4.14.2006
7.2. A Colombian and Latin American Film Policy
Several policies can be developed to improve film industry revenues, cut risks, and expand film production. The frame of reference for such proposals is the analysis of the Cinema Institutions in Spain and Colombia. The objective of each of these policies, which only together can transform the production cluster from projects to companies, and from companies to industry, is to take the current Value Network of the Colombian audiovisual industry to a more advanced stage, closer to the current industrial formation found in Spain. Such development would allow our audiovisual industry to locate itself in a position where international trade of film products, and internal and external diversity of human representations actually take place:
a) Production
- Increase Tax incentives for individual investors or companies from other economic sectors, when they invest in film productions. New solid companies formed out of the delivery conglomerates, attracted by tax incentives and the obligation to invest in film (see below) and helped by their competitive leverage, will attract capital easier and with higher chances to see good rates of return.
- Maintain the state support for first works, shorts, formation, screenplay development and financing support for experimental projects. Grant incentives when audiovisual firms integrate the films produced under state support into their commercialization and delivery networks.
- Develop a cooperative scheme for the films financed with state aid: if one or several of them are successful nationally and internationally, share all the profits among all the people involved in all the productions of that same “grants period” and according to the share of state funds granted to each project.
- The only way to reduce the risk of film projects is through production of film portfolios. These portfolios are produced by clusters of companies. For a Nation to enter the film market, to produce more films with national talent and resources, it is necessary to guarantee the production financing. A regulation for all electronic delivery systems (Open and Pay TV) would make them reserve a progressive percentage of their revenues to invest in existing production companies, specifically on film projects. Joint ventures for creation of new companies focused on film production would have a differential tax rate incentive.
- Established players (measured by size of their assets) with production infrastructure would have to allocate a progressive share of their investments in film production with independent film services companies (from advertising or TV). If the big players do not create their own film production arms or none of their current production assets were used in film production projects, the big players (usually TV delivery systems) still would have to invest – without tax incentives – on film projects put together by independent film companies from the rest of the audiovisual sector.
- A relevant share of the resources gathered from these “obligatory” investments should be destined to the production of Micro-Budget films (under US$200,000) in order to expand production, experience, efficiency and chances for an international hit.
- Keep focus on co-production strategies. Use the new companies to attract international talent and capital to the country. Include at least a relevant share of principal photography in Colombia and generate media attention on the stars and projects they are on development.
b) Distribution
- Make the Major distributors to include Latin-American films (with production percentages and talent from LATAM countries) in their distribution packages. Besides guaranteeing exhibition the regulation makes the Majors use their international network to bring films they might have picked up elsewhere. Both theatrical exhibitors and the Majors would allocate marketing resources into the new group of films to make the more profitable. The regulation allows to diversify audience tastes and habits by offering the option to see similar representations to those found in Colombian films. The Majors can still make money out of their distribution operation, but not exclusively with Hollywood films.
- Focus on key markets and develop film business missions to contact and exchange talent, to learn business practices and to function as distributors of Colombian products, buyers of the local products on those markets, and networking offices to develop co-production deals. Argentina, Chile, Venezuela, Mexico, Miami, New York and Madrid, should be first targets.
- Invest in stands of Colombian products and projects in the main international film markets. Enhance the visibility of, and create real Latin-American market events in, the Cartagena Film Festival and the Bogotá Film Festival.
- Push new Colombian films on DVD (even VHS) through traditional video retail channels. Develop progressive pricing, with volume prices in lower income areas and higher prices in high-income areas. The objective is volume distribution for audience formation.
c) Exhibition
- Eliminate the tax incentive on Exhibitors for showing National shorts. Allow exhibitors to swap the tax payment (up to 50% of their due payment) only in direct proportion to production investments on independent film projects or in partnership with the new production companies (include also investments in film publications: magazines, books, etc).
- Create a Film Market Intelligence unit to develop information on trends, markets, producers, production companies, independent distributors, contacts, etc, in all continents, to better segment and define the sales strategies for each wave of films produced according to the potential markets that have been explained.
- Create new ways of exhibition, in partnership with exhibitors, taking Colombian film programs, on “exhibition trucks” with LED screens, to mid-small towns and urban areas as a public service. Allow people to pay what they feel they can pay and what they feel each film deserves. Inform them about the film programs with different options of films and allow them to vote for the films they would like to see. Make the exhibition a democratic experiment in areas without access to cinema.
- Create exhibition quotas for Latin-American films, including Colombian films. At around 25% of the total films released in theaters; also for TV in national channels, out of the total amount of foreign films broadcasted.
d) Government Measures
- Keep the State funds coming from the “para-tax” on theatrical tickets and include a new “para-tax” on all sales of blank cds for DVD copying and on all sales of DVD players and DVD-PCs (to get revenues from the piracy industry). Use part of these “piracy” funds to create a subsidy system for legal video rental stores and retailers on the basis of each Colombian Video rented or sold. Although Colombian video rentals are just a small share of all rentals, that will generate a push strategy from the stores each time a Colombian film is released on video.
- Do not condition the distribution and exhibition quotas to reciprocity from other Latin-American countries. Just send the signal to the market: Colombia sees Latin-American cinema as a platform to expand its National Film Industry.
- Finance and develop permanent channels of communication with the media: press kits, star system press conferences, arranged interviews with national talent working abroad to bring attention to National Cinema. Develop workshops for journalists on Colombian Cinema touring the country with the filmmakers, movies and “stars”.
- Develop an “internship” program with IBERMEDIA to take Colombian and Latin-American filmmakers to spend a season working in the top Spanish production, distribution and audiovisual companies.
- Start audience formation programs by including Colombian Cinema as part of courses on History, Literature, Social Analysis, and Media Literacy in high school and University.
- Build a database of heavy cinema and video users and keep them informed of all developments on Colombian Cinema, to trigger word of mouth.
- Start research and understanding on how to integrate Internet Service Providers, online technologies, and Internet audiences into Film Policies and into the Film sector structure.
New investments from TV companies, or new companies created by the TV channels would generate more stable projects with stable workers from adjacent clusters, like TV or Advertising. Stability and experience would create better products. New and established producers would find a private forum with resources to pitch their projects. Marketing spending would improve through the use of the media vehicles of the new investors in the sector (Open and Pay TV); and the investors' TV channels would be used for marketing communications and publicity on news and general information programs. The international sales experience of the TV channels would facilitate additional revenues from, and penetration in, international markets.
This set of recommendations is balancing in the tight rope of free-market neo-liberalism and market-friendly government intervention. It tries to balance different traditions of economic thought. It uses Smith’s ethical liberalism, where states intervene in order to prevent distortions in the market caused by extreme concentrations of power in the hands of certain agents (one of the key reasons behind antitrust authorities around the world) and to maintain choice and competition present in the marketplace.
This set of policies has a more optimistic view of the state than traditional Marxist thought. It concedes that democratic processes and government actions will not only represent the interests of a few powerful agents. Instead, state actions will recognize the importance of national representations and will support them, but in ways that acknowledge the existence of a market and the need to compete for a share of that market through private processes and private leverage.
The measures also use the post-keynesian approach of demand-side intervention but not through government spending (only reserved for first works and experimental film projects) but through training of professionals through national and international training and internship alliances, and formation of audiences through investment in new exhibition windows within the nation, using state infrastructure like schools, libraries and culture houses more efficiently in terms of their relationship with film as an educational and cultural tool for citizens.
Finally, these recommendations acknowledge the importance of competition as one of the key drivers for development in capitalist societies and, at the same time, as a driver for creation of diverse options for consumers. They also acknowledge the reality of international competition. But competition has to take place between equals in order to be fair and a more equal competitive space is responsibility of governments and owners and citizens. These measures seek to get big and small national private actors to compete in the film market and to diversify into it, making it richer and more diverse for consumers, and at the same time, allowing national film professionals and firms to compete in a more equal ground with the usual congloms.
The general objective of these film sector and government actions is to combine a film resistance strategy, to treasure national representations and seize them as cultural objects, and a film differentiation strategy, to compete in certain geographical areas and in specialist film niches like art circuits, world cinema, and cult markets. Such combination will allow to build an industry, and with it, the physical and professional infrastructure for the future implementation of a collaborative strategy with the majors. The competition strategy, the last level of difficulty in the film game, will be the task of a future generation.
Additional research should be developed exploring the exact depth of application of each one of these proposals. Solid arguments have to be prepared for the negotiations, arguments to make the Motion Picture Association of America understand that the world is actually enough, and that they have to be prepared to share it.
Equally important, those arguments depend on research on the differential values embedded in cultural products like film. Viable research to prove that social improvements occur when cultural value networks are expanded will be strategic to sustain cultural policies and content trade-offs that do not show quantitative economic efficiency at first glance.
Follow to the Last Section
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¶ 8:38 PM 
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Several policies can be developed to improve film industry revenues, cut risks, and expand film production. The frame of reference for such proposals is the analysis of the Cinema Institutions in Spain and Colombia. The objective of each of these policies, which only together can transform the production cluster from projects to companies, and from companies to industry, is to take the current Value Network of the Colombian audiovisual industry to a more advanced stage, closer to the current industrial formation found in Spain. Such development would allow our audiovisual industry to locate itself in a position where international trade of film products, and internal and external diversity of human representations actually take place:
a) Production
- Increase Tax incentives for individual investors or companies from other economic sectors, when they invest in film productions. New solid companies formed out of the delivery conglomerates, attracted by tax incentives and the obligation to invest in film (see below) and helped by their competitive leverage, will attract capital easier and with higher chances to see good rates of return.
- Maintain the state support for first works, shorts, formation, screenplay development and financing support for experimental projects. Grant incentives when audiovisual firms integrate the films produced under state support into their commercialization and delivery networks.
- Develop a cooperative scheme for the films financed with state aid: if one or several of them are successful nationally and internationally, share all the profits among all the people involved in all the productions of that same “grants period” and according to the share of state funds granted to each project.
- The only way to reduce the risk of film projects is through production of film portfolios. These portfolios are produced by clusters of companies. For a Nation to enter the film market, to produce more films with national talent and resources, it is necessary to guarantee the production financing. A regulation for all electronic delivery systems (Open and Pay TV) would make them reserve a progressive percentage of their revenues to invest in existing production companies, specifically on film projects. Joint ventures for creation of new companies focused on film production would have a differential tax rate incentive.
- Established players (measured by size of their assets) with production infrastructure would have to allocate a progressive share of their investments in film production with independent film services companies (from advertising or TV). If the big players do not create their own film production arms or none of their current production assets were used in film production projects, the big players (usually TV delivery systems) still would have to invest – without tax incentives – on film projects put together by independent film companies from the rest of the audiovisual sector.
- A relevant share of the resources gathered from these “obligatory” investments should be destined to the production of Micro-Budget films (under US$200,000) in order to expand production, experience, efficiency and chances for an international hit.
- Keep focus on co-production strategies. Use the new companies to attract international talent and capital to the country. Include at least a relevant share of principal photography in Colombia and generate media attention on the stars and projects they are on development.
b) Distribution
- Make the Major distributors to include Latin-American films (with production percentages and talent from LATAM countries) in their distribution packages. Besides guaranteeing exhibition the regulation makes the Majors use their international network to bring films they might have picked up elsewhere. Both theatrical exhibitors and the Majors would allocate marketing resources into the new group of films to make the more profitable. The regulation allows to diversify audience tastes and habits by offering the option to see similar representations to those found in Colombian films. The Majors can still make money out of their distribution operation, but not exclusively with Hollywood films.
- Focus on key markets and develop film business missions to contact and exchange talent, to learn business practices and to function as distributors of Colombian products, buyers of the local products on those markets, and networking offices to develop co-production deals. Argentina, Chile, Venezuela, Mexico, Miami, New York and Madrid, should be first targets.
- Invest in stands of Colombian products and projects in the main international film markets. Enhance the visibility of, and create real Latin-American market events in, the Cartagena Film Festival and the Bogotá Film Festival.
- Push new Colombian films on DVD (even VHS) through traditional video retail channels. Develop progressive pricing, with volume prices in lower income areas and higher prices in high-income areas. The objective is volume distribution for audience formation.
c) Exhibition
- Eliminate the tax incentive on Exhibitors for showing National shorts. Allow exhibitors to swap the tax payment (up to 50% of their due payment) only in direct proportion to production investments on independent film projects or in partnership with the new production companies (include also investments in film publications: magazines, books, etc).
- Create a Film Market Intelligence unit to develop information on trends, markets, producers, production companies, independent distributors, contacts, etc, in all continents, to better segment and define the sales strategies for each wave of films produced according to the potential markets that have been explained.
- Create new ways of exhibition, in partnership with exhibitors, taking Colombian film programs, on “exhibition trucks” with LED screens, to mid-small towns and urban areas as a public service. Allow people to pay what they feel they can pay and what they feel each film deserves. Inform them about the film programs with different options of films and allow them to vote for the films they would like to see. Make the exhibition a democratic experiment in areas without access to cinema.
- Create exhibition quotas for Latin-American films, including Colombian films. At around 25% of the total films released in theaters; also for TV in national channels, out of the total amount of foreign films broadcasted.
d) Government Measures
- Keep the State funds coming from the “para-tax” on theatrical tickets and include a new “para-tax” on all sales of blank cds for DVD copying and on all sales of DVD players and DVD-PCs (to get revenues from the piracy industry). Use part of these “piracy” funds to create a subsidy system for legal video rental stores and retailers on the basis of each Colombian Video rented or sold. Although Colombian video rentals are just a small share of all rentals, that will generate a push strategy from the stores each time a Colombian film is released on video.
- Do not condition the distribution and exhibition quotas to reciprocity from other Latin-American countries. Just send the signal to the market: Colombia sees Latin-American cinema as a platform to expand its National Film Industry.
- Finance and develop permanent channels of communication with the media: press kits, star system press conferences, arranged interviews with national talent working abroad to bring attention to National Cinema. Develop workshops for journalists on Colombian Cinema touring the country with the filmmakers, movies and “stars”.
- Develop an “internship” program with IBERMEDIA to take Colombian and Latin-American filmmakers to spend a season working in the top Spanish production, distribution and audiovisual companies.
- Start audience formation programs by including Colombian Cinema as part of courses on History, Literature, Social Analysis, and Media Literacy in high school and University.
- Build a database of heavy cinema and video users and keep them informed of all developments on Colombian Cinema, to trigger word of mouth.
- Start research and understanding on how to integrate Internet Service Providers, online technologies, and Internet audiences into Film Policies and into the Film sector structure.
New investments from TV companies, or new companies created by the TV channels would generate more stable projects with stable workers from adjacent clusters, like TV or Advertising. Stability and experience would create better products. New and established producers would find a private forum with resources to pitch their projects. Marketing spending would improve through the use of the media vehicles of the new investors in the sector (Open and Pay TV); and the investors' TV channels would be used for marketing communications and publicity on news and general information programs. The international sales experience of the TV channels would facilitate additional revenues from, and penetration in, international markets.
This set of recommendations is balancing in the tight rope of free-market neo-liberalism and market-friendly government intervention. It tries to balance different traditions of economic thought. It uses Smith’s ethical liberalism, where states intervene in order to prevent distortions in the market caused by extreme concentrations of power in the hands of certain agents (one of the key reasons behind antitrust authorities around the world) and to maintain choice and competition present in the marketplace.
This set of policies has a more optimistic view of the state than traditional Marxist thought. It concedes that democratic processes and government actions will not only represent the interests of a few powerful agents. Instead, state actions will recognize the importance of national representations and will support them, but in ways that acknowledge the existence of a market and the need to compete for a share of that market through private processes and private leverage.
The measures also use the post-keynesian approach of demand-side intervention but not through government spending (only reserved for first works and experimental film projects) but through training of professionals through national and international training and internship alliances, and formation of audiences through investment in new exhibition windows within the nation, using state infrastructure like schools, libraries and culture houses more efficiently in terms of their relationship with film as an educational and cultural tool for citizens.
Finally, these recommendations acknowledge the importance of competition as one of the key drivers for development in capitalist societies and, at the same time, as a driver for creation of diverse options for consumers. They also acknowledge the reality of international competition. But competition has to take place between equals in order to be fair and a more equal competitive space is responsibility of governments and owners and citizens. These measures seek to get big and small national private actors to compete in the film market and to diversify into it, making it richer and more diverse for consumers, and at the same time, allowing national film professionals and firms to compete in a more equal ground with the usual congloms.
The general objective of these film sector and government actions is to combine a film resistance strategy, to treasure national representations and seize them as cultural objects, and a film differentiation strategy, to compete in certain geographical areas and in specialist film niches like art circuits, world cinema, and cult markets. Such combination will allow to build an industry, and with it, the physical and professional infrastructure for the future implementation of a collaborative strategy with the majors. The competition strategy, the last level of difficulty in the film game, will be the task of a future generation.
Additional research should be developed exploring the exact depth of application of each one of these proposals. Solid arguments have to be prepared for the negotiations, arguments to make the Motion Picture Association of America understand that the world is actually enough, and that they have to be prepared to share it.
Equally important, those arguments depend on research on the differential values embedded in cultural products like film. Viable research to prove that social improvements occur when cultural value networks are expanded will be strategic to sustain cultural policies and content trade-offs that do not show quantitative economic efficiency at first glance.
Follow to the Last Section
.
