned theaters – 4,693 employees

The total number of 7,131 filmmakers and technical specialists worked in the specialized units in the framework of Bulgarian Cinematography Association.

In March 1991 the Council of Ministers adopted Regulation No. 44 by virtue of which funding of Bulgarian Cinematography from the national budget was stopped and the funds were given to the Ministry of Culture for direct financing of cinema. In June the same year, by Resolution No. 107 of the Council of Ministers, Bulgarian Cinematography Association was terminated and its successor became the National Film Center (NFC) in the Ministry of Culture. The National Film Center was defined as a “corporate body on budget support with the objective of the coordination of filmmaking and cinema services, production and film distribution activities”. The Film Center functions under the economic mechanism of non-profit organizations, which allows raising resources from the national budget and revenues from other sources in a fund without the obligation of a budget that receives financial means within the calendar year. This very important circumstance reflects the specifics of filmmaking, on one hand, and the aspect of a cultural industry, on the other hand.

The normative documents regarding the work of the Film Center were prepared with the active participation of filmmakers and experts. The Regulation on the structure and activity of NFC develops in details the mechanisms by means of which NFC carries out the governmental cultural policy regarding the development of the Bulgarian cinema – on a competitive basis through national boards for each type of cinema and governmental subsidy at an amount, that is a certain percentage of the film projects budget. The Regulation contains a definition of “producer”: “a physical person or corporate body that organizes, provides economically and undertakes the responsibility of the creation of an artistic work”. This definition, with an insignificant revision, was adopted in the Law of Copyright and Similar Rights (Art. 62 [3]). It was approved later.

The Producer in this new sense is a key figure in regard to the essence of the reform in the national filmmaking. Earlier, in the conditions of governmental monopoly in cinema, this role was played by the Government – in the form of film studios managed by the Central Office of Bulgarian Cinematography Association. The Government financed the entire film production and determined its thematic and genre development.

The new principles aim at creating conditions for market competition in the audiovisual field, encouraging personal initiative and enterprise with the presence of a partial financial grant from the Government. Of course, these objectives could be fully implemented if there were economic stability, GNP growth, capital re-investment of production companies and law amendments, encouraging enterprise activity.

The legal basis for accomplishing the reform in cinema consists of the Trade Act, adopted in June 1991 and regulated in a new way the activity of economic entities, and the Law of Copyright and Similar Rights, adopted in August 1993.

These two laws were the starting points for harmonization of Bulgarian legislation in compliance with the European one. Art. 1 of the Trade Act provides that film production and transactions with intellectual property are commercial activity. The Law of Copyright eliminated the governmental monopoly in cinematography, which was in fact formally removed in 2000 with the cancellation of the Law of Cinematography of 1948. The European concept of copyright was accepted in the Law. It belongs to the authors, while prior to this it was property of the film production studios. In 1993 the Ministry of Culture adopted the decision and began restructuring the film studios in state-owned companies. The state-owned enterprise “Film Distribution” was terminated. Earlier in 1992, regional film distribution offices were transformed in 28 commercial companies.

Thus the activity of film producers, production studios, film distribution companies and theaters was market based. The third important law for the stabilization of an economic basis in cinema reform – the Law of Radio and Television – was adopted in 1995. By virtue of this Law, TV channels and operators have to provide at least 50% of the annual program time for European works, including national productions, and to spend 10% of their budget on production of TV movies. The Law introduces the National Council of Radio and Television that monitors and controls these provisions. In 1998, the Center for Production of TV Films was created within Bulgarian National Television (BNT). It applies the same principles and mechanisms as the National Film Center.

In June 1999, the Law of Protection and Development of Culture was adopted. It regulates governmental financial support and the independence of cultural institutions and activities, with equality and competition among artistic projects. Practically, these principles have been applied to the work of the National Film Center and other art centers since their creation in 1991 to 1992. The Law of Culture relied on the Bulgarian National Television to determine by means of agreement with the Ministry of Culture its participation in the production, presentation and distribution of cinema and TV films. The draft agreement designates financial participation on behalf of BNT of at least 10% of the budget for film projects with governmental subsidy from NFC. In this way financial aid from the Government will be united for the purpose of creating a national film product without infringement on the independent choice of criteria accepted the two institutions – BNT and NFC – for project selected for support.

Since its establishment the National Film Center, together with the Union of Bulgarian Filmmakers, works on the adoption of the Law of Cinema in Bulgaria. This law will complete the normative basis of the reform in the Bulgarian cinema. The most important objective of this law is the establishment of a mechanism for accumulation of funds for self-financing, and restoration of the disconnected links in the film industry. In the past 10 years three drafts of the law of cinema were prepared. They were approved by the Ministry of Finance, but none of them were discussed in Parliament. One of the major obstacles is the fact that during the same period there were eight cabinets. It was not until April this year when the draft of the Law of Cinema passed the first reading at the Parliament. There are all the prerequisites to be adopted until the end of the year. The draft provides for a Bulgarian Cinema Fund which would gather resources from governmental subsidy, ensuring the production of 5 motion pictures, 10 documentaries and 10 cartoons, from the license fees of theaters, and from distributors depending on the number of prints.

One of the main priorities of the reform is the inclusion of the Bulgarian cinema in European funds and programs, and attraction of foreign investors on the grounds of the good existing facilities.

In October 1993 Bulgaria was accepted into Eurimages European Fund for Support of Co-productions. Bulgaria is an active member of Audiovisual Eurika International Organization, which supports countries applying for membership into the EU in the direction of homogenization of national jurisdictions and practices with those of the member countries. About 50 Bulgarian professionals have taken part in seminars, special sessions and programs for development of projects and promotion of films.

In 2000 Bulgaria closed Chapter 20 – Culture and Audiovision in the negotiations for EU membership, which created an opportunity for our country to be integrated, though for a short time, in MEDIA2 Programme of EU. Two Bulgarian projects received support for distribution of European films. The acceptance of Bulgaria in the new program of EU Media Plus is forthcoming. This will create opportunities for Bulgarian professionals to participate in all thematic directions of the program – training, project development, distribution and promotion.

Until now, in order to exist, the Bulgarian Cinema relied mainly on governmental aid. It is also the main guarantee for realization of international co-productions. The amount and the mechanism for granting governmental support are set forth in the Regulation of NFC. The Center grants the support. This Regulation applies the European model for support of national filmmaking and until now it has passed five amendments, imposed by the practice of development and realization of the approved film projects.

The first normative documents regarding the activity of the Film Center are the Regulation on the Structure and Functions of NFC and the Rules for Production Activity. The Regulation develops in detail the mechanisms by means of which the Center implements the governmental policy for protection and development of the Bulgarian Cinema – competition, national boards appointed by the Minister of Culture, which decisions are obligatory for the Film Center, and granting subsidies as a certain percentage of the budget amount. The Rules for Production Activity defines the conditions and the order of granting governmental support for film projects.

The Regulation on the Structure and Activity of NFC was enforced on January 15, 1994 and united in one document the Regulation and the Rules of 1991. By virtue of these Rules were introduced the so-called “automatic subsidy” and a stricter control on the grant of resources. Governmental subsidy was automatically granted to Bulgarian producers that had managed to provide aid from foreign national institutions of Eurimages. The objective of this support was to attract funds from abroad for the national film industry and to stimulate the integration of our cinema with the European one. Five motion picture projects received automatic subsidy, two of them were entirely shot in Bulgaria, and the other three were documentaries. This type of assistance has increased the interest of producers to apply before Eurimages, and at present 5 Bulgarian production companies constantly participate in co-productions supported by Eurimages. Up to now 5 Bulgarian motion picture projects and 4 documentary projects have been supported. 24 are co-productions with minor Bulgarian participation. Most often the co-productions are regional – with Greece, Cyprus and Turkey. There is Bulgarian participation in co-productions with France, Germany, Russia, the Netherlands and Hungary. A definite success is the Bulgarian participation in Mordburo (1996) and East-West (1999). Bulgaria and Hungary have three joint projects supported by Eurimages: The Black Swallow (1996, Bulgaria/France/Hungary), Romani Kris (1997, Hungary/Germany/Bulgaria) and Letter to America (2000, Bulgaria/the Netherlands/Hungary).

Fearing that the grant of automatic subsidy may considerably decrease the financing of an entirely Bulgarian film, a part of the filmmakers united against the continuation of this practice, at least until Bulgarian Cinema Fund would be established. On July 1, 1995, in the Rules of NFC this mechanism was amended and remained in force only for Bulgarian project – international co-production. The amendments in the Rules cancelled the subsidy for screenplay ideas and the term “average statistic budget” was introduced as a basis for determining the amount of support for film projects. These restricting conditions and the economic crisis in 1996-1997 were the reasons for not granting a single support for international productions. The subsequent amendments of the Rules in 1997 restored the mechanism. The support for projects with minor Bulgarian participation was fixed at 10% of the annual subsidy and was granted after a competition conducted by a specially appointed committee. The Bulgarian projects with international financing receive a subsidy equal to the subsidy received by those approved after the competitions. Apart from that, the support for development of screenplays and projects was restored. The proceedings of competitions were facilitated and the approach to the international co-productions with Bulgarian participation was further specified.

The film projects receiving governmental help from NFC are selected by three National Committees (for motion pictures, documentaries and scientific pictures, and animation) by means of competitions. The National Committees conduct competition sessions twice a year, select the film projects and determine the subsidy amount for each project. Each Committee includes representatives from the Union of Filmmakers, Producers’ Association, BNT and Film Distributors. The committees are appointed by the Minister of Culture for a period of two years. Members of these national committees have been distinguished cultural figures, motion picture directors and screenwriters, composers, artists and film critics. The national committees represent the supreme body in the field of the Bulgarian filmmaking. Only producers registered with NFC may participate in the competitions for governmental subsidy. The project file is prepared according to the accepted European standards for this type of documentation. From the beginning of 1992, when they started, until the end of 2000 the National Committees conducted 24 competition sessions.

The total number of projects includes screenplay ideas, except for 1996 and 1997. The analysis of competitions (1992-1999) shows that the competition in the field of the motion pictures and documentary is equal – 31% of the applications were approved. In the field of animation the percentage of approved projects is 42. From the approved projects 7 motion pictures, 4 documentaries and 5 animations were not realized. Out of the total number of 247, subsided screenplay ideas in the field of motion pictures were 37% and 22% in the field of documentary cinema.

The governmental subsidy determined by the National Committees provides from 50% to 80% of the budget of an approved film project and it may be granted within 18 months following the decision of the relevant committee. The most difficult thing is the realization of motion pictures – the inflation in 1998 and the lack of other constant sources of financing decreased by two the actual value of the subsidy. Out of the total number of 36 approved motion picture projects 7 were not realized. They were more complicated with specific shooting, and consequently more expensive than the rest of the projects. Unfortunately, the impossibility of finding normal financing creates limits the variety of themes of the new Bulgarian pictures – they are interior, contemporary, and are shot only in Sofia.

The trend that is registered by statistics is a decrease in the average production value of one motion picture to approximately USD 215 thousand, and that falls under the critical minimum. Of course, this value does not ensure basic competitiveness of the Bulgarian films. The low budgets not only diminish the artistic and technical level but to a great extent limit the possibilities for co-productions with other developed filmmaking organizations. During the last five years only four Bulgarian projects applied before Eurimages and only three of 12 completed motion pictures are international co-productions.

Film Production in Bulgaria

The low economic indices depicting the development of the country in the last ten years had an impact on the opportunities for financing of filmmaking. The governmental subsidy is the main source and guarantee for the start of the film projects, and in many cases - for their successful completion. During the years the subsidy for filmmaking from the national budget has varied from USD 1.2 million to USD 260 thousand in the critical 1996, then smoothly increased to USD 856 thousand in 2000.

AMOUNT OF GOVERNMENTAL SUBSIDY FOR CINEMA

Amounts in until 1998 inclusive are in BGN. Since 1999 the Bulgarian currency has been BGN - the denominated Lev.

The average budget per motion picture in the period from 1992 to 2001 was USD 240,699. It is quite obvious that though average production value has decreased to approximately USD 157 thousand in 1996 (date of 1997 is not actual, because 3 of the pictures completed during the year had been in production since 1995). After overcoming the economic crisis in the period from 1998-1999, though slightly, but smoothly an increase in the production budget can be seen. In the last years there was a considerable increase in the share participation of BNT in film production subsided by NFC. The other major source of financing for the Bulgarian cinema is the support from European funds and programs.

Financial Sources for Bulgarian documentaries supported by NFC

Financial support includes: Eurimages, CNC (France), Media 2, PHARE, SOROS Documentary Foundation – New York

In the first years of the transition (1990-1995) there was a well-expressed trend of private investment in the production of feature films. During this period 8 feature films were created, two of which were two-episode series, only with private funds. Due to the fact that their distribution hadn’t reached the expected result nor economic, nor in terms of prestige – private investors drew back from the financing of the Bulgarian cinema. In 1999-2000 The Filmmaking Center of BNT began active work and granted BGN 2.3 million in 1999 and BGN 3.5 million in 2000. Outof these funds 20% are given for film projects of NFC, mainly feature films, which are being realized together with BNT. BNT is the producer of the five feature films with subsidies from NFC that began production in 1999.

Bulgarian films have a limited potential market, because the population is only 8 million, the number of functioning theaters is 179, and annual admission is 1.35 per person. In the conditions of the competition of the American pictures, the domestic market may cover 15% to 20% of the production costs. Sales abroad are mainly for television and in the most cases are realized as financing of the production budget. During this year, for the first time a Bulgarian picture – Letter to America – has a contract for world distribution.

As already pointed out, in 1989, according to the existing monopoly, only one organization – “Film Distribution” – possessed the right to distribute films in the theaters. The first companies that cracked that governmental monopoly were Bright Ideas, Kiwi and Sidgy (later Sunny Films). Bright Ideas was registered in 1990 and was the representative of Warner Bros and TriStar for Bulgaria according to the commission agreement with the American companies. Sunny Films (registered in 1992) began as a film distribution representative of UIP. At present it distributes Disney’s and Buena Vista’s films. Duga Film began distribution in 1992 as the representative of 20^th Century Fox. The company also actively distributes European and Bulgarian pictures. Since 1993 Alexandra Films has been very active in the film market as the representative of Warner Bros, MGM, Columbia and TriStar. The Company possesses the video right for Bulgaria in the pictures of Fox, Disney and CIC. Alexandra Films has the biggest market share – 32%-42% of the box office and over 50% of the video market. Apart from the three big companies, representatives of major American companies, there are five more independent firms that distribute mainly European and Asian pictures – 3 to 5 titles per year average.

In the last year the picture of film distribution of premier films is as follows:

Number of new films

During the reform period the theater chain shortened very much. In 1990-1991 29 theaters in Sofia and the key cities and more that 50 in the smaller towns were restituted. While filmmaking in 1993 was entirely in private hands, the theater chain remained state-owned. The conditions of full self-support, absence of governmental protection, lack of resources for modernization, led to a considerable devaluation of the theaters as cultural places. During the years the owner (Ministry of Culture) showed no interest, weak control and indecisiveness in regard to the possibilities for privatization. Only in 1997 was the principle decision for privatization of the state-owned theaters with preservation of their activity for 50 years adopted. Unfortunately, due to the delay of this decision, good offers were missed and interest from abroad decreased. The privatization of the state-owned theaters in the country has been completed, the theaters in Sofia, having 65% of the income, and in process of privatization.

Admissions and box office in the theaters

In the last two or three years the interest in investment in theaters increased. The number of the new private theaters grew bigger, modernization and restructuring were undertaken. In 2000 the American company United Cinema opened the first multiplex in Sofia with 6 halls.

The reform of cinema disconnected the links between the production and film distribution. At present there are no quotas for Bulgarian films on Bulgarian screens, there aren’t any mechanisms for subtraction of revenues from distribution for production of Bulgarian films. The draft of the Law of Cinema will partially solve this problem – Bulgarian Cinema Fund will collect resources from license fees for distribution of foreign films and from the theaters.

The stabilization of the national economy in the last 3-4 years and the controlled inflation (since 1997 there have been a monetary board in Bulgaria), as well as the adopted regulative laws in the audiovisual field create the necessary conditions for progressive development of the Bulgarian cinema.

The film market has been transformed into an international film market and Bulgarian Cinema falls under the foot of audience’s standards. Just as it is impossible to produce goods using old technology and sell it in Europe or America, it isimpossible to produce a film and to draw attention at least, if it does not comply with universal standards in terms of theme and technical quality. From this point of view Bulgarian cinema needs long-term strategic objectives to drag it from insulation. At present one of the reasons for the failure of the Bulgarian cinema is the small production unites and the small artistic circles respectively. As a rule, the producer and director, and in many cases the screenwriter, are one and the same person. Apart from that, this person does not have enough money and strives to save as much as possible. This multifunctional cinematographer is not able to use the complex highly developed technology for making a contemporary film product.

The creation of the Bulgarian Cinema Fund by means of governmental subsidy and other income, with the purpose of collecting funding resources for 5 to 10 feature films, is the only possibility for restoration of the cinema process and distribution of Bulgarian film in our own film market. If the Law of Cinema is adopted by the end of 2001, this will be an act of political will and expression of public support for the Bulgarian cinema.