Falling currency boost opportunites abroad
While Asian and European economies have significantly slowed, Brazil and Canada are hopeful that the devaluation of their currencies could be a good thing: They’re hoping Hollywood producers will be lured back for shoots.
“You hate to profit from other people’s misery, but it’s like a gift from heaven,” says Paul Bronfman, CEO of Canada’s production services company Comweb Group. “We’re definitely back on the radar. I really think we’re in for a good year next year. I do believe that the producers will come back to Canada.”
Even though publicly traded TV companies like Corus, Astral and CanWest Global have been facing downward pressure on their share price, there is a silver lining. Pubcaster CBC’s executive director of network programming Kirstine Layfield says: “Every dollar we make goes back into programming, so the economic downturn is not good. But the benefit is that people will be watching more TV because people will be home more.”
Brazil’s economy will slow down from the current annual 6% GDP growth pace, but local nets seem to be prepared for the currency devaluation.
Globopar, the parent company of Brazil’s No. 1 net TV Globo, suffered with the sharp devaluations of the real in 1999 and 2002, and eventually had to default on its debt. Since it reached an agreement with creditors, the company has significantly reduced its debt in dollars.
The film industry did not significantly profit from the country’s economic expansion in recent years. But with films relying heavily on government incentives, production is not being directly affected by the lack of credit.
Moreover, the strong dollar is good news for local companies that provide production services to international producers. With the sharp appreciation of the real from late 2002 to this September, production costs in dollars here had significantly increased. Since September, costs have fallen, and the leading providers of production services, such as helmer Fernando Meirelles’ O2 Filmes, expect their business to grow.
— Brendan Kelly and Marcelo Cajuiero