Cinema is a key industry sector for the development of sustainable policies and the national economy in other sectors as well, it is a driver for creating jobs and growing the country’s GDP as well as developing tourism in the territories.

With the new Budget Law 2024, the rules of tax credit and those for accessing state funds and tax breaks in cinema are changing.

These rules have ensured a steady growth of the film sector especially after the Pandemic and now they are renewed to introduce, for the first time, Artificial Intelligence and put at the center the role of private investors, who are called to bear 40 percent of the cost of productions that want to access funds.

An important sector for the national economy

According to research by Cassa Depositi e Prestiti, the Italian film and audiovisual industry is composed of more than 9,000 companies and has generated employment of more than 65,000 people in recent years, in addition to 114,000 people employed in related supply chains.

It is therefore not surprising that Cinema in Italy produces very positive economic and employment effects: for every euro invested in the film-audiovisual sector, 3.54 euros are created throughout the Italian economy, most of them in other economic sectors, with very positive effects on direct, indirect and induced employment creation.

The impact of the investment is not equal in all territories: the multiplier in terms of employment is greater in the South, almost double, a very important result given that the South experiences a condition of economic disadvantage and low levels of employment.

Moreover, the audiovisual sector is increasingly capable of responding to the new needs of sustainability since it is dynamic, counts high rates of youth and female employment and spreads advanced digital and language skills.

The Italian market generates a turnover of 13 billion euros, 10 percent of the European total, and ranks fourth out of the total EU countries, third in productivity after Germany and France.

Cinema also supports economic development in seemingly very different sectors such as tourism, a study by the Television and Audiovisual Research Center of the Catholic University of Milan shows, highlighting how the enjoyment of films and audiovisual content have become a powerful boost for youth and digital tourism. In addition, research by Federturismo Confindustria notes that the value left on territories by national and international film tourism amounts to 600 million euros.

Italian cinema is the subject of significant foreign investment: according to a study by eMedia for ANICA and APA, the role of international co-productions hosted by Italy is growing more and more along with the number of countries involved, +51 percent in the three-year period 2020-2022, while the value of exports has tripled.

These data reveal that cinema not only makes an important contribution to the cultural growth of our society but is a key success factor for the Italian economic system.

What changes with respect to public investment

In the new Budget Law 2024, the ceiling of 9 million earmarked for an Italian work remains unchanged, but commercial works, that is, those that have a market, will have to have prior coverage of 40 percent of the cost from private investors, while films from festivals and start-ups, first and second works, will have automatic access to the fund.

Seventy percent of the fund will be given in advance and 30 percent upon project closure, for those films defined as “small and medium with liquidity problems,” but the important novelty concerns support for shooting Italian stories with Italian directors and actors. Funding of 52 million euros has been defined for productions that will tell stories of great Italians made in Italy, while international productions, which have multiplied thanks to the tax credit, will benefit from greater reductions if they use Italian actors.

Finally, for the first time, Artificial Intelligence is mentioned, although funded only for special effects production, an important step that begins to recognize the role of this technology for the industry.

Artificial Intelligence and Cinema.

The link between technology and cinema has deep roots, but today Artificial Intelligence has actively entered the film industry from pre-production to distribution.

Thanks to its ability to optimize cost and time, it no longer only plays a role in the creation of incredible special effects such as “de-aging,” which allows for the alteration of the age of actors on screen, or the creation of artificial crowds and the virtual reconstruction of complex locations and scenes, but is applied at almost every stage of production. For example, in script selection and optimization or for identifying the most suitable locations and scheduling the availability of actors.

AI is also used in distribution, particularly streaming and advertising for platforms, where it becomes a tool for improving efficiency, reducing costs, and increasing the quality of interactions with audiences.

Yet the great versatility in the field of image creation, whose most discussed topic is deepfakes, the technologies that make it possible to generate completely new faces or “resurrect” deceased artists, fuels the debate between the need to experiment with creativity and ask ethical questions.

Also generating doubts is the application of AI in the production of screenplays, which could lead to the replacement or profound change of the pivotal creative figures for cinema, screenwriters.

Future scenarios

Box office receipts 2023 see the share of Italian productions at 24%, ranking second in Europe only after France.

In the selections of the major international festivals, Italian titles are increasing, and an Italian film has been nominated in the five of the Academy Awards. This is the latest in a long series of nominations: Italy is the country that has won the most Oscars in the best foreign film category, as many as 14, in addition to dozens of awards in other categories.

For a country like Italy, which makes sustainable growth one of its goals, the film sector is a fundamental resource both culturally and economically.

Thanks to the recognition of the role of investors in the distribution of state funds, the growth of international interest and audiences responding to the needs of theaters and streaming platforms, the film sector can only play a leading role in future scenarios.