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Pirates wreak havoc on guarantees, presales

International Film Finance Forum 2012

Stopping piracy “is not just about (paying for) swimming pools in Beverly Hills,” says Ted Shapiro, deputy managing director, veep and general counsel for the Motion Picture Assn. (MPA), the international arm of the MPAA. It’s about having enough money to make the next movie. “If you’re not recouping and you’re not making a profit, what are you going to plow into the next film?”

That’s the point Shapiro hopes to drive home in his opening remarks at the third annual Intl. Film Finance Forum, presented in Cannes by Winston Baker in association with Variety, on May 18.

“I really want to look at the way piracy has impacted the decisions that people are making about what films they can make, where they can make them, what territories they can rely on to get the financing,” he says.

Shapiro says the issue is even more pressing for independent producers and financiers than it is for the six major Hollywood studios whose interests he’s charged with representing through the MPA.

“A lot of films — particularly independent films — are funded by selling the rights in advance in different territories,” Shapiro points out. “You might think that Spain was going to be a place where you were going to get 4% of your budget covered before you started making the film. But that country has been hit so hard by online piracy, I’ve been hearing that you can get minimum guarantees of only 0.5% to 1% there. I heard that in Mexico you can’t do any presales. It’s only negative pickups for local films.”

While the DVD sales have stagnated in the U.S., they’re still growing in less- developed countries, even in Central and Eastern Europe, according to Shapiro.

“The question is who’s going to benefit from it — the DVD pirates or the legitimate sellers,” Shapiro says. “If you can sell only five (non-pirated) DVDs on the homevideo market and you can rely only on theatrical, fewer independent and smaller films are going to be made.”

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