Requirement that studios back local films creates revenue stream

Last December, when Argentina President Cristina Fernandez de Kirchner launched a crusade against Hollywood’s box office domination, she came armed with a carrot, not a stick.

Rather than establishing strict quotas, the government has instead leaned on the Hollywood majors to distribute more Argentinean films locally and in the rest of Latin America. “Eighty percent of Argentina’s box office is occupied by foreign distributors or films: Fox, Disney, Universal,” Fernandez de Kirchner told an audience of local film professionals at Buenos Aires’ august Bicentennial Museum at the time. “My mission is to ensure that those who import also export our films and contents.”

The result has been that a select crop of more market-aggressive Argentinean movies have benefited from Hollywood coin, distribution muscle and expertise.

The studios have benefited, too, as first-half local B.O. in Argentina spiked 25.5% to $150.5 million.

According to Argentina’s National Institute for Cinema and Audiovisual Arts (Incaa), four Hollywood distributors — Disney, Warner Bros., Fox and UIP — have inked $9.24 million worth of distribution and co-production deals for Argentine content, largely movies. In 2011 and 2010, only Disney and Fox released Argentinean movies in Argentina.

In May, UIP announced its first Argentine distribution deals for films since 2008 — for $20 million animated feature “Foosball,” from director Juan Jose Campanella (2009 foreign-language Oscar-winner “The Secret in Their Eyes”), which it will distribute in Argentina and has bought for the rest of Latin America; and “I Thought It Was a Party,” from up-and-coming helmer Victoria Galardi (“Mount Bayo”), which UIP will release in Argentina.

Fox released Argentine pic “We All Have a Plan,” starring Viggo Mortensen, in local theaters in late August; Warner Bros. sent out comedy “En fuera de juego” in June.

Disney has bowed 11 Argentine films locally this year, a recent company record.

Execs at Disney, UIP and Warner Bros.-Fox in Buenos Aires, the studios’ biggest reps in Argentina, declined or were not available for comment on export obligations. Yet Argentina’s stance may have nudged some majors along a path they were already taking.

UIP already distributes Brazilian films — including blockbuster “Elite Squad” — and was looking to get involved in Argentine pic distribution, Mauricio Duran Ortega said in May on the Cines Argentinos website. Fox. Intl. Prods. announced international rights on “Plan” in May 2011. It distributed “The Marzianos” last year.

Disney co-founded Patagonik, Argentina’s biggest production shingle, in 1996, co-producing “Son of the Bride” and “Nine Queens,” icons of the so-called New Argentine Cinema. It had already released eight local pics in Argentina in 2011, up from three in 2010 and two in 2009. Led by the wife-swap comedy “Dos Mas Dos” ($5.9 million), “White Elephant” ($4.2 million) and jewel heist romp “Atraco!” ($3.3 million), nine of Disney’s Argentine movies grossed $400,000-plus in 2012.

No more than two Disney local pics achieved that per year over 2004-10.

In general, majors are picking up rights to Argentinean films for all of Latin America, says Liliana Mazure, president of Incaa.

“Before the obligations, I’d never have thought of presenting a project to a major,” says one Argentine producer. “We didn’t even know each other; there was no communication or contact. Now it’s a daily occurrence: We’re in contact and analyzing projects from their very beginning. And I’ve learned a lot from the majors’ distribution expertise.”

The bottom line: The cream of Argentine movies, like many across Latin America, may be far more ambitious, market-worthy and exportable than just a few years back. And Hollywood studios’ muscle and coin is helping those films realize their market potential.

“(Regional) pay TV deals for Latin American films can be worth as much as sales to France or Germany,” says sales agent Eric Schnedecker, at arthouse distrib Urban Distribution Intl.

While the studios continue to rake in 80% of the Argentine box office — the top five films of 2012 in Argentina are from Hollywood, and have grossed some $82 million — the nation is continuing to favor the carrot over the stick: Fernandez de Kirchner is looking to double subsidy caps per local film, and announced in late August plans for a major Buenos Aires studio complex.

The real test of the success of those moves will be if U.S. companies under no export obligations start to invest in Argentine movies.

What: Argentina demands Hollywood invest in local pics.

The takeaway: Homegrown films benefit from studio coin and expertise, while Hollywood gets new rev stream.

Charles Newbery contributed to this report.

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