Funding for original Israeli TV projects is about to dry up, warn industry insiders

Illustrative: A film crew shoots a scene from the hit TV show ‘Fauda’ in Tel Aviv on May 30, 2019. (AP/Oded Balilty)

At the Jerusalem Film Festival, producers of hits such as ‘Tehran’ say outdated legislation coupled with wariness of international companies means Israeli productions may soon say ‘the end’

The future of the Israeli TV and film industry is under threat, experts warn, with out-of-date regulations slashing budgets and overseas production companies increasingly wary of doing business with Israel amid global boycott efforts.

“I don’t see a future for our industry,” said Shula Spiegel, a veteran TV producer behind the international sensation “Tehran.” She noted that “all of the productions that I’m currently involved in are in a budget deficit… I don’t know if I’ll be able to finish the films that I committed to, that I signed contracts for, and in my stupid optimism said, ‘It’ll be OK.’”

The crux of the problem, pointed out the participants in a panel at the “Future of Israeli Cinema” conference on the sidelines of the Jerusalem Film Festival on Sunday, is a piece of outdated legislation that has increasingly exempted the major Israeli TV providers from investing in original Israeli productions.

The current law requires Israeli TV providers and networks to funnel 8-15 percent of their incomes into local productions – but it applies only to traditional broadcast TV, and not streaming or internet-based providers or services (OTT). And over the past 10 years, Israelis who subscribe to internet-based TV providers have jumped to 74% of the market, compared to just 4% a decade ago, according to Communications Ministry figures.

“The law that exists today was written in the 90s and it was fitting to the 90s,” said Eliran Elya, chairman of the Directors Guild of Israel, at the panel on Sunday.

Partner and Cellcom, which are fully internet-based, have no requirement to invest in local productions, while HOT and Yes, whose subscribers are rapidly shifting from broadcast to OTT, are only required to invest the percentage of their income that is derived from traditional cable TV. Meanwhile, Netflix, Amazon Prime and Disney, which have also siphoned off Israeli TV users, have no such requirements at all.

“Cellcom and Partner, whose infrastructure is via the internet, how much do they invest? Zero. They’re required to invest zero and they invest zero,” added Elya. “Add to this the international platforms, Netflix and Disney, who entered the market and took away customers,” he said, leading to a shrinking market share for HOT and Yes, with no requirements of their own to support local productions.

Efforts to change the law, said Elya, “are not just about the creators and producers, it’s also about our identity here as Israelis and about our culture… without regulation, there won’t be any original Israeli productions.”

Over the past few years, many Israeli filmmakers and producers have sought to sell their productions overseas, securing a stable and usually more generous budget. But, they warn, such offers have dried up since the start of Israel’s war in Gaza, launched following Hamas’s October 7 attack.

“We’re not succeeding in selling our programming overseas,” pointed out Spiegel. “They don’t want to hear from us.”

Ziv Naveh, the CEO and artistic director of the Gesher Multicultural Film Fund, said she also hears such sentiments from global companies.

“They say there’s no chance that they can partner up with Israel on anything right now; it will be boycotted in a matter of seconds,” said Naveh.

The Communications Ministry predicts that by the end of 2026, 100% of Israeli TV will be internet-based, wiping out the legal requirement to invest in local productions – unless the law is changed. In such a scenario, the only body with a requirement to produce original Israeli content would be the Kan public broadcaster, which Communications Minister Shlomo Karhi has been working to shut down for years.

Film industry insiders, including the Directors Guild of Israel, have attempted to work with Karhi on a legislative fix. Included in a wide package of legislation pushed through a ministerial committee in May, against the advice of the attorney general, is a requirement that all TV or content providers operating in Israel be required to invest 6.5% of their revenue in local productions.

Most of those in the mainstream film and TV industry are, however, unhappy with many other elements of the bill, including introducing a new government regulation body that would police content and fine broadcasters for violating its terms, as well as striking down divisions between news and entertainment operations.

The future of Karhi’s legislation is unclear. The bill also includes the requirement for international streamers like Netflix, Amazon and Disney to partake in the 6.5% investment of their revenue in local productions.

Such a requirement, pointed out members of the panel on Sunday, was successful in France, although the Israeli proposal reportedly triggered US Ambassador to Israel Mike Huckabee to protest the move in a meeting with Finance Minister Bezalel Smotrich.

Meanwhile, efforts to advance a separate private bill by Likud MK Shalom Danino, specifically focusing on the requirement to invest in local productions, has not advanced in months.

Some sort of intervention is hugely pressing, urged industry insiders, before funding dries up entirely.

“I’ve been producing [films and TV] for more than 40 years, and the sentence ‘it’ll be OK’ has been accompanying me the whole time — but this year I feel like it’s less and less true,” said Spiegel. “I haven’t given up on this world and I hope I don’t give up on it, but it is becoming [financially] irresponsible.”