Industrial networks or value chains vary in their complexity according to the development of the market. Complexity evolves from basic levels of delivery, just TV, or Film Theaters, TV, and the Internet, to complex levels of production infrastructure (Hollywood and its clusters of Studios, FX companies and talent agencies). Colombia has some audiovisual development: TV broadcasting, Film Theaters in some cities, some cable and satellite services, some distributors, and good TV and Advertising production companies. But there are very few Film production companies and no companies willing to strongly diversify into Film production.
A National Film Policy, although concerned with the other elements of the Audiovisual Industry, has to be focused on the creation of production companies. The creation of a viable production cluster is the strategic condition for a National Cinema to grow.
In order to have a viable film production cluster it has to be integrated to the distribution and to the delivery (exhibition) cluster. But such integration requires regulation because both distributors and delivery systems can operate and be profitable without a national Film production cluster. The objective of that integration is to connect production with financing sources that also have marketing leverage in the media.
Private Financing is the top strategic condition for competitiveness and market penetration, if such financing does not exist, because other audiovisual products than films are more comfortable (less risky) to produce, governments have to make the private audiovisual distributors (TV Channels, Advertising Producers, Cable and Satellite Channels, Video distributors, Film Distributors, Internet Service Providers, Cinema Exhibitors) to invest in production and distribution of film commodities, assuming the risk professionally, using the leverage of their distribution platforms, and, of course, also receiving the profits as they come. Such obligation responds to the normative social need of having a share of the economic and cultural patrimony produced from, and consumed within, the national film market-space.
Additionally, Public financing must complement the film space and serve as an investment incentive (through risk reduction) for the willing participants of a film production venture. That is, the public, the people, assigning, through the state, a share of their taxes, to formation and internationalization of audiovisual professionals and production and co-production of national shorts and feature films that will be created with a different (or at least reduced) logic than that of pure commercial production. This complementary type of content will supply additional points of view within the oligopolic spaces of today and provide new talent breakthroughs at a national and international level.
Today in Colombia the government, that is, the public, finances some film projects through the price of cinema tickets (just one of the different delivery systems). The money goes to the government and then it is allocated after a “committee” selection of projects. The projects are developed and produced by talent and suppliers mainly working in advertising and TV, and gathering resources from different grant programs and from individuals willing to invest in the project. Sometimes, when the filmmakers work for a TV Channel, the channel invests in the film.
Investors and talent work for the intangible value of experience, reputation of being involved in a film project, and a potential payment if the film does well at the Box Office. Once the film is finished distribution negotiations are directly held with the biggest national exhibitor who operates as distributor at the same time. Sometimes, films are offered and picked up by the Majors’ local offices, opening some possibilities of distribution in other Latin-American markets, but at very low revenue for the producer due to poor Box Office performance linked to small or no marketing investments.
This discussion points at two obvious marketplaces, each one with potential to better release a different type of value, each one providing space for expansion of the current market size, which appears small due to missed opportunities internally, and saturation of screens by Hollywood product everywhere:
The international market, where the economic value of national productions can be better captured, has to be approached through different tactics: more co-production projects; intelligent alliances with international sales agents and the majors; development of sales agents in Latin-America; strengthening networks with the talent and audiences that have already penetrated the US market; focus in developing specific territories as platforms for further penetration in Europe, Asia and Latin-America; concentration in certain market niches; creative use of delivery windows; and increased professionalization of workers and product.
A second space is the national market. This space requires new and creative delivery tactics. Expansion of the Cinema space to mid-small towns; efficient use of “culture houses”, libraries, churches and schools infrastructure; educational policies that actively include media literacy and Colombian film language in schools and universities programmes; educational workshops for opinion leaders and media celebrities about National films; volume based distribution of Colombian film classics on VHS and DVD formats; integration of cable and open TV time-slots and capital to film production and distribution.
The rest of the industrial network is specialized in soaps, news and advertising production. In sales of audiences’ attention to advertisers and subscriptions of cable and satellite TV to consumers. Colombian production companies get a marginal share of the Box Office, no share of the TV advertising on films, and no revenues from international markets, which could be covered using the commercial infrastructure of TV channels.
Industrial networks in general depend on the development of industrial clusters through mutual help between the nodes of the network. Diversity in the media industry is about generating social network effects triggered by the economic and cultural values embedded in film products, and through the knowledge they convey and multiply. To expand the media windows of a nation, to make those windows available to itself and to other nations, by expanding the reach of the nation’s Film Industry, is a way to release national and international social value.
According to the present analysis and in the case of the Colombian film industry, the current policy framework is not enough to trigger a real and organic expansion in film production. To expand the policy portfolio and modify it in the right directions is in the interest of the professionals of the production sector, and if it is properly implemented, the Distribution and Exhibition sectors will also enjoy a good share of the benefits. To leave the current policy framework as it is now is mainly in the interest of the Hollywood Majors, since they will keep the market for themselves.
This tension in the film sector reflects the tension between the neoliberal discourse of free markets and the intervention discourse to protect citizens from market distortions caused by concentration and absence of competition. Whatever the final evolution of the policy framework it will depend on the results of a confrontation between a group of national film activists that up till today have not acted in a collective way, and a group of multinational companies that operate under the protection of the pro-market regulations, with clear geo-political implications, pursued and implemented by the United States in Latin America and other parts of the world. Given the current situation and trends such a battle is not going to be an easy one, but there are strong arguments and international examples showing that it is possible to move forward and generate a more diverse and equal film space (see Figure 7.1).
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