Brazilian pics vie with Hollywood for box office share

Hollywood pics are performing increasingly well in Brazil, compensating for the decline of local movies.

In the first quarter of this year, the country’s total box office rose 8.7% to 359.2 million reals ($197.4 million), thanks to the 24.1% growth of the combined B.O. of all foreign pics and in spite of the sharp 67.1% fall on the combined B.O. of domestic movies.

The same trend was registered last year, when Brazil’s total B.O. increased 12.3%. The 21% rise in foreign pics’ B.O. offset the 27.3% decline of the local pics’ B.O. The market share of local pics fell to just 11.6% in 2011, from 17.9% in 2010.

Industry watchers say the fortunes of local pics could turn upward in the future but, for now, Hollywood dominates. According to industry execs and analysts, that’s because Hollywood delivers a steady influx of pics of all genres and sizes, and for all demo targets. These include profitable 3D blockbusters. But the top reason for this strong performance, many say, is the lack of good local pics available to meet the demands of an expanding market.

“The recent crop of Brazilian films is weak. The market continued to grow this year, but not a single local film performed well,” says Patricia Kamitsuji, managing director of Fox Filmes do Brasil.

Kamitsuji highlighted the fact that local producers fail to make pics for kids and families, a target attended by Hollywood. For instance, Fox’s “Alvin and the Chipmunks: Chipwrecked” pulled in $24.3 million at the local B.O.

Brazilian producers also do not compete for the fast growing local 3D market, says Sergio Sa Leitao, president of Rio municipal government funding company RioFilme. Mariana Caltabiano’s “Brazil Animated,” released in January 2011, is the only 3D local pic and no important Brazilian 3D pics are scheduled to open this year.

But the demand is there. The combined B.O. of all 3D pics in Brazil rose 40.5% in the first quarter of 2012 against the same period last year. Their market share of the total B.O. reached 29% in the period.

Paulo Sergio Almeida, president of local film marketing firm Filme B, pointed out that “Brazil has exported” some of its top helmers, who are involved in international productions, which has affected the quality of the local production. For example, Fernando Meirelles (“City of God,” “Blindness”) directed “360”; Andrucha Waddington (“Me You Them,” “The House of Sand”) helmed “Lope”; and Jose Padilha is set to lense the remake of “RoboCop.”

Leitao and Almeida believe the root of the problem with local pic production lies in the country’s financial model.

The issue isn’t lack of coin. In fact, the amount of federal incentives for pic production has steadily grown for the past years and is expected to continue to increase. But the distribution of the grants is decentralized and comes in scattered rounds organized by different government orgs and government-controlled companies. The process is slow, bureaucratic and unreliable, with the rounds frequently canceled or postponed. This prevents central and strategic planning based on market needs.

“The lack of good Brazilian films in the beginning of this year was caused by a financial gap,” says Marcio Fraccaroli, general director of Paris, Brazil’s top indie distrib. “Hollywood has financing. The studios schedule their film releases way in advance. We can’t do it here.”

Despite all this, Fraccaroli and Almeida are cautiously optimistic and say there are two main reasons to believe in a Brazilian pic production sector’s expansion in the long term. First, the federal government is increasingly pumping incentive coin in the sector. Second, the local market is expected to continue to expand.

The recovery is expected to begin in the second half of this year, they say, when the crop of local pics will be far superior to the ones released in the first half. Comedies “E ai, comeu?,” “Totalmente inocentes,” “Os penetras” and “Upside Down 2”; Breno Silveira’s dramas “A beira do caminho” and “Gonzaga”; and Walter Salles’ “On the Road” (an English-language, but officially France-Brazil-U.K.-Germany co-prod) are expected to deliver a significant B.O.

But Almeida forecasts that even with a good second half, the market share of local pics could fall to a single-digit percentage in 2012. “The U.S. cinema industry has an expertise in market occupation,” he says. “They do not let a single market opportunity pass by. If Brazilian production fails to occupy its market, Hollywood seizes it.”