Hollywood Meet Holy-wood: Israel's big screen potential

“We will put ‘made in Israel’ on countless screens around the world."

DECEMBER 16, 2017 12:12

Updated: DECEMBER 20, 2017 09:23

JASON ISAACS (right) and Ori Pfeffer on the set of the US TV show ‘Dig.’ The show, produced by NBCUniversal for its USA Network, stopped filming in Israel during the June 2014 Gaza war and completed filming in Croatia and New Mexico. (photo credit: RONEN AKERMAN/USA NETWORK) — JASON ISAACS (right) and Ori Pfeffer on the set of the US TV show ‘Dig.’ The show, produced by NBCUniversal for its USA Network, stopped filming in Israel during the June 2014 Gaza war and completed filming in Croatia and New Mexico.

(photo credit: RONEN AKERMAN/USA NETWORK)

Anyone who’s been to Dubrovnik in Croatia in recent years can see how the HBO series Game of Thrones, part of which was filmed there, has impacted the city.

Dubrovnik’s Old City, its central tourist attraction, is filled with themed souvenir shops, and has a thriving cottage industry of Game of Thrones tours, where visitors can follow along with Cersei’s walk of shame, or sit on the balcony of the castle where Joffrey’s wedding was filmed, or see the site of the fight between The Mountain and Oberyn Martell. Tourism has gone up so much in Dubrovnik that the city has decided to cap the number of people who can enter each day.

Now imagine if the Game of Thrones effect came to Jerusalem, or if James Bond or Ethan Hunt of Mission: Impossible were filmed dashing from rooftop to rooftop in Acre.

That is the vision Deputy Minister in the Prime Minister’s Office Michael Oren has had in mind in recent months, while working on creating the conditions necessary to attract major Hollywood and Bollywood studios to what he is calling “Holy-wood.”

Oren posited that the plan will have a massive, positive impact on Israel’s public diplomacy, which will “break BDS and other attempts to delegitimize and isolate us.

“We will put ‘made in Israel’ on countless screens around the world,” Oren said.

“On a diplomatic level, this is a fantastic thing to do,” Netta Korin, a senior adviser to Oren, said on Thursday. “Think of Israel’s bad reputation, but then an action film... shows Israel in a light that 90% of the world doesn’t see. You can imagine what a huge impact that’ll have.”

To that end, Oren and the Consulate of Israel in Los Angeles have been in constant negotiations with American productions, and the deputy minister traveled to India to promote work with the world’s largest film industry.

The best way to bring movies to Israel is through financial incentives, but Oren is facing deep skepticism from the Budget Department of the Finance Ministry.

“Films will bring millions of dollars into the Israeli economy and create hundreds, maybe even thousands, of jobs,” Oren argued.

Finance Minister Moshe Kahlon, the leader of the Kulanu party of which Oren is a member, told him to show that there are movies that are interested, and then the minister would push the changes through.

Oren said two major film productions are close to closing a deal with the government, but would not divulge which.

“Kahlon said to [Oren], bring me a movie, and we’ll work on it,” Korin said. “We’re working on getting a few major projects. We’ve already been approached by multiple projects, and are waiting for a letter of intent from them, which says they want to come but need us to do certain things, to put in front of the Finance Minister.”

Kahlon’s backing is essential for the project’s success, Korin said. “When change comes from the top, you can move things, but working from the bottom is like pushing molasses.”

CURRENTLY, ISRAEL offers an exemption from value-added tax for film productions. Other countries in the region offer additional benefits. Abu Dhabi, where scenes in Star Wars: The Force Awakens were filmed, gave a 30% grant. Malta, where the Jerusalem scenes in World War Z were filmed, gave a 27% grant.

A comprehensive report compiled for Oren and his staff by auditing firm KPMG recommended offering filmmakers a 25%-35% return on production costs in Israel, with a NIS 30 million ceiling.

However, the usual financial incentives are not enough to bring Hollywood to Israel, because of the security situation.

Korin pointed to the cautionary tale of the 2014 saga of the American TV show Dig. The TV program, produced by NBCUniversal for its USA Network, was filming in Israel in June 2014 when the Gaza war broke out. After initially just pausing operations, the crew then decided to leave the country and finish filming in Croatia and New Mexico. NBCUniversal filed a $6.9m. insurance claim with its Atlantic Insurance Company to cover the unexpected costs. But the insurance agency said damages due to war were not covered by the policy. In the ensuing legal battle, NBC lost, and was ultimately out millions due to the unexpected rescheduling.

Portions of the first and second season of the hit US show Homeland (based on the Israeli TV drama series Prisoners of War) were also filmed in Israel. The same was meant to be true of the third season, but in 2013 the show canceled its Israel shoots citing the uncertain security situation with Syria. The show, now in its seventh season, has not filmed in Israel since.

“Dig was insured for an act of terrorism, but not an act of war,” Korin recounted. “Even though Israel didn’t consider Operation Protective Edge a war, the IDF gave out war medals, and the court ruled that it was a war.

“So one of the things the studios said is that unless the insurance issue is fixed, they can’t take the risk, because there’s a conflict every other week. That’s something the Finance Ministry Budget Department is willing to talk about and help with,” she said.

Therefore, the KPMG report suggested that the government create a “completion bond,” a special insurance policy in case a production must be stopped due to terrorism or a war. The policy would have to include both possibilities, so that the production would be covered if its regular insurance policy does not cover these perils.

Another suggestion the report makes is to create a government office responsible for encouraging foreign productions, which would launch a marketing campaign, oversee incentives for foreign producers and coordinate with national and local government in areas such as streamlining the distribution of work visas.

The economic benefits of bringing foreign productions to Israel are made very clear in the report.

“Every shekel of benefits given by the state creates economic activity worth three times as much,” it states.

KPMG’s research found that four to six film and television productions per year, which it called a conservative estimate of Israel’s potential, would bring in NIS 100m.-200m. in spending annually.

If the government were to cover NIS 7m. of a NIS 20m. production, the benefit for the economy would include approximately NIS 4m. in taxes, NIS 14m. in salaries, including about 160 full-time jobs, and NIS 23m. in other additional spending in Israel, according to the report.

In addition, like in Dubrovnik, film productions attract tourists. New Zealand and Norway faced sharp increases in tourism numbers after the films The Hobbit and Frozen, respectively, were released. An estimated 10% of tourism to the UK is credited to the film and television industry.

KPMG estimated that if bringing film and television productions to Israel were to increase tourism by even 1%, that would bring NIS 193m. into the Israeli economy.

Bollywood films in particular are known for bringing large waves of tourism to countries, Korin said. However, their productions have lower budgets and therefore would have less of an economic impact at the outset, before a film is released. Oren and Korin are focusing more on Hollywood to launch their efforts, because higher-budget productions would bring the kind of spending and jobs to Israel that would keep the ministry convinced of the project’s wisdom.

This project is also launching at a great time for the television industry, which has grown massively in recent years with the advent of high-budget productions at HBO, Netflix and other companies.

“A lot of [production] sites are almost at full capacity because of huge growth in the television sector,” Korin said. “If we open a new market with this huge potential, then they will come. We have fantastic industry employees here, and everyone speaks English.”

Israel’s luck in attracting foreign productions has been mixed in recent years.

While the fourth season of the popular Amazon Prime Video show Transparent, which aired this fall, was set almost entirely in Israel, director Jill Solloway chose to do almost all of the filming in Los Angeles, with none of the actors ever traveling here.

But many shows have filmed in the Holy Land recently, including a travel special from late-night comedian Conan O’Brien, who was in Israel in September. Reza Aslan also set an episode of his CNN show Believer in Israel, which was filmed in 2015 but only aired in April.

Also in April, Hugh Bonneville, of Downton Abbey fame, was in Israel filming a documentary for PBS and for Irish national TV titled Countdown to Calvary, which is slated to air around Easter next year.

If Oren gets his way, we’ll be getting a lot more star sightings here, in “Holy-wood.”

Amy Spiro contributed to this report.