State-backed incentives and stringent protective measures have fomented a glut of films in Latin America, especially in Brazil and Argentina. Indeed, bolstered film laws in Chile, Colombia and Venezuela have been stimulating an upsurge in local titles.

Unfortunately, the distribution and exhibition of homegrown films remain a challenge. Most domestic films rarely get a chance to have word of mouth build before they are shunted aside to make way for Hollywood releases.
Some countries are addressing this problem.

Argentine film institute INCAA just unveiled a string of new measures to help national films get adequate screentime. These include a tighter screen quota system, effective September 1st (2006), which obliges exhibitors to screen at least one local film every quarter based on each theater's screen count. For instance, a six-screen multiplex must show six national films per quarter.

Furthermore, INCAA guarantees two weeks of screentime for Argentine films. "This will give local films the chance to build word of mouth. Otherwise, exhibitors pull them out if they don't earn the minimum box office gross required to stay on the screen," explains Venezuelan director Alejandro Saderman who now resides in Argentina where he just released his docudrama "El ultimo Bandoneon."
Venezuela now boasts the only state-run distribution company in Latin America, Amazonia Films. "We are hoping to learn from the mistakes of Brazil's now-defunct state-run distributor/film agency Embrafilme," says Amazonia president Juan Carlos Lossada.

Venezuela is also building a circuit of 24 digital screens. Its film institute, CNAC, oversees a growing film fund sourced from state and mandatory tax contributions from all sectors of the audiovisual industry.
The protective measures in Latin America pale in comparison to those in France or Italy, Saderman points out. "Without them, we wouldn't stand a chance against Hollywood," he says. Even individual filmmakers are tackling the problem with their own hard-earned money. Argentine director/writer/producer Daniel Burman whose father/son drama "Ley de Familia" has been a local and international hit, is investing in an arthouse circuit in Argentina. He is partnering with Spanish distributor/exhibitor/producer Wandavision to build various small arthouse plexes in Buenos Aires, starting with a three-plex to open in March 2007. "Production has not been a problem in Argentina, but exhibition continues to be one," he says, adding that some arthouse cinemas in BA have closed down. Indeed, with the exception of Mexico, most of the region is vastly underscreened.

In Brazil, Rain Networks is spearheading the digitalization of screens in the country and elsewhere. With offices in São Paulo, Rio de Janeiro, New York and London, the company transmits, via satellite, films in digital format to more than 106 screens in Brazil, 14 screens in the U.S. and one screen in UK.

"Digital cinema is a great solution for the distribution problem, since it allows better booking with a low upfront investment, thus lessening the risk of distributors, and allowing exhibitor to be part of the first run," the company states.

It has been proven time and time again that when a local film connects with its national audience, the result is box office gold. It is no wonder that more Hollywood majors are getting into the act, either as producers and distributors or both.
Fox Warner Chile's first--ever local release "El Rey de los Huevones" (The King of Idiots) has reigned for at least three weeks straight since it opened Aug. 31. Drama/comedy scored the all-time opening weekend record for a Chilean film with more than 95,000 admissions and a 60% share of the market. On its second weekend, its market share dipped a mere 50%.

In Brazil, Hollywood distributors are obliged to invest in local cinema by law so they release a good number of local films, some of which have been resounding hits like Columbia TriStar's record-breaking "Carandiru" in 2003 and "Two Sons of Francisco" last year.

However, the majors have gone for obvious crowd-pleasers while smaller, more art house fare languish unreleased or go on limited runs.
In Mexico, Disney label Miravista, Columbia TriStar and Warner Bros. have just started to roll out their first local titles since they launched their production companies. The first out of the gate, Warner Bros. Mexico's "Efectos Secundarios" became the year's second biggest grossing Mexican film to date. It is unlikely to outgross the biggest hit this year, Videocine's animated feature "Una pelicula de huevos." which scored $12.8 million. Given their ample resources in marketing and distribution, these studio outposts enjoy advantages that should help the local film industry.

Attendance of domestic films has waned in recent years in Latin America, with Mexico reporting an abysmal 25% plunge in 2005.  The box office share of local films in Argentina dipped to 4.2% in the first half of this year compared to the 6%-7% average of recent years.  Brazil has yet to climb back to its 2003 heights when Hector Babenco's "Carandiru" drove the domestic market share to 21% with 22 million tickets sold. Since then, attendance of local films in Brazil has shrunk to 16 million in 2004 and 11 million in 2005.

More filmmakers in the region are striving to make more commercial films. Chileans responded enthusiastically to the first-ever local musical, "Rojo, la Pelicula."
When a local film deftly touches on controversial issues and sparks a national debate, it invariably wins at the box office as Carlos Carrera's priest drama "El Crimen del Padre Amaro" did in Mexico in 2002 and in Venezuela last year with Jonathan Jakubowicz' kidnap drama "Secuestro Express." Both films raised the ire of authorities and the ensuing (free) publicity only drove more people to see them. "Crimen" racked up an all-time box office gross of $16.5 million in Mexico while "Secuestro" was number one for seven weeks and attracted a record 1.2 million movie-goers. Both films lured people who had never been to the cinema in their lives.

In Colombia, a semi-fictional drama about a real event that continues to capture headlines, has triumphed at the box office. "Sonar no Cuesta Nada" has dominated the box office since it opened on August 11 and has lured 1 million admissions to date. Film tracks a regiment of Colombian soldiers who stumbled upon a booty left by FARC guerillas. Instead of turning in the cash valued at $46 million, they decided to spend it. Their ongoing court trials continue to make headlines in Colombia.

"With hits like these, we're hoping to get Colombians to get back into the habit of seeing their own films," said Carlos Llano, head of the film's distributor Cine Colombia. The number of local releases in Colombia have risen to an average of seven to eight, up from an abysmal median of two just five years ago. The all-time box office hit in Colombia continues to be Sergio Cabrera's 1993 comedy "La Estrategia del Caracol" which attracted 1.6 million admissions.

As Hollywood has discovered, the benefits of well-oiled marketing, distribution and exhibition industries in the U.S. mean virtually nothing when a film fails to connects somehow to its audience. Bad films can open well, thanks to the marketing blitz that precede them, but unless they click, audience levels oftentimes plunge more than 50% the next weekend. Last year, the worldwide box office slumped but not because of "distractions" such as the ipod, videogames or simply great weather. It came down to one simple fact: mediocre films. This year, stronger titles are reversing the trend.

Some Latino filmmakers realize they need more than state backing to get people to see their films. "To be honest, not many films in Argentina have connected with their audience," admits Burman.
Aimless meandering films financed by the state have been the norm. Now even low-budget auteur filmmakers like Burman, Pablo Trapero and Israel Adrian Caetano, are delving into more commercial fare.
Argentina's Damian Szifron, who first made his mark with hit TV show "Los Simuladores" is sticking to genre movies and succeeding. His action comedy "Tiempo de Valientes) was a box office hit in 2005.
In October, Mexican producers Lemon Films are hoping to strike box office nirvana with horror movie "Km. 31."

Chile's Jorge Olguin has successfully tapped the horror genre twice with "Angel Negro" and "Sangre Eterna." Now, Mexican director Guillermo del Toro ("Pan's Labyrinth") has come on board to co produce Olguin's upcoming horror film, "The Call of the Sea," starring Leonor Varela.

At the end of the day, the quality of a film will determine its distribution and exhibition. If it's good, word of mouth will give it a life of its own. But to be sure, a little help from some friends in high places can go a long way.

Anna Marie de La Fuente is the Chief Latin America writer  for Variety. Based in Los Angeles, de la Fuente began her career in journalism while living in Madrid. She was the Spanish bureau chief for the Hollywood Reporter from 1990-96, at which time she moved to Los Angeles and became a freelance media writer. In 1998 she was appointed Latin America bureau chief for London-based film magazine Screen International. De La Fuente has written widely on the entertainment industry, contributing to the Los Angeles Times, Variety Deal Memo, Billboard and Broadcast.