Film biz looks alter-bound

Broadcasters, indies draw global productions

MADRID — Picture 1950s picket-fence suburbia. Lem and his parents are barbecuing on a Sunday afternoon. Suddenly, an alien spaceship descends. The ship bears — for Lem — a strange symbol: what looks like an American flag.

Oh, and by the way, Lem sports two droopy antennae from his forehead.

Written by “Shrek” co-scribe Joe Stillman, animated feature “Planet One,” from Madrid’s Ilion and London’s Handmade, is budgeted at E40 million ($54 million). It’s an alien-invasion tale, but this time, the alien is human. In scale and ambition, it’s pretty alien to Spain’s low-budget film world.

But “One” marks the beginning of something new in Spain: change.

It’s needed. For months, broadcasters and producers have butted heads over a mooted new film law. Its main thrust is to oblige broadcasters to earmark 0.9% of annual revenue — $31 million for 2005 — to pre-buy or co-produce films from indie producers.

For many producers, this safeguard is sacrosanct. “Until the broadcaster battle is settled, there will be no Spanish industry,” maintains producer Andres Vicente Gomez.

The spat has transfixed the media.

As with most Spanish industry face-offs, the brouhaha turns on film finance. Market fundamentals, including two crucial issues, have taken second place.

One of those sidelined issues is the escalating scale of online file-sharing and sharing of DVDs among friends. The other is an obvious and growing disconnect between filmmakers and Spain’s popcorn-movie crowd.

Given the prevalence of both problems — according to consultancy Gfk, 43% of Spaniards pirate movies — it’s perhaps remarkable how well Spanish film has held up.

Last year, Spanish pics took a 15.5% domestic market share. That pales in comparison with France (45%), Germany (26%) and Italy (25%), but it betters Spanish films’ 11.1% 1990-99 average.

New trends are working in the film biz’s favor:

  • Big broadcaster-backed pics are being put into production, such as the $32 million “Independencia!” set against Napoleon’s siege of Zaragoza.

  • International projects from high-profile directors — Woody Allen, Brad Anderson, Steven Soderbergh, Michael Radford, Menno Meyjes and Roman Polanski — are being produced in Spain, or at least draw Spanish funding coin.

  • Local helmers are taking foreign excursions: Isabel Coixet is directing “Elegy” for Lakeshore, Juan Carlos Fresnadillo helmed Fox Searchlight’s “28 Weeks Later,” Julio Medem shot “Chaotic Ana” in New York and Arizona and, in snatches, Native American languages.

  • A Nueva Ola of new directors was consecrated at March’s Malaga Spanish Fest.

  • The toon industry is growing in edge, economic heft and hipness.

  • Areas beyond Catalonia and Galicia are now pouring coin into new projects.

  • Benefiting from 12%-18% rebates, the macro studio Alicante Ciudad de la Luz was bustling by April. Its biggest catch, “Pompeii,” shoots there this summer.

Often so self-obsessed, Spain is sluggishly opening up to global business, with such worldwide concerns as brothers Ignacio and Javier Perez Dolset’s Wisdom Group moving into filmmaking.

Worldwide, some companies are moving from art to auteur event or mainstream films — entities such as Sony Pictures Classics, Focus, Wild Bunch, Capitol and Celluloid Dreams

“We’re in an era where the pure-arthouse small film is a hard sell,” says Sogecine-Sogepaq CEO Simon de Santiago.

With some notable success, Spain’s entertainment industry has reacted on three fronts: It has invested in international auteurs; its broadcasters have raised the bar, becoming kingmakers on high-end projects; and it is tapping more foreign coin.

“If you think of a big-budget film, you automatically think of a broadcaster to co-produce it,” says Morena co-CEO Juan Gordon.

Beyond that is the international pedigree of projects. In 2006, two of the five top-grossing Spanish feature productions were helmed by foreign auteurs: Guillermo del Toro’s “Pan’s Labyrinth” ($11.7 million), a 78% Telecinco Cinema film; and Tom Tykwer’s “Perfume: The Story of a Murderer” ($10.2 million), a 20% Filmax production.

TV stations were the lead producers on three of those five top grossers as well: Viggo Mortensen starrer “Alatriste” ($22.4 million) a Telecinco Cinema (80%) swashbuckler; “Labyrinth”; and dynasty drama “The Borgias” ($9 million), an 80% co-production of Antena 3 TV film unit Ensueno.

Producers have earned more than air miles abroad. Spain has created a fluid co-production axis with Argentina and the U.K.

“Argentina has a large film culture and manages to make very interesting films with few resources,” producer Luis Minarro observes.

But after Blighty’s introduction of a new tax credit system, Spain-U.K. co-productions will fall. “We’ll be forced to shoot in English more, with larger British participation,” Gomez says.

Mexico may take up some of the slack. Mexican Section 226 tax coin, clarified in new March regs, looks set to facilitate Spanish-Mexican co-productions or larger alliances.

Mexico has the so-called Los Tres Amigos (Del Toro, Alejandro Gonzalez Inarritu, Alfonso Cuaron) and actor/ now-producer Gael Garcia Bernal who can accelerate international financing, tap talent and gain festival berths.

Spain still has a knack of turning out small, quirky pics that slowly carve out niche sales abroad.

“There’s always space for films from directors with different, unique, personal visions, no matter what audiences they target,” Gordon says.

Two examples of that are Daniel Sanchez Arevalo’s “DarkBlueAlmostBlack” and Jorge Sanchez-Cabezudo’s “The Night of the Sunflowers.” Each grossed $1.4 million in Spain and will have moved into profits off foreign sales.

“The problem isn’t financing but what projects there are to finance,” one producer says.

Two of exhibitors’ biggest hopes for 2007 are Jaime Marques Olarreaga’s “Thieves” and Juan Antonio Bayona’s Critics’ Week pic “The Orphanage.” Spanish industry events at Cannes include the first market push for “Planet One” and the global Web release of animated “Going Nuts.”

All four of those films are by first-time directors — 2007 could be an exciting year.

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