Beth Potter in Prague -

A triple whammy of the weak dollar, a writer's strike and now a potential actor's strike has slowed the Czech movie-making business in recent months, leaving pessimistic industry insiders wondering when the other shoe is going to drop. To soften the blow, Czech officials recently promised a 20% tax incentive for foreign film productions. But while that might help mitigate the weak dollar against the Czech crown, the tax break hasn't received official approval yet and isn't slated to go into effect until 2009.

For the post-communist economies of Central and Eastern Europe, international movie production has been a bonanza. Foreign movie productions brought in some $76m to the Czech Republic in 2006, according to Dusana Chrenekova, spokeswoman for Barrandov Studios; Romania's economy has benefited to the tune of about $183m over the past five years, says Bogdan Moncea, marketing director of Castel Film in Romania

It's easy to see why, therefore, the recent slump in business is so worrying for the Czech government. Czech Film Commission officials say they have lost films in recent years to countries like Hungary and Poland, both of which have started marketing themselves more aggressively in recent years with tax and other incentives. "Hellboy II: The Golden Army" was filmed in Budapest; the original "Hellboy" was filmed in Prague in 2004.

Independent producer Hunter Holder, who recently released the film "The Other Mr. Johnson," blames the lack of tax incentives for creating the industry slump. David Minkowski, head of production at Stillking Films, a production arm of Barrandov Film Studios, says getting the tax break promise was just a matter of education. "It's more expensive to shoot anywhere, that's why it's so important to enact a tax break," Minkowski says. "It's just educating people on the benefits that a tax incentive doesn't cost money, it actually makes money."

Star strike

Possibly just as big of a blow to the industry has been a looming actor's strike at the end of June. As film executives scrambled to get things done in time, the uncertainty rose. Two or three films that had made commitments to shoot in Prague backed out when directors realized the shooting window would be too short to complete their work. "Nobody will start a movie until they know they can finish it, so the window was closing very quickly," Minkowski says. "If it's not off the ground now, until they can make a new contract with the actors, they won't do it."

Films that were able to get started before the "shooting window" closed, including Paramont Pictures' "G.I. Joe" now starting up at Barrandov, are keeping big studios busy, but between the weak dollar - which has lost about a third of its value against the crown over the past year - that looming strike and the just-resolved US writer's strike, "it's definitely reducing the amount of business that's going on," Minkowski says.

International Production Co., a well-regarded production studio in Prague, has also suffered some sleepless nights from the writer's strike, although it managed to get replacement business, says Kevan van Thompson, a producer currently working on "Solomon Kane," an action-adventure flick. Both van Thompson and Minkowski declined to give financial information related to the slump and aren't feeling any financial impact at this point, but for smaller operations, like Nancy Bishop, owner of Nancy Bishop Casting in Prague, losing even a small amount of work is a big disruption. "The strike has slowed down business everywhere, including here," says Bishop, whose company has cast actors in more than 50 productions.

Given we're talking about the movie business, some detect a sense of melodrama about the situation. Norbert Auerbach, former head of United Artists studios in California who now lives in the Czech Republic, says Czech locations are so unique, and its workers so much more skilled than others outside of the US, that it can hold its own even without tax incentives.

Minkowski also points out that even if some films didn't make the deadline to start work ahead of the potential strike, "it just means they're postponed, it doesn't mean they're dead. Obviously everyone would rather have more movies than less, but we're still busy."

There are several optimistic signs for the summer. Production companies are building on last year's success in shooting "Prince Caspian," the second in the Narnia Chronicles trilogy, James Bond thriller "Casino Royale," and "Wanted," Auerbach says. "Therese Raquin," a drama starring Glenn Close, is also expected to see shooting here in coming months.

And Barrandov is upgrading the world's largest soundstage, which was first used in Narnia filming last summer, according to Auerbach. The company has added air conditioning and is revamping the soundstage power grids. The smaller, independent Prague Studios operation also plans to open four new stages in 2010, each at 21,500 square feet.

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