BUENOS AIRES — Argentina’s government has exempted filmmakers from duties for celluloid print imports and vowed to settle three years of unpaid film subsidies in an effort to spur domestic distribution and production.
President Nestor Kirchner made the announcements at the Mar del Plata Film Festival, which ran March 11-20.
Argentine pics are made with an average budget of 1 million pesos ($340,000), yet “must compete with foreign films with $50 (million)-$100 million budgets that reach our theaters already globally promoted and amortized,” he said. “It is a competition between David and Goliath that requires active public policies” to promote and protect the domestic industry.
The measures come after rough years for the film industry. The government, struggling to pay foreign debt, cut film funding in the late 1990s, limiting production. The economy crashed at the end of 2001, deterring auds and drying up credit for making movies. And a 65% slump of the peso against the U.S. dollar since then has jacked up production costs and cut box office receipts by two-thirds in dollar terms.
Now, though, producers are regaining optimism. “The measures are a good beginning,” says Veronica Cura, executive producer at Aquafilms.
Filmmakers are now exempt from import duties on prints, a 15% reduction in the final cost of a key material.
Prints and other film materials are the third biggest cost for producers after talent and laboratory time and services, largely because they are quoted in dollars.
This has made it harder to break even. A pic must draw 500,000 spectators to be profitable, something that only four or five do a year, according to industry calculations. Few lure more than 100,000.
The import-duties exemption “will help producers recover their investment in films quicker,” says Pascual Condito, head of Primer Plano Film Group. The production company is producing Santiago Oves’ hard-times drama “Conversaciones con mama” (Conversations with Mother) and Juan Taratuto’s immigration comedy “No sos vos, soy yo” (You’re Not You, I’m Me).
Aquafilms’ Cura plans to use the savings from print imports to spend more on materials and talent to improve films, she says. Her outfit is currently producing Enrique Pineyro’s “Whisky, Romeo, Zulu,” a drama about the lead-up to a 1999 airplane crash in Buenos Aires, for release later this year.
Wiping the slate clean
Kirchner also announced plans to settle film subsidies not paid between 1999 and 2001. The state-run Argentine Film Institute (Incaa), the main source of funding for the film industry, was forced to reduce payments during those years.
The cash-strapped government took up to 50% of the average $13.8 million-$17.2 million in film funds each year to pay foreign debt and cover other costs in an unsuccessful attempt to avert a financial crisis in 2002.
By law, Incaa gets revenue from a 10% tax on movie tickets and video rentals plus a share of TV ad revenue. It gives out a maximum subsidy of $517,200 pesos and a minimum of $163,800 to projects. There is talk of raising the ceiling to $690,000.
The return of the money is expected to bolster production. Many producers, says Cura, are going to use the money to fund their next films.
Producers are also trying to step up exports, where they fetch revenue in stronger currencies.
For years, the local producers have been pressing for more screens, saying the current total of 1,000 makes it hard to compete with Hollywood blockbusters that release 60 to 100 prints. In many provincial cities, cinemas have shut down over the years, unable to compete with videos and pay TV. To counter this, the government plans to expand screenings to cities without theaters, even using public libraries.
The industry is pressing the government to enforce a quota system, requiring exhibitors and TV broadcasters to show a minimum number of local pics per year.
“It can be really hard to get distribution when you’re competing with Hollywood films,” Cura says.