For Hollywood, Cuba Is Close But No Cigar

Although hard-pressed by the trade embargo imposed by the U.S. 33 years ago, Cubans commonly joke about keeping things status quo – if only to get free movies and TV.

Indeed, the streets of Havana, pulsating most evenings with crowds moving to a Caribbean beat, are relatively hushed on Saturday nights. That’s when everybody is inside watching Cuba’s highest-rated TV show, a double-feature of U.S. blockbusters such as “Jurassic Park,” “Forrest Gump” and “Apollo 13.”

“We have always had Hollywood films here,” smiles Cuba’s film boss, Alfredo Guevara, president and founder of the Cuban Institute of Art and Cinema (ICAIC), “and we get them however we can.”

In fact, they steal them. Films are bootlegged from wayward prints or pirated from satellite signals along with CNN, HBO and an array of TV fare.

If Hollywood wants to tap revenues from Fidel Castro’s Communist-ruled island of more than 11 million avid film fans, nothing less than an act of the U.S. Congress will help.

Cuba is the only Cold War adversary in the world still frozen shut to American enterprise. Legislation currently proposed by Sen. Jesse Helms (R-N.C.) would tighten the blockade further.

Ironically, the U.S. blockade has given Cuba a leading role in the Latin American film world by forcing Cuba to create its own domestic film industry. The Intl. Film and TV School in Havana trains students from every South American country. The school, along with ICAIC, the Mexican Film Institute (Imcine), Telefilm Canada and the Sundance Institute, will host a Latin American producers conference June 6-10.

Moreover, the blockade has forced Hollywood to come up with strategies for re-entering the Cuban market. Studio execs unanimously stated “No comment” to Variety inquiries on the subject. But sources in Havana confirm that reps from major U.S. entertainment companies have visited Cuba recently to explore its potential.

“They are optimists,” Guevara says, emphasizing that many hurdles remain on both sides before U.S. films can be shown on Cuba’s 500 screens.

Co-prod explosion

Meanwhile, overseas companies are taking advantage of changes in Cuban policy that make investment in co ventures possible and are happy to have the U.S. out of the competition.

“The blockade would only make sense if you could enforce it 100%,” says Ricardo Alarcon, head of Cuba’s National Assembly. “You couldn’t do that even during the height of the Cold War. How can you possibly do it now?”

The consequences for the U.S. entertainment industry are negligible for the moment. The economically shattered nation, where movie tickets cost 5 cents and a typical worker’s daily salary is equal to the price of lunch for two at McDonald’s, is not presently a serious source of revenue. Nor is the embargo about to be lifted in the upcoming election year.

But in the long run, say many observers of international markets, Hollywood may be missing a strategic opportunity. Before Castro’s 1961 seizure of all film businesses, Cuba’s 500 cinemas were dominated by U.S. product, grossing in excess of $30 million yearly for Hollywood majors, measured in 1995 dollars.

And Cuba’s TV network, one of the first established in Latin America, now reaches vastly more Cuban homes than it did three decades ago. A concern expressed by several Hollywood execs is the fact that Cuba is still a tightly controlled society.

Privately, many Cubans complain about the government’s intrusion into their daily lives. The Cuban exiles in Miami say worse. “Basically, we’re just waiting for Castro to die,” says one studio international distribution chief.

Yet any visitor to Havana can see that the country is undergoing another kind of revolution, heralded by the chirping of cellular phones at the newly opened El Aljibe Restaurant in the once-swank Miramar district, the comings and goings of foreign businessmen in the lobbies of the city’s major hotels, and the dollars exchanged in taxis, produce markets and private businesses that have sprouted up in only the past few months.

Cuban film co-productions are on the rise, with France, Spain, Germany, Canada and Mexico as the primary partners. Movers and shakers from the Spanish-lingo film industry huddled in Havana during last week’s 17th Intl. Festival of New Cinema to pursue co-production and distribution efforts.

Film preservation

Preserving Cuba’s film industry, which has produced world-renowned directors such as Tomas Gutierrez Alea (Academy Award-nominated “Strawberry and Chocolate,” an art-house and fest hit that was backed with funds from Spain and Mexico), is a high priority. Anti-Castro sentiment in the U.S. is also an issue.

Among the optimists pushing for change on the U.S. side is John Kavulich, president of the Gotham-based U.S.-Cuba Trade and Economic Council, a private not-for-profit corporation operating in Cuba with the support of top Cuban ministries. “Attorneys for the studios are making the first calls,” Kavulich says, “and then marketing and some production people come down to take a look.”

Kavulich recently hosted a visit to Cuba by a group of 38 CEOs of major U.S. corporations, including Time Warner chairman Gerald Levin. Kavulich would not disclose specific companies that have contacted or signed up with his organization, which numbers over 100 members seeking to do business in Cuba.

Talks between Cuba and Hollywood have been “at the highest levels,” Cuban film boss Guevara says, including “the financial heads” of Hollywood majors, but he declines to name the companies or execs with whom he has met.

“The U.S. Treasury Department does not seem to be very tolerant, so I must be careful,” says Guevara, referring to the government agency charged with enforcing the embargo. But aside from delivering movies and news, prospects for U.S. product on Cuban TV are dim.

Alfredo Pereira, chief of international relations for the state-owned TV net, says that although sufficient funds are available, buying U.S. product “is not a priority.” Programming for the two national channels is 80% domestically produced.

“Our policy is not to establish private networks,” he says, although an increase in tourist-aimed programming is possible. In fact, under the Cuban Democracy Act signed by President Bush in 1982, film, video and TV are legally exempt from the embargo. “Under U.S. law,” says John Kavulich, “arts and entertainment, publishing, telecommunications and pharmaceutical industries can all do business in Cuba.”

Miramax encountered no problems in distributing “Strawberry and Chocolate.” “We had no hesitations at all,” says acquisitions exec Trea Hoving.

Island consumers are buying legally imported U.S. entertainment product, mainly music. According to Kavulich, Cuba imported $500,000 worth of U.S. tapes and CDs in the last year. While many U.S. entertainment companies would like to expand into Cuba, they are shy about going on the record.

“It’s a very political situation because Cubans living in the States would threaten any company that openly admitted to having any talks,” says a cable exec.

But Cuba’s film industry, a creation of the Castro-led revolution in the 1960s, “is not up for auction,” Guevara emphasizes. “We are open to associations of different types.” Guevara also says that ICAIC, which runs all film production, has achieved financial self-sufficiency.

While resources are limited, ICAIC returns 22% of its profits to the state. Cuba will abide by GATT agreements regarding free trade, says Guevara, but screens will not be dominated by Hollywood pics as they once were, due to a de facto quota system; the film ministry will choose only the films it wants – and can afford.

Semi-open door policy

When the door to Cuba opens, however, it will not be open to all. Films by anti-Castro Cubans will be nixed, Guevara says. Cuban-American filmmakers are equally hostile to ICAIC and oppose lifting the embargo, despite the opportunities it would create.

“The regime has barely changed,” says Southern California-based filmmaker Fausto Canel, who left Cuba after being jailed by the government. “We would find ourselves dealing with the very same bureaucrats who curtailed our opinions, took our careers away from us, put us in prison and sent us into exile.”

Meanwhile, Cuban co-productions are proliferating with overseas partners. A six-month shoot wrapped here last week on “Blue Indigo,” a French TV series for TF-1 with a French and Cuban cast. German producer Chris Sievernich (“Paris, Texas”) begins “Paradise Under the Stars” in May with Cuban writer/helmer Gerardo Chijona (“Adorable Lies”) and “Strawberry and Chocolate” star Vladimir Cruz.

Can U.S. companies recover lost ground in Cuba once the embargo is lifted? “When the Americans arrive,” says Alarcon, “it will never be like Cuba in 1958.”

But Hollywood, it seems, may have certain advantages that other businesses aiming at Cuban trade don’t enjoy. As Alarcon says, between puffs on a Partagas cigar, “Mickey Mouse has never disappeared from our screens.”

But then again, has he tried to leave?

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