thE imPACt OF GlOBAliZAtiON tO CREAtiVE iNDUStRiES: thE ANAlySiS OF Film iNDUStRiES OF CENtRAl AND EAStERN EUROPE

Tomas MITkUS1, Vaida NEDzINSkAITĖ-MITkĖ2 1Vilnius Gediminas Technical University, Faculty of Business Management, Department of International Economics and Business Management Saulėtekio al. 11, LT-10223 Vilnius, Lithuania 2Vilnius Gediminas Technical University, Faculty of Creative Industries, Department of Philosophy and Communication Trakų g. 1, LT-01132 Vilnius, Lithuania E-mails: 1tomas.mitkus@vgtu.lt (corresponding author), info@studiomitkus.lt; 2vaida.nedzinskaite-mitke@vgtu.lt


Introduction
Over the past twenty years the concept of the film industry has fundamentally changed. if a couple of decades ago it was possible to hold that cinema was widely analyzed by scholars in the media, culture, economics, sociology, management, and communication sciences, it should be pointed out that we know much less about the film industry today. The processes of globalization have influenced the film industry in many ways in both production (technological and administrative) and sales processes (marketing, distribution, and exhibition), and even in viewer habits (demand for narrative elements, a requirement for technical quality, and format choice). to demonstrate just one of these

III. FIlm ANd CINEmA STudIES IN THE CoNTExT oF CrEATIVITy ANd CrEATIVE INduSTrIES
Various innovative solutions, the quantity and quality of which reached a hitherto unseen scale in the 21st century, influenced the film industries of different countries becoming ever more connected to the global network of creativity, entertainment, culture, and business. this is why one cannot legitimately analyze the national context of the film industry today without evaluating the global context in parallel.
First, let us discuss the definition of globalization. It is usually described as a process beyond that of internationalization when the systematic relations between countries that affect the seamless global cultural, economic, and, to a certain extent, the political system or network formation (lorenzen 2007;held et al. 1999;Friedman 2000;Stiglitz 2002;amin, Cohendet 2004). In the case of the film industry this is film production, which becomes a global activity as more and more countries create their national films partially or entirely abroad, and after completion of a movie they try to reach the widest possible global audience with it (i.e., beyond their own cultural circle). therefore, it is necessary to clearly define what the activities of the (global) film industry consist of: 1. The economic practices of businesses and workers that contribute to film creation (or production) at different stages of production; 1 2. Film distribution (both the right to exhibition and the final distribution of the product in other formats); 3. Paid domestic and foreign exhibition at cinemas in a particular country. Filmmakers come up with the idea for a film and an action plan, cinema promoters contribute to the implementation of this plan, and then the film is exhibited (shown) to national and international audiences as a finished product in order to make a financial return to cover the production costs and make a profit. The global nature of these actions is reflected in movies today in that they have less of a national identity and have become part of "world cinema" (Elsaesser 2005).

The value and importance created by the film industry
The film industry is a segment of the creative industries. This means that the industry's primal existential objective, by default, is profit; recognition as an important cultural product is secondary. This is why the film industry is part of the creative industries and not the cultural industries. 2 Therefore, the 21st century film industry is well documented as a segment of the creative industries, creating economic capital and contributing to the economy (Griswold 2003;young, A. F., young, R. 2008;Oxford Economics 2010higson 1995;UNESCO 2014;mitkus 2011b;UNCtAD 2004;De Vany 2004;howkins 2001;Florida 2002;European Commission 2010Visser 2014). What matters is that the film industry positively influences related segments of the creative industries, such as tV and advertising (Oxford Economics 2010), and even has a strong impact on the growth of tourism (heitmann 2010;Beeton 2001;Busby, klug 2001). it is equally important that film production is always a strong additional stimulus to the local economy. This is because cinema needs to include not only specific services to the film industry, for example, video and audio equipment rental, but also accommodation (hotel sector), scenery and props production, food, clothing, and transportation services. in fact, this film production process' ability to stimulate the country's economy in a very diverse range of professions is one of the main reasons why since 1990 approximately 30 countries have offered national and local incentives and have been trying to attract foreign production by providing fiscal incentives (McDonald 2011;Honthaner 2010). Thus, the global film industry, which is a continually growing part of the world economy and is one of the major segments of the creative industries, creates not only outstanding film-specific employment, but also stimulates the country's other economic sectors.
equally important is the cultural value created by film. One thing that has been widely described is how films help generate cultural and symbolic "capital": they raise national pride, prestige, or fame (encouraging viewers to remember and help them get through historical state victories, grand imperial times, or resistance against conquerors) and create a message that can raise awareness about social, cultural, historical, or economic problems in society. Films can also act as an educational tool or even help to define and shape national identity in 21st century society and the world (Allen, Gomery 1985;Shafer 1997;Webb et al. 2002;mikalauskas 1999;Oxford Economics 2010;higson 1995;UNESCO 2014;mitkus 2011a, 2011b. Partly thanks to these and similar studies, small governments justify national film industry subsidies even when there is virtually no economic return. the belief that the national cinema plays an important role in "negotiating cultural identity and articulating social consciousness" (Gao 2009: 423) is strong enough to prevent the film subsidies from being interrupted for purely economic results. But in order for a film to become a cultural object additional factors must be met, i.e. the movie must be watched by an audience. therefore, as per the one of the author's analysis in the previous article (mitkus 2011b) cultural capital is only created in films that are viewed, not those that nobody watches. But when the national film industry is healthy and able to create successfully for the domestic market, films become one of the most effective modern products of culture. as well, culture is an element of strategic importance for the state: every sovereign coun-try has to have its own unique cultural products so that they can express themselves as a unique people. The United Nations educational, Scientific and Cultural Organization (UNESCO) Culture Property Convention (UNESCO 1970) states that "cultural property constitutes one of the basic elements of civilization and national culture", so for a small country, survival of cultural identity takes place via movies as modern cultural products; films are one of the most effective 21st century ways to create cultural and symbolic capital and sometimes even weapons of information warfare against unfriendly or aggressive neighbors.
Summarizing this section, it is worth noting that the film industry operating in a given country can generate strong economic benefits for a variety of sectors; therefore, it is clear why more and more states are reviewing their cultural industries strategies and little by little starting to subsidize them to encourage development. however, a strong and active film industry does not pump out cultural products automatically, successfully at the national level. A hypothetical country can pack movie theaters to the brim showing foreign films, and local film professionals can be competitive internationally fulfilling foreign orders. Both of these film industry activities generate economic well-being for the state (by creating well-paid jobs and taxes), but they have little or no influence on cultural and symbolic capital.
The situation and problems of the European film industry assessing the film industry in the european context, it is worth starting from the eU's Creative Europe program that in 2014-2020 will allocate €800 million to support EU film projects (european Commission 2015). Incidentally, the eU film subsidy is only a supplementary source of funding for EU members in addition to the independent national film support mechanisms, which in 2014 amounted to €3 024 501 in Lithuania; for comparison, in latvia it was €4 041 639, while in Estonia it was €6 853 223 (Baltic Films 2013). It should be noted that depending on the local film support rules and the film project category itself a national funding mechanism is usually limited to 50% or 75% of the total budget of a film project. The remainder must be collected by the producer's own efforts.
Thus, over €2 billion of national and european taxpayers' money subsidizes film sector investments in Europe each year. this money helps retain over 373 000 work places and sustain 91 000 companies in the EU (European Parliamentary... 2014a). The Big Five comprise most of the film industry in the eU, namely France, Germany, Italy, United Kingdom (UK), and Spain. These five countries account for as much as 80% of the film industry in europe (european Parliamentary... 2014b), which is why they enjoy more continual film sector growth, movie theater popularity, and foreign market interest than the rest of europe, as well as investment in film projects (Screen Digest 2006). However, when assessing the overall situation of the eU film industry, it is necessary to distinguish between these five giants and the rest of the european countries whose film industries are much weaker in terms of competitive position and capacity. In this respect, it is convenient to divide the overall european film market using the martin kanzler (kanzler et al. 2008) grouping system, which splits it up into four regions, the Big Five, the rest of Western Europe, Scandinavia, and Central and Eastern Europe.
Generally, the eU (eU-28) film industry used subsidies and private funds to produce 1 546 films in 2013 alone, while in the same year only 622 movies were produced in the United States (USA) (katsarova 2014; Film l.A. inc. 2014). it would seem that at the beginning of the 21st century, European cinema is starting make up for the 20th century dominated by the US; however, unfortunately, film industry economic capacity is assessed by movie theater ticket sales rather than the number of films. In this regard, the european film industry is not doing quite so well, because 69.1% of all movie theater tickets purchased were to see films produced in the USa, and barely 26% were for European movies (kanzler, talavera 2014). this number, once again, is a general EU average taking into account the movie-goers from every European country. the situation is even worse looking at the success of movies in countries individually rather than assessing Europe as a whole. Data in table 1 shows the percentage of movie tickets sold in Eastern and Central European that were for locally made films. Only the Czech Republic and Poland are consistently serious players in their own film markets; all the other eastern and Central european countries in the region are simply consumers of foreign film production, although there are years for all countries when watchability of national films jumps significantly. Therefore, assessing the overall situation of the european film industry (forgetting the economic value created by major USa films) and film success in eU movie theaters, it must be acknowledged that in a significant part of the eU creative industries segments are economical parasites. Assessing things in economic terms, it is very difficult to rationally understand how a business receiving so much taxpayer money can produce a tremendous amount of output, but at the same time it is of little to no interest to local consumers. interestingly, although the EU's direct investment in the film industry has more than doubled (measuring the period from 2001 to 2008), it seems that this only led to an increased number of films, rather than improving their economic return (De Vinck, Lindmark 2012). Clearly, the Lithuanian national film industry's problems are part of an overall regional challenge.
this almost constant inability of European cinema to be commercially successful creates a strong negative side effect: a natural corporate reluctance to take part in the creative industries segment, which in terms of business, is considered a high risk and low return operation. it seems there are not any entrepreneurs working in the european cinema segment. european film co-production study (Kanzler et al. 2008) revealed that although international co-production empowers every aspect of movie results in cinemas, it seems that very few producers seek cooperation. And when it does happen it is mainly in order to secure the necessary funding through the national film support mechanisms, rather than as a strategic solution to improve movie outcomes. kanzler noted that this circumstance showed up most often in European countries with a low level of financing for cinema. this has so far been an overview of economic results of European cinema assessing cinema ticket sales and europeans filmmaker achievements. However, in assessing the economic contribution to the country's well-being created by the film industry, it is worth to look at the film production services sector. There are numerous studies that showed how greatly foreign film production contributes to local economy (Oxford Economics 2010Economics , 2012young, A. F., young, R. 2008;UNESCO 2014;Screen Digest 2006), but a successful film production services sector is beneficial in other ways, also. The current Lithuanian film professionals have been trained precisely by foreign producers working in lithuania. Foreign projects, which usually have much larger budgets than Lithuanian films, often bring with them the latest innovations in film or other technical novelties, thus unwittingly allowing operators to develop their Lithuanian teams, who can then put this knowledge to use to adapt Lithuanian filmmaking. A strong production service sector means not only foreign money is left in the lithuanian economy, but also a sort of high caliber professional development for lithuanian creative personnel.
The biggest film service customers in europe are the big six american studios, Warner Bros., the Walt Disney Company, Paramount Pictures, 20th Century Fox, Universal Studios, and Sony Pictures entertainment. american film projects that have received big six funding, on average, have budgets exceeding €85 million, while the eU average is €11 million for UK films, €5 million for Germany and France, and just €300 thousand for film projects in countries such as estonia and Hungary (Katsarova 2014). thus, with money this vast at stake, it is very easy to understand why countries are competing for foreign film production. Film tax incentives can be identified as one of the key government strategic tools of film promotion, which have now become simply indispensable for attracting film projects fleeing the USa. This promotion mechanism often runs parallel to state support, the latter being available only to nationals of that country. meanwhile, foreign operators can take advantage of cinema tax relief just by fulfilling the condition of spending most of the aid received in that country. So americans fleeing the already very expensive Hollywood and looking for space to make their film projects happen always pay attention to three things: the geographical location required by the plot, the opportunity to assemble an experienced local team, and lower production costs. in this case, Gustav Visser (2014) even claims that securing financing can be considered the heart of the film industry. It is therefore not surprising that since 2014 there are 15 countries in Europe alone (Uk, France, Germany, hungary, lithuania, ireland, Belgium, Croatia, Czech Republic, malta, Iceland, Poland, Serbia, romania, and Bulgaria) offering financial schemes for film projects (Zeevalkink 2014).
The overview of the european film industry's economic capital culminates on an upbeat note. A kind of creative industries development strategy fever arising since the 1970's has already yielded great results at the academic and government levels. encouraged by the findings of international organizations on the economic benefits generated by the creative industries, most countries of the world have undertaken a thorough restructuring of the creative industries (including film) development strategies in order to create the best possible conditions to further their development and compete on the international market. this is a case where the EU puts in a major contribution that is closely monitored by the EU member states and comprehensively stimulates film industries (especially in smaller countries) benefiting from national support to become active and successful participants in the market-based economy. it is also pleasant that the most enterprising developers in Europe are forming cross-border associations and engaging in lobbying at the EU level for an additional incentive to create better conditions for a european film industry. an ongoing feasibility study on the overall digital distribution platform for shared european film output by the four european film associations can be mentioned as one of the latest examples (Creative Europe Desk Uk 2015). Although the results are only scheduled to be presented to the public at the end of 2015, film industry players believe that the new opportunities for filmmakers following this project will directly reach most european audiences, allowing filmmakers to achieve unprecedented success.
it is therefore natural that today most of the EU's national policy makers are beginning to ask the question, does the national film industry take advantage of its full potential. Although positive changes are already visible, in order to completely transform the film industry in europe to an independent and entrepreneurial creative industries segment they will need further strategic changes carried out at the national government level in the tax and legal environment, for example, state supported tax incentives and grants, more effective protection of copyrights and law standardization in eU and etc.; qualitative requirements for filmmakers asking for state subsidies and more entrepreneurial creators who clearly understand this medium's business rules and opportunities.

Conclusions
1. Due to historical circumstances and the relatively small local market, most Eastern and Central European countries have film industries dependent on the public-subsidy. The EU research reveals that the film industry in the region is not entrepreneurial: even such simple solutions as co-production, which always increases movie theater ticket sales, are not used, although it is even encouraged financially by European subsidies. A general analysis of the region reveals that with the exception of Czech and Polish filmmakers, most countries are still not producing cinematic output attractive to their own nationals; 2. Globalization and digitization processes today have created a global film industry, in which local film industries are obliged to undertake necessary reforms if they want to compete successfully; otherwise they will not be able to attract investment and also lose their talent (employees). A number of necessary fiscal and legal reforms can only be achieved if filmmakers strive to achieve certain strategic objectives collectively, rather than individually. 3. The systematic pursuit of film art and film business is not a combination of polar opposites, but rather two complimentary forces that work together in synergy and could help the film industry to make a considerable economic and cultural contribution to national prosperity. Artistic value and commercial success of cinema have to be seen as a single thing by the film industry rather than elements contradictory to each other.