.

The film industry structure and certain historic, geographic and linguistic conditions have given Hollywood an incomparable market and professional power. On the other hand, the cultural nature and the media attention that the film industry receives has given National Film Industries a legitimate voice to ask governments for protection and regulations to allow countries to have some amount of indigenous film productions and audiences. The present section will analyze the tensions between two oppositional policy discourses, one that supports markets as the main regulators of what films will be produced and what films will be available to who, and another that supports state intervention in order to protect national films and the cultural value that they carry. The results of such historical opposition between discourses of markets and discourses of culture have shaped the policy approaches to the Film Sector.


3.2.1. Cultural Industries and Cultural Diversity

The defense of national film industries, of the “right” to produce national films, has been mainly based on the framing of films as cultural objects, as objects that enrich the culture of a nation, the culture of the communities that live within the imaginary geographical limits of a nation state.

The cultural approach to films (that has also been used to frame other forms of art or cultural expressions) set these audiovisual products in the space of the so-called cultural industries. This concept has its origins in the neo-Marxist critical thought of the Frankfurt School and two of its main scholars-celebrities: Theodor Adorno and Max Horkheimer. They developed the concept of the “Cultural Industry” in the context of the Second World War. They argued that cultural items were produced in the same way of other mass consumer goods. Profit-making, rationalized organizational procedures, assembly line characteristics, planning, synthetic methods, were all part of the production of movies, novels, music, and others forms of art (Negus, 1997, p. 70). Although their critique reveals a nostalgia for a type of independent art created by an independent artist that didn’t exist anymore – if it ever did – their concept certainly shows the two dimensions of films (and art for that matter) under conditions of advanced capitalism: films are a mass merchandise but they are also cultural expressions.


Their critique predicted certain social and industrial consequences (Negus, 1997, p. 73):

- Standardized commercial cultural commodities, masked with pseudo-individual characteristics, would emerge out of the concentration of cultural production in a capitalist industry.

- Free, critical and autonomous art would give way to a repetitive, light and unchallenging culture.

- The individual experience would disappear under the weight of mass culture and learned habits. Cultural consumption would be endlessly, passively and obediently practiced with “effortless pleasure” as ultimate objective.

Although critics of these critics might see a high-culture bias in their analysis, the neo-Marxists, nevertheless, pointed at the risks for cultural environments that standardization and lack of diversity (hidden in pseudo-individuality) would trigger under conditions of advanced capitalism.

Adorno and Horkheimer’s analysis of the Cultural Industries actually morphed into social practice in 1982 when UNESCO used their critical approach in its volume The Culture Industries: a Challenge for the Future of Culture. UNESCO expresses several concerns about the cultural industries (with several points that touched on common Marxist ideas): the concentration of ownership of the means of production and of the distribution circuits of cultural products; the marginalization of cultural messages that do not achieve value as marketable commodities; and the subordination of independent firms and artists to market forces and to mass consumer demand. The report also points at potential trends towards cultural uniformity and the dangers it sets on the cultural heritage of mankind, that is, the diversity of conceptions, values and customs that emerge from every society.

The UNESCO report calls for member-states to develop and initiate ‘response strategies’ through national policies that might unite the shared interests of the citizens to regulate the way in which standardized cultural products are distributed and sold. The objective of these policies is to diminish the threat to world cultural diversity that might emerge from homogenous messages flowing from, and concentrated in, the top ‘northern-center’ media conglomerates (Negus, 1997, p. 78).

From the Frankfurt School theory to UNESCO policy recommendations, all these concerns express several things. First, for some people in the world, cultural diversity seems to be an important element of human life, full of social value, worth protecting even through national policies and state intervention. Second, some people think that the process of cultural industries regulation is in the interest of individuals as citizens of a nation, not as consumers in a market, signaling, again, an economic/cultural duality: people as consumers and markets in the economic sense but people as citizens and public in the cultural sense. And, as will be shown below, this duality illustrates the tension between recent liberalization trends and regulatory reactions in the realm of the Cultural Industries.

The UNESCO report came out at the precise moment in which the Reagan/Thatcher era was pushing for privatization and deregulation policies across the board of international sectors and national markets (including communications) and when corporations, mainly located in North America and Europe, were starting to feel the need of new markets to maintain their growth rates and also starting to salivate with the possibility of a planetary reach for their products and the subsequent economies of scale they would achieve if homogeneous goods were to be distributed everywhere (Negus, 1997, p. 79). Within the cultural industries, especially in the United States, it was the film industry the best positioned for the next planetary step.

3.2.2. National and International Cultural Industries

As stated above, the neo-Marxists critique of the concentration trends in the Cultural Industries and UNESCO’s concerns about their international configuration from center to periphery, are examples that carry the evident normative objectives of protecting the diversity of national cultures, the diversity of their expressions, and to avoid the standardization or homogenization of cultural creation. In an economic sense the concern could be seen as a tension between the need to maintain competition and the trends towards monopolization. The ‘reciprocal recognition’, between nations, of this cultural approach across local, national and international spaces implies support for a multilateral and equal exchange of cultural expressions inside and outside the nation.

Within the communications landscape, these concerns about culture have to do with the consumption of foreign media, especially the media produced in the Anglo-US realm, and with the consumption of concentrated national media. Media invasions can sometimes be resisted or redefined according to local culture and experience. Media invasions might be large towards certain places, small towards others; some receiver nations – or collective communities within nations – resist or adapt the received meanings in certain ways, while other nations are used to be in the role of senders with minimal receptions from abroad (the United States being the most pathetic case, since it is the best positioned nation – in technological terms – to enjoy the diversity of world communications) (McQuail, 2000, p. 236). In the case of Western Europe, it is said, the ‘internationalization’ of its media flows was self-chosen, an act of free choice from diverse options, and not the result of ‘imperialism’. Although the media can extend cultural choices in a creative way, and hybridization can be a creative process, ‘cultural invasion’ of peripheral cultures is different because it is accompanied by other material changes and occurs in situations of dependency and/or domination and less free choice (McQuail, 2000, p. 237-238).

Again, the normative critique on these media processes points at an ideal situation of media equality in which free choice among available options is desired. If on the one hand international media flows are welcomed because of their creative possibilities, on the other, nations also require a degree of cultural and audio-visual sovereignty in order to provide media options and free choice of media for their citizens. A sovereignty that allows a country to make media decisions, which are strategic for its cultural development, according to its own interests and needs and not to the interests and needs of powerful central nations.

Certain types of media allow different levels of concentration and control of production, distribution and ownership in the central nations, and therefore different levels of influence in the media sovereignty of other nations. The frequency of production, the economic cost involved in the production, and the reliance on language as opposed to visual elements determine this difference (McQuail, 2000, p. 218):

- Centralized media production and distribution tends to occur with one-off texts, with high production and marketing costs. Texts that do not depend mainly on language for the understanding of their meanings (or with easy language adaptation-translation potential), and can be distributed over longer periods of time. This is the case of films, expensive TV series, music, foreign news, and books. These types of media tend to be controlled by central nations with enough capital to produce and distribute them.

- Decentralized, or nationally based media, tends to occur with cash-flow texts, that might have lower production costs but have to be produced and consumed every day due to their short-term informational value, and are based on local stories and local language. Newspapers and Television and Radio broadcasting fit in this category, and local companies (and local infrastructure) are viable for producing and distributing these types of media.

Under current technological trends, especially in the audiovisual sector, more and more people within more and more nations are having access to audiovisual-content from different origins. Cable and satellite TV allow people to access national and international content. Radio stations and Newspapers remain local, although music stations and bookstores tend to offer national and international options. In this sense, a fragile diversity emerges within national media landscapes, a diversity that, nevertheless, faces important degrees of inequality within the nation and between national and international media companies, and between national and international discourses.

From a media technology point of view, what is missing from these national media landscapes, with the fragile diversity they show, is the coexistence of nationally produced films and imported ones. This absence, added to the representation and storytelling capacity of film, gives base to the permanent interest and struggle of certain groups within a nation to demand government intervention to support, protect and expand National Film production.

Although it can be said that other types of media evolve within a context of inter-national diversity (a diversity that is new because all national media systems were local in their beginnings), and with a degree of media sovereignty in each media window, it is evident that Film content has not evolved in that way in most national media landscapes (nor even in the United States). Such a difficult position for a mass media sector, where both culture and industry are under pressure, has made cinema a central element of national media policy.

If these difficulties frame the situation of the film industry in many countries it is to be expected that different social groups, especially those most interested in filmmaking (audiovisual professionals, cinephiles with political power, etc) will execute private and public actions towards the nurture, protection and expansion of the industry. Such actions, especially the public ones, involving certain degree of state intervention through new legislation will encounter political opposition. Not everyone thinks that the film industry, or any other for that matter, should be protected in anyway. Some political actors think that industries operate more efficiently when they face economic conditions without any type of intervention. The following section explains in general the origin and nature of such opposition, which applies to any industry, including the film industry.

3.2.3. The Contemporary Ideology of State Intervention

Market economies, in their purest conception are those in which all decisions regarding investment, allocation of resources and consumption are directed by market forces in a social space with a determined distribution of resource ownership, usually with high degrees of concentration, that is, with varying minority percentages of people having ownership rights over a disproportionate amount of resources. State intervention is limited to a set of minimum conditions for markets to operate efficiently in such contexts: a national system of defense, law and order, and a legal framework for the making and enforcement of contracts. This ideal market economy sets a standard against which government intervention is measured. In practice and in most capitalist societies, governments intervene in the economic processes in much higher degrees (Slater & Tonkiss, 2001, p. 118).

This standard generates two principles for the management of capitalism. On the one hand, economic liberalism, commitment to free-trade and market self-regulation; on the other, government measures to provide social protection from the punitive effects of market competition, market inequality, and market failure.

Economic liberalism was originated by Adam Smith, a Scottish economist and moral philosopher who lived in the UK during the eighteenth century. For him, a liberal state should intervene to defend market principles from those who wish to distort markets for their own gain. His thought was both about economics and about ethics. It evolved into the idea of markets as self-regulating entities and able to go back into balance after exogenous economic shocks like wars, hurricanes, or ill-conceived policy interventions.

But if markets are about the balanced relation between supply and demand and about the growth of national wealth, even within liberal economic thought the government would have a starring role in the management of such processes through demand-side and supply-side market interventions and labor policies implementation.

Demand-side interventions were developed by J. M. Keynes in the first half of the twentieth century. He understood that markets in crisis not necessarily recover from the down side and can maintain low wages, unemployment and economic insecurity for long periods of time. The role of the government would be to ensure full employment by promoting aggregate demand (employer subsidies, public employment programs, etc). On the other hand, boom economic times trigger high inflation and constrained supply, in such cases the government should implement consumer and income taxes and interest rates policies in order to restrain aggregate demand and inflation. Later, Neo-Keynesians avoided theories about direct job-creation programs, but supported state intervention in training and education as strategies to stimulate employment growth, foster human capital, and minimize the impact of de-skilled workers (Slater & Tonkiss, 2001, p. 125).

Supply-side interventions developed from the monetarist approach of Milton Friedman. Full employment targets were replaced with the acceptance of a ‘natural rate of unemployment’ and the concept of rational expectations was introduced: the expectations of economic agents cancel out the policy effects in the long run because the agents adjust their behavior in line with market and government signals. Therefore, if the employment programs and fiscal deficits used to trigger aggregate demand were out of the policy portfolio, the space left for intervention was on the supply-side. Governments could promote growth in output and higher levels of employment by enhancing industry productivity and efficiency in labor markets. This approach meant deregulation of capital, labour, goods and services markets through elimination of currency controls, privatization of national industries, the curbing of trade union power and the abolition of wages policies and forms of employment protection (Slater & Tonkiss, 2001, p. 124).

One of the key concerns of these two principles is how to improve employment rates. If they were to be applied to the market of films in order to solve a sector crisis or to support it in order to grow, and therefore, to improve the living standards of its professionals, the policies from the two approaches would be radically different. From the demand-side they would imply measures like government spending in film production, triggering employment creation in production or subsidizing private production companies for undergoing the effort of developing film projects. A less direct intervention, following the post-Keynesian line, would be to develop training programs for film professionals, to make them more competitive, and to trigger productivity in the film industry.

On the other hand, the supply-side intervention would, for example, give more freedom to film production companies to import film equipment (with lower import tariffs), to hire and fire film professionals (with lower employment controls), and to produce more types of film content (with lower censorship barriers). In theory, such measures would allow the film production sector to locate the best economic (labor or capital goods) or thematic (content) resources to develop a more productive film creation activity.

It is from this last stream of economic thought, supply-side economics, that the Neoliberal rhetoric of markets, competition and deregulation emerged. First, as a central element of a New Right ideology in the 1970’s. Later, in the 1980’s, as the orthodox and radical agenda for policymaking of the conservative governments in the UK and in the US. And finally, in the 1990’s, as an economic mandate at international scale that penetrated Europe, Australasia, Latin-America and the former communist block (Slater & Tonkiss, 2001, p. 138).

Neoliberalism is based on an ethos of privatism in relation to the provision and regulation of social and economic life and it uses specific discourses to frame the ‘private’ virtues such as free market, enterprise, competition and flexibility. Neoliberal political rationality believes that the private sector is best equipped than the state to generate the conditions for market efficiency and for individual and collective prosperity. Neoliberal ideologues mixed Friedman’s supply-side state intervention and a disdain towards welfare states and the potential of welfarism to create a culture of ‘dependency’ among its clients. The welfare state approach gives a high priority to the realization of the ‘rights’ of its citizens instead of an emphasis on ‘rights’ as unreal written abstractions within unequal market societies. Key to this approach is the provision of social goods that do not compete with other commodities in the market, such as education, public housing, healthcare, employment schemes and public childcare (Slater & Tonkiss, 2001, p. 137-138).

The neoliberal policies resulting from such technical and ideological mix were designed to face a common set of economic conditions specific to advanced capitalist countries: the crisis of Fordism; industrial decline and transition to service and informational economies; the need to find new markets to generate economic growth; and intensified competition as a result of the internationalization of markets. The neoliberal policy portfolio includes the sale and privatization of certain public assets (nationalized utilities, industries and telecommunications); deregulation of private enterprises (broadcasting, financial services, air transport, construction and urban development); flexibilization of labor markets (curbs on trade union activities and relaxation on employment protection); and contracting out of public functions to private providers (local government services, security and penal services, military actions) (Slater & Tonkiss, 2001, p. 139).

The neoliberal position is a paradoxical one: state intervention is seen either as a source of economic inefficiency or as a cause of “unfair competition” by supporting certain sectors or industries against their foreign competitors; on the other hand, high levels of industry concentration or private duopolies or oligopolies sustained by adequate government regulations are not seen as sources of inefficiency or unfair competition. Neoliberal antipathy for state intervention forgets that the market itself is a form of regulation, and even beyond, that the free market utopia is only sustained by direct state intervention, implementation and protection of the policies that neoliberals and their clients have pushed for.

The examples of intervention on the film market described above, of both demand and supply-side economics, did not contemplate a national film sector operating in a social space where the main competitor is a foreign and dominating player with disproportionate access to investment resources for production and marketing. If that was the case, and it is the case in fact for many national film sectors, both approaches of government intervention on capitalist processes should, in any case, consider some kind of competition policy, that is, measures to guarantee access to the market by less well off players, guaranteeing two key drivers of efficiency in a capitalist context, choice for consumers and competition in the marketplace.

Belief in the market carries, sells and propagates a key assumption: markets are a given field upon which a swirling and varying set of social groups, with equal opportunities, interact and compete for survival and for pleasure resources. This assumption has no concept of the historical and differential nature of resource ownership, social structures and social power or of the sources of that power. The neoliberal assumptions have no concept of any of these critiques on capitalist structures, usually associated with Marxist thought. After all, in the west, Marx, along with God, was another victim of the twentieth century.

As explained above, the neoliberal framework was developed by the ruling classes and governments of the advanced capitalist nations, under their specific conditions and needs; “advanced” nations that were set and ready to “compete” in the strategic markets of today’s world economy, with all of those markets connected, in one way or another, with information, content, and intellectual resources. The final result is the contemporary idealization of, and practical reliance on, markets and US driven capitalism to the point that the whole belief system falls prey to its associated superficial ideologies of freedom and equal opportunities for all as if they were transparent and innocent mechanisms to accomplish an inevitable improvement of the world (Garnham, 1990, p. 2).

The interaction between states and markets, the highly permeable boundary between the two entities, correspond to specific forms of economic government at different political moments and places, with variable tactics of regulation shaping markets and variable economic models shaping state interventions, but in a moment in history, when such models have conquered a planetary reach. The historical and contested nature that connects all these economic and political dispositions shows that, at a given moment in time, planning and control of social and economic life are purposive practices, executed by specific humans, enjoying or enduring differential amounts of power and resources, either located within the state apparatus, within the private firm, or both.

An analysis of policies and government interventions into the cultural industries, the media, or the film sector, has to consider these general and evolving economic frameworks from which different forms of media market regulations emerge. Those professionals, politicians, or civil servants, interested in the development of supportive policies for the film industry have to be aware of the type of economic approach they face when asking for implementation of protective measures.

3.2.4. Strategies for a National Film Industry

National film or audiovisual sectors and their individual agents can potentially generate four different strategies, which can complement each other and become manifest in the types of policies applied by the state or in the type of movies or private business actions that emerge from the industry professionals and companies. The four strategies cover the main agents of a film industry: the Hollywood and the national media oligopolies, the individual film industry agents and the national governments, all of them interacting with higher or lower degrees of tension (Higson, 2000: 207-208):

- Competition Strategy: to compete against the majors means that ‘national’ film productions will play the Hollywood game, that is, to develop and produce expensive High Concept style features and rely on local blockbuster success and international markets and sales for investment recoupment.

- Collaboration Strategy: To collaborate with Hollywood means that the national industry will be, on the one hand at the service of the majors (and also to other national industries or media clients), with professional clusters of support services, infrastructure and talent to bring Hollywood productions and money to national soil; or, on the other, co-producing or co-financing with the majors and making Hollywood type feature films in order to bring in the financial rewards of a high but ‘safer’ investment. Besides, Hollywood majors themselves are starting to be interested in co-financing and/or distributing ‘other nations’ projects as long as they have commercial potential or, as the US Motion Picture Association would put it, as long as the producers of those projects ‘give younger audiences what they want’ (Solot, 2004, 40). This is the main strategy applied by the Anglo-Saxon world, that is, the UK and Australia, and to some extent by France (with some Blockbuster type experiments in English – the Luc Besson model – or with direct ownership of Hollywood Studios – Vivendi).

- Political Resistance: To politically resist the top film corporations means to treat a National Film Industry as a public service by setting up a policy framework to protect and support the domestic industry and try to play a more even game against the Hollywood oligopoly, at least within the national space, by producing more indigenous films.

- Differentiation Strategy: To differentiate from Hollywood means to produce low-budget indigenous films or middle-class art cinema (the first type, especially, is many times inexportable) and expect local success or rely on some international hits born from international film festivals circuit or from the international art-cinema niche.

As Figure 3.2. illustrates (see below) these strategies can be related to different film market segments that more or less correspond to different types of film products. Three axes form this film market space:

- The indigenous or neutral/universal nature of the film story and locations. Films carrying more intense national themes are opposed to films with more neutral stories and spaces.

- The intellectual effort required by the film story, and by its narrative and visual structure. Films with mass reach are usually linked to ‘evasion cinema’ [M. Laurens, telephone interviews, 16 September 2005 and 1 December 2005], (Monteverde, 1995, p. 188), with entertainment as their main function (or as the Frankfurt School guys would put it ‘effortless pleasure’). Such films are opposed to niche films linked to a ‘reflexive cinema’, with its main function being ‘to think’ or ‘to endure intellectual effort’ (a type of cinema related to masochistic markets or audience segments).

- The level of realism or similarity to the reality of things and actions that the film conveys. In this case realist cinema is in contrast to fantastic cinema, where physical spaces and human actions and creatures might have little resemblance to reality.

Each market segment represents a likely type of National film, and the likely market size of the niche in which that film product will be sold and submitted to the test of economic demand. Film productions can be the result of varying shares of national finance, national professionals, national thematic elements and more or less resemblance to the Hollywood narrative and visual structure (that is, a trend towards Evasion, Fantasy and Universal/USA themes and physical spaces). The films can also be co-produced with companies or governments from other countries, and after a period of time, the resulting set of films, will constitute the National Film Industry collection, with more or less emphasis on certain policy or sector strategies, with more or less films spread across the blurry market segments.

The illustration serves to show the complex configurations that different National Film Industries, with different access to financial resources and different amounts of film production, can develop over time. The market dimensions can help either policymakers or company managers to chose a niche to concentrate on, knowing that such thematic segment can be supported by certain strategy.

Except for rich countries, a competition strategy is almost unthinkable. It means to compete with the Hollywood majors for market share within the two biggest audience segments: the Multinational Commercial Fictions/Chronicles segment, that is, big budget entertaining films with fantastic or realist backgrounds and universal/neutral or US driven story-lines. This type of films has shaped certain audience expectations in terms of production values (from stars to special effects) that are difficult to achieve by projects outside Hollywood.

A collaborative strategy is more viable for certain national film industries. It has to be implemented through collaboration between local media conglomerates, their film production houses and the Hollywood majors. This strategy can be divided in “co-production projects” and “infrastructure development”. Co-production goes beyond Hollywood needs of ‘exotic’ locations and cheaper labor. Projects with higher budgets than the national average and observance of Hollywood commercial rules, like the use of national TV stars, the inclusion of action sequences and indistinguishable urban locations, reduced ‘national culture references’, and production financing and advertising space from the country’s multimedia company, will have better chances to get a co-financing deal from one of the majors local branches (Falicov, 2000, p. 330). Infrastructure development is about offering the facilities (locations, sets, professional technicians, post-production facilities) to Hollywood projects, usually at a cheaper rate than in Los Angeles (it means competition in the ‘film production facilities market’). Pinewood Studios in the UK; technicians, locations and sets in Canada or Australia illustrate this strategy. Films produced under this strategy are usually part of the multinational commercial segments (e.g. The Matrix, Eyes Wide Shut, The Lord of the Rings).

A differentiation strategy follows a niche marketing logic into the art-cinema circuit, which can be complemented by the political resistance strategy through state support and protection of the National Film Industry or through co-production with other National Film Industries and their resisting sectors. Lower budgets are given in these categories. Differentiation, especially when targeting international distribution, will be followed by films made as co-productions between two or three countries, with neutral themes but not set in the US, many times with a reflective story and with varying degrees of fantastic or realist story-background. These projects constitute the Multinational Art Chronicles and Fictions. Examples of this strategy are the French-Argentinean Irreversible or the Colombian-Mexican-Brazilian-Spanish Rosario Tijeras.

Political Resistance strategies are based on a level of Government support that diminishes commercial pressures, and a politically committed level of national private investment, that allow more experimental (or independent) National Films in terms of film language or national references, but depending on a government selection committee whose interests might vary for different reasons, and on the availability of private support. These films usually operate only in the National Market, either as Indigenous Commercial Fictions/Chronicles (usually with TV stars) or as Indigenous Art Fictions/Chronicles (with even less chance of a wide market reach). These films will attempt to draw national audiences with minimal marketing investments and perhaps make an inroad into some international festivals and markets, usually failing to recoup the taxpayers’ money but leaving a trace of national memory to be shown on late TV and to be saved at the national film archives. Low-budget national films rely in strong themes, strong scripts, and a certain amount of visual experimentation, a mix that, not without risk, is the way to place new professional careers on the industry map, and sometimes, even on the Hollywood map. For both, government supported national productions/co-productions and independent national films, a pick up by a sales agent, a major’s distribution arm, or a good performance at a relevant festival can change the destiny of a movie and of its production team. A successful example of this political commitment on a national film, although not so low-budget, is Brazil’s City of God.

But to have a National Film Industry is not in question. Many interest groups want to have a National Film Industry. Some of these groups want a stronger, financially viable industry with higher rates of employment and better professional standards, without much consideration of the themes expressed. Others want the possibility of making movies that express strong national themes, spaces and peoples, and that do not have to follow every single one of the commercial cinema rules. The first group is more concerned about the Economic and industrial dimensions of the sector, the second is more focused on the Cultural and textual dimensions of national films. Beyond this division, many examples of commercially successful films, at a national and international level, with strong national references and film language innovations, show that the difference is not irreconcilable, although not necessarily easy to dissolve.

As Table 3.2. shows (see below), the review of available actions for national film industries point at a set of affinities between the type of strategy and the type of industry players that can green light a project in terms of financial provision. The review also makes evident the overlapping nature of film strategies and film players.

An additional element of the combination of strategies pursued by National Film Industries is the fact that government support might be available to all players depending on the types of film policies implemented by the state, this means that in some countries, powerful companies, many times allied through co-financing deals with the Hollywood majors actually receive state support to finance certain projects, thus lowering their risks with taxpayers’ money (Hayward, 2000, p. 2002).

While competition and collaboration strategies can enhance the industrial structure of a national film sector, and even bring foreign direct investment from Hollywood majors, the question about the themes that National Film Industries should express and the types of film languages to express them still remains. This dilemma appears in contrast to the relative safety that Hollywood strict narrative forms give to industrial cinema production since, under current collaboration strategy trends between media corporations, at least a share of National films will be based on the Hollywood model, which is not locked out from narrative experimentation or thematic diversity, but still complies with certain commercial rules. Those films will still be financially national (at least in part), professionally national (hopefully in a good part), thematically more neutral (without weaker emphases on national references). These films will even receive government support, not that they really need it, but it does not hurt the corporate producers.

The other National Film Industry players, which could be called independents, those which are supposedly more open to thematic and formal experimentation, are the ones under pressure and generating resistance and screaming for government support. As a medium, film serves multiple functions, from light entertainment to social reflection to representations of peoples and places, to memory archive. Independents reclaim some of these functions from Hollywood control and reconfigure them from a more national perspective. Especially important for filmmakers is the possibility of representation of national dimensions and peoples from a more local perspective and using film (not only local TV or newspapers), representations which Hollywood movies are incapable of, nor interested in, producing.

An Independent National Film Industry functions as a local voice of representation among the foreign, entertaining, and sometimes diverse, loud noises of Hollywood. A National Film is a local representation for the locals but it can also be a local representation transmitted to international audiences, and therefore the importance of a film policy that supports the circulation of such representations. This strategic role of national policies in the production of National Films will cause many local interests to struggle to define or restrict the representations that are created, either because it is in their interest to produce critical representations of national problems or to protect the status quo within the national space; or to shape the representations that travel abroad, the international image of the national – the marketing/diplomacy/public-relations of the national and the exportation of national cultural capital (Falicov, 2000, 334). It is here that the tension between culture and commerce becomes evident, the tension between the cultural-national reasons to give support to more local film projects and the economic-international reasons to leave the film industry alone and to be shaped by market forces.

Film’s cultural character has given the sector a kind of strategic importance in the crossroads of commerce and culture, and justifications for further protection and support have been framed as necessary to protect the right/freedom of expression and the national identity (whatever it is). Even the right of minority audiences that want to see alternative content could be added to the support list. State intervention in the case of cultural industries like film, is legitimized as the attempt to correct international distortions resulting from a market economy that would endanger the public domain, cultural diversity and democratic pluralism (Frau-Meigs, 2003, p. 3). These are the characteristics of the political resistance to free media flows and to film trade in particular.


For National Film Industries focused on the Political Resistance and Differentiation strategies, important contextual and textual factors will be:

The types, extension and depth of national film policies – decided by parliaments and politicians with strong input from a number of agents like film professionals, audiovisual associations, and the Hollywood cartel. Such policies will involve box-office taxes, box-office advancements for national productions, screen/media quotas, tax incentives/shelters for investors, investment obligations for A/V channels operators, restrictions on vertical or horizontal integration within the sector, entry barriers, the establishment of film schools and funding of state film corporations, censorship/content regulation, state grants and direct production subsidies, licensing conditions, international marketing bodies of national films, and international co-production treaties.

The availability of independent financing – giving more freedom from ‘state’ content wishes to national production teams and their ideas although they’re still restricted by the commercial wishes of the financiers and by the tension with the foreign creative input in the case of co-productions involving other National Film Industries’ resources;

The issues and themes that seem to be important for the nation and for the usually eurocentric agents in government film committees – shaping the text by thematically (and unconsciously) restricting the ideas (and ideologies) available to film producers and by determining the ideas that will be better positioned to receive a green light from film committees or private financiers;

The aesthetic and narrative influences and traditions of the production teams and of film finance decision makers – modeling the texts through educational and professional audiovisual experiences, through positive or negative views of the national popular culture, and through a mix of aesthetic ingredients from other National Film Industries that are indigenized, specially from European Art Cinema and, of course, Hollywood.

Lee and Bae (2004) (see also Jayakar and Waterman, 2000) developed an econometric study evaluating factors for a successful domestic film industry. They reached a very impressive conclusion: the wealthier the country the higher the domestic film industry market share within the country vis-a-vis foreign films (a.k.a. Hollywood). Additionally, and perhaps more insightful, they also conclude that countries with smaller market sizes (GDPs) will have smaller investments in film production and therefore less films will be produced and less resources will be available to promote existing films domestically and internationally. But they also see that in such a case, a screen quota system will serve not as an ultimate method for preserving a domestic film market, but at least as a protective means to keep part of the market from the majors. Market size, wealth, is not only important because of its essence as an indicator of disposable income, but for its indication of disposable leisure time mixed with spending power in a market, the key factor on which entertainment industries thrive, protected or not.

When international liberalization trends consolidated in the early 1990’s, many concrete national film policies, like screen quotas, where saved thanks to the concept of “cultural exception” as a way to maintain “Cultural Diversity.” The concept peaked during the General Agreement of Tariffs and Trade (GATT) negotiations in the late 80s and early 90s, with France leading the lot of countries interested in protecting their cultural spaces from the United States lifestyle and culture that seem to dominate the world today (Ellis, 1984; Jameson, 1992). Both the General Agreement of Tariffs and Trade and the Deregulation Agreement of the OECD countries allowed “screen quotas” in the new context of international trade. Even though such quota system goes against the WTO principle of national treatment, which prohibits discrimination between locally produced and imported goods, the quotas were sustained by the assumptions that films are cultural/content products and that films are strategic to conserve national cultural identity and the domestic film industry of a country (Lee & Bae, 2004, p 163-165).

From a purely neo-liberal economic point of view there would not be any National Film Industry except for Indian cinema and Hollywood movies. Under the new trends of world trade many national industries (like shoe making or cotton production) in different countries have disappeared due to international competition, changing entire ways of life for millions of people from one year to another. Film has been lucky due to its cultural product nature. State intervention has been a necessary measure to save and conserve a small national film industry or, at least, some national movies. But even in the United States, state intervention has been vital, not only to keep independent cinema and innovation going (through tax relief measures), but also to keep Hollywood going, since it is one of the few US industries that generates trade surplus and is strategic in terms of US propaganda to the world. US government intervention and support in the realm of film goes from lending military ships, tanks and planes, and NASA installations to film productions to bilateral trade negotiations with other countries to guarantee free market access for Hollywood products (Acheson & Maule, 2005, 343; Zuleta, 2000; Vogel, 1998, 72).

This mixture of strategies and conditions shape the film products and talent that emerge from national spaces. National audiences on the other hand – except for those in the US and India, and to a certain extent France – are used to experience cinema as ‘another’ cinema than as their own National Cinema. National Film Industries are marginal, fragile and depending on different kinds of support. In every market National Film Industries are dispensable, since distributors, exhibitors and audiences can do without national product, though they can not do without Hollywood product, which delivers a constant flow of new films and owns, at the same time, the distribution pipelines (O’Reagan, 1996).

Film activists have to negotiate to win ground for their National Film Industries in this context. Local cinema needs to be reworked with every new generation of critics, viewers, exhibitors, distributors and politicians, with filmmakers and activists legitimating, lobbing for, and self-consciously articulating and marketing their difference from the dominant international film industry.

At the same time the locality and low budgets of many national productions go hand in hand. They are channels to test, present, and launch new talent for the national and international audiovisual industries. They can go for authentic representations of the national culture, or for low budget commercial-exploitative genres, or for eccentric-experimental film ideas. Under the current film industry structure, as production budgets get bigger and the financial risks higher, the purely national elements begin to fade and more international elements are brought in, the production has to become more mainstream in order to reach a wider international audience, the themes more accessible, the places more neutral, the actors more recognized. But these transition to the less risky mainstream will still carry relevant shares of national elements which benefit national industries: financial pipelines, working talents, locations, idea developments, etc.

No National Film Industry is purely national. There are always external elements which are indigenized and structural conditions that amplify the need for international involvement of capital and talent and above all, audiences. With the exception of the Hollywood Cartel and of strong domestic markets like India, all National Film Industries are at the crossroads of expressing some kind of national culture while combining production budgets, talent and audiences from several nations.

National Films are important for states, and it seems, for people too. It is important for the project of a nation, for the creation of its identity, and for the development of its cultural and political ambitions, as they are set by the interaction of individual citizens and the imperfect and unequal representative democracies that govern them. National Film exist, in one way or another, because it matters to public policy makers, interest groups, film activists and lobbyists, film-makers and, potentially, audiences. The struggle to expand the National Film Industry has to be shared and supported by all of these agents if the goal of a less uneven representation of the national within and beyond national spaces is ever to be achieved.