studio The movie industry as a co-existence strategy.
 The role of the Government

By Gonzalo Castellanos
 The promotion of the local movie industry turns out to be an efficient investment from everywhere you look: good investment for a diverse cultural look and for coexistence, but simultaneously good investment in the economic area before the potential to attract foreign projects in co-productions with countries that possess already promotion instruments.

The Latin-American countries share a common aspiration for consolidating democratic regimes that concrete an impassable space of respect to the human rights, that consolidate postulates of more equitable distribution of wealth opposite to the exacerbation of market contradictions and of overcoming the social inequalities generated by the exclusion to the interior of the national collectivities and of these before the global system.

In this contemporary look opposite to the big humanitarian commitments, fortunately the culture stopped being a subject for intellectuals, of the Renaissance arts, or the old or monumental things.

There, in the cultural space, relations are intertwined with education, the pacific resolution of conflicts, with the promotion of human development, in response to a context of social and economic inequity that place to more than the half of the Latin American population in lines of technical measurement of poverty.

Before this social panorama of immense complexity, the culture and the multiculturalism have passed to occupy a principal place; almost without exception, the national constitutions currently consecrate that culture is an essential source of a nationality that accepts the plurality of its origins, thus recreating a profound association between the sense of nationality and the origin’s and cultural evolution.

The bond of the collectivity with its material patrimony, monuments and historical sites, ancestral communities, traditional holidays, regional gastronomy, its vernacular, with its atavistic medicine, symbolic references, with the way of interpreting the world, of telling and creating own and others’ stories – through literature and movies - the understanding of the urban language, the possibility of acceding in a rational way to the arts and to the universal culture,  and the viability of being a consumer or creator of anyone of these expressions, is a fact that  determine in good measure the mind-frame sensation of feeling or not like a member of a nation and thus being willing to defend her.

Joseph Brodsky describes with immense vision this social value of the culture as:
"I do not really bother about culture or the destiny of some great – or not so great – poets.  What I worryis that the man, unable to articulate, of expressing adequately, throws to the action. Since the vocabulary of the action is limited to his body, so to speak, he is leaded to act violently, enriching his vocabulary with a weapon, when a word would have been sufficient."

Supreme Value
Precisely there, in the recognition of the multiculturalism as a supreme value, as source of co-existence, and as a command also directed to the guarantee from the Government that the diverse ways of seeing the world have their own space, one finds a normative element that authorizes and determines that the national legislations articulate systems of economic incentives and, why not, of preferential treatment, for impelling the creation, management and cultural consumption.

However, in the transactions of rights, goods and cultural service, economic effects of profound impact are also produced:  In 2001, in United States of America, the contribution of cultural industries to the GDP was 791.2 thousands of millions of dollars, representing 7.8% of the GDP, according to studies from the Andres Bello Agreement (Convenio Andres Bello).  The exports of cultural goods cover close to 83% of the continental ones.

The average share of cultural industries (cinema, editorial activities and graphics) in the GDP of the Mercosur is 4.5%, and in the Andean Region and Chile is 2.5%, which incorporates into the entertainment industries the cultural tourism to historical and environmental sites, the trade of intellectual property, as well as the patents of emblems and traditional medicines of increasing interest for transnational companies. In Colombia, as a significant example, in the first years of this century the publishing sales have overcome the traditional exports of coffee, at the same time that the publishing and movie industries of Mexico, Brazil or Argentina, or the cultural tourism to archaeological sites in Peru, are desirable examples of sectorial contribution to the national accounts.

The special features of cinema
The image is not only figure, color and light, but, in essence, it is a form defined as visible in a cultural context.

If only one country, or only one trend, corners the production and communication spaces, there would be one only source from which the ideas and imaginary and strategic senses of that producer country would flow in a unified and evenly way.

Production, distribution and exhibition are abstracted from cinema activities, like the sectors or links that form the elaboration and disclosure chain of a movie.

Among these big sectors multiple activities, goods and services are spilt (literary creations, scripts, music, ideas, inputs, technical processes, credits, financings, contracts, copyrights, intermediation services, entertainment industries, connected industries of edition, processing, postproduction, sound, cultural, ideological or commercial elements), and each of these particular components, and every moment in the chain, exists and is defined by all the rest in a reciprocal relation.
Finally, the finished feature – disclosed by any mean or format –, faces at this moment the sensible appraisal, spell, and cultural dialogue with the spectator, what prevents in some way to precise if this is indeed the end of the process, or just its beginning.

We are dealing with a series of stages with structural characteristics that, in fact, turn out to be similar in Latin American and European countries.

Complex factor converge in the production process of a movie, essentially of economic nature:  the low capacity of bulk production of movies to lower costs;  the high risk capitals involved and the limited expectation of profits;  the limit access to credits from a financial sector demanding thick warranties and interests;  the difficulties in attracting foreign investment for co-productions, all of which is complicated or simplified in proportion to the shooting time, to the quality of the technical processes used, to the content costs of the movie, and, in general, to the decision of making a movie with high, medium or low budget, and the estimate of potential public.

Likewise, the elaboration route of the picture generates a cascade of taxes, investments and expenses (acquisition of input materials, goods and services, copyrights, purchasing or leasing of equipments, leases, locations, actors and technicians services.)

The cost -in content and process- of national pictures, although onerous at local level, is well below of those of the foreign movies that arrive to the same spaces and windows of disclosure after being produced with costs overwhelmingly higher and with an enormous distribution power, which in principle generates a difficult competition.

No movie happens to capture the public attention by itself.  It is necessary to invest in advertising campaigns and select its image, negotiate the exhibition circuits more adjusted to the kind of feature, define the number of copies, and choose the complementary advertising material, with costs that may determine the commercial success.

Foreign Cinema
The foreign cinema, mainly produced in United States, has the capacity to corner close to 90% of the spaces and marketing windows, which is why within a legit commercial expression the exhibition and transmission infrastructure, as well as the distribution services, are adaptable to the requirements of that offer.

The reduced national production and the limitation due to that many of their contents are directed to an essentially domestic potential market, makes unattractive for major distribution companies - majors - to add the new local productions to their offer portfolio.  Not many alternate intermediaries are in the local context either, because the reduced size of the production does not make attractive or viable the creation of specialized distributors for this kind of products.

These structures make many countries to consider promotion means for the audiovisual space through subsidies and measures to increase local production, and for supporting the distribution and disclosure of local contents in national and foreign territories.

The local productions of countries with important cinema development, as France (240 feature films premiered in 2005), Spain (142) or Brazil (46), rely on   Government support in a percentage close to 50% of the medium cost of production and promotion, which improves the content costs, aids that come together with quotas or projection impositions on TV or on means opened to the public.

The reference is also applicable in Colombia, where with the Incentives Law of 2003, from two productions per year we are now close to 10 per year, with outstanding success in local box office, all of them receiving direct non-reimbursable support from the fund created to this purpose, incentives from the Ministry of Culture and supports from private investors based on fiscal incentives, that exceeded in some cases the 60% of the production costs of every film.

But the matter was ‘round’: that increasing number of films with an average budget of one million dollars attracted high foreign investment for co-production, generating value added taxes, of revenues in goods, services and box office, and generated payments for employment of technicians and actors superior to what the Government gave up receiving because of the given incentives.

The process that the Dominican Republic just started because of the serious and consequent interest of the Government in promoting the local movie industry, I can dream that to do it turns out to be an efficient investment from everywhere you look: good investment for a diverse cultural look and for coexistence, but simultaneously good investment in the economic area before the potential to attract foreign projects in co-productions with countries that possess already promotion instruments, to grow an industry with  high demand of qualified goods and technical services, promoting thus this privileged country as an interesting scenario for all its  neighbors.

Gonzalo Castellanos Valenzuela is an attorney, specialist in Public Management and Administrative Institutions. Adviser and author of cultural projects in Colombia as the Cinema Law, the regulation of the archaeological and sub aquatic patrimony, of the material and immaterial patrimony, and of economic incentives to culture, is a cinema consultant in the Dominican Republic. He is an author of several books and columnist on cultural and opinion topics.


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