Cinema: funding falls by 27 per cent and businesses remain vulnerable

For many Italian film companies, public funding makes the difference between breaking even and making a loss. And it is precisely this support that is being scaled back: in 2025, funding allocated through the four main schemes for production and distribution will fall to 477.6 million, down from 656.6 in 2024. This represents a 27.2 per cent drop, driven by the reduction in the tax credit, whilst for the beneficiary companies, these grants remain crucial for keeping their accounts in balance.

This fragility is highlighted in the ‘Assessment of the economic, industrial and employment impact of the measures provided for by Law No. 220 of 14 November 2016’: a report on the impact of the cinema law, the ‘Franceschini’ Act (currently being amended by a draft bill that has reached the Senate following approval by the Chamber of Deputies), published online on 30 September (in line with the annual deadline laid down by law). The report acknowledges that the incentives provide a tangible boost to production, but also highlights what this growth has failed to resolve: struggling companies, sporadic employment, and the difficulty films face in reaching an audience.

The slowdown stems from the tax credit, which supports a large part of the audiovisual sector. The figures, relating to 2025, show that the number of approved applications has fallen from 888 to 527 in one year: a drop of 40.7 per cent. Funding allocated falls from 622.6 to 402.8 million, a reduction of 35.3 per cent. Selective grants have risen from 21.5 to 61.8 million, but this is not enough to offset the decline. The number of projects supported, however, has increased: 814 compared with 799. Fewer resources have therefore been allocated, whilst the number of projects remains almost stable.

The problem is evident from the financial statements. Between 2018 and 2025, public aid accounts for 37 per cent of the output of beneficiary companies. For the smallest firms, the figure is 77 per cent. If the subsidies are deducted from the accounts, the operating result becomes negative. This support is therefore an essential component of economic stability, particularly for the most vulnerable businesses. However, it is the large firms that receive the lion’s share of the resources. Companies with an average output of at least 20 million account for 6.4 per cent of the classified firms and receive 53.1 per cent of the subsidies for the period. Those with an output of less than 500,000 euros make up 55.9 per cent, but receive just 6 per cent.

Across the four schemes examined, 97.5 per cent of the 2025 funding is allocated to production; 11.5 million remains for distribution. The incentives are particularly effective at boosting production. The effects on employment are more modest and less certain. Interviews with industry professionals reveal that the increase in the number of film sets has not guaranteed more stable employment for everyone. Furthermore, whilst the arrival of foreign productions brings services and expertise, it does not automatically translate into a greater presence of Italian films abroad.