European Audiovisual Observatory publishes report on Turkish film industry

Europe’s second largest theatrical growth market

Turkish cinema celebrates its 100th anniversary this year which also saw Nuri Bilge Ceylan’s Winter Sleep (Kış Uykusu) winning the Palme d’or at the Cannes Film Festival. The European Audiovisual Observatory has just published a brand new report on the Turkish film industry which looks back at its dynamic and eventful history. After collapsing into a deep crisis by the end of the 20th century, the Turkish theatrical market succeeded in achieving remarkable growth in admissions, which stands out among the other – mostly mature – European markets, where admissions have been stagnating or even declining over the past ten years. Turkish admissions more than doubled from 24.6 million in 2003 to 50.4 million in 2013. This represents an average annual growth rate of 7.4% per year and compares to an average annual decline of -0.6% in the EU. Turkish GBO even grew by 15.4% per year on average, compared to 1.6% in the EU. Only the Russian Federation has registered higher growth rates and growth in volume over recent years.

With 50.4 million cinema tickets sold in 2013 Turkey further strengthened its position as Europe’s 7th largest theatrical market in terms of admissions, superseded only by the ‘big 5’ EU markets and the Russian Federation. Gross box office reached EUR 200 million (TRY 505 million) in 2013. These are the highest levels achieved in Turkey in recent history. Box office growth has been largely driven by a growing number of extremely successful local blockbusters as well as by the enlargement and modernisation of Turkey’s screen base as a large number of modern cinema complexes were opened in the mushrooming number of newly constructed shopping malls over the past decade.

At the same time, Turkey´s cinema-going rate still ranks among the lowest in all of Europe. Even in the record year of 2013, admissions per capita did not surpass 0.7. This compares to an average of 1.8 tickets sold per inhabitant in the EU. With a population of 76 million and a growing economy, the Turkish theatrical market is hence predicted to continue growing by 6% to 7% per year before reaching maturity in 2018.

Film production growth despite comparatively low levels of public support

Stimulated by the box office success of Turkish blockbusters and benefiting from public production support, Turkish feature film production volume – including minority co-productions – increased from 16 feature films released in 2004 to a new record high of 87 films released in 2013 (1), the 8th highest level in Europe.

This increase in production levels is particularly remarkable given the fact that Turkey provides comparatively low amounts of public film support. Between 2007 and 2009 the Ministry of Culture and Tourism, the only major source of public film funding, supported film related activities with an average of EUR 13.3 million per year, only 50% of which were allocated to film production. Public support for film related activities is hence is well below the pan-European average of EUR 53.6 million. In terms of activity spend per capita, Turkey actually granted the lowest level of support for film related activities per capita in all of Europe.

Reflecting the focus of the Turkish film industry on its home market, 90% of Turkish films produced between 2009 and 2013 were financed entirely within Turkey. Turkish majority co-productions accounted for 8% of total production volume while there are generally not more than one or two Turkish minority co-productions produced per year. The comparatively low levels of international co-productions can also be explained by the fact that public support is currently not accessible to Turkish producers holding minority positions.

Highest national market share in Europe

The Turkish film market stands out in the pan-European landscape as the only market where national films regularly outperform US films.

In 2013 Turkish films took 58% of admissions, followed by US films (38%), leaving only 3% for European films and 1% for films from other parts of the world. This makes Turkey the European market with the highest national market share.

The high national market share does however not translate into high admissions figures for a large number of Turkish films: between 2009 and 2013 the top 10 Turkish films took 79% of the total number of tickets sold for all Turkish films on average. Just like their European counterparts, many local films struggle to find their audiences as the Turkish theatrical distribution system is clearly geared toward the distribution of local and international blockbusters and there is no targeted public support for the distribution and screening of local films or art-house films.

Market-driven film industry with high concentration levels

Generally speaking the Turkish film industry is less regulated than many of its European counterparts. Following market dynamics the Turkish exhibition as well as the distribution markets are highly concentrated. In 2013 the market leading exhibition chain, Mars Entertainment (Cinemaximum), accounted for 52% of the Turkish box office and 85% of the screen-advertising market, operating 26% of all screens, almost two out of three digital screens as well as all of the IMAX screens in the country. This represents the highest concentration level among the ten largest European exhibition markets.

The Turkish distribution market on the other hand was practically dominated by only three distributors, UIP, Tiglon and Warner Bros., who cumulatively accounted for almost 90% of admissions in 2013 (2).

Lagging behind in digital cinema roll-out

Turkey has clearly been lagging behind the rest of Europe – by about four years – when it comes to digital cinema. Digital conversion only gained momentum in 2013 when the number of digital screens more than quadrupled and digital screen penetration jumped from 11% to 48%. Though a big year-on-year increase, digital screen penetration is still significantly lower than in the EU, where an estimated 87% of all screens in the EU had been digitised as of December 2013.

The slow adoption of digital cinema is closely linked to the limited availability of financing options particularly through VPF schemes and the lack of public support. Even though VPF schemes seem to have become more readily available in 2014, according to producer’s association SE-YAP there is still no industry wide agreed VPF system in place and VPF obligations may vary between films and cinemas.

Report available for free

The Observatory’s report is probably the most comprehensive market analysis of the Turkish film industry available in the English language. It provides a sound overview of the development and current trends in Turkish film policy, theatrical production, distribution and exhibition, as well as by analysing the export of Turkish films abroad. Apart from a brief historic overview the report focuses on key developments between 2004 and 2013 and sets the Turkish film industry into the context of other European markets, providing comparisons where meaningful and elaborating structural differences, which are important in gaining a better understanding about how the Turkish film market works.

The Observatory thereby hopes to provide a valuable information tool for international film professionals interested in learning more about market structures and trends in the Turkish film industry e.g. for the purposes of co-producing, distributing films in Turkey or selling / distributing Turkish films abroad.

The report can be downloaded free of charge here.

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