Milk, Honey … and Movies

Israel’s film industry continues to add notches to its belt in the same way Israelis do just about everything: swiftly and assertively. During the past two years, Israel campaigned furiously and succeeded in scoring back-to-back Academy Award nominations for best foreign film.

“Waltz With Bashir,” which was a heavy favorite to win this year, didn’t deliver Israel’s first Oscar but nevertheless took home the Golden Globe and generated tremendous international buzz. Both “The Secrets” and “Beaufort” — the latter the 2008 Oscar nominee — have graduated from Blockbuster’s foreign films section to the upper echelons of the new releases shelves.

Nearly 20 feature films and 85 documentaries are produced in Israel each year — a major increase from just 10 years ago. Less than 1 percent of Israelis paid to see Israeli films a decade ago, according to Katriel Schory, executive director of the Israel Film Fund.

Schory, whose $6 million Film Fund budget finances development of about 30 Israeli scripts a year and heavily subsidizes the marketing and distribution of those films worldwide, introduced a new incentive for foreign filmmakers at a producers’ breakfast at Cannes on May 18.

A law for the encouragement of production of films was approved by Israel’s Knesset on Oct. 28, 2008. It was actively promoted by the Israel Film Fund at Cannes and will be at Los Angeles’ Israel Film Festival during a press conference and luncheon for film and television professionals from Hollywood and Israel on June 5.

Designed to encourage production of foreign films and television series in Israel, the law creates incentives in the form of tax benefits that reduce production costs by up to 20 percent. To qualify for the rebate, a foreign production company must link up with an Israeli company, which will purchase goods and services on its behalf, receive the tax credit and then pass the benefit on to the foreign counterpart. The production must spend at least 8 million NIS (approximately $2 million) in Israel.

Foreign films with Israeli co-producers and co-financiers can receive a discount of between 10 and 15 percent, depending on the percentage of foreign investment in the film.

“It’s a tough market out there,” said Israel Consul General Jacob Dayan, who spoke briefly about the initiative at a UCLA conference on “Be Tipul” (HBO’s “In Treatment”) in April and hosted a film industry event at his house the same month to talk about the new law.

“We’re competing against Michigan, which has a 40 percent rebate; Canada; Morocco; New York,” Dayan said. “It’s not about Zionism. No one is going to come to Israel because they love Israel. It’s all about the bottom line. And it’ll be an uphill battle.”

This may be true because the first thing people often ask Dayan about Israel is: Is it safe there? A producer could not ignore concerns about the possibilities of missiles, suicide bombings, wars and terrorist attacks interrupting his shoot and endangering his crew.

Zvi Chalamish, consul and chief fiscal officer of Israel’s Ministry of Finance, whose headquarters in New York will be instrumental in implementing the incentive in the United States, is confident that Israel has a lot to offer and can be a strong competitor in this segment of the international film industry.

“We have professional studios, English and multilingual speakers, quality facilities, a mixture of cultures, technology, infrastructure, diverse landscapes … ” he rattled off. “We have everything in our tiny country.”

Indeed, the compactness of Israel is offered as one of its distinctive selling points: In only three hours, one can drive from the snow-capped peak of Mount Hermon in the north to the desert plains of the Negev in the south. In between, the “Filming in Israel” brochure published by the Ministry of Industry, Trade and Labor Investment Promotion Center lists Israel’s many varied environments: sandy Mediterranean beaches, green forests, verdant coastal plain, rolling hills of the Galilee, desolate wastelands of the Dead Sea, the red granite mountain range bordering the Red Sea, bazaars of Jerusalem, bustling city streets of Tel Aviv, quaint farming communities and Roman ruins of Caesarea.

However, Israel has had this diversity to offer for decades, and that hasn’t inspired a flood of productions. What gives this incentive teeth now is the country’s thriving and increasingly polished film industry — Israel currently counts 120 local production companies, 10 studios and 30 post-production facilities. Without the recent success of Israeli films abroad, it is believed that no serious producer would consider teaming up with an Israeli filmmaker or studio, even if it was just to organize the catering.

European filmmakers have already started getting in on the action. France has co-produced 28 films with Israel, including “Waltz With Bashir”; Germany 14, including this year’s “Lemon Tree”; and Canada four. Israel currently has official co-production agreements with Australia, Belgium, Canada, France, Germany, Hungary, Italy, Poland and Sweden. In addition, it recently completed an agreement with Great Britain. In 2008, 40 percent of the total amount invested in Israeli films came from abroad.

Aside from the obvious economic value of foreign companies producing films in Israel — buying products, paying for services, employing locals and contributing taxes — the new law could have other, perhaps even more substantial, benefits.

“How can we better brand Israel? That’s what we’re always thinking,” Dayan said. “Branding is key to improving Israel’s image.”

Israel’s economy relies heavily on tourism, and with every conflict or crisis, that industry takes a beating. An influx of new visitors — beyond the Zionist Jews and vacationing expats — could be a real boon for businesses that normally subsist on tourists: hotels, restaurants, bars and retail shops. In addition, Internet-age moviegoers know details, such as where a film was shot, and are often inspired to visit the now-famous street corners and cafes shown in the films.

The promotion machine has already started grinding its gears with the Israel Film Fund, Israel Film Festival, Israeli Consulate, Ministry of Trade and Ministry of Finance all working in tandem to spread the word about the new incentive.

The June 5 Israel Film Festival luncheon at the SLS Hotel will be the setting to re-introduce Israel to Hollywood.

“One of the main goals of the [Israel Film] festival has always been to connect the Israeli and American film industries,” said Meir Fenigstein, founder and executive director of the Israel Film Festival, now in its 24th year.

Most years, that has meant bringing Israel to Hollywood. So now, will Hollywood return the favor and come to Israel?