Small European Film Markets: Portraits and Comparisons

Estonia

The development of the Estonian film industry has been approached systematically since the early 2000s. Since then, the focus has been on internationalisation, professionalisation, capacity building and institutional strengthening of the industry. The strategy has brought relative success, including increased domestic admissions, widening genre and thematic diversity of films, increased production volume, and significantly improved linking with international production industries.

  • The relative industry growth and advancement have not translated into visible exporting success in terms of revenues earned in international markets. 

  • Estonian film, despite gradual festival success, has not managed to become a recognised brand motivating international investments, including from leading platforms.

  • The focus on servicing international productions puts pressure on increasing funding for national films to avoid becoming purely a service industry. 

  • Concentration in the domestic exhibition market undermines producers’ bargaining powers and potentially revenues from theatrical windows.

The Estonian film industry experienced a significant disruption in the early 1990s after Estonia regained independence: its former institutional setup disintegrated, and a contemporary market-based industry needed to be built anew. This took a while, initially with slow progress. More systematic work started in the early 2000s when, in 2004, a new internationally oriented film school (then Baltic Film and Media School (BFM), a Tallinn University College) was set up to address talent development systematically and equip the industry offspring with up-to-date skills. 

The second pillar of the new system was the quick growth and development of the Black Nights Film Festival (BNFF) with its various fringe festivals throughout the year. This helped to advance wider film education in the country and – importantly – by launching the BNFF market and industry platforms it established a bridgehead for local industries to be systematically linked with international partners. 

The third pillar was the transformation of the Estonian Film Foundation (which only funded films) into the Estonian Film Institute (EFI) in 2013, which became a comprehensive at-arms-length policy development and audiovisual culture governance institution in Estonia. EFI has been fighting for the growth of public funding for film production and has designed and pushed through the fourth pillar of the system: the cash-rebate schema to facilitate the emergence of the production services industry – to enable the further growth, internationalisation, and professionalisation of the local film industries. 

The fifth main pillar is the soon-to-be-launched construction of large studio facilities in Tallinn as well as at other localities (Tartu, Jõhvi). 

What has resulted from the system-wide development described above is the widening of the pool of talents and professionals, institutional strengthening of the local film production industries, as well as improved infrastructures for both production and consumption. This in turn has resulted in increased production, and more diverse output in terms of genres, styles and themes of films as well as in the growth of domestic recognition – admissions for Estonian films have been growing steadily. Domestic approval has been somewhat mirrored also internationally: since 2015 when Tangerines (EE, GE 2013) received an Oscar nomination there has been slow, but steady growth in international awards and recognitions. Yet, despite festival success, the Estonian film industry cannot be seen as an effective exporter – revenues from international markets are mostly insignificant and irregular. 

Production volumes have been slowly but steadily growing (see: Production volume). While at the beginning of the 2000s the focus was on producing three feature-length fiction films in a year (one popular film for the general audience, one art house film for festival circulation, and one for kids and youth), by the mid-2010s the number varied between 5-10 for domestic features, accompanied by a slate of minority co-productions as well as animations and documentaries. By the early 2020s the number of feature-length fiction films stabilised at around 10 films per year. Significantly, a notable number of films are co-productions – the growth in co-productions has been a clear policy agenda of the EFI. The aim has been to facilitate skills and knowledge transfers from other countries to Estonian professionals, to facilitate their collaboration and networking and, in the process, improve the international competitiveness of the Estonian industries.

In relation to the number of firms and professionals involved in the production of films and TV programmes, the Estonian Institute of Economic Research observed a quick growth between 2015 and 2019: from 482 companies with 294 employees in 2015 to 754 with 841 employees in 2019. 

The growth in talent and production firms – and relatedly in the number of films produced – has also resulted in films being generically more diverse. While during the Soviet occupation and in the 1990s Estonian film had a somewhat questionable domestic reputation (often referred to as too slow, artsy and serious), this started to disappear in the mid-2010s when the new generation of filmmakers (mostly BFM graduates) emerged with films in different genres and appealing to different segments of society. This met the audience’s approval and domestic admissions started to improve. The generic variety and especially the focus on audience-friendly genre films has been further enforced by the increasing volume of private financing for films (see below). Further, the establishment of regional film funds (in effect, cash rebate funds with a regional focus) has also affected the representation of different regions in Estonian films. For instance, the city of Tartu has become a recognisable locus for a series of popular kids and youth films.

In relation to the variety of films being produced, it must be highlighted that Estonia has long traditions, established firms and infrastructures for animation productions. Hence, in addition to live-action films, nearly every year sees the release of one feature-length animation (hand-drawn or stop-motion) film and about 10 short films. Typically, the feature-length films are aimed at young audiences and prolonged international commercial runs while the majority of short films are artistic explorations aimed at festival circuits. A portion of EFI funding is always secured for animation production to keep the national tradition alive. 

Regarding production infrastructures, Estonia is currently still missing fully functional and contemporary studio facilities, but work towards building them has been ongoing in several municipalities. Estonian parliament Riigikogu has elected to fund the construction of a seminal complex in Paljassaare, a peninsula on the outskirts of Tallinn. Known as Film Wonderland, this set of studios will also host a special stage for virtual production. In parallel, the local authorities in Tartu and Ida-Virumaa (Jõhvi) are finalising plans for constructing additional studios in their municipalities. These infrastructures are expected to service both Estonian films as well as foreign productions that take advantage of Estonia’s national cash rebate fund.

Public funding for development and production has seen growth, although it has been slow. The EFI supported film production in the amount of €6,117,000 in 2022. In 2010 this was 47,516,000 Estonian kroons, or about €3 million – only half of what was distributed 12 years later. In 2024, the sum is expected to grow beyond €7 million. Funding for film is one of the only areas of public funding for culture expected to grow during the ongoing economic decline. This is based on the recognition of the relative success of film as a field of art and commerce in Estonia and its spill-over effects on the other cultural industries and economy. 

However, another recent argument for increasing the funding for national film production has been the parallel growth in funding for Estonia’s production services cash rebate fund. Estonia was a relative latecomer to the international market for film production services – it started in 2015 with a national public investment of €500,000 to the scheme (with a relatively high 30% financing for budgets); this investment reached €4 million by 2023. This growth and related involvement of large swathes of production professionals in production services has started to concern the EFI in terms of the further evolution of national film. Hence, the strongly presented arguments that support for national film also needs to increase.

Another significant trend in production is that not all films are produced with public support. In the mid-2010s there were a few examples where low-budget comedies received significant audience attention that evidenced that their production could be possible on purely market-based grounds. This was picked up by the leading cinema chain (by now almost monopolistic) that established its own production and distribution firms and started production on a series of such films. Very often these are adaptations of popular national literary works or remakes of old comedy classics. In 2023 the four most popular domestic films were of this kind, making up approximately 53% of domestic admissions. 

But not all such films were cheap comedies. In 2018 Tallifornia Studio was launched, which relies on a private fund created by a set of venture capitalists that made their fortunes in the start-up sector. Tallifornia relies on a strategy to produce low-budget but provocative films on contemporary topics (start-up culture, cryptocurrencies, robot-companions, etc.). The aim has been to produce a slate of films where a few successful ones are expected to keep the company afloat. They also aim to capitalise on longer-term and long-tail-based VoD circulation of their films. 

Differently from Scandinavian countries, in Estonia neither the Public Service Media nor private media firms have a significant role in funding film production, nor even quality TV drama production. Due to market constraints, Estonian TV drama is typically a low-budget affair. Despite occasional promises, international streaming giants have not contributed to film or series production in Estonia. Relatedly, Estonia has started work towards taxing large international VoD platforms to reinvest earned income into national film and TV content production (based on article 13 of the EU Audiovisual Media Services Directive). 

The modern story of Estonia’s theatrical exhibition started in 2013 when much of the sector experienced a quick change due to the end of the distribution on film and the start of the DCP era. While the multiplexes in Tallinn and other bigger cities were able to finance the purchasing of DCP projectors themselves, to save cinemas in all counties and in smaller towns the government needed to step in and fund the purchasing of projectors in these places. Currently, all of Estonia’s 15 counties have at least one cinema with a regular programme. Altogether this makes 41 cinemas with 90 screens and 15,075 seats, according to the EFI– averaging 66 screens per million people. For a comparison with the other small markets see Number of cinemas/screens. The growth in screens in bigger cities and especially in Tallinn has been supported by many shopping centres reconceptualising themselves as lifestyle hubs and, hence, including multiplex cinemas. Thus, the real estate development sector and urban development trends have had significant spill-over effects affecting film culture in Estonia. 

However, a parallel and a problematic trend has been the gradual concentration in the exhibition sector: by 2023 nearly all commercially run screens in the four bigger cities were under the control of a single entity – Apollo Group – which also owns a large chain of bookstores. Currently, the Estonian Competition Authority is investigating Apollo’s purchasing of the country’s second-biggest cinema chain, Forum Cinemas. However, the current near-monopolistic position that Apollo exploits has reduced the bargaining power of film studios when making distribution deals. Adding to the difficulties is Apollo owning the dominant distribution firm Hea Film.

Aggregate admissions in 2023 were 2.82 million, which averaged 2.12 admissions per capita and generated an aggregate box office of €21 million; 64% of this went to American films, 22% to Estonian films (€4.2 million) and 12% to other European films. Only 2% went to the rest of the world (see also Admission and markets shares).

As described above, the Estonian distribution market is dominated by Hea Film, which is owned by the near-monopolistic cinema chain Apollo (see also Distributor market shares). Hea film distributed 56% of films in Estonia in 2023. The second biggest firm, distributing 32% of films in 2023, is ACME Film, which is also Estonian-owned.

The paradox of the Estonian distribution market, however, is that despite significant market limitations, the sheer number and diversity of films distributed in Estonia is high: 424 different films in 2023.

The quick growth of the BNFF and its becoming a major international A-list festival (with a territorially unlimited competitive programme and a market/industry programme) has had a very positive effect on the evolution of Estonia’s film industry and market. The industry platform of the festival facilitates networking and joint projects between Estonian professionals and their international colleagues. The festival itself and its subsidiary festivals – youth film festival Just Film, romantic film festival Tartuff in Tartu, and horror film festival HÕFF in Haapsalu – have contributed significantly to film education and awareness among Estonian audiences. Very significant is the festival’s work on developing film education programmes for children, both in terms of formal (in secondary schools) and informal educational programmes.

When it comes to the circulation of Estonian films in international festivals there has been gradual success since the mid-2010s (see Festival recognition).  More significant examples include Mandariinid/Tangerines (EE, GE 2013; Golden Globe and Oscar nominations), Risttuules/In the Crosswind (EE, 2014; series of awards from smaller festivals), Miekkailija/The Fencer (FI, EE, DE 2015; Golden Globe and Oscar nominations), November (EE, NL, PL 2017; series of awards from smaller festivals); Hytti nro 6/Compartment nr 6 (FI, RU, EE, DS 2021; Cannes Grand Prix), Kapitan Volkonogov bezhal/Captain Volkonogov Escaped (RU, EE, FR 2021; series of awards from smaller festivals), and Savvusanna sõsarad/Smoke Sauna Sisterhood (EE, FR, IS 2023; European Film Award and series of awards from leading festivals).