4.14.2006
6.4. Current Regulations and the New Film Law
- Other Tax Benefits are also present in Law 814. The Ministry of Culture will grant an “investment certificate” to any company that invests in a Colombian production (the firm can not be a “producer/co-producer of the film). The investment can be discounted from the income tax base of the company at a value of 125%. If the investment was US$1,000 then the company can deduct US$1,250 from its tax base. This benefit expands in absolute terms the more investment a company assigns to a project out of its profits. The benefit might be a marginal reduction on the tax amount or a relevant discount. However, the bigger the tax discount the bigger the investment the company has to make (always way larger than the actual tax incentive), and the higher the risk. Filmmaking is a risky business everywhere, and companies know it.
- The Government can set Screen Quotas to exhibitors (other than TV) to promote the sector, that is, an obligatory minimum percentage of National films within the total amount of released films during a year. Opinions from industry agents will be asked when such measure is considered. Differential quotas can be established according to city, location or characteristics of the exhibition outlet. Subsidies can be granted to exhibitors obliged to comply with the quota. The National Television Commission can also set screen quotas of National films on TV.
- Sanctions for not complying with the Law vary and involve from payment of fines to closure of theaters. The Mixed Fund for Cinema Promotion will be in charge of collecting and controlling the contributions, and exemptions, paid by each agent.
In summary, current Colombian legislation is a soft evolution from the chaotic policy mix that took place in the 70’s and 80’s with Focine (the previous film support agency) and the “additional price” law (to finance the production and exhibition of shorts). And a reflex (perhaps coincidental) of some of the policies available in Spain in the 1950s, before automatic subsidies were introduced (see summary on Figure 6.2. below). The key point is that, again, the state is pouring public resources to finance part of the projects, and trying to revive national film production. Part of the fund financing comes from the “Cinema Audiences” and especially its heavy user target groups, and part from the sector agents. The public is charged at the Box Office through diverse exhibitors’ pricing strategies that, nevertheless, have to be more competitive than before.
The Mixed Fund for Cinema Promotion – Proimágenes en Movimiento serves as a platform of seed capital in order to facilitate the involvement of other investors to complete the projects. A “para-tax,” exclusively assigned to the traditional film supply chain is the financial base of the fund, which operates with the classical selective subsidy committee scheme, although more transparent and representative than before. There seems to be better control mechanisms of the public money for film financing than was the case in the 1970’s.
The policy also wants to involve the private sector through tax incentives on film project investments and with the future rules to allow film projects shares to be traded at the stock exchange. These are new developments compared to the 70’s when tax exceptions where only applied to exhibitors. However, both incentives and shares are marginal influences on overall investment into film production. The film business, especially the business of selling films project by project, is way too risky. And Colombian film projects, from a financial perspective, have had a very poor performance. Investors that are not related to the audiovisual industry, without guaranteed distribution and retailing, will not green-light funds into such projects.
Today, short films policy is not a way for their producers and exhibitors to make money, but a way to save money for the exhibitors alone (through the “para-tax” discount). Again, it is the Cinema audience the one in pain, especially the heavy users of Cinema, having to endure the same short several times, or spectators for an adult film having to see a children’s short, or even worse, a low quality (bad) short many times. Exhibitors save a relevant amount of money that should otherwise have gone to finance feature length projects, or even short films, but not for public exhibition, but to travel around in festivals and facilitate the marketing of the talent involved and the selling of their new projects to international film companies, based on the quality of their previous work, of their previous short(s).
Because shorts are a way for new filmmakers to train for the real thing, it can be expected that the quality will not be at the top level, which is fine, as a training device; or, again, if the result is good, the short serves as a marketing tool for the talent involved. But it is not the medium to promote national filmmaking among national or international audiences. As it happened in the 70’s, with a huge cost in terms of the national value of national production, the shorts tend to become negative, tiring advertising for the very filmmakers that are producing them and for the national cinema they are suppose to represent.
The shorts policy obeys the attempt of the government to create incentives for filmmakers and exhibitors (not distributors) to negotiate “shorts production deals”, that is, to create a market for shorts on the basis of tax savings, and at the expense of Cinema Audiences. Such attempt is not necessarily negative, but it imposes a 7 minutes tax plus change on the audience, with a product that they are literally not choosing to see. On the other hand, the exhibition caps are too low. Colombian Box Office can be estimated in 2005 at US$48 Million. There are 330 screens. Exhibitors’ revenue can be estimated at US$24 Million (Zuleta et al., 2000; Eskpe, 2005b); [Pritchet, 2005]. The “para-tax” of 8.5% on their revenue should generate US$2,040,000 for national film support (plus the tax on distributors, another US$2,000,000). They have a US$2 Million incentive to show enough shorts, usually produced by inexperienced filmmakers, to comply with the regulations (7 minutes; between 15 days and 2 months on each screen). With some 20 shorts (which they might get for free) and around US$100,000 on 35mm copies, or even some DVDs and a Video Beam, exhibitors can save some very interesting money out of the “fund” for national film promotion and out of keeping audiences thinking that Colombian filmmaking is an amateur and boring craft.
Perhaps the most visible absence in the current legislation, at the beginning of the 21st century, is the lack of integration between the film law and the post-modern windows of exhibition. Television and Home Video are not around. Cable and Satellite systems are not even close to the text of the policy. The Internet and Video phones which are, in reality, decades away from reaching critical mass in Latin-America. The whole policy and discussion is focused on the smallest distribution window nationally and internationally. The law, even though is a new beginning, is still idolizing the ritual of going to the dark room. Colombian Cinema attendance dropped 10% in 2005 to 16 Million viewers (Eskpe, 2005b). The dark room is still there, although already on its way to become a collection of many niche venues spread across cities and suburbs, a set of high margins miniplexes, with many small rooms to show films, and in the lobby outside, concessions of books, magazines, DVDs, coffee, video games, and of course, popcorn (Henson, 2005). Although the legislation has been promoted as another new beginning for Colombian Cinema, it is just a mild modification of the previous framework, working as a short-term support to create some films every year, which are just seen by a small and sympathetic group of heavy cinemagoers.
If the Colombian audiovisual sector aspires to expand into the market of 70 or more minutes long products shot on High definition formats, and if the state, as a representative of the Nation, is to set a policy framework which really supports such expansion, the Law will have to evolve again from its old fashion core, and extend itself into those other electronic spaces were people spend their free time, into those other Latin-American geographies that are part of the culture it seeks to promote and protect, into the long term struggle to guarantee more media diversity and more space for National images in the movie format. Such a quest will need a whole lot of film activists, young and old, with a taste for reality or with a taste for dreams, ready to face structures rooted on decades of habitual rituals, ready to set their agencies in motion and work together to open a space for their own ideas of the world.
Follow to the Next Section
.
¶ 9:06 PM 
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The possibility for the government to support the film sector is still based on the 1942 law. Tax exemptions and reductions, and financial support funds for film production have been the usual State props. The creation of the Ministry of Culture, originated in the new constitution of 1991, was made official in 1997 with Law 397. The new entity brought Culture into the corridors of power giving Cinema a more relevant role out of the outskirts of the Education and Telecommunications ministries. Colombian cinema today, as understood by Law 397, is an artistic and industrial endeavor that generates the Nation’s own imaginary and collective memory and serves as an expressive medium for National Identity (OEI, 2005; Mejía, 2003; Proimagenes, 2005, p. 59). It is important to point that there is no reference to the “Entertainment” function of film, which it obviously has and at the same time is the most visible in the real world.
Law 397 also defined the elements that constitute a Colombian production or co-production as Colombian; it created the Mixed Cinema Fund to administer State funds for the film sector and to support the industry through new policies and incentives of diverse types; it also mentions the potential for agents involved in the industry to save up to 50% of income tax when they reserve or invest in the film sector. A key task of the Mixed Cinema Fund was to serve as a communication channel between government and sector agents in general, and especially during the process of design of the new film law that the Cinema Office at the Ministry of Culture would develop for some years until it became a reality as Law 814 in mid 2003.
The following are the main norms that rule the promotion of the Colombian film sector as of 2005 (Proimágenes, 2005a). Each measure is described according to the legislation and if necessary, explicative comments are added:
The possibility for the government to support the film sector is still based on the 1942 law. Tax exemptions and reductions, and financial support funds for film production have been the usual State props. The creation of the Ministry of Culture, originated in the new constitution of 1991, was made official in 1997 with Law 397. The new entity brought Culture into the corridors of power giving Cinema a more relevant role out of the outskirts of the Education and Telecommunications ministries. Colombian cinema today, as understood by Law 397, is an artistic and industrial endeavor that generates the Nation’s own imaginary and collective memory and serves as an expressive medium for National Identity (OEI, 2005; Mejía, 2003; Proimagenes, 2005, p. 59). It is important to point that there is no reference to the “Entertainment” function of film, which it obviously has and at the same time is the most visible in the real world.
Law 397 also defined the elements that constitute a Colombian production or co-production as Colombian; it created the Mixed Cinema Fund to administer State funds for the film sector and to support the industry through new policies and incentives of diverse types; it also mentions the potential for agents involved in the industry to save up to 50% of income tax when they reserve or invest in the film sector. A key task of the Mixed Cinema Fund was to serve as a communication channel between government and sector agents in general, and especially during the process of design of the new film law that the Cinema Office at the Ministry of Culture would develop for some years until it became a reality as Law 814 in mid 2003.
The following are the main norms that rule the promotion of the Colombian film sector as of 2005 (Proimágenes, 2005a). Each measure is described according to the legislation and if necessary, explicative comments are added:
- Films Nationality (Proimágenes, 2005a, p. 60): a film is Colombian if 51% of the investment comes from Colombian concerns. 51% of the “below the line” crew and 70% of the “above the line” personnel has to be Colombian. A Colombian co-production requires at least 20% of Colombian capital and at least 70% of “competent” Colombian personnel on the basis of the investment share (e.g. 20% investment – 14% personnel). Films for theaters have to be at least 70 minutes long; for TV at least 52 minutes. 70% of State resources have to be destined to film production (50% to National productions and 20% to Co-productions). If these percentages are met the Ministry will grant a Nationality Certificate (Proimágenes, 2005a, p. 45) to the production for it to have access to film incentives. If the co-production project was developed on the basis of an international co-production agreement, the rules of the agreement take precedence on the National percentages describe above (Proimágenes, 2005a, p. 38-39).
- Automatic subsidies on Box Office results (Proimágenes, 2005a, p. 60): the Government will grant economic incentives to National Productions on the basis of exhibition results on cinemas or other media. The rules for its application are not official yet.
- Audience Formation (Proimágenes, 2005a, p. 58): One of the issues that frequently appears on Government documents about film policies is “Audience Formation”. No specific plans have been developed on this, but legislation does cover the issue encouraging Schools and Universities to include in their academic programmes as much as they can of audiovisual creation and literacy in general. No reference to Colombian Cinema in particular. For 2006 the Film Council destined US$170,000 to Audience Formation although execution plans are not yet available.
- Age Classification of films and types of exhibition outlets (Proimágenes, 2005a, p. 52 – 54): a committee for age classification composed by a lawyer, a film expert, a psychologist, a representative of parents (and until 2004, now overruled by the constitutional court, a Catholic Priest) is in charge of assigning age restrictions to films (all audiences, 12 years old, 18 years old). A film can be banned if it incites to or makes apology of crime. The Ministry of Culture is in charge classifying cinemas according to seats, location, technical features, etc.
- Conservation Incentives (Proimágenes, 2005a, p. 47 – 50): the Ministry of Culture is in charge of evaluating which audiovisual materials deserve to be declared of National Cultural Interest according to their capacity to convey the national cultural identity in the present and future and to integrate the national memory and to offer understanding of the past. Approximately 320 pieces have been granted such status (Proimágenes, 2005a, p. 29 – 36). Owners of the audiovisual materials can deduce conservation expenses of their income tax and have to give a copy of the material to the government. The National Library and the Film Patrimony Foundation manage the materials.
- Festivals and Cine-clubs (Proimágenes, 2005a, p. 39): non-profit or “cultural” film entities have to register with the government in order to operate. They can show films without going through the age classification process.
- The Law 814, 2003 (Proimágenes, 2005a, p. 17 – 29): The new Law also emphasizes that National Cinema activities are in the social interest given the cultural wealth embedded in films and their capacity to form cultural identity. As such it has to be protected and conditions for investment and sector growth, for competitiveness and social participation, have to be created. It recognizes the importance of National Cinema and underlines the need to mix public and private actions in order to develop National Audiovisual production.
Two new developments appear in this policy. First, the acknowledgement by law that film productions can be public “companies.” This initiative was introduced thinking in allowing film projects to be offered in the Colombian stock exchange. In Britain, for example, where National Cinema suffers some of the illnesses of Colombian films, a usual practice is to “create a company” for each new film project. Such tactic works well for account management or for inclusion of new partners as new investors are found, but it is not really about taking a singular high-risk film project to the stock exchange to be evaluated by a financial trader, since such investment, compared to others, is not as efficient. The issue, nevertheless, is how to atomize the budget into many investors to lower the risk. Such a task requires a personal approach to every potential producer.
Second, Cinema agents have to deliver information about their activities (tickets and concessions sales, budgets, imports, etc) and the government can order new information categories, to build a Cinema Information and Records System (CIREC), in order to provide the industry with timely information about its own developments.
Additionally, traditional public support through selective subsidies to film production, channeled by the State, constitutes the core practical measure. The Law created a “para-fiscal” fund, that is, a special tax on the sector players, deducible as a cost to determine the yearly income of the contributor. It does not go to the government budget but to the Film Fund in order to finance film activities, especially National film production. This is the main driver of the latest wave of Colombian productions, which are selected on the basis of quality of the crew, script, budget, financial viability, additional financial sources etc. Of this Quota for Cinema Development the exhibitors have to contribute with 8.5% of their revenues on tickets (ticket revenue in the US, and it might be similar in Colombia, represents between 40% and 50% of exhibitors revenue, the rest comes from popcorn and video games concessions); the distributors give 8.5% of their “distribution share”; and the producers contribute with 5% of their share on rentals. The contribution is usually collected by the exhibitors and then deposited in the Film Fund account. The Mixed Fund for Cinema Promotion is in charge of the funds management and subsequent allocation (with approval of the ministry’s Film Council). The Law also assumes that every Colombian production will get at least 30% of each ticket sold at the Box Office (the lowest cap to calculate the 5% producer’s fund tax). Colombian films are not covered by this “tax”, as an extra incentive to show them. The support funds are complemented with additional aid from the State’s budget.
The fund is basically a film production fund with 70% of its resources going to film production through direct subsidies. It also will be used to support restoration of film materials; to grant soft-loans for production and creation of national laboratories for film processing; to create the industry’s Information System (CIREC); to support research projects about Colombian Cinema and its markets, to provide resources for piracy control programmes; and to grant soft loans for improvement or building of exhibition infrastructure. The administrative apparatus in charge of the fund will use 10% of the Fund to pay for its own costs.
The rule also includes stimuli for distributors (including the Majors) and for exhibitors (Proimágenes, 2005a, p. 25 – 26). Certain criteria have to be met in order to get a discount on the 8.5% “para-tax” that exhibitors and distributors pay:
* Exhibitors can reduce the “para-tax” payment by 6.25 percentage points out of 8.5, that is, 73.5% of the para-contribution per ticket sold. This rule applies on tickets allowing entrance to sessions in which a short film of minimum 7 minutes, certified as Colombian by the Ministry of Culture, is shown before the main movie. The shorts have to be shown before every movie session. No short can be shown for more than two (2) consecutive months in the same screen and if a short is going to be exhibited it must be shown for at least 15 days on the same screen. Shorts have to go through the process of age classification and a short for adults, for example, con not be shown before children’s films. Although every month exhibitors have to send the “shorts schedule” to the Cinema Office at the Ministry and to the Mixed Fund office, it is not clear if showing a short for 15 days grants the 6.25 incentive for the whole two months of shows for a particular screen. This incentive makes exhibitors want to show the minimal possible amount of shorts (6 a year per screen) at the lowest cost of acquisition per short, in terms of copy investment and royalties (basically for free since new filmmakers just want to show them), as close as possible to the 7 minutes minimum cap, and, at the same time, being careful to not scare audiences away with very bad quality shorts.
* Starting in 2003 and for 10 years, Distributors can reduce the 8.5% “para-tax” by 3 percentage points (35% of the contribution for the film fund) if they pick up, for national or international distribution, as many or more Colombian films as the Government determines. This rule is related to the possibility of the government to establish “screen quotas” of national films, a tool that has not been used yet. For example, in 2003 a total of 170 international features were released in Colombia. If the government established a 10% quota, that would mean an exhibitor obligation to show 17 national titles. If a distributor were to pick up at least 17 titles it would get the 3% “para-tax” discount on the revenues of 17 of its international films. The distributor has to inform the government, before releasing them, which 17 titles should receive the discount. National and international distribution expenses on Colombian films grant the distributor up to 50% discount on its Colombian income tax. Although the incentives are attractive, the government has never implemented quotas (especially because of the lack of “national produce”) and the specific rules on when the discounts reach the upper cap have not been clarified. This rule has not been standardized. Today the number of Colombian films to show is 0. So Distributors get a 3% discount without picking anything up.
- The Law 814, 2003 (Proimágenes, 2005a, p. 17 – 29): The new Law also emphasizes that National Cinema activities are in the social interest given the cultural wealth embedded in films and their capacity to form cultural identity. As such it has to be protected and conditions for investment and sector growth, for competitiveness and social participation, have to be created. It recognizes the importance of National Cinema and underlines the need to mix public and private actions in order to develop National Audiovisual production.
Two new developments appear in this policy. First, the acknowledgement by law that film productions can be public “companies.” This initiative was introduced thinking in allowing film projects to be offered in the Colombian stock exchange. In Britain, for example, where National Cinema suffers some of the illnesses of Colombian films, a usual practice is to “create a company” for each new film project. Such tactic works well for account management or for inclusion of new partners as new investors are found, but it is not really about taking a singular high-risk film project to the stock exchange to be evaluated by a financial trader, since such investment, compared to others, is not as efficient. The issue, nevertheless, is how to atomize the budget into many investors to lower the risk. Such a task requires a personal approach to every potential producer.
Second, Cinema agents have to deliver information about their activities (tickets and concessions sales, budgets, imports, etc) and the government can order new information categories, to build a Cinema Information and Records System (CIREC), in order to provide the industry with timely information about its own developments.
Additionally, traditional public support through selective subsidies to film production, channeled by the State, constitutes the core practical measure. The Law created a “para-fiscal” fund, that is, a special tax on the sector players, deducible as a cost to determine the yearly income of the contributor. It does not go to the government budget but to the Film Fund in order to finance film activities, especially National film production. This is the main driver of the latest wave of Colombian productions, which are selected on the basis of quality of the crew, script, budget, financial viability, additional financial sources etc. Of this Quota for Cinema Development the exhibitors have to contribute with 8.5% of their revenues on tickets (ticket revenue in the US, and it might be similar in Colombia, represents between 40% and 50% of exhibitors revenue, the rest comes from popcorn and video games concessions); the distributors give 8.5% of their “distribution share”; and the producers contribute with 5% of their share on rentals. The contribution is usually collected by the exhibitors and then deposited in the Film Fund account. The Mixed Fund for Cinema Promotion is in charge of the funds management and subsequent allocation (with approval of the ministry’s Film Council). The Law also assumes that every Colombian production will get at least 30% of each ticket sold at the Box Office (the lowest cap to calculate the 5% producer’s fund tax). Colombian films are not covered by this “tax”, as an extra incentive to show them. The support funds are complemented with additional aid from the State’s budget.
The fund is basically a film production fund with 70% of its resources going to film production through direct subsidies. It also will be used to support restoration of film materials; to grant soft-loans for production and creation of national laboratories for film processing; to create the industry’s Information System (CIREC); to support research projects about Colombian Cinema and its markets, to provide resources for piracy control programmes; and to grant soft loans for improvement or building of exhibition infrastructure. The administrative apparatus in charge of the fund will use 10% of the Fund to pay for its own costs.
The rule also includes stimuli for distributors (including the Majors) and for exhibitors (Proimágenes, 2005a, p. 25 – 26). Certain criteria have to be met in order to get a discount on the 8.5% “para-tax” that exhibitors and distributors pay:
* Exhibitors can reduce the “para-tax” payment by 6.25 percentage points out of 8.5, that is, 73.5% of the para-contribution per ticket sold. This rule applies on tickets allowing entrance to sessions in which a short film of minimum 7 minutes, certified as Colombian by the Ministry of Culture, is shown before the main movie. The shorts have to be shown before every movie session. No short can be shown for more than two (2) consecutive months in the same screen and if a short is going to be exhibited it must be shown for at least 15 days on the same screen. Shorts have to go through the process of age classification and a short for adults, for example, con not be shown before children’s films. Although every month exhibitors have to send the “shorts schedule” to the Cinema Office at the Ministry and to the Mixed Fund office, it is not clear if showing a short for 15 days grants the 6.25 incentive for the whole two months of shows for a particular screen. This incentive makes exhibitors want to show the minimal possible amount of shorts (6 a year per screen) at the lowest cost of acquisition per short, in terms of copy investment and royalties (basically for free since new filmmakers just want to show them), as close as possible to the 7 minutes minimum cap, and, at the same time, being careful to not scare audiences away with very bad quality shorts.
* Starting in 2003 and for 10 years, Distributors can reduce the 8.5% “para-tax” by 3 percentage points (35% of the contribution for the film fund) if they pick up, for national or international distribution, as many or more Colombian films as the Government determines. This rule is related to the possibility of the government to establish “screen quotas” of national films, a tool that has not been used yet. For example, in 2003 a total of 170 international features were released in Colombia. If the government established a 10% quota, that would mean an exhibitor obligation to show 17 national titles. If a distributor were to pick up at least 17 titles it would get the 3% “para-tax” discount on the revenues of 17 of its international films. The distributor has to inform the government, before releasing them, which 17 titles should receive the discount. National and international distribution expenses on Colombian films grant the distributor up to 50% discount on its Colombian income tax. Although the incentives are attractive, the government has never implemented quotas (especially because of the lack of “national produce”) and the specific rules on when the discounts reach the upper cap have not been clarified. This rule has not been standardized. Today the number of Colombian films to show is 0. So Distributors get a 3% discount without picking anything up.
- Other Tax Benefits are also present in Law 814. The Ministry of Culture will grant an “investment certificate” to any company that invests in a Colombian production (the firm can not be a “producer/co-producer of the film). The investment can be discounted from the income tax base of the company at a value of 125%. If the investment was US$1,000 then the company can deduct US$1,250 from its tax base. This benefit expands in absolute terms the more investment a company assigns to a project out of its profits. The benefit might be a marginal reduction on the tax amount or a relevant discount. However, the bigger the tax discount the bigger the investment the company has to make (always way larger than the actual tax incentive), and the higher the risk. Filmmaking is a risky business everywhere, and companies know it.
- The Government can set Screen Quotas to exhibitors (other than TV) to promote the sector, that is, an obligatory minimum percentage of National films within the total amount of released films during a year. Opinions from industry agents will be asked when such measure is considered. Differential quotas can be established according to city, location or characteristics of the exhibition outlet. Subsidies can be granted to exhibitors obliged to comply with the quota. The National Television Commission can also set screen quotas of National films on TV.
- Sanctions for not complying with the Law vary and involve from payment of fines to closure of theaters. The Mixed Fund for Cinema Promotion will be in charge of collecting and controlling the contributions, and exemptions, paid by each agent.
In summary, current Colombian legislation is a soft evolution from the chaotic policy mix that took place in the 70’s and 80’s with Focine (the previous film support agency) and the “additional price” law (to finance the production and exhibition of shorts). And a reflex (perhaps coincidental) of some of the policies available in Spain in the 1950s, before automatic subsidies were introduced (see summary on Figure 6.2. below). The key point is that, again, the state is pouring public resources to finance part of the projects, and trying to revive national film production. Part of the fund financing comes from the “Cinema Audiences” and especially its heavy user target groups, and part from the sector agents. The public is charged at the Box Office through diverse exhibitors’ pricing strategies that, nevertheless, have to be more competitive than before.
The Mixed Fund for Cinema Promotion – Proimágenes en Movimiento serves as a platform of seed capital in order to facilitate the involvement of other investors to complete the projects. A “para-tax,” exclusively assigned to the traditional film supply chain is the financial base of the fund, which operates with the classical selective subsidy committee scheme, although more transparent and representative than before. There seems to be better control mechanisms of the public money for film financing than was the case in the 1970’s.
The policy also wants to involve the private sector through tax incentives on film project investments and with the future rules to allow film projects shares to be traded at the stock exchange. These are new developments compared to the 70’s when tax exceptions where only applied to exhibitors. However, both incentives and shares are marginal influences on overall investment into film production. The film business, especially the business of selling films project by project, is way too risky. And Colombian film projects, from a financial perspective, have had a very poor performance. Investors that are not related to the audiovisual industry, without guaranteed distribution and retailing, will not green-light funds into such projects.
Today, short films policy is not a way for their producers and exhibitors to make money, but a way to save money for the exhibitors alone (through the “para-tax” discount). Again, it is the Cinema audience the one in pain, especially the heavy users of Cinema, having to endure the same short several times, or spectators for an adult film having to see a children’s short, or even worse, a low quality (bad) short many times. Exhibitors save a relevant amount of money that should otherwise have gone to finance feature length projects, or even short films, but not for public exhibition, but to travel around in festivals and facilitate the marketing of the talent involved and the selling of their new projects to international film companies, based on the quality of their previous work, of their previous short(s).
Because shorts are a way for new filmmakers to train for the real thing, it can be expected that the quality will not be at the top level, which is fine, as a training device; or, again, if the result is good, the short serves as a marketing tool for the talent involved. But it is not the medium to promote national filmmaking among national or international audiences. As it happened in the 70’s, with a huge cost in terms of the national value of national production, the shorts tend to become negative, tiring advertising for the very filmmakers that are producing them and for the national cinema they are suppose to represent.
The shorts policy obeys the attempt of the government to create incentives for filmmakers and exhibitors (not distributors) to negotiate “shorts production deals”, that is, to create a market for shorts on the basis of tax savings, and at the expense of Cinema Audiences. Such attempt is not necessarily negative, but it imposes a 7 minutes tax plus change on the audience, with a product that they are literally not choosing to see. On the other hand, the exhibition caps are too low. Colombian Box Office can be estimated in 2005 at US$48 Million. There are 330 screens. Exhibitors’ revenue can be estimated at US$24 Million (Zuleta et al., 2000; Eskpe, 2005b); [Pritchet, 2005]. The “para-tax” of 8.5% on their revenue should generate US$2,040,000 for national film support (plus the tax on distributors, another US$2,000,000). They have a US$2 Million incentive to show enough shorts, usually produced by inexperienced filmmakers, to comply with the regulations (7 minutes; between 15 days and 2 months on each screen). With some 20 shorts (which they might get for free) and around US$100,000 on 35mm copies, or even some DVDs and a Video Beam, exhibitors can save some very interesting money out of the “fund” for national film promotion and out of keeping audiences thinking that Colombian filmmaking is an amateur and boring craft.
Perhaps the most visible absence in the current legislation, at the beginning of the 21st century, is the lack of integration between the film law and the post-modern windows of exhibition. Television and Home Video are not around. Cable and Satellite systems are not even close to the text of the policy. The Internet and Video phones which are, in reality, decades away from reaching critical mass in Latin-America. The whole policy and discussion is focused on the smallest distribution window nationally and internationally. The law, even though is a new beginning, is still idolizing the ritual of going to the dark room. Colombian Cinema attendance dropped 10% in 2005 to 16 Million viewers (Eskpe, 2005b). The dark room is still there, although already on its way to become a collection of many niche venues spread across cities and suburbs, a set of high margins miniplexes, with many small rooms to show films, and in the lobby outside, concessions of books, magazines, DVDs, coffee, video games, and of course, popcorn (Henson, 2005). Although the legislation has been promoted as another new beginning for Colombian Cinema, it is just a mild modification of the previous framework, working as a short-term support to create some films every year, which are just seen by a small and sympathetic group of heavy cinemagoers.
Figure 6.2.
If the Colombian audiovisual sector aspires to expand into the market of 70 or more minutes long products shot on High definition formats, and if the state, as a representative of the Nation, is to set a policy framework which really supports such expansion, the Law will have to evolve again from its old fashion core, and extend itself into those other electronic spaces were people spend their free time, into those other Latin-American geographies that are part of the culture it seeks to promote and protect, into the long term struggle to guarantee more media diversity and more space for National images in the movie format. Such a quest will need a whole lot of film activists, young and old, with a taste for reality or with a taste for dreams, ready to face structures rooted on decades of habitual rituals, ready to set their agencies in motion and work together to open a space for their own ideas of the world.
Follow to the Next Section
.
