Cine Sin Fronteras Book by Horacio Valdivia

REFLECTIONS ON AUDIOVISUAL DISTRIBUTION CSF /// Cine Sin Fronteras

CSF /// Cine Sin Fronteras

REFLECTIONS ON AUDIOVISUAL DISTRIBUTION

CINE SIN FRONTERAS PROGRAM

INSTANCES AND PROBLEMATIC OF DISTRIBUTION by ERICK GONZALEZ

IT COMES WITH THE TERRITORY: FILM DISTRIBUTION IN LATIN AMERICA by BRUNO BETTATI

EXPERIENCES OF THE CHILEAN STATE byLEONARDO ORDOÑEZ GALAZ

CHALLENGES FOR AUDIOVISUAL DISTRIBUTION IN LATIN AMERICA

CLOSE UP

CONTENTS

INTRODUCTION

Why a notebook ref lecting on audiovisual distribution? The distribution and commercialization of creative and cultural goods and services, particularly in the audiovisual sector, has been a pending issue all around the world. In Latin America there are no major experiences on plans and programs dealing with this subject. This is caused either by a lack of vision or by the assumption that the major responsibility of its execution lies in the private sector. Whatever the case, this inert situation of audiovisual distribution can only favor and reinforce the primacy of supply, as we know well that production has been always supported by the different states, in many cases—propitiously—by law. This support is thought either as a first step or the only funding to reach distribution and therefore the audience, according to the particular country. While the territories covered by productions, according to each film’s nationality, would guarantee a quick distribution, this doesn’t happen in practice, as each production has to assume the particularities of every territory. In addition, it is the film producer who assumes this work in most cases, while he may know little or nothing about dealing with the process of distribution. Considering many Latin American countries where it will always be necessary to keep promoting the professionalization of audiovisual production, one may presume that the dream of professionalizing the distribution sector to link the works with different audiences could still remain a pending issue. In this context, the awareness to discuss this problematic in depth arose from the very film festivals four years ago, as it was well assumed that festivals cannot be the only solution to promote distribution. In the context of the Cine Sin Fronteras program - supported by Media Mundus, and the Chilean Council for Audiovisual Art and Industry - emerged the conviction to work to energize the actors in the audiovisual sector and reflect on this subject with the goal of finding solutions that may contribute the development of the sector and to implement these later on. This first Cine Sin Fronteras publication has the goal to motivate a reflection, analyze the situation, and contribute with alternative solutions that better serve this problematic affecting most film-producing countries around the world. This is why it is presented as a student notebook, since the more this subject is studied and written about, the easier to create social awareness for a joint effort between the public and the organized private sectors to install support programs—like those existing for production—that encourages and focus on audiovisual distribution. This publication was devised preferably for a digital medium, with the idea to generate reflections in the international audiovisual sector The first part of the notebook consists in three study documents dealing with the problematic of distribution around the world, including aspects implied in the process and quoting practical experiences of cases that may be observed as models. In addition, the notebook includes a section named “Close Up” in which leading experts in cultural policies and audiovisual promotion focus their analyses on particular aspects of the distribution process, while

in the future it will allow the contribution of other international expertsâ&#x20AC;&#x2122; particular experiences. This is why the notebook includes some blank pages, to motivate new reflections from those interested that may contribute the debate in the future, which is the reason of this Close Up section. Today we know that the major problem is not the scarcity of produced works. In fact, there have never been this many films produced in the world. The problem comes from the diffusion, distribution, and commercialization, favoring a certain kind of films that correspond, moreover, to those already enjoying a good exposure and distribution in conventional business networks with little or no innovation. Nevertheless, in most countries, this kind of films do not receive enough help for diffusion and circulation: there is no support for distributors of either local, or foreign art and essay films, nor for independent film exhibitors, nor, in many cases, for foreign professionals distributing the films. There exists, however, a demand for diversity that shall find an answer and generate spaces. Circulation professionals are the bridges between films and their audience. By being competent and informed, they may improve the circulation of films by taking care of its promotion focusing on an audience with proper means. In this case is necessary that the circulation actors may structure a market to find professional synergies. With globalization and the development of new technologies, the situation gets worse, increasing the gaps between a potentially interested audience and the contents produced within a territory. Internationally, the audiovisual industry is experiencing a focalized crisis regarding distribution and commercialization of contents, therefore it is a matter of concern in countries like Chile, where far from being an exception, special attention is required considering the stress put in the execution of public policy advancing the development of the audiovisual sector, with business models linked to the audiovisual sector requiring at least revision and updating to allow the installment of new an better ways for the circulation of content supported by the state itself. We believe that with these thoughts there is a first step to install the problematic, and make known processes and cases of countries attempting to contribute the advancement of a sound audiovisual industry. We expect these texts would allow contributing to the dialogue for the private sector to detect and propose solutions that the public sector may eventually consider, and thus consolidate an updated public policy for audiovisual promotion, covering all the aspects that the sector requires.

CSF first edition—in Valdivia, 2010—was devised only as a workshop. Since the beginning of the program, however, the idea was to propose the creation of a distributors network to the participants. The project known today as LARED, starts with most of the distributors present in that first edition. Ever since, they come back every year to the workshop in Valdivia, to continue their training and keep developing the networking. Also, based on the project’s editorial line, two or three new Latin American distributors are invited every year. Their participation in the CSF workshop does not imply automatic entrance in LARED, but it allows to evaluate the new participants’ characteristics required to become part of the group. CSF workshop contents are mainly about new technologies, new strategies in the circulation market (acquisitions, sales, distribution, and exhibition), alternative marketing, and audiences’ development and diffusion. This program has the support of MEDIA Mundus and the Chilean Council for the Culture and the Arts—current members of LARED.

PROGRAM

CSF Latin America is comprised by audiovisual entrepreneurs, interested in improving and innovating in the distribution processes of different contents. Aware of the need to open new circuits for the circulation of produced films, they have created LARED, an instance created in the continent to think and implement new ways of connecting film contents with their audience.

www.australab.cl

networking, and oriented towards European and Latin American circulation professionals (distribution, exhibition and diffusion). The workshop has the goal to improve the circulation of European and Latin American films in both continents through specialized training in topics related to this important stage in the chain of rights, thus encouraging networking. CSF consists in biannual sessions. The first session gathers European independent film distribution and circulation professionals at the Toulouse Latin American Film Festival in France. The second session gathers Latin American independent film distributors in the context of AustraLAB at the Valdivia International Film Festival.

CINE SIN FRONTERAS

CINE SIN FRONTERAS (CSF) is an international, specialized workshop with a focus on

GRUPO FUNDADOR

The LARED project, as proposed by CSF, currently brings together the following distributors: 1. MUTANTE CINE: Uruguayan distribution and production company, founded by Fernando Epstein and Agustina Chiarino. 2. INTERIOR 13: Mexican distribution and production company, founded by Sandra Gómez and Maximiliano Cruz. 3. LAT-E: Argentinean distribution and marketing company, founded by Florencia Schapiro. 4. MALAPARTE: Chilean distribution and production company, founded by Juan E. Murillo, Roberto Contador, Simón Rivera, and Antonia Rossi. 5. ND MANTARRAYA: Fiorella Moretti is the chief of this Mexican company’s distribution branch. Initially founded as a production company by Jaime Román Díaz and Carlos Raygadas. 6. PACIFICA GRAY: Costa Rican distribution and production company, founded by Karina Avellán and Marcelo Quesada.

Guest Distributor: •

CINEPLEX: Colombian distribution company founded by Elba McAllister.

CSF Directing Consortium CSF is directed by a consortium representing the three organizations developing the project:

• Europa Distribution, represented by Adeline Monzier. • Toulouse Film Festival, represented by Eva Morsch. • FICValdivia’s AustraLAB, represented by Erick González.

We need that film distribution becomes

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INSTANCES AND PROBLEMATIC OF DISTRIBUTION

ERICK GONZALEZ

Chile

Erick González is a Master 2 graduate in Filmmaking by the University of Toulouse Le Mirail. Since 2007 he is part of the Administration Board of Toulouse Rencontres Cinémas d’Amerique Latine Festival. The same year he starts participating in the selection committee of Cine en Construcción, for both San Sebastian and Toulouse editions, and in 2008 he assumes as programming director of the last.

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In parallel, in 2009, he gets in charge of FICValdivia’s Work in Progress, and one year later—together with the Festival’s director Bruno Bettati—he founds and directs AustraLAB, an international platform for the advancement of the audiovisual industry, comprising a Work in Progress, Cine Sin Fronteras, and a Coproduction Forum. He is also a consultant for the audiovisual industry.

INITIAL WARNING

1) Unless otherwise specified, “distribution” in this text will only refer to theatrical distribution. Or

more precisely, for the “silver screen”, considering that in the search to expand towards currently unusual audiences for the so-called independent films, some professionals have developed exhibition projects for spaces other than movie theaters, even open spaces, but always respecting what is an important part of cinema DNA—films made in high definition formats for projection on a large screen for a collective audience.

Every time this text either attacks or defends whether a model, a logic, or an idea, it assumes the fact that it is being expressed as my own personal opinion. It is more a text of reflection— certainly based on certain knowledge of the area—than one pretending to draw conclusions from numbers, statistics, and specific bibliography. The medium is changing so fast that—in my opinion—a text based on statistics and bibliography may contribute an historic perspective, but it may hardly propose concrete solutions based solely on raw data.

Even as today none seems to disagree that it is in distribution where currently lies one the most important obstacles in the chain of rights, the efforts of Latin American audiovisual institutions to produce solutions for this problematic are nonexistent in certain countries—even in those with important audiovisual funds–, and in any case, insufficient. In addition to each country’s insubstantial efforts to reactivate internal distribution, the regional initiatives have been scarce and inaccurate. There are milestones in this regard. IBERMEDIA’s fund subsidizing the distribution of Latin American films until 2011 has been terminated, and, despite certain announces, up to this date there has not been any other regional initiative by the audiovisual institutions pretending to fill this absence. It could be argued that the disappearance of the Ibermedia fund for distribution was conditioned by the European crisis that, together with the victory of the People’s Party in the 2011 elections, brought Spain to such devastating situation as to suppress the Ministry of Culture as an autonomous organization, merging it into the new Ministry of Education, Culture and Sports. In spite of this, at least two things can be argued: First: the support for distribution was cut at the same time the coproduction funding was kept untouched, at a time when everybody insist in saying that the issue of production is far from a priority (in fact, there have never been produced as many films as today). Secondly, before disappearing, this fund existed for many years although with a design that rendered it ineffectual in practice; and, along the years it existed, it was never modified to make it effective. This may be the result of a certain prevalence in the audiovisual institutions of the biased and simplistic idea that coproduction itself would produce a raise in the distribution of Latin American films in the region, or it is simply the consequence of the bureaucracy of these institutions that weights the balance against common sense and the duty of public institutions. Either that, or our institutions do not understand the audiovisual market enough as to efficiently solve the issues they are dealing with. It is most likely that it is actually the result of all these. Looking for the few examples of related initiatives that came out of institutions (considering we are only referring to theatrical distribution), besides the disappeared Ibermedia fund for distribution, there was a bilateral program between Argentina and Brazil—the Argentina and Brazil co-distribution agreement— to increase the exchange of films between both countries, with the idea to promote a model that could be later extended to other Latin American countries. In fact, Chile followed suit and signed a co-distribution agreement of the same tenor with Argentina—an initiative that while shattered certain trusts, was at least an outline of wills.

INSTANCES AND PROBLEMATIC OF DISTRIBUTION

1) STATE AUDIOVISUAL ORGANIZATIONS AND THE PROBLEMATIC OF DISTRIBUTION

This initiative was also ineffective and quickly faded away—unsurprisingly, as, even from a commonsensical perspective, it was unlikely that by institutional will alone a country would overnight start importing films from another particular country in levels sufficient to represent a solution, or a step in the solution of the problem of distribution. I am not referring only to volumes, but to the model itself. On the other hand, even while the will existed in theory, the technical elements to render this initiative effective were not established in the practice. It can be argued in favor of a project that does not have an initial impact in volume, insofar as one can see in it a promising model when implemented at the right scale. This was not the case. There are two important points, however, that can be rescued from this experience. First and precisely, the will—at least in theory—to cooperate between Latin American countries; and second, the search for a solution that is not all about subsidies—which are still needed, and probably always be—but a model of exchange that facilitates the circulation. This text does not pretend to be exhaustive, nor being an in-depth analysis of public institution. Mentioning what happened with the Ibermedia fund for distribution, and also note that in addition to this program the only other initiative known regarding this issue was the failed bilateral between Brazil and Argentina, only pretends to exemplify and note the lack of operational skills and knowledge from the region’s public institutions to solve these problems, but overall, the lack of real cooperation within the region. This lack of will for regional cooperation shall be noted, as this is one of the major obstacles towards reaching solutions for the distribution problems—and not only for this, but also for any other problem that may arise whether in the short, medium or long term.

2) FESTIVALS AND THE PROBLEMATIC OF DISTRIBUTION Now well, insofar as the possibility to create solutions to a problem may come up from other places in the margins of public institutions, the responsibility is not only of the audiovisual institutions. To mention an example, film festivals have been developing one by one the so called industry spaces (what industry? we should ask ourselves in the first place), and even when most of these work with public funding, and consequently, relatively submitted to their directives, they do have a certain range of action that state institutions lack. However, practically all these have been focusing their resources and energies in actions linked to production, rebounding on what has already been done: project pitching, coproduction meetings, producers labs, works-in-progress, among others. In addition to the CSF program, supported by Media Mundus and the Chilean Council for Audiovisual Art and Industry, I could not mention even one other initiative in Latin America, developed from the festivals, and pretending to deal with the problem of distribution. Being optimist, it is possible though (and desirable) that other initiatives exist I don’t know about.

3) PRODUCTION COMPANIES AND THE PROBLEMATIC OF DISTRIBUTION 16

In Latin America, many independent film producers have begun to distribute the films themselves This may produce results and become a concrete solution for certain films—those by these producers—to circulate better than they

would if were taken by reluctant distributors. The model thus created, however, is double-edged; what is beneficial on the one hand, creates problems on the other. Unfortunately this practice, useful as it is to alleviate distribution problems in the short term, has given cause to institutions and certain private actors for pushing this model as the formula to install, while it actually is mostly a patch, an emergency solution. In most Latin American countries, good projects delay their processes, or carry them out in less than ideal conditions, as there is an evident scarcity of producers in relation to directors. Even when there is frequent state funding, there are few production companies capable to manage these funds properly and carry these projects through, strengthening them from their content to postproduction processes, and structuring international or local cooperation to boost them. To ask the producers to take care of distribution is to displace the problem. This model reduces the ability of producers to engage in new projects, and mostly, their willingness to work with novel or less known directors. In this sense, it may result pernicious to expect producers, already scarce in the medium, to take care of distribution. A project that manages to get in the catalog of a solid production house with experience in distribution, chances are it will obtain a good production and assured distribution. Those that don’t make it into these catalogues will have difficulties to produce, but they will also face, from the start, huge disadvantages to achieve distribution. Definitively, there is a negative impact in the diversity of the works produced, and also in the quality of many films lacking experienced producers who have to devote their time to distribute films already produced before engaging in new projects. In addition to this, plain and simply, distribution is a trade that implies certain specificities, while a producer that starts distributing to keep their films out of the storerooms is, by default, always half a distributor, even when their films have good results.

THE PARTIAL VISION

“It is a lie, the problem is not the distribution” None seems to contest that the major current problem in the chain of rights is distribution, even while it is quite a contestable idea. Distribution is stagnant, that is an inescapable truth; but to isolate distribution as the only part in the chain that experiences difficulties and consequently holds back the whole chain, is an error. In this sense, saying “the problem is distribution” is to lie (even if by omission) or being quite naïve. Let’s recall: for years it was sought to improve the conditions of production—having the means to produce films, and quality in those films. That was achieved. Regrettably, when the question was raised about how to obtain a fair amount of quality films in each of our countries every year, it wasn’t simultaneously asked what would we do with them once they were made. What a basic question, nonetheless. The error was to isolate the problem—then it was called “the production”.

Today we find ourselves at the quandary of not knowing how to make these films reach the movie theaters. Now it seems we are starting to assume there’s a problem; I don’t know how long it will take us to give it the necessary importance, and even less, when will we reach the solutions. But, lets assume, for example, that enough venues (theaters and the like) come to exist to exhibit all or most our films for a certain period of time, enough to justify the investment—not just monetary—in producing those films; and also let’s assume that after we managed to solve the problem the distribution channels to reach these venues come to exist; then we would be asking, now that the films are in the theaters, how we make the audience actually come and see them? Questions shall be raised simultaneously, and start dealing with all the problems in and out of the chain of rights— the public does not acquire the rights by paying an entrance—in parallel. Otherwise—is it so difficult to see?—we would have advanced two steps when around the staircase there would be no building anymore whose floors to connect. I will venture the problems that need to be urgently and simultaneously targeted, if we pretend to set forth in the right path to solve the stagnation of film circulation.

1) THE AUDIENCES I think the premise that the creators should keep the audience—as paying customers—in mind when writing or devising a film, can only be supported by those who conceive cinema as a marketable product instead of a work, or “aesthetic object”. I insist, I do believe in order; it cannot be denied that the moment a film enters the object/money system of exchange, it becomes a product; but before being a product, it is a work. Consequently, it shall be thought as such from before, even if just by one second—every time it is conceived, in present continuous. While it is both things, what motivates the existence of a film is not its ability to turn into a product—certainly an idea conceivable by the bureaucratic reasoning that audiovisual institutions shall be able to resist. A film’s author is obliged to dialogue in every case, for he knows that the film exist as long as someone sees it. This awareness cannot be omitted, but to claim that whoever makes a film should think of the other in terms of audience, as a paying customer, it is clearly thinking cinema from the wrong place—a dangerous one for cinema. If one expects condescendence from cinema, then one expects neither great films nor authors. Even though not every director will become a great author, they cannot be required to work towards mediocrity from the start.

What is left, then? To make the audiences be prepared for and susceptible to a less condescending cinema. We are not referring to experimental films or video art, just to films that do not conform to Hollywood codes. It is indispensable that, while we look for the best short-term solutions, medium and long-term actions be established with the goal to create an audience for this cinema. One of the most relevant actions in what today is called audience development, is the so-called “image education” oriented to the youngest segments. Without a doubt, it would be ideal that initiatives exist within the educational system to stimulate and allow the discovery of film as an insightful object for reflection, closing in on art, and breaking with that vision that proliferates its entertaining and spectacular features. This would require a major effort, however, as it escapes the scope of the audiovisual sector, falling within the education field. Even though the task seems difficult, there are major reasons to start this endeavor right now. An initiative of this kind would need concrete support from our sector, as driving forces demanding this idea, to push the public institutions to begin projects in this respect. The example of France is clearly enlightening. A Latin American film averages 30,000 tickets in this market with the most affluence of non-hollywood films in the world. That is, 30,000 people watching each Latin American film even when competing with so many films from all around the world. This audience is not there by chance, is not spontaneously created, and this is not only related with a prominent cultural tradition. Each person in France discovers the so-called independent films at an early age, through the programs “lycéens au cinéma” and “école et cinema”. That is already a huge achievement, as it allows developing a taste for cinema by allowing its experience. In addition to introducing it, it stimulates the taste for this cinema—this can only be twice as beneficial. Against this I’ve repeatedly heard the argument that image education is based on a paternalistic vision. That would be equal to consider paternalistic the requirement of certain readings—from “Little Prince” to “Don Quixote”—in the formative years. If one conceives cinema as elitist—therefore, irrelevant in the context of general education—then a perverse logic does get installed, which is much worse than just paternalistic: one that declares that cinema only exists for the enlightened few that may discover it thanks to a superior sensibility, with a scope restricted to those higher spirits. Intellectual sophistication and sensibility is not a priori, but rather a result. There are many other ways to develop audiences, some not related to image education at the school. We cannot think a solution to the problem, however, without reflecting on how to create audiences for this cinema. We cannot pretend that the solution is for cinema to adequate the tastes and expectation of the masses, since we would be asking cinema to verge on that abyss where many corpses lie—TV among them.

2) THE NEW DISTRIBUTION TECHNOLOGIES Regrettably—and even when it has been stated almost without objections that distribution is stagnant—nothing has been done in Latin America to deal with the real problems that the new technologies present. On the contrary, by attempting to develop entrepreneurial initiatives without a definite plan, without establishing certain logic, and without fundamental coherence, new technologies end up tangling everything up. The advocates of independent cinema, whether for some sort of technological dazzle or lack of transversal reflection, had often supported the questionable idea that in order to recover the health of cinema—its audience—films shall reach their audience in any way possible, and for that, new technologies are best. Some talk about VOD, others about YouTube and web platforms, and even mobiles phones, and not just as complements or secondary paths of exhibition, but as the new and only ways to exhibit films that will allow this kind of cinema to keep their audience. These illogical logics astonish me. It is enough to have been through a “cinematic experience” to understand that “films of this kind” are in serious risk to fall ill, not by the mutation of its original medium, nor by the appearance of new technologies to make films, but rather by the disappearance of its vital space. Because it is there, in the space in which the audience relates to the film, where lies an important part of cinema’s DNA: in the movie theater. None should disregard such an evident detail: this space has conditioned all the technological and commercial aspects, old and new, of how films are made. Otherwise, what would cause discussions about how comparable digital projection is to 35 mm? Why to develop high-resolution cameras, HD, and the new DCP exhibition format if the main exhibition outlet is to be some low-res portable device? What sort of schizophrenia has allowed those promoting new technologies to achieve a digital quality comparable to 35 mm are the same ones defending any exhibition outlet as the main and valid space for this cinema? Clearly, it is not out of romanticism that the audience attend the movie theater, but because there they are confronted by cinema and not by its reduction. Regarding the new technologies, it is incontestable that the screening format—even within cinema’s habitual space, the movie theater—it is not film anymore, and will no longer be. Of all the technological changes, in my opinion, this is the one that less affects and endangers the proper “cinema experience”. Nevertheless, it supposes a change in the methods, just simply in the “machines”, changes that are expensive, and not doing them may confront us with quite catastrophic consequences. Even though in Latin America, none with the faculties to resolve seems to be doing anything important about it, other than just waiting for things to happen and “see how it goes”. The following will happen, among other things: The rest of the world will end equipping up with DCPs (and maybe in a few years with something else), while in Latin America only the large exhibition companies programming Hollywood films will have done it—the same where currently it is almost impossible to exhibit a non-Hollywood movie. When this happens and there is no more distribution of 35mm, no producer outside Latin America, no sensible sales agent will ever make 35mm prints just to offer their films to territories that are unprofitable markets. This will result in more difficulties for the already few independent films reaching us, as they will only be able

to be distributed into the large Hollywood cinema chains, the same ones where it is already difficult to exhibit non mainstream films. On their hand, the movie theaters that still make efforts to distribute independent films will progressively disappear or become even more precarious by scarcity of content. We will never see films again with image and sound quality as we can still see today. If we ever want to see them in theaters, we might still be able to watch them in Blu ray. But it will also happen that for our films to be exhibited outside Latin America, we will be required DCP copies, and since we cannot distribute DCP in our countries, we will also have to make 35mm prints (if we want to exhibit in high quality also in our countries). Thus, what in the rest of the world will have resulted in economic savings, as promised, for us it will mean an increase in costs and labor, and the decrease of the already diminished distribution of Latin American films in the region. On the other hand, what in other places will have implied a constantly improving image quality, for us, at least regarding international films, will become into an impossibility to watch films with high quality of image and sound within the movie theaters. It is absolutely urgent that audiovisual institutions would raise these issues; and for that, it is also absolutely urgent that audiovisual authors and professionals would bring attention to this need.

3) THE EXHIBITION VENUES This will be short. Evidently, for the so-called independent films to reach the audience for which they were made—in the silver screens—it is necessary that exhibition venues exist. The efforts to retrieve spaces for independent films are precarious, and even more so when it comes to directly creating these venues. I don’t know of any place in Latin America where the important numbers that independent films obtain in terms of audience take place in venues oriented towards Hollywood or mainstream films. The question that remains to be asked then, is under what assumption or empirical basis there are people proposing this kind of initiatives as solution? The cinema that we’re trying to defend has certain specificity, and accordingly, one may expect the same from the venues where these films are to be screened at. Instead of the vain and naïve efforts for making silk purses out of pigs’ ears, just like that, we rather start making silk. And if it has a cost, we should assume the cost. Regarding the venues, all the rest is bureaucracy.

4) LOCAL AND INTERNATIONAL COOPERATION Unfortunately, a high percentage of audiovisual cooperation programs in Latin America are solely oriented towards coproduction, even while many of the aspects mentioned earlier, should be traversed by cooperation initiatives. To quote an example, if one really expects that distribution of our own films in Latin America be possible in the future,

it is indispensable that the audiovisual institutions of the entire region establish as a priority to equip movie theaters with DCPs. If this is also made coordinately, establishing similar models, the results can be obtained more quickly. Without coordination between the different countriesâ&#x20AC;&#x201D;just like it is currently being handledâ&#x20AC;&#x201D;the outlook is bleak. Nevertheless, not only political cooperation is necessary. Networks are a complex but efficient way to establish cooperation between privates in the sector. The idea of networking is not new: there have been previous attempts to establish networks in Latin America, while in Europe and elsewhere networks exist since decades with known results. Only to mention some examples in different stages of the chain of rights: Europa Distribution, ACE, EAVE, CICAE, etc. It is very unlikely to pretend to compete with adversaries such as Hollywood, or even in Latin America, with the European cinema. In a continent with similar problems, with a language common to almost the entire region, one would expect that it be understood that a coordinated and cooperative work is pertinent to face almost all problems in the chain of rights, and probably even more than any, in distribution. This text has been written as the result of a project related to Latin American cooperation for distribution, and the thoughts herein stated have arose in the course of developing this project. In some way this work, which today starts bearing actual fruit, is the best evidence of how the will to operate under the logic of cooperation and networking is an important aid in finding solutions to the distribution problem, which as I have tried to state, is far from an isolated problem in the chain of rights.

IT COMES WITH THE TERRITORY: FILM DISTRIBUTION IN LATIN AMERICA

BRUNO BETTATI (39)

Chile-Italy

B.A. in Philosophy, managing partner of Jirafa Films—production house based in Valdivia–, producer of the feature films El asesino entre nosotros (2006), Ciudad de papel (2007), El cielo la tierra y la lluvia (2008), Optical Illusions (2009), Manuel de Ribera (2010), Bonsái (Cannes Official Selection, 2011), Miguel San Miguel (2012), ll futuro (2013), and El verano de los peces voladores (2013); associate producer of Sexo con amor (2004) and Gatos viejos (2010). He is a 2009 IPA1 member of the European network ACE-Producers, and a 2011 member of the documentary producers network EURODOC. Since 2010, he is the director of the Valdivia International Film Festival (FICValdivia). Former president of the Chilean Film and TV Producers Association (APCT) 2009-2012; former president of the Centro Cultural de Promoción Cinematográfica de Valdivia 2003–2006—Valdivia’s Cultural Center for Film Promotion, institution producing the Valdivia International Film Festival since 2007–, and former president of Valdivia Film S.A. (2001-2006), an associative project contributing to the establishing of an southern audiovisual cluster.

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He is based in Valdivia since 2001.

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He has been part of the crew for feature films Gringuito (1999), Last Call (1998), Coronation (1999), A Sure Deal (2000), 199 recetas para ser feliz (2006), Muñeca (2007), El brindis (2007), and Magic Magic (2012).

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Between 2002 and 2009, he has trained audiovisual producers in all thirteen regions of Chile. He has been guest lecturer for EAVE network (Europe) and for the TyPA workshop (Argentina).

LOOKING FOR DISTRIBUTION

a. Why coproducing b. Double nationality c. Effects of coproduction on distribution

3 a. b. c. d.

THE CONTRACT WITH THE DISTRIBUTOR OR SALES AGENT Territories Expenses Fees MG

OUTPUT DEALS AND WORKING TOGETHER AGAIN

A SALES AGENT LOOKING FOR DISTRIBUTOR

a. Large territories first b. Regrouping territories c. The MG

2 a. b. c. d.

LOOKING FOR A SALES AGENT Teamwork Marketing: launch in the markets The first festival is the key Realpolitik of the markets.

EL DELIVERY

a. The assets b. The film’s marketing elements c. The image and sound masters

PROBLEMS OF LATIN AMERICA AS A TERRITORY

a. Shortage of distribution entrepreneurs b. Fragmented territory c. Too much work for a small box office

8 a. b. c. d.

A PRODUCER LOOKING FOR DISTRIBUTOR The untimely task Festival premiere Matching production values and territories Radiation effect (geography, language)

GAJES DE LA DISTRIBUCIÓN DE CINE EN AMÉRICA LATINA

1. LOOKING FOR DISTRIBUTION

After a substantial multilateral step was taken in 1988 by creating IBERMEDIA—a regional fund supporting Latin American coproductions—most countries gave themselves institutions—councils, film institutes—which started managing public funds to support the production of film contents. Additionally, some countries complemented those incentives with public policy specific for tax exemptions, to boost private investment that complements the state funding of production. After almost 25 years, the Latin American region enjoys several incentives for fostering film production. Since its first appearance in 1988, Ibermedia also took care of advancing the distribution of the regional film products by accomplishing the commercial premieres of the films, aware that the political project of creating a Latin American “audiovisual space” wouldn’t make sense without an effective circulation of the films among the countries members of the territory and the program. The trend taken by the fund, however, was to reduce the support for distribution while increasing the coproduction projects. This trend—clearly noticeable between 1998 and 2004—is also present in the local national funds. In different Latin American countries, the efforts were focused on stimulating production and coproduction, under the premise of increasing the budget of individual films in exchange for guaranteeing the premieres in the coproducing countries. These policies didn’t have the expected results. Today, it is still exceptional that a Latin American film premieres in other countries, even in those taking part in the coproduction. On the other hand, with the decisive advancement of digital technologies for the capture and editing of image and sound, and the irreversible arrival of HD since approximately 2004, the amount of films not made in coproduction has grown steadily in each country, with some Latin American countries producing in 2011 more titles than some European countries.

a. WHY TO COPRODUCE? The policy of advancement initially deployed by Ibermedia, relates to a fundamental hypothesis: If producers of multiple territories make a film, it is more likely that the film will be released at least in the participating countries. That is why the support establishes an obligation in exchange for the help: the commercial premiere in each of the producing countries. But the commercial way in which the Latin American region is dealt with differs with the logic of choosing a coproducing partner. International sales agents and habitual Latin American distributors acquire or sell by regrouping the region in subregions: Andean (Venezuela, Colombia, Ecuador, Peru), Southern Cone (Argentina, Uruguay, Chile), while the giants Brazil and Mexico are treated separately. Consequently, the overlapping of that public policy and this market customs may produce better distribution budgets randomly, but never a commercial strategy that allows the film to deal with the regional territory as a whole.

b. DOUBLE NATIONALITY In virtue of the Latin American Coproduction Agreement, and the film coproduction bilateral agreements signed by the countries among themselves and with others from the northern hemisphere, it is feasible for a film—in addition to receiving support or incentives from the participating territories—to seek binational status by complying with the requirements of the corresponding agreement. Depending on the case, such binational status widens the range of incentives for the film being coproduced. It not only allows the access to larger state support in each coproducing country, but also to distribution incentives and support, which is particularly useful in the case of “automatic” incentives, that is, those not depending on competition, but on the mere commercial performance of the box office. It is relevant to note that applying for a coproduction certificate consists in procedures at the corresponding councils or film institutes, and in most cases, it is required that certification be applied to before the shooting of the film. It is rarely possible to require certification at postproduction stage, and impossible if the film has been completed. In consequence, the distributor may benefit of this feature in only a few of the films he commercializes.

c. EFFECTS OF COPRODUCTION IN DISTRIBUTION Two or more coproducers are able to raise more and better marketing products, including posters, printed materials, trailers, pressbooks, pictures, and viral products for the web. Both their efforts in this sense may advance much work in order to contact future distributors for the film. Considering that in general there is one distributor per country, it is convenient to store and publish these materials in the digital cloud, in such way that the access to these by each distributor assuming the commercialization of the film in a given territory be straightforward and, actually, immediate. Two or more coproducers handle larger budgets for a film, and consequently, are under more stress to obtain concrete commercial results. In occasions, the sales projection is part of the film’s financing, which turns the obligation to obtain box-office results in different countries into a necessity that should be targeted with strategy and anticipation. That is why the international premiere of a coproduction is doubly or triply relevant. At this point, the selection of the film by a prestigious international festival becomes strategic, in order to boost with the press in advance the marketing that will be made later on in different territories. More partners may take larger actions towards the selection of a film in a festival.

2. LOOKING FOR A SALES AGENT

Each territory has specific characteristics when it comes to commercialize a feature film. Thus, each distributor is an expert commercializing films in their own territory. Only an entrepreneur knowing their target audience and immersed in the culture proper of that market, may take accurate decisions regarding the ethical and conceptual principles guiding the marketing campaign. On the other hand, some governments offer selective or automatic support to facilitate the distribution of a particular title, and only an entrepreneur based in the territory knows how to access, implement, and report the accounts for these. The task to export a film beyond their territories would therefore imply to meet and contact distributors in each territory that constitutes a potential market for the film in question. How can this potential be defined? Which territory does present better chances to attempt a commercial premiere for our film? There is no exact way to define this. Without a doubt, the trajectory of a director and their work previously positioned in a territory would help make this choice; but in the case of debut films, it is a needle in a haystack. Film festivals were created, among other things, to concentrate the offer of exportable feature films, becoming attractive hot spots for distributors (generically called “buyers”), who not only save time by watching many recent films in a short span, by they also receive preferential treatment. Festivals attempt by every mean to attract buyers to generate transactions, and this means preferential credentials and support for lodging and fares. Throughout the years, some festivals have accomplished the consolidation of spaces dedicated specifically for commercial transactions, the so-called “markets”. For feature films, there are three noticeably outstanding: Berlinale (European Film Market or EFM), Cannes (Marché du Film), and Toronto (TIFF Market). For documentary, IDFA emerges as the main transactional market. For short films, there is Clermont-Ferrand’s Marché du film court. Once these markets were consolidated, starting in the 1990s, emerges a character specialist in finding buyers for a film, an entrepreneur that knows the festivals and markets, travels a lot, expert in film packaging, brochures, promotions, catalogues and setting up booths, that even gets involved in the job of seducing festival programmers to select particular films for competition. This specialist is the sales agent, operating as an intermediary to producers and distributors. Films with international potential, and in general all international coproductions, will try to get a sales agent to add value to the film’s commercialization chain. Some sales agent work with a few films, assuming four to eight films every year —as a boutique—, while others manage large catalogues and release over twenty films into the international markets every year.

a. TEAMWORK 28

Films with an international potential, and thus 100% of international coproductions, aim for booking a sales agent. Some sales agents will sagaciously try to sign a film that may later gain entry into the

selection of an international festival. If the film festival has a market, this would raise the sales projection. For this, coproducers shall work diligently, following the good practices proper of this business. In the first place, corpoducers shall delegate the search for a sales agent to just one of the producers to avoid different voices representing the film, which would damage its reputation. It is also possible that each coproducer would search for sales agents in their own territories. The relevant thing is to agree on conferring on a representative the power to negotiate with the sales agent the conditions of the authorization to sale in representation of the film’s owners and investors. The sales agents are available to see a film whether as a first cut, as a final cut without sound mix, or the definitive version with finalized audio. But in general, they will only see it once, and consequently, their first impression is decisive. The producer shall carefully consider the time to show the film to the possible sales agent, as well as the technical conditions of audio and image projection for the screening. Particular attention shall be given to the subtitles’ visibility, phrasing, orthography, and punctuation, as well as the quality of the translation. It is standard practice to always subtitle into English for the international market. It is also standard to use DVDs or Blu rays for the film screeners. A physical disc has the risk of early piracy, which is even more serious if the film is unfinished. On the other hand, the options to screen without a physical medium— through Internet—do not achieve the desired effects, for the average resolutions currently obtained by download or streaming. A third option is to organize a private screening, which would solve both problems, although it means the specific work of inviting the programmer or programmers of each targeted festival. Here the collaboration of all producers is important to make a good presentation to festivals in each of their territories.

b. MARKETING: LAUNCHING IN THE MARKET The sales agent will choose a film with regards to the first film market in which he may present the film, preferably into a market with an official competition of finished films. This combination that, as we previously noted, few festivals satisfy represents the best tactic for launching: the presence in the competition increases the visibility, and consequently the press for the film and its authors. This constitutes exposure, that is, appearances in the media that are otherwise impossible to pay for. Festivals take on the role of transforming marketing into news, with a consequent, positive externality favoring the film’s owners. Obtaining prizes and mentions in the competition increases the exposure even more towards the film’s upcoming international sales. The film thus completes its first appearance in a market, its market launch. It is worth noticing that a select group of films make their market launch during their development stage, that is, when the plot or treatment have been finished, but not yet with a definitive version of the screenplay. These are meant for development markets existing under the wing of different festivals and institutions, having the goal of strengthening the scripts, the funding and general development of films before they proceed to pre production stage. Technically, these presentations to international film industry professionals are by themselves market launches, and it is not a good idea to let too many years pass between this particular type of launching and the film’s premiere. Films that had their market launch during development shall rather try to strengthen their relationship with the festival or institution

supporting the project with regards to a prompt release and a second market launch, this time with the film finished and ready for commercialization. The film begins its commercial life with the positioning into a market. From there, it has about 24 months to exploit the theatrical releases in the different territories—what is also called the theatrical market. For this, at the time of the release, there is a series of elements that need to be ready in order to exploit the exposure received and position the film. Posters, film stills, pressbooks, and trailers of different lengths, are mandatory. The effect of exposure is finite; the film fades away quickly from memory, and gets diluted in the ocean of films struggling for a little exposure in each festival every year. That is why it should be properly packaged in advance.

c. THE FIRST FESTIVAL IS THE KEY If the film does not get selected in a competitive festival with a market, the film shall divide its strategy: attempt competitive selections in festivals without market, and prepare a market launch afterwards. Two presentations imply double fares and lodging, and overall, a double effort. The first festival marks the beginning of exposure: the first reviews and the first encounter of the authors and their audience. It usually marks the personality or type of film we talk about, and in this sense one should be extremely careful in the way the film is communicated. It is key to select and hire an international press agent for several reasons. In the first place, coordination of the festival events, the best “photo opportunities” of the film’s authors are crucial, as this material will serve for all the rest of the commercialization. Some festivals have extremely rigid protocol systems, and it is very important having a coordinator like this agent. Secondly, the relation with the media specialized in cinema business—also called “the trades”: Variety, THR, Screen, among others—cannot be neglected in any way. These are media with powerful influence in the public communication of the film to future buyers, which are all subscribers of these magazines and websites. At last, the coordination of the international press agent with the press agents in each sold territory is also useful, as the press materials of one will also serve the others. Finally, the presence of the launching festival in the form of laurels in the promotional media (like posters and trailers) is an inescapable marketing element.

d. REAL POLITIK DE LOS MERCADOS

Having a sales agent, and gaining access into a competition and market is not everything. Undoubtedly, some agents enjoy a dominant position, whether because their films are usually selected for competitions, or because they have better stands and promotional materials. Buying certain advertising slots it is not only about money; the markets are service providers for the sales agents, so there is a commercial relationship previously developed between them.

In this sense, the location of ads in the markets is a matter of marketing, and a specialized view is relevant. One can learn lots from this, in order to make the most out of the promotion and marketing budget available for the

international release. It is the sales agents themselves who pay these costs in advance, and therefore, a sales agent with cash flow is highly relevant. A similar thing happens with the trades, as the relation of the international press agent with these media guarantees better informed interviews, and better visibility spots for the films. In addition, trade magazines will cover their clients better in terms of advertising; it is therefore appropriate to foster relationships among the trades and public and private institutions committed to the international promotion of each countryâ&#x20AC;&#x2122;s cinema. It is a fact that Berlinale, Cannes, and Toronto take up the market space concentrating almost all the commercial buying and selling of feature films. This is not convenient for the Latin American films, as most of them are not spoken in English and have production budgets conspicuously lower. For a sales agent, income from Latin American territories do not represent more than 5-7% of total exploitation, therefore the promotional efforts for those territories are moderate, and in some cases nonexistent. There are not always definite strategies to deal with Latin American film festivals, beyond collecting the screening fees. The natural tactic of Latin American films is attempting to open new sales venues, like San Sebastian, Venice, Locarno, and also Toulouse, Biarritz, Amiens, Sundance, NDNF, Miami, Chicago Latino, Los Angeles LALIFF, to mention some examples. Another tactic, this time by the producers, is trying to leave the Latin American or Ibero American territory outside the deal when negotiating with the sales agent, and then distribute in these territories by themselves. A higher profile strategy with public and private involvement has been to organize markets particularly oriented towards the Latin American products. One each semester, the markets of Guadalajara (March) and Ventana Sur in Buenos Aires (December) try to attract buyers to our territories, and have become relevant venues for acquiring films. They are complemented with related activities, like works-in-progress, projects in development, and summer activities with a touristic interest. For a Latin American film, the option to find a sales agentâ&#x20AC;&#x201D;or having one alreadyâ&#x20AC;&#x201D;and make sales in Guadalajara or Ventana Sur has become an inescapable action every year, in just three years. It is relevant that the region governments have taken notice, making specific resources available to foster the travel of missions and the promotion of their products in these markets.

3. THE CONTRACT WITH THE DISTRIBUTOR OR SALES AGENT

The sales agent that decides on signing a film would consider different variables. In general, the sales agent assumes that the film has an exploitation potential high enough as to produce utility margins for themselves and for the film’s producers and distributors. Secondly, the sales agent legitimates with their seal, as a filter and selector of high level films. Some sales agents make their bets on a new discovery or debut film that may successfully crossover to mainstream —like emblematic cases as Son of the Bride, Amores perros, Y tu mamá también, or more recently The secret in their eyes. Others, closer to a boutique criterion, would choose a film based on their interest in a director’s career, and the potential it may represent their second, third, or fourth film—some examples of this trend are Lucrecia Martel and Carlos Reygadas. Other sales agents would simply work by volume, that is, they want a high stock of products to commercialize, as they know that by simple statistics some of them will sell. At last, there are sales agents who are just beginning, and they are looking for their first film to make their own launch in the market as sellers; even when they don’t have many resources or networks, they will put all their effort in working the film in the best possible way to profit from the sales. Whatever the style of the sales agent, the deal is structured based on four cornerstones.

a. TERRITORIES

The sales agents will always prefer to represent the film all around the world, as this will increase the sales option for the same marketing campaign. Usually, only the territories of origin are excluded, which are the countries taking part in the coproduction—in this case each producer will choose a local distributor, keeping 100% of sales of the territory.

b. EXPENSES

One of the most important advantages of having a sales agent, is that they will advance the international promotion and marketing expenses, which in the case of class A festivals may easily surpass € 30,000. It is a cash investment at times when the producers’ resources are at its lowest, after financing the film’s production and post-production.

The relevant thing is to define a maximum cap to these expenses, as the sales agent will reimburse these expenses first before starting the distribution of sales income. Capping the expenses too high can be detrimental, as the producers will see quite reduced the perspective of obtaining a utility margin to distribute among them and the investors.

c. FEES

For each sale, the sales agent will receive a fee usually ranging between 15–30% of the sale made. Insofar the film comes well packaged, with good marketing elements, and hasn’t been requested too high an MG, it is possible to negotiate a lower commission. But as the producers require an MG, the commission rises accordingly.

d. THE MG

4. EL DELIVERY

The minimum guarantee (MG) corresponds to a cash advance required by the producers at the time of closing the deal with the sales agent. It is generally required when the film has arrived to the commercialization stage in deficit, but also when there is a lack of resources to finance the marketing elements or even the actual delivery of materials. When this advance is not necessary, it is better to avoid it, or at least to immediately distribute it among the producers and investors. Spending 100% of the advance in production expenses would usually introduce a highly demotivational factor within the producing team, which needs the motivation to go out and sell. That is why the MG shall be always oriented towards stimulating a new wave of involvement in the film, this time for the commercialization. The enthusiasm of the director and actors—as promoters—are key at this point of the chain. It corresponds to the physical delivery of all the media allowing the commercialization of the film. As these are several elements, they are sometimes called deliverables. They can be divided in three elements or parts:

a. THE ASSETS These correspond to the intellectual property chain of title, that is, a series of legal documents, among them: i. ii. iii. iv.

The copyright registration of the plot or treatment and screenplay at the intellectual property registry. The transfer of rights of the adapter, the screenwriter, and the director to the producer. The transfer of rights of a previous work, as a novel or play, in case it exist. The transfer or licensing of rights and connected rights of the musical works used in the film, whether original soundtrack (OST) or recordings previously produced. v. The authorization of industrial property in the case of trademarks and commercial patents. vi. Legal incorporation documents of the film’s production company to which all the rights to commercialize the film have been transferred. vii. Contracts with investing entities that demand services in return, as mentions or logotypes. viii. Contracts with investing entities taking part in the commercial exploitation of the film. The sum of these documents allows the producer to authorize the sales agent or distributor to commercialize the film on their behalf

. THE FILM’S MARKETING MATERIALS These are the stills, pressbook, graphic designs, electronic press kit (EPK), and posters. From these elements, each distributor may create their own graphic and audiovisual pieces for their marketing campaign in a territory. Usually all the material is left on a folder in the cloud to be downloadable at ease from each sold territory.

c. THE IMAGE AND SOUND MASTERS These not only include the digital masters for image (HDCam, HDCamSR, hard drives) and audio (DVDs, hard drives), but also 35mm masters: the internegative and the sound-on-film. While these materials are not physically delivered, they are stored in a laboratory or post-production facility. A letter of access is delivered where the owner of the rights identified in the assets, authorizes a sales agent and distributors to produce the exhibition prints for each territory. These elements are always technically checked by a second laboratory or facility on behalf of the sales agent, to certify that the quality is suitable for broadcasting and theatrical exhibition.

5. OUTPUT DEALS AND WORKING TOGETHER AGAIN

The final deliver of deliverables is a sine qua non to collect any kind of cash advance on sales, and it is not unusual having to invest the very advance in paying all the deliverables required by the sales agent. It is relevant to consider the cost of deliverables within the film’s budget, something that is not always the case in Latin American cinema. To attenuate this shortfall, there are local and regional funds particularly oriented to support the deliverables. It is clear that the commercial potential of a film is not only defined by its quality and international release, but also by the capacity to have duplication masters to make all the necessary prints and copies according to the different exploitation windows—theatrical, TV and internet.

The right gearing of production and distribution links is not something easy to achieve in the context of Latin American cinema. The production budgets not always consider the cost of deliverables, nor that of prints and advertising (P&A). Consequently, films come into commercialization without all the necessary materials for an effective commercial exploitation, or without budget to produce them. In this sense, the sales agent tries to maintain the advance on sales to ensure the proper finalization of the film, something not always liked by producers or coproducers. Otherwise, the sales agent will not take the film into their catalogue. That is why when thinking of having a sales agent, one shall consider coming to him with the work well done: with a film that is not only well produced, but also well packaged. For the same thing, after a good commercialization experience the sales agent will try to keep working with the same director. Some sales agent’s contracts include a “first offer, last refusal” clause, according to which a director shall first present their next film to the same agent to take it or reject it. This clause may actually mean a good opportunity for a director, and for this it is also convenient for a director to keep working with the same producer along their filmography, as it means a strengthening of the chain of creation, production, and commercialization. Consequently, a group of producers have the interest in establishing output deals with the same director, that is, guarantee the production of two or more films in exchange of fees or participation, while trying to keep the same sales agent. A strategic perspective like this allows focusing all the attention in the film’s quality control and financing (including distribution), and ensures a fluent commercialization process that instead of being an obstacle becomes a natural, well planned step.

6 PROBLEMS OF THE LATIN AMERICAN TERRITORY

As we have seen, Latin America as a whole is a territory representing a minor percentage of the total possible international sales of the commercial exploitation of a film. This has some causes that are worth noticing.

a. SCARCITY OF DISTRIBUTION ENTREPRENEURS

During the 60s and 70s, the business of film distribution in Latin America was fragmented in countless movie theaters, each one a company by itself. This meant the existence of numerous independent distributors importing different film contents into their territories while solving the logistic problems derived from circulation. That is how French nouvelle vague, British free cinema, Italian neorealism and post-neorealism, or American independent cinema propagated through different latitudes of the planet while becoming a referent and an epoch. The progressive substitution of the movie theaters by the multiplex during the 90s implied a concentration of the distribution business and a notorious reduction of diversity regarding the origin of films for Latin American audiences, reaching a concentration of the offer of American films taking up around 90% of movie screens. In such condition, current distributors focus in the mass distribution of the American products, with simultaneous releases in different countries. Only the remaining 10% of screens of each Latin American country are for films from other countries. With a reduced space and unequal competition, the figure of the “independent distributor” tends not to exist. The job of exploiting a film by circulating it through Latin America may be titanic: a great expense with small retribution. Because of this, there is little specialization in the film distribution venture. In other words, each Latin American country has few distributors and movie screens available for theatrical exploitation of films from countries other than the U.S.

b. FRAGMENTED TERRITORY

Traditionally, distribution in Latin America has tried to span groups of territories when these markets are too small as a way to boost the box office, which in turn stimulates better P&A campaigns. Colombia, Venezuela, Ecuador, and Peru are considered one single exploitation territory (“Andean countries”), just like Chile, Argentina, and Uruguay (“Southern Cone”), while the giants Mexico and Brazil—with a notorious higher amount of movie screens and audience—each is treated as a single territory. Traditional Latin American distributors prefer to acquire the license to sell these four major territorial groups. It is clear that in such conditions, film distribution faces serious obstacles in territories like Bolivia, Paraguay, or Central America. In the case of independent distributors, who know how to exploit only their own territories, the goal is even more difficult to reach. Chile serves as example; a territory producing a remarkable amount of films every year—almost 30–, but its distributors find impossible to bring films from other continental countries inasmuch as the commercial exploitation of a film in such small territory forbids reaching an equilibrium between income and expenses for each event. Chile only has near 320 screens and 17,000,000 tickets sold

6. LOS PROBLEMAS DE AMÉRICA LATINA COMO TERRITORIO 36

in 2011; 35 films from other countries were commercially exploited in Chile, against 129 American ones.

c. TOO MUCH WORK FOR A SMALL BOX OFFICE

The selling experiences of a film in the Latin American territory itself are usually low, as we have noted. This implies the sales agent will pay less attention and effort to the Latin American commercialization, invest fewer resources, will not travel to Latin American festivals, nor prioritize the exhibition prints available for these territories. Even worse, in some cases the sales agent may delegate the commercial management back to the Latin American coproducer, requiring their assistance sending materials and prints as they are physically closer than the sales agent—usually based in the northern hemisphere. In this sense, the sales agent’s wish to represent world sales will conflict with the Latin American producer’s interest in keeping Latin American distribution for themselves—a work they will have to do anyway, or at least collaborate actively if they wish to increase the exploitation in the continent. For the same thing as well, a Latin American distributor trying to improve the circulation of films within the region shall be able to negotiate the commercial conditions offered by a northern-hemispherical sales agent to a Latin American film —which is also a cause of the reduced circulation of Latin American films in their own continent, already given as a whole to the sales agent’s administration. The logical thing would be, when closing a deal with a sales agent, to exclude Latin America from the commercial representation. But this would affect the deal negatively: less presale, less chance to recoup distribution expenses, and overall, less interest of the sales agent to assume the commercialization of the title; if they are going to do the effort of marketing the film, and every country is a potential territory for sales, why renounce to represent sales all around the globe? Latin America thus ends up in a weird limbo, as a necessary cession resulting of the ambition of the world exploitation of a title, but as a virtually dead territory by its residual commercialization. Meanwhile, independent film production thrives in every country in the Latin American region thanks to the public incentives to production, oriented towards the supply.

d. EXHIBITION

The American majors produce between 20 and 30 titles a year, that is, 120 to 180 films every year altogether. According to industry statistics, 50% of box office comes from territories other than the U.S. Therefore, movie screens around the world are important for them to pay for their very high production and distribution costs. Insofar as the American cinematographic products take over, and distribution concentrates, the exhibitors increasingly develop supplier relationships booking their screens. In this context, the offer of Latin American titles coming one by one, without regularity of stock and deliver, makes the Latin American products much more complex from a logistic perspective, and therefore, less attractive for theatrical exploitation.

The exporting of American films establishes their own distribution branches in each country to this end. By contrast, Latin American cinema does not have broad strategies, and doesn’t either organize itself to improve regularity in the offer of titles, in relation to dates and amount of prints. Each Latin American film is, ultimately, a distribution pilot facing an exhibition system with tacit rules established by a practice that followed from a dominant position. A second barrier is the high cost of 35mm prints, as the production of a 35mm image and sound negative costs beyond € 40,000; In addition, many Latin American producers would skip the internegative in order to reduce costs, which means a limited stock of composite prints. The sole fact of deciding to cut laboratory costs is a substantial commercial decision that will affect delivery. On the other hand, the usual practice is to recycle 35mm prints from a territory to distribute them in another, that is, reselling the prints, even though they suffer scratches and cuts and the quality is much reduced in a few months. Towards the imminent end of the 35mm exhibition system, the advent of DCP as the standard format of digital projection did look as an opportunity for Latin American distribution. But this is not yet the case, by two phenomena: a. Facing the need to invest in converting the theaters’ equipment, the exhibitors considered transferring the cost to the distributors by implementing a fee for each DCP exhibited in their screens. The logic of this concept is to consider that since the distributor’s costs for duplicating a hard drive to exhibit DCP is much less than producing a 35mm print, then the distributor should contribute by paying the exhibitor a fee for each print they are saving, amortizing the exhibitor’s costs for equipment investment. That is why it is called “virtual print fee” or VPF. The savings that could mean not producing 35mm prints is affected by this policy. In any case, this mechanism should end once all the screens experiment the DCP conversion, and therefore, its application has an unstated end date. b. The first DCP screens in multiplexes are mostly dedicated to 3D exhibition. For this, Latin American films will not have real access to exploit DCP copies in multiplexes but until the conversion period ends. In Chile, this process is expected to be finished by early 2014. Other problems arise from the way in which multiplexes exhibitors implement the film’s promotional materials— particularly posters, trailers, POPs. Each complex requires particular dimensions for posters and backlits, and the distributors need to comply with these when printing the materials. There are also particular deadlines for admitting 35mm trailers in the screens—usually 30 days in advance—and POPs that are not always respected by local distributors. On the other hand, the positioning of POPs in the multiplexes sometimes represents real territorial guerillas competing with the materials of American films. This difficult context for distributing a film in the multiplexes immediately raises the question for an alternative circuit of movie theaters. What happened in Latin America to the arthouse cinemas, the neighborhood cinemas, and the municipal screens or those owned by cultural corporations? Here the setup has problems of its own: very old 35mm technology, cold auditoriums, uncomfortable seats, incapability to take part in a network of theaters, different accounting and billing systems among the venues. There is also a tendency of these exhibitors not to inform box office results publicly, but only privately to distributors, making impossible to measure the real impact of these screens. In this sense, the pilot experience of building a network of state-owned screens in Argentina is highly relevant for the regional context, as it directly confronts the underlying problem of the scarcity of screens.

7. SALES AGENT LOOKING FOR DISTRIBUTOR

In the case of signing a sales agent, the Latin American film enjoys important benefits. First, the sales agent will make all the work of applying to festivals, and then, will position the film within each festival in which the film is exhibited. After that, begins the hard work: to find a buyer.

a. LARGE TERRITORIES FIRST

The sales agent will focus in selling the film to the large territories that also present a good track of consumption of international films: the U.S., and France are the countries with the best box office for these. It follows Spain, Germany, Italy, U.K., Mexico, and Brazil. That is why reducing the territories available for sale may notoriously diminish the interest of a sales agent for exploiting the film. It is convenient to have these territories available, which is usually impossible when some of these countries are part of the coproduction, as we have seen. It is also not a good idea having made previous exhibitions in those territories, as it violates the prestigious festivals’ rule of world or continental premiere, lowers the film’s profile, and even risks being pirated and distributed informally. Sometimes the craving for exhibiting the film before cutting a deal with a sales agent produces problems that will make the exporting of the film more difficult.

b. REGROUPING TERRITORIES In the case of smaller territories, but with considerable audience, the distributors prefer to assume the sales per regions. Thus, the “Andean”, “Southern Cone”, and “Central America and the Caribbean” subregions we mentioned, and we can also mention Benelux (Belgium-NetherlandsLuxembourg). It is certainly more attractive for a seller to have all the territories of a subregion in order to make a broader and better priced sell to a distributor. In any case, the existence of subregional distributors has also been receding. Pascual Condito, Bernardo Zupnick, or Altafilms are excellent examples of distributors dealing with the Southern Cone, but they are few in relation to the amount of titles available in stock for commercialization. Again, the scarcity of screens is an insurmountable barrier.

c. THE MG The seller dares an MG as a way to ensure the capture of the film for their catalogue. But there are other reasons that made the minimum guarantee a standard practice in the market. On the one hand, the right fulfillment of the delivery requires an additional capital that the producer doesn’t have, and the use of the MG is convenient for the sellers themselves as it guarantees they will obtain the materials needed to sell.

On the other hand, the producer may have financed the film with private equity, and these usually have priority to recoup their investment from the first sales, making the MG crucial to reimburse the investor and sustain their motivation and entrepreneurship in the risky business of cinema.

The best situation, without any doubt, is obtaining the MG having covered already the delivery costs, making it the first net income of the film to be immediately shared between the film’s owners.

8. PRODUCER LOOKING FOR DISTRIBUTOR

On their part, distributors in every territory should understand the need to always advance an MG to the sales agent for a title, which allows the flow of capital described, but also it is a testimony that each link in the commercialization chain is taking a risk and boldly competes to recoup the risked capital. Sharing the risk is healthy for everyone, evidently. There are many cases of Latin American films that may not capture the interest of a sales agent. The reasons may vary: the film was too “small” in terms of production, it was not screened in good conditions, the casting was not recognizable enough, a target market difficult to identify, or it simply wasn’t liked.

a. UNTIMELY TASK

Most of the time, the problem began when the producer started looking for a seller too late. Differently than focus groups, the film is screened to the seller only once. That is why the moment to screen the film to a possible sales agent is generally delayed quite a bit. Because of this, when a film is relatively ready to screen, the exploration for a seller shall be quick, persevering, and insistent. A prompt answer is required. If it doesn’t get a seller, the producer has no other choice than assuming the festival work, expecting to find one or more distributors on each territory to purchase the film directly.

b. FESTIVAL PREMIERE

If the film has a commercial opportunity in a certain territory, the producer has to look for the right festival in the said territory where the film may find a buyer. Then they should particularly invite the buyer to watch the film in the occasion, performing some positioning actions in the context of the event. Printed material, advertisements, or an event are habitual actions.

c. MATCHING PRODUCTION VALUES AND TERRITORIES

But, which territory may want to buy a particular film? This is often a random search, a needle in a haystack. The commercial history of films similar to the one being sold, however, may help detect particular tastes of certain territories. Certain production values of the film can be also used as reference to orient us towards the territory to approach. A known actor or actress from another country, a particular treatment of music, a narrative genre, may provide clues towards the circulation of the film for its commercialization. Finally, the language of the film also immediately orients what markets to approach: those speaking the same language. In Latin America sometimes there have been attempts to make film directly in English, as a way to increase the access to markets. It is also known the fact that for the American market, any subtitled film is immediately considered “arthouse” for this reason alone.

STATE EXPERIENCES IN AUDIOVISUAL DISTRIBUTION IN CHILE

LEONARDO ORDOÑEZ GALAZ (39)

Chile

M.A. in Public Policy and Governance, with a specialization in Economy and Culture by FLACSO. Public administrator; B.A. in Governance, Public Administration, and Political Science by the Universidad de Chile. He redesigned and directed the Program for the Advancement of Cinema and Audiovisual Industry by CORFO—the Corporation for the Advancement of Production of Chile’s Ministry of Economy— for more than 8 years. This program has become a fundamental pillar of the development of the new Chilean cinema today. His management made possible the design and implementation of new programs and projects linked to the audiovisual development. He designed and directed the Chilean Program for the Advancement of Creative Economy, a program by CORFO for the installment of productive platforms allowing the improvement of management, networking, and fostering the process of distribution and diffusion of the Chilean artistic production. He directed the Department of Artistic Creation of the National Council for the Culture and the Arts (CNCA). He was in charge of conducting of the Cultural Funds, and the design and approval of public policies for the Chilean artistic sectors.

le leo o. @ or sa do nt ne iag zg oc @ re gm a ai tivo l.c .c om l

He is currently chief executive of SANTIAGO CREATIVO, a platform for the advancement and exporting of goods and services from the creative industries of the Metropolitan Region in Santiago, Chile. He works as an international consultant for cultural matters, with a focus on entrepreneurship, creative economy, and development of new businesses for the artistic and cultural sectors. He also teaches and lectures at different Chilean and international universities.

One would have to recall, not just the difficult moments of the democratic transition of the 90s for this sector, but also the fact that if it wasn’t for the distribution of films during the period 1999–2009 it would be hardly possible to enjoy the thematic diversity that the Chilean cinema offers today, nor the different generations of filmmakers and genres, the local and international recognition the sector enjoys today, and the quantity and diversity of professional university schools teaching the subject—all of which are recent and basic elements to think and implement daring commercial strategies, if the goal is to reach this commercial success. The commercial requirements for the Chilean cinema are mostly derived from the Hollywood model and its results, which, for Chile and many countries in the world, is the only well-known, immediate referent, with which our country coexists every day. But to get to that, one would also have to recall that the United States had considerably more time than the 10 years this study considers, the same 10 years it has existed in the State of Chile an Integral Program for the Advancement focused on the needs that had to be satisfied at the time for the audiovisual sector. The same program that had to get in charge of nurturing and creating generations of filmmakers, that had to support the installment of technical and professional skills for filmmakers around the country and for all the productive chain of an audiovisual work, that stimulated the necessary thematic and format diversity, fostered the creation of schools and regional cinema clubs, that ventured exploring the international markets to install itself in the world and obtain experiences—mainly because, in a systematic and integral way, little of all these had been experienced before the period 1999–2009.

STATE EXPERIENCES IN AUDIOVISUAL DISTRIBUTION IN CHILE

At the time of raising the question whether Chilean cinema is an industry or not, many—even within the sector—tend to associate their answer by referring to the production process and the commercial success of a film (box-office). Among these many, it is possible to obtain a quick and negative answer together with a simple speech about what the State should and should not do for filmmakers to reach this much longed for commercial success, loosing sight of the context of the country that makes cinema, and those working in the sector, currently a productive activity.

It seems that it is not an issue in our country to assume that the current audiovisual problematic is at the international level; or that in ten years, Chile joined the international problematic of the filmproducing countries. The worrisome scarcity of audience development, the aesthetics and topics dealt by the near seven generations of filmmakers working in Chile, the outdated business model of the multiplex exhibition, the technological changes impacting the behavior of the consumer of films, and the globalization that brings all the diversity of contents and formulas, necessarily forcing the states to foster innovation for distributing—all these are sufficient evidence to think of a new challenge for the audiovisual sector. Is the Chilean audiovisual sector aware of this international problematic? Or are they still focused, as in the 90s, on applying to government funds to produce just one film? Does it solve anything to install a new multiplex exhibiting the same kind of films with the same business model than the existing screens? Do they think this happens in Chile because of the political views of one side or the other? Do they think that public contests for funds will solve all the infrastructure, access, audience, distribution, and commercialization problems?

This document is part of the investigation, approved with honors, towards obtaining a MA in Politics and Governance by FLACSO (Latin American Social Science Faculty). The thesis considers concepts of the creative economy and the international audiovisual reality—both contexts with little assimilation in Chile, although generating much concern and development at the international level—which are useful to value and describe what has been done by the action of CORFO regarding film distribution in Chile between 1999 and 2009. Observing results and detecting weaknesses, in order to generate knowledge and think about new areas of promotion, may result interesting for those with the conviction to keep advancing the cultural and artistic sector, for those searching an in-depth approach, and for those who want to put some content into their simple speeches. The situation of the private sector escapes the attention of this analysis, as it drifts to particular relationships that for all effects are the interest of other fields of study. CONTEXT Countries that grow and develop, they do so with their culture and their people. According to UNCTAD1, countries had to look for creative solutions to keep developing in times of crisis. The most remarkable is related to bringing an economic dimension closer to the cultural sector, taking a qualitative and quantitative leap at the time of creating public policy, plans, and programs, increasing the sustainability of the sector when considering this approach. The processes of distribution, commercialization, and market creation are directly related to fields of economy. Each economic sector defines its own ways to improve the processes of all the productive chain, as well of their surroundings, to increase markets, territories, improve technologies, etc. Nevertheless, regardless if the culturalartistic productions become commercial successes, they will keep being primarily cultural products directly touching the life of human beings. That is why the relationship between economy and culture requires special treatments and considerations that need to be underlined, published and communicated, in relation to other traditional economic sectors of Chile. In the period 1999–2009, in countries that decided to include in their economic growth elements proper of the creative industries—Colombia and the UK, for example, both very different in their conformation—it is notorious the contribution made by just adding the economic dimension to cultural activity, which has resulted in an improved quality of life for its inhabitants, and has made them known through he world by the complementary insertion of this approach, which in turn, among other benefits, boosted the image of the country and the tourism, which translated in a progressive GDP rise in the last years2. Pretending to guarantee the free circulation of cultural goods and services today by the public contest of cultural funds, and leaving this responsibility solely on the applicant and the projects they continue to present in design and reach, is inconsistent with the current demands, international problematic, and the goals and challenges not only of the country’s audiovisual sector—as they keep raising questionings from the citizens and the Ministry of Economy when designing and discussing the new public budget.

1 UNCTAD: : United Nations Conference on Trade and Development 2009. 2 British Council: “The Creative Economy: an Introductory Guide”. 2010.

To look for and communicate the Chilean experiences in distribution with an economic approach, allows detecting lack of intervention, or keep thinking possible options for a joint effort between Economy and Culture that might be easy to establish. Seven cases were followed in the present investigation, covering all the types of support delivered to audiovisual distribution by the State of Chile through CORFO, during the 99–09 period; and, in some cases when it corresponds, we mention examples of film projects aiming to demonstrate the different state-supported initiatives and their main results. To retrieve these data, it was necessary to find information of the projects by using qualitative techniques. The seven cases of support delivered by CORFO regarding audiovisual distribution for the period 99–09 are the following: 1. 2. 3. 4. 5. 6. 7.

CORFO Support for the Development of Audiovisual Projects Associative Projects Fostering Film Distribution and Commercialization CORFO Support for Audiovisual Distribution and Commercialization nternational Co-distribution Agreement Technical Assistance Focusing on Audiovisual Distribution Market Information International Context: Prospecting New Markets and other programs.

CASE SELECTION The analyzed cases are linked to every line of support that CORFO offers, or has offered, in relation to audiovisual distribution and the improvement of its environment during the period 99–09 (100% of cases). In addition, the information obtained from the annual market research made by the Council for Audiovisual Art and Industry, allowed to know the results of local titles in the local market in relation to the designed strategies that obtained support for distribution. SCOPE OF THE INVESTIGATION The methodology used is oriented to develop an instrumental case study in which the study of a single experience— in this case CORFO for the film distribution stage—makes sense as it allows to understand the problematic beyond the institutional experience obtained in a particular way. In an instrumental case study, the researcher’s zeal goes beyond the intrinsic value of the experience, but it also requires to analyze it to create knowledge and learning about questions or topics that allow to develop a systematic body of professional knowledge. In this sense, to analyze CORFO’s singular experience in this stage of the audiovisual productive chain is not the goal of the research, but a means or useful tool to contribute to the development of a field of professional knowledge that supports future strategies allowing advancing the development of the audiovisual sector and foster the creative industries in Chile.

THE ROLE OF CORFO The Corporation for the Advancement of Production (CORFO) depends of the Chilean Ministry of Economy and works for the economic development of the country by a series of instruments at the service of its clients with the goal of finding a solution to a series of market problems or failures that restrain the growth and expansion of economic sectors, and the markets for entrepreneurs and businessmen in our country, working from the microenterprise level with several credits at their disposal, as with small and medium enterprises (SMEs) highly needing the opening of new markets and more sophisticated business networks3. CORFO’S EXPERIENCE FOSTERING AUDIOVISUAL DISTRIBUTION In order to understand the scope of CORFOs actions, we pretend to analyze some cases focusing on the Chilean experience of development and fostering of the audiovisual industry, a sector that took off in Chile in the last decade. Some factors that made it possible: • Political will that analyzes the demands of the citizens and translates them into state programs projecting beyond the government in office. • Formal organization of the sector and their decision to generate an economic sector. • Coordinated public institutions. • Participation of universities and schools for professional education. • International coordination. The advancement of globalization and new technologies has become one of the main factors strongly affecting the development of audiovisual products oriented towards other markets and requiring technical resources for execution. Both factors directly affect the process of audiovisual distribution since this process uses different media and windows to exhibit and make these produced contents known to their audience. Therefore, media, audience, and territory are three fundamental concepts taking part in the equation to manage to implement a good distribution process, concepts that many times seem to be absent from the distribution strategies of creative audiovisual contents. The audiovisual industry has a high technological content. Today, physical proximity is not required from those taking part in the chain of production. Some of the processes of the production chain that have been most affected by this are distribution and commercialization. KEY FACTORS OF SUCCESS IN THE CHAIN OF PRODUCTION In 2004 analyses were made on the projects favored by its process of resource allocation, in order to know the progress and create a system of management control allowing improving the performance of the given support.

3 www.corfo.cl

TABLE OF FILM AND AUDIOVISUAL ACTIVITIES

Activity A

Idea

Screenplay

Previous activity

Minimum Optimal Time (months)

Business Plan

Budget

Shooting Plan

CORFO Film & TV F

Hiring

G H

12 DyE

Production

Shooting

Audiovisual Council

Ibermedia

CNTV I

Transfer

8 H

Editing

Answer Print

Cultural Funds

Marketing Plan

Release Prints

KyL

Advertising

Distribution

PREMIERE

M, N y Ñ

Other Channels CORFO Distribution

Dirac

ProChile

*Average total duration, according to table of estimated time per productive stage, converted to months. Source: Study of Management Control for the Audiovisual Program CORFO, 2004.

4 Aliaga Romero, Ignacio and Ordóñez Galaz, Leonardo: Estudio de Control de Gestión para el Programa Audiovisual CORFO, 2004

In this diagram, the audiovisual productive process is shown in stages with a time estimated from the production duration of some films that went through the whole process—some of the films are Machuca, Subterra, Padre nuestro, Mi mejor enemigo. It is noticed that the critical path implies that the activities to control are preproduction, production, postproduction, and distribution—all these fostered by the Program for the Advancement of Film and Audiovisual, with an average duration of the whole process of 208 weeks (≈ 3.5 years). The critical points are located in the nodes between the activities, where efficiency factors shall be introduced constituting the foundations for plans of action for a continued progress. In the following diagram, a more detailed route of activities can be observed, based on the information obtained from the Table of Film and Audiovisual Activities.

111/111

COMMERCIALIZATION

PREPRODUCTION 0/0

TI UC

OD UC TI

PERT DIAGRAM 1

Audiovisual Productive Process by Stages

58/58

DISTRIBUTION 160/160

208/208

PERT DIAGRAM 2

Audiovisual Productive Process by Activities E

J K

15/15

17/17

20/20

22/22

26/26

30/30

45/45

46/46

D 0/0

3/3

8/44

Source: Study of Management Control for the Audiovisual Program CORFO, 2004.

C 5/14

0 47/47

48/48

51/51

It can be observed that the distribution process is relatively short in relation to the time it takes to produce the film, and what is worrisome is that the effort put in the creative and productive processes might loose its sense if it wouldn’t exist a system so important as the production platform focalizing on distribution, considering this is the most important stage sought after by the director and screenwriter—the creators—to produce the expected communication process with the audience. It shall consider two effects: 1. The inescapable and most important contribution to the cultural development is the distribution of films for entertainment, education, or information.

CASE STUDY

2. Eventually, the possibility to generate commercialization for these contents, whether in the local or international markets, when an interest exists from the filmmakers to begin diverse commercial strategies for reaching their goals.

CASE 1: CORFO SUPPORT FOR THE DEVELOPMENT OF AUDIOVISUAL PROJECTS With the goal of stimulating national production, professionalize the execution of projects, improve the management in the sector, learn the implications of an audiovisual project beyond production, take investment decisions, and consider distribution and commercialization since the inception of audiovisual productions, and ease for filmmakers the process of reaching an eventual objective audience, CORFO grants through the mode of public contests a non-refundable contribution to production or distribution companies presenting new projects for feature films, short films, and other productions for new formats and TV series. This mode of support has been operative in CORFO since 1999 to date, period in which it has considerably improved in relation to its first editions. The information of projects supported by CORFO for the period 1999–2008, and the information on the contest can be found at www.corfo.cl It could be concluded at that time, that 10% of projects supported had been released5, accomplishing the whole productive chain, at least at the local level; 34% of projects did not continue with any productive process after obtaining the contest; while 56% of the cases presented some advancement in relation to when they took part. To the year 2009, 30% of projects supported in development had become films and had been released or near commercial exhibition. Also 40% of projects supported to the date were in a stage of advancement towards its realization. As a public policy of advancement of audiovisual production, it can be considered a good case, since it considerably raised the amount of national productions in relation to the 90s—the initial goal of the support—, and forced filmmakers to think and decide whether to pursue in the search of funding for the following stages in the chain of production, or to redefine the commercial strategies and rebuild the business plans to look for better options of international coproduction. 5 By released, we understand the theatrical exhibition with sale of tickets, for the case of feature films and documentary features; and TV broadcasting in channels with mass audience, for the TV series.

CASE CONCLUSION

In order to stimulate the quality of audiovisual contents, and to install technical skills in filmmakers to design the projects and business plans necessary to make decisions, this kind of support has been fundamental. It all directly affects the distribution at the end of the chain of audiovisual production. The fact that in a new sector, 30% of what obtained support became a commercial release means that at least 80 new titles were released and distributed in the period 99–09. The sound and lightning problems of the films released at the beginning of the period were clearly overcome, adopting state-of-the-art technology planned since the development stage, which allowed to enjoy Subterra, Machuca, 31 Minutos, Chile puede, Promedio rojo, to name a few of many local productions and coproductions that began with this support. This case has served as example of good practices for other Latin American countries, for example Colombia, Uruguay, Mexico, and Ecuador. Most of Chilean cinema’s current releases have begun their process at this stage. Nevertheless, as informed by international expert opinions, the raise in production—previously celebrated by local filmmakers—has become a new problem, and therefore, a new challenge. This is because few filmmakers think on the distribution process since the inception of the project. Since considerable help from the state exists for production, there are applicants with good ideas looking for funding who see in these concrete options for obtaining an income and leaving aside the variables of distribution until a few days from the premiere—an untimely moment to look for support for a stage requiring particular skills beyond film production, such as knowing objective audiences, market segmentation, media strategy, commercial strategies for the sale of rights, sale prices, among others.

CASE 2: ASSOCIATIVE PROJECTS FOSTERING FILM DISTRIBUTION AND COMMERCIALIZATION This is an instrument of production advancement allowing dealing with a problematic common to a group of at least five entrepreneurs that cannot be solved by themselves, in an associative way. This support started being implemented for cinema in the 90s. As a result of the previous experience, however, in 1999 opens a modality specific for cinema and audiovisual productions, PROFO. Sixteen PROFOs for film were organized, approved and executed, from 1999 to 2004. This instrument allowed to deal with film distribution and commercialization as a joint effort, as it was recurrent a demand from the producers for the expenses of this stage, the role of distributors and the need to release the local works in an optimum level, to communicate to the community the new Chilean productions hitting the screens. Sixteen PROFOs are a representative sample to say that 90% of the local production is released with the support of CORFO, as we are talking about at least 80 different titles that were favored with the support, whether or not they received support in the first development stage (case 1). By this instrument the particularities of distribution started getting known, the role of the producers, the distributors, and exhibitors, their practices, relations and situations. Also the audience (the spectators) popped up as the main element, and their characterization according to country and region. Therefore it was possible to confirm that no film distribution model is the same to another, and different business plans are created according to the kind of production and possibilities of distribution. It is evident that the result in terms of audience and the distribution model for a film like Machuca, is very different and is not related to what happened with a film like El huesped, having received similar state support. This instrument was initially thought for at least 5 feature films, documentary or animated features, in a film negative format or in digital finalized to 35mm, with a minimum running time of 70 minutes. Knowing the process, the sector, the technological advancements, and the sustained rise of local production, it was later included the distribution on digital medium and some acceptance requirements were made more flexible. The support was assigned to copying services, advertising, and promotional materials for the release of the film. Using this instrument, and according to the project, a space opened for international consultancies on distribution, or innovative models exploring the launching of films on the Internet or DVD. While the instrument intended to improve the action of distributors, it was the very producers who used it the most. It was observed with concern the lack of distribution in the countryâ&#x20AC;&#x2122;s regions and also the growing apart of audiences and local production, which was evident. At last, if the producer doesnâ&#x20AC;&#x2122;t distribute, the work is not make known either; clearly not all producers know about designing and elaborating strategies for film distribution, as not all of them have collectively organized themselves to deal with local or international territories to distribute their productions.

CASE CONCLUSION

From an analysis of this instrument and its impact on the sector made in 2004, it was possible to verify the scarce or null joint participation in the selection of suppliers, a fact that makes more difficult and lessens the negotiating power of the group of entrepreneurs to obtain cost reductions, resulting in inefficiencies in the use of resources and disincentives. All of these concluded that there were no relevant levels of association, which was what the support instrument pretended since the beginning. It is also relevant to underline how little detailed information of suppliers had the operative agent of PROFO, which he had to inform CORFO about. This produced a slow process of gathering records for making reports and the execution of management controls for the participants of the instrument. Out of this analysis, it was resolved that CORFO will not keep fostering audiovisual distribution in an associative way, as it was understood that it was more a particular situation of each film, according to its own commercial strategy to deal with this process, and it should not be forced to obtain a support. It is left to the initiative of the private party the option to deal with new and better businesses that need to be addressed in an associative way, for which the PROFO instrument can be of great help to some audiovisual entrepreneurs with a clear strategy and the need to work together. Since 2004 to date, the constitution of other types of PROFOs by the same sector is scarce.

CASE 3: CORFO SUPPORT FOR AUDIOVISUAL DISTRIBUTION AND COMMERCIALIZATION After the previous case and its results, in 2005 a new instrument of advancement was designed that continues until today. CORFO currently grants non-reimbursable resources to audiovisual productions wanting to start their marketing, sales and exhibition process, both locally and abroad. For co-financing this stage, the applicants shall present an individual project per title; open window year round for applications. CORFO co-finances up to 50% of the project, with a maximum cap defined in the application guidelines.

Year

Releases

Attendance

2003

1.710.565

2004

1.213.534

2005

391.637

2006

749.299

2007

914.539

2008

939.835

Source: (CAEM 2009)

The number of productions is over 10 films released, which shows a sector capable of a steady creative production. To understand the numbers, the amount of local productions released in Chile is similar to Portugal or Finland, and a little lower than the Netherlands and Greece6. A greater number of releases do not necessarily come with greater audiences. In fact, these numbers hide the strong concentration of the audience in a few productions. What is happening is that a certain amount of local films barely attract the interest of the audience. Given the small size of the Chilean market, and the lack of national plans for audience development, the logical thing would be to define a national strategy that clearly identifies the characteristic aspects of Chilean audiovisual productions that would be attractive to face a process of audiovisual distribution in other marketsâ&#x20AC;&#x201D;in case the reason of concern be sectorial at the country level, and not just a few producers in need of distribution for their finished works. Until now no major advances on the matter can be seen, even knowing most countries have a similar difficulty. In addition, it would have to be considered that large distributors that sell several films combining productions of unerring success with other riskier titles mainly dominate this sector. Since the costs of producing prints is high, the distributor delivers a limited amount of risky films resulting in just a few venues screening the film and limiting its possibilities. If we sum the fact that the current behavior of most local spectators is to choose contents with the most media effect, resulting of a dependency effect of entertainment film contents, we have a complex outlook for local productions. But it is also a great challenge for the country for the unquestionable cultural contribution of the Chilean films, the talent of its filmmakers, and the special economic and commercial attractive that interested other countries in purchasing our local films. Without a doubt, an important element to consider for designing a medium- to long-term strategy for the Chilean audiovisual sector is related to a vigorous participation in festivals and obtaining international awards for Chilean cinema, which has been increasing and outstanding. The greater film activity has come with an increasing professionalism and technical capabilities of the sector. It is important to notice that more than 15 production companies have produced more than one feature film in the period 99â&#x20AC;&#x201C;09, something unheard of in the local cinema. The growing evolution of the qualified human resource, the action of higher education centers, the high level of production services, the standard technologies with international consensus installed in Chile, the excellent, high-quality postproduction services of international renown, allow to confirm that local production has overcome the technical problems that affected it at the beginning of the XXI century. The challenge today is the creative content that gives the most work to filmmakers, which is just the everyday challenge they always have for making stories, lives, and situations known that filmmakers 6 Focus: World Film Market Trends 2009.

conveyed into different genres with the idea of contributing culturally, and connecting with the different audiences locally and abroad that could access them at the movie theaters. Understanding this systemic logic installed in the local audiovisual sector, and knowing the distribution results in the local territory–which is not only about what the numbers reflect–it can be easier now to understand the commercial results of local cinema in our country. Therefore, it can be asked if it is worth to go into that debate, objectively assuming that this activity in the country is relatively new in an organized way, as to require commercial success from a sector that had to rebuilt itself from the most basic, and obtaining, in addition to better professionalization, visibility, and local and international recognition in just ten years. The simplistic critiques or debates that have installed, many come from the ignorance or the seemingly academic tribune, or from a minimal experience without major success in the area; pretending to demand a commercial performance from the sector, they forget that the first thing in Chile was to install the sector with basic professional tools, a situation that just in recent dates we can say this goal has been exceedingly accomplished. Having observed, in addition, the stall of some programs like the ones for audience development and decentralizing the sector to the regions, it is natural at first to conclude that Chile has focused in the last years mainly to audiovisual production, delaying the processes related with this that so many demand from Chilean cinema, and few understand—distribution, innovation in the processes, and the development of markets and new audiences related to the aesthetics and contents that the local audiovisual language offers at its best, which is, by the way, the best the local creators may offer at this time. The project evaluation is made by CORFO itself, which pronounces on the technical aspects of the business and the viability of distribution according to the background presented by the applicant. The evaluation of contents is not the goal of this line, as it is assumed that this should have been considered during the development stage of the audiovisual idea, and that the producer and distributor know very well the advantages and disadvantages of their new product for the territory they pretend to target. Therefore, the responsibility of the commercial and cultural impact of the new content starting distribution is the applicant’s, whether distributor or producer. CORFO offers a support to begin the first twelve months of this distribution process. We could access a considerable amount of projects that applied to this stage. 20 titles supported by CORFO were reviewed; noticing that 90% of the projects in the last 5 years present the same project formulation or a very similar one, it was decided for projects that tried to escape the noticeable uniformity. Therefore, the following criteria were defined to select the titles: 1. Diversity in contents with new and experienced filmmakers 2. Innovation in the distribution business models 3. Commercial formula in the distribution strategy to achieve the greatest amount of audience 4. Projects from different years. Short Films

1. XX by Cristián Jiménez 2. Crying Underwater by Alicia Scherson

3. 4. 5. 6.

12 minutos by Sebastián Lelio Women Workers Leaving the Factory by José Luis Torres Leiva Vernissage by Yael Rosenblut Lobos by Ilán Stehberg

Feature Films 7. El regalo by Cristián Galaz 8. The Sky, the Earth and the Rain by José Luis Torres Leiva 9. Optical Illusions by Cristian Jiménez 10. Christmas by Sebastián Lelio 11. Lokas by Gonzalo Justiniano 12. The Good Life by Andrés Wood 13. En la cama by Matías Bize 14. The Maid by Sebastián Silva Documentary Features 15. Ciudad de papel by Jorge Garrido 16. The City of Photographers by Sebastián Moreno 17. Opus Dei by Marcela Said 18. Agustin’s Newspaper by Ignacio Agüero 19. Monógamo sucesivo by Pablo Basulto 20. Red Eyes by Juan Ignacio Sabatini

CASE CONCLUSION De la revisión de estos proyectos se puede concluir: 1. The instrument deals with the local reality of the area: few applications of distributors (20%), mostly producers (80%). In the opinion of some applicants who were asked about the situation, “it is the alternative we have to deal with the process, considering that not all distributors take an interest in our contents, and therefore, movie theaters do not ensure any permanence in the screen” (Bruno Bettati, president of the Film and TV Producers Association, producer of Optical Illusions, Ciudad de papel, Bonsai, among others) 2. EIt is interesting to observe that more than 80% of the projects propose similar distribution formulas: exhibition prints, DVD design and copies, advertising pieces. Far from producing a real impact, this only represents the classic model that assures obtaining the public fund by the applicants, assuming that in spite of the diversity of contents chosen for this sample, the films would be distributed in the same way aspiring to the successful but traditional formula used by the largest foreign distribution chains (the majors) installed in Chile. 3. Projects looking to innovate modestly in distribution are very few (20%). The first volume of the Enciclopedia del Cortometraje Chileno [Chilean Short Film Encyclopedia] is remarkable; an innovative project for this format in charge of Retaguardia Films. The central idea of the project is to organize an archive of local short films, which are usually fading into oblivion after circulating in a couple festivals. In this sense, the proposal has a good chance because there is much interest in accessing works that are impossible to obtain in the market with very limited circulation. And not just recent works as with Snob, title of the first volume, but also the project has the goal to publish compilations of older works, which results attractive. The idea was to continue with CORFO as an ally in this project, but only these first six short films were found. According to Cristián Jiménez, responsible for the project and partner of the production company, “...one has to apply to CORFO for each title, which is cumbersome in every sense, so much for the applicant as for CORFO’s evaluation.” 4. 70 % of the projects are looking for distribution abroad by participating in international festivals. Some have obtained recognition while obtaining interesting awards. Andres Wood’s The Good Life stands out; in spite of not obtaining the same commercial results than his prior film Machuca, it does become the best foreign film obtaining in 2009 the Goya award, one of the most important international cinema awards. 5. The instrument is oriented to begin the distribution process by the distribution system installed in Chile, that is, theatrical, DVD, TV (PPV, cable), festivals. With the technological advancements and a little innovation of the applicants, it is possible that there are distribution windows being left aside, like for instance, Internet, mobile phones, and digital distribution. The evaluation of the distribution projects to date, does not consider an evaluation of the film’s content. Until 2009—the studied period—CORFO does not comment on the value or possible cultural impact or contribution of the content of a production, and much less venture an eventual commercial impact, as it understands it is a subjective process whose audience is identified in the distribution plan, the reason by which the strategies and results stated in the project’s application are the sole responsibility of the

applicant. In spite of that, at the beginning most of those who gained access to this financing were preferably small (independent) distributors. The larger distributors (majors) have never required the support for local productions, even when there is no restriction for them to access. Nevertheless, this situation has changed with the time, being the local producer who assumes again the role of distributor, provoked by following factors: 1. A notorious diminishing of distributors in the local and international markets. 2. Need of the producers to have a greater participation in the income of their own process of commercial distribution of the production. From this observation it is concluded that technical capabilities are not being installed in entrepreneurs specialized in distribution, perhaps because majors keep control of distribution in the exhibiting complexes established for that end, even if they continue distributing conventionally under a classic business model already known, a model that is also very likely in risk, and certainly, because there are no other exhibition spaces, and because it is evident that the local audiovisual sector does not have a sectorial strategy for this important point in the chain of value. Until today, CORFO has supported with this line the distribution of more than 90% of local works distributed in Chile and aborad. The 10% remaining corresponds to films that either didnâ&#x20AC;&#x2122;t meet the application requirements or that simply didnâ&#x20AC;&#x2122;t apply. This form of support will have to be necessarily updated, forced by the changes in the existing models, and even by the international trends and evolution. It is then, a good opportunity to support the innovation in this important stage of the productive chain. During 2008, CORFO started working redesigning this program. Nevertheless, until today this same way of support has kept going.

CASE 4: INTERNATIONAL CO-DISTRIBUTION AGREEMENT With the goal of looking for effective solutions to guarantee distribution markets larger than the local, during 2003 CORFO and CNCA started working in possible co-distribution agreements, having as a referent the good performance of international coproduction agreements subscribed by Chile. That is how the first Film Co-distribution Agreement with Argentina was signed. The Argentinean National Institute of Cinema and Audiovisual Arts (INCAA) joined this effort allowing the opening of distribution possibilities for Argentinean films in Chilean territory and vice versa. Before long, this initiative exposed the role of the distributor and the quality of the services offered, allowing to verify that it is not just cinema going through a crisis with the distribution business model, but it’s also the profile of the distributors and the scarcity of entrepreneurs existing in this part of the chain of production. Chilean films like Machuca, Subterra, and Cachimba, were distributed in Argentina, exhibiting for one week. There was only one Argentinean film released in Chile, El juego de Arcibel.

CASE CONCLUSION

Even when it resulted a good initiative, it didn’t thrive because of the different conditions of distributors in both countries. Later on, the international problematic of distribution reached Latin America, affecting all the productive chain focused in digitalization, editorial line of the theaters screening contents, and the logic of a distribution business model that was good at some point but now is forced to reinvent itself. In addition to this, there is the political, financial, and commercial stability of both countries.

CASE 5: TECHNICAL ASSISTANCE WITH A FOCUS ON AUDIOVISUAL DISTRIBUTION Facing the concern for the results of distribution in terms of the business models implemented, and the notorious ignorance of many actors of the audiovisual sector regarding topics believed to be widely in the public domain, it was decided to begin since 2006 a series of workshops and seminars in charge of different public institutions taking part in the program—CORFO among them.

•

2006 First CORFO workshop on Copyright and Intellectual Property for the audiovisual sector.

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2007–2009: Workshop for applying to CNCA and CORFO funds.

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2006–2009: Practical guide for the design of distribution plans.

•

2007–2009: International Seminar on Executive Production and Screenwriting, organized by UNIACC with the support of Ibermedia, CAIA, and CORFO.

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Visit of international experts.

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Technological missions of the audiovisual sector to the international markets: Cannes, Berlin, Buenos Aires, Los Angeles, Guadalajara, and Amsterdam.

CASE CONCLUSION

These initiatives can be an example of good practices, insofar as they bring the sector attended by CORFO closer together. In addition, CORFO has been present in all these activities, many times as the only public fund. The processes of project formulation were improved and advanced towards the professionalization of the sector in areas relevant for the sector development. Workshops, whose goal is to stimulate the private sector to generate agreements, improve or change the dynamics and relationships between the different actors taking part in the processes of this sector. That is why many actors of the sector observe the future with concern, as they have known in practice the international problematic mentioned before.

CASE 6: SECTORIAL INFORMATION AND MARKET RESEARCH Given CORFO’s experience, together with CNCA’s, there was a public call for tenders in the period 2006–07 for hiring a regional study of enterprise characterization regarding ventures linked to the creative industries. Because of the sectorial need to obtain useful quantitative information in the public domain, in 2007 a proposal to outsource the local market research was presented at the Audiovisual Council Executive Secretary, in order to generate monthly and annual reports informing the results of the Chilean films in theatrical exhibition. This research has been relevant every year at the time of defining commercial strategies for distribution and commercialization of films in Chile. In addition to this, there is the work done by the Chilean Camera of Multiplex Exhibitors (CAEM) who hired a study in 2005 on audience behavior in order to know the orientation of its preferences; a similar initiative is made by the Camera of Film Distributors (CADIC), with a study in 2009 about the results of films released in Chile.

CASE CONCLUSION

These studies, some recent and some a couple of years older, for which CORFO had to provide data or support the decision to perform, are of the utmost importance for the audiovisual area at a time when pretending to step forward in the path of sectorial development. It is fundamental for every sector to gather data and analyze it with the goal of observing trends, trajectories, directions, etc. This is clearly very recent, only 5 years; therefore it has not yet achieved a solid and recognizable systematization allowing diffusing stable indicators reflecting the state of the art in the sector at a given moment in time. It has been a timid, recent approach that, as every process, requires some time to make the necessary crossing of topics and thus develop better-focused programs. It is curious that at this time there is no observatory for the analysis of the sector’s evolution, since without objective, hard data, is difficult to evaluate the role of a public policy—and it is not possible to have those directly participating in the chain of production as the main objective sources of data, whether distributors or exhibitors. By now, a certain interest can be noticed for advancing on these topics directly binding audiovisual distribution, but until now it has been only a spoken interest far from implementation.

CASE 7: CORFO SUPPORT FOR ATTRACTING INVESTMENT, PROSPECTION OF MARKETS, AND INDUSTRY DEVELOPMENT The existence of CORFO’s Program for the Advancement of Film and Audiovisual Industry has generated an interesting experience for the institution from the moment that it puts other generic instruments at the disposal of the audiovisual sector in addition to the supports already seen. This experience, little by little, has captured the attention of other countries wanting to learn in terrain the strategies Chile employed to develop the audiovisual sector in this period 99–09. Cases like Uruguay, Colombia, Puerto Rico, Argentina, Peru, Brazil, are some of them. The Chilean audiovisual sector has started a work of inserting the local production in the world, taking advantage of the existing international productive platforms allowing guaranteeing the projection and continuity of film and audiovisual production. There are at least three initiatives standing out: 1. From 2009 onwards: Cinema Chile is a public–private initiative, initially supported by INNOVA-CORFO Sectorial Brands, created for the promotion of the Chilean TV and film industries in international markets, and to ease the mass presence of local filmmakers and representatives in such instances: Cannes, Berlin, Guadalajara, Buenos Aires, Amsterdam, just to name a few. This initiative is implemented by the Association of Film and TV Producers.

2. 2008-2009: Audiovisual Offshoring7 Chile: Initiative supported by CORFO and executed by UNIACC, which starts an interest in learning the quality of Chilean services deriving from the audiovisual industry, their different states and characteristics, with the goal of designing a country strategy allowing to offer optimum quality services to the international audiovisual industry from Chile, thus generating another type of development for the industry. It is a challenge to learn the quality of the services offered in the country’s regions, the main technicians, territories, locations, etc. The best developed audiovisual industry requires lowering their costs without lowering production standards; to this end, Chile requires learning what it is being offered in every area, and from there elaborate a strategy to offer the international community that which is possible to offer, and another one of leveling the internal market, with the goal to raise these standards allowing in the medium-term to insert the local entrepreneurs and their locations in the international context. The development of the Audiovisual Offshoring Industry is directly conditioned by the state and the growth perspectives of the Chilean audiovisual industry as a whole. The three sectors considered within the audiovisual industry (publicity, TV, and film) present different degrees of development, and therefore, they require diverse stimuli to build a supply of services towards the exterior 8. 3. From 2009 onwards: Audiovisual Action, a program funded by the Inter-American Development Bank (IADB) designed and approved by CORFO, and executed by the Catholic University of Chile. Its goal is to contribute the improvement of competitiveness of the Chilean audiovisual industry, increasing its access to the regional and international market, and turning it into an attractive sector, profitable, and contributing the cultural development of the country. It pretends to improve the articulation between the different links of the audiovisual industry’s chain of production, and strengthening some skills that are currently limiting its potential development. In addition to these initiatives, there are the different international film festivals in which Chile takes part. Guadalajara, Cannes, Berlin, San Sebastian, and Toulouse, are some of these. In the same line, instances for participating in specific markets like the documentaries in Amsterdam (IDFA). It is interesting to emphasize the case of the Valdivia International Film Festival (FICValdivia) as one of the most important audiovisual development hubs of the region in Chile, inserted in the world, whose results are in part due to the constant support of CORFO from the year 2000 to date, through the Associative Programs of Advancement, or stimuli for innovation. It should be noted some attempts of audiovisual development in the regions of Valparaíso, Biobío, and Antofagasta, with the joint effort of public and private sectors and supported either by PROFO or Territorial Integrated Programs by CORFO. The Valdivia International Film Festival, however, positions as the most important Chilean event at the international level. As it has been the tradition, it emerges as an instance of encounter with international cinema through the competence and exhibition of films. The seal of regional identity given by the Universidad Austral, in charge of the initiative, and the policy of regional development by the region of Los Ríos, have evolved to make this festival a national event with a definite international projection. That is how since 2007, international productive platforms started being generated with the main expert international distributors and producers. This is the case of the Austral Laboratory of Film, AustraLAB, with its Work-in-Progress and Cine Sin Fronteras program, two initiatives that are positioning themselves in the audiovisual world as relevant venues for encounters, reflection, and creating new international audiovisual businesses, considering the current context of the sector9.

7 Focus: World Film Market Trends 2009. 8 Centro de Estudios Universitarios, UNIACC – INNOVA CORFO: “Offshoring: potencialidades en el sector audiovisual chileno”. 2010. 9 www.ficv.cl ; www.cinesinfronteras.org

CASE CONCLUSION

It is at least promising to watch these initiatives as very interesting models of public funding and private execution. As with every other recent initiative however, it requires more time to observe its results, which will not be perceived until two or three more years. Yet the focus has been put in the Chilean participation in international film markets and encounters. While this is certainly necessary and relevant, compared to the scarcity of local distributors—a similar situation to Europe and Latin America—, to the difficulty of the role of distribution being assumed by the producer, the globalization and the technological advancements, it seems there are no major advancements in formalizing the distribution sector with innovation on the

GENERAL RESULTS It is interesting to notice that five out of the seven cases studied developed with a better focus on distribution from 2005 onwards, a considerable amount of time, but not enough to measure the impact on the commercial strategies and the possible sectorial development. This demonstrates that it is a relatively new intervention, therefore it requires a lot of attention if one pretends to consider this experience for the future development of public policy for audiovisual advancement, and to achieve a change in the perception of the presence of local cinema in the market. Because of the above, as it is a new subject for CORFO, there is diversity on quantity, quality and typology of the intervention. The focus of the support in the Metropolitan Region shows a country focusing its distribution activity mostly in the capital city. Out of the analyzed cases, five of them are still currently active. FIELD FOR CREATIVE ECONOMY Distribution exists in every productive process to bring the product closer to the end consumer. In the audiovisual medium, it is all the more justified at the time of knowing that a feature film production reaches an average budget of 300,000,000 Chilean pesos (CLP)10. Consequently, it makes perfect sense to recoup the production costs with distribution processes. Distribution in cinema is related to the possibility to sell the exhibition rights of the work (intellectual property) to the different windows existing to that end: theatrical, DVD, TV, digital, Internet, mobile devices, etc. Each window comes with a price mostly related to the amount of people linked to each medium; therefore, the logic of thinking the smaller the screen the more possibility for consumption will work in some media, like for instance TV and internet. The cases studied show different type of interventions designed by CORFO in order to approach the world of distribution from the state. Cases 2 and 3 (associative and individual distribution respectively) are the ones best linked to production and with the chance to reach a target audience.

10 CNCA (Aliaga Riquelme, Ignacio - Aliaga Romero, Ignacio - Ordóñez Galaz, Leonardo): “El audiovisual en Chile 1999 – 2003”

The mere fact, however, of noticing that it is mostly the very same producers—the owners of the copyright—the ones accessing these funds, it already demonstrates that something is not working in the private part of the chain. It is not desirable to think the distribution of a creative product as something separated from the previous production stage, especially having noticed also this problems in projects for content development (case 1); there are few local producers and creators anticipating distribution, exhibition and audience since the initial stage of the project. We would have to assume that in Chile to reach the target audience, one has to go through the space controllers that buy exhibition rights or charge a percentage for exhibiting content. This model—which is not the particular responsibility of any public policy but of the established economic model applied to all the productive sectors, assumed by all, developed and endorsed for the last 39 years—make that the Chilean films would receive the same commercial treatment than Hollywood films. From this, one may understand that the only alternative to reach the screens would be through the same logic the model enforces: theatrical release, certain amount of prints, marketing campaign, a couple of weeks exhibiting, and if the film doesn’t work as expected, no matter who assumed the investment, the controller of the space will take it out of the program to allow for new titles. And if the film does work, it will stay on the screens until a better title may compete with it. That is, free market. Independently from the economic model, the Chilean audiovisual sector does not have a definite strategy for its future development. This can be perceived in the lack of a national plan of advancement, and little interest in innovating in the distribution business models, recognizing the different existing opportunities, the characteristics of the territory, and the alternatives offered to boost innovation. The cases show a concentration mostly in the Metropolitan Region. Only the region of Los Ríos has taken part in instruments of audiovisual distribution. The regional production does not manage to reach the existing regional commercial spaces. Therefore, for these and the vast majority of local productions, it only remains inserting into the instutionalized networks of content diffusion existing in Chile and abroad, film festivals and exhibitions. Through these cases, CORFO has assumed different issues affecting audiovisual distribution: • • • •

Bring the audiovisual production closer to the audience through the existing individual or associative spaces. Installing technical distribution skills by funding of projects. Deliver market information to those interested. Open international spaces to learn experiences and insert Chilean cinema into the world.

The cases occur independently from each other, therefore it is difficult to systematize information to create a sectorial strategy of common development. For being independent cases, the goal to build a creative productive sector with an important commercial presence in the Chilean market—which is the aim of the creative economy on a territory—gets diluted and we only keep the accumulation of good experiences on the subject, with the risk that they might be seen as isolated cases from the moment it was not the main focus of attention of public policy since 1999. This is understood as in that year, the audiovisual sector went through structural problems greater than the distribution itself, as it were the professionalization of production, training, contents, and technical quality of production, among others.

Weak commercialization strategies can be noticed of the local distributors for the Chilean films, whose actions instead of getting stronger in the market, have been quite weakened because the international context presented in the theoretical framework, and also because of CORFO original interest in advancing distribution in an associative way, that later had to be modified to an individual intervention. Not all audiovisual producers are familiar with the technical specificities of distribution, a process they care about but that is still foreign to them. The individual support for distribution for each film has become an instrument supporting mostly the producers, who replicate similar project models. Therefore, innovation is not being encouraged in the distribution business plans, generating a sort of dependency to funding assigned to producers for the inorganic reproduction of similar distribution strategies. On the other hand, the role of exhibitors who preferably program American filmsâ&#x20AC;&#x201D;many times taking up 90% of commercial screens with content of this kindâ&#x20AC;&#x201D;make the commercial outlook for local films discouraging 11, although it still is a good challenge and opportunity for innovators to start new business stimulating these relevant areas for the sector. It has been a limitation of this study not being able to find information about projects interested in market development for the audiovisual industry, or strategies for increasing the audiovisual consumption in the internal market. This is the strategic subject for the distribution process, it is observed as an opportunity for CORFO in case of looking for viable alternatives to start working on the subject from the experience obtained. Likewise, it results disquieting not finding information about proposals for development of spaces for the exhibition business, using new technology, in order to open new innovative business that allow to create a different option to the conventional ones, stimulating distribution of contents through these alternative ways. Audiovisual distribution is being affected by the technologic revolution and globalization, which forces countries to think in strategies and look for the best solution models to face it, if the interest is to continue developing film production. From that it can be noticed a complete lack of these topics in Chile, that beyond attempting to solve them with policies for cultural infrastructure, they should be seen in an integral dimension, with an economic scope and focus, in order to get ahead or regain the time lost, as this problematic is strongly increasing in Chile, producing concrete distances in the use of technologies, their access, and the social development. To face this problematic of space, infrastructure, access, development of consumption habits, innovation for effective solutions to create instances of content distribution as alternative business models designed to stimulate the access and consumption of an interested audience, are necessities that need to be addressed urgentlyâ&#x20AC;&#x201D;and should not get trapped in the logic of pretending to solve them by public contests in the way they are designed today.

11 Focus:World Film Market Trends 2008, 2009 y 2010. Festival de Cannes.

FINAL CONCLUSIONS AND DISCUSSIONS Having demonstrated that important experiences of audiovisual distribution do exist in Chile for the period 1999–2009; this is the first conclusion of the analysis. CORFO has performed a fundamental role in Chile by providing public funding for the professionalization of the sector, and deciding to invest resources in topics like audiovisual distribution even when it wasn’t the main focus of attention of the public policy strategy as defined in 1999, which justified the creation of the Program for the Advancement of the Film and Audiovisual Industry. Because of this, having an experience from the state, even if scarce, has much value at the time of observing the development of the sector and think how to solve its problematic that comes from both the local and international contexts, affecting the evolution of the sector in Chile. The Chilean audiovisual sector is in better and favorable condition to face the demands of content distribution, in relation to what it was in 1999. Therefore, thinking that these experiences may be considered for the future design, planning, and implementing of strategies oriented to the audiovisual distribution regarding commercialization, access and development of audience, is what corresponds to do in a country that values its knowledge and learns from what it did right and wrong. Since 2005 through the Council for Audiovisual Art and Industry (CAIA)—where CORFO has representation—, there has been progress in implementing public policies looking to address the main problems of filmmaking and audiovisual in general, raising the still low state budget to improve the quality and viability of the projects and ease the production in the regions. Also, opening spaces of integration with the cinema of other countries, particularly in the European and Ibero-American markets. We have to assume that this alliance of public institutions has been a success for the Chilean audiovisual sector, a success obeying to particular moments in the history of the country. Without the institutions at the time, committed to design and implement a public policy on these matters, it was necessary an alliance of public institutions that in the logic of a program, would coordinately articulate their actions. But this model is part of history. Currently, the existence of the Council for Audiovisual Art and Industry (CAIA), linked to the National Council for the Culture and the Arts (CNCA), it would make sense for CAIA to define the development policy for the audiovisual sector, designing a country strategy and an implementation plan for a definite period, with clear systems of evaluation and monitoring to be able to observe the results along time and modify those actions that do not work out. Starting 2010, the public policy for the audiovisual sector was approved by the National Directive Board of the National Council for the Culture and the Arts, a work where all the audiovisual sector of the country participated together, and took three years to settle down and reach a consensus with the members of CAIA. It is therefore expected that in this new period starting with the new government, a country strategy gets to be defined, and a programmatic implementation plan which far from being mainly focused on audiovisual production would give enough space for the distribution and commercialization of Chilean films in the national territory and abroad, audience development, and the preservation of film heritage, considering the context and problematic affecting the audiovisual sector in the world. The last is greatly important, since:

1. The budget of CAIA for the implementation of its public policy is minimal and insufficient to comply with all the demands of the law that created the Fund for Audiovisual Advancement. 2. CAIA itself has not defined a development strategy for the sector for the years to come. 3. CORFO, CNTV, DIRAC, and PROCHILE do not depend on CNCA, and by their institutional tradition, will not depend—and it’s not the idea—on this institution. Therefore, in this context, to create a correct and coordinated alliance of supports as it once was, it is necessary to redefine a country strategy and an implementation plan, so each institution may be rethought and put at the service of the sector with its offer, keep growing in supports, focusing their efforts in those new subjects that should be covered by the logic of the public policy, and stop insisting just with those kinds of support that already demonstrated being a contribution to the sector for the last ten years.

Do they think that public contests for funds wil l solve al l the problems of infrastructure, access, audience, distribution, and commercialization?

What was it worth the social investment made by the state to support the creation process of many films, if they donâ&#x20AC;&#x2122;t reach the citizens?

a) THE NEED TO DEVELOP AND INCREASE THE AUDIENCE. Two ways have been tried out towards this end. In the first place, the development of audiences; in the context of the educational reform, the audiovisual arts got into school curricula in many countries, and the particular activity of school cinema clubs means a contribution to the education of new audiences for Ibero-American cinema, and teachers have been trained to this end. Another aspect is the creation of networks of video screening rooms, many of them equipped, with the aim to conform a low-maintenance, complementary circuit of diffusion, allowing communities excluded from the formal exhibition circuits the access to audiovisual works. The positive results indicate they represent efficient actions, but requiring greater efforts. Concretely, a dimension of the audiovisual economy that should be addressed decidedly is the incentive for consumption of cultural products, in the current case, audiovisual ones.

THE DEVELOPMENT AND PROFESSIONALIZATION OF THE CREATIVE ACTIVITY WITHIN EACH COUNTRY (REGIONAL AND NATIONAL OUTLOOK). It becomes indispensable to diminish the excessive distance between the capital city and the rest of the country, because of the excessive concentration of the production within it. To advance in the actual decentralization of audiovisual creation and production is a necessary goal to democratize the activity; through training workshops, and artistic and professional development, as well as programs of advancement and other initiatives. The increasing associativity is one of the most notorious achievements. However, it is necessary to deepen and widen the actions in this respect, for even when positive results can be observed, regarding the quality of projects and the professional development of the audiovisual sector it is necessary to assign greater resources and actions to reach more significant goals, thus favoring actual entrepreneurship. Certainly, these efforts have been possible within the regions that decided to position the creative sectors, mainly audiovisual, in a privileged spot of their regional development.

THE NECESSARY PARTICIPATION OF TELEVISION IN THE PRODUCTION AND PROMOTION OF FILM, AND IN CULTURAL DEVELOPMENT. Better quality television is needed, not just regarding better technology, but better intelligence to make of this medium a real and effective space of entertainment, information, and education.

CHALLENGES TO FACE AUDIOVISUAL DISTRIBUTION IN LATIN AMERICA

In addition to public support by subsidizing creation and production, and other actions and instruments developed, there are other relevant aspects affecting the growth of the audiovisual sector, and presenting challenges at the time of relating with distribution. In many of these there have been progresses, but these still need to settle and deepen to reach more permanent goals, supporting a good development for the process of distributing audiovisual contents. Aware that Ibermedia was created to this end, and that each state may contribute advancing the production and circulation of works, as a conclusion, we mention some aspects to keep present:

THE PARTICIPATION OF PRIVATE INVESTORS IN DISTRIBUTION. It is noticeable that legislations of other countries offer tax incentives to private investors participating in the financing, as is the case

of Brazil. If one considers the tax revenue generated by setting in motion an audiovisual production oriented to the market, with high exhibition volumes on different windows, it seems an alternative that needs to be studied and implemented. In turn, the existence of venture capital funds could be attractive for private investors wishing to invest in the creative sector with the largest ventures. North-American and European models could be interesting at the time of observing implementation formulas, although, at the time, the existing private investors have not thought about articulating a formal investment fund allowing to ease the process of private funding for the different contents that increase every year, with the end to incentive content distribution in different territories. The option of bank credits would be possible by assuming the risk of conceiving works as the main asset of an entrepreneur. From there, efficient and innovative systems of risk evaluation for the investment are key to insert in this system.

LATIN AMERICA IN THE INTERNATIONAL CONTEXT. The progress achieved by effect of the Ibermedia Cooperation Program—consisting on a fund for the support of coproductions, development, and training—is remarkable. It will be necessary to strengthen these marketing and distribution actions to make the most out of the advances and reach substantial goals within the short term, as a fundamental path to offer better sustainability to productions—which is what Ibermedia pretends. Although, in parallel, it will also be necessary to start a process of training new entrepreneurs and innovators on distribution and commercialization, who start implementing innovative, updated business models, assuming the international problems, and responding to the needs of this dynamic market in a serious work proposed by the Cinematographic Conference of Authorities, in order to articulate a network with new and better distributors to take care of the circulation of contents through innovative services that could be offered.

f) CONSTANT WORK IN ARTICULATION OF TERRITORIAL NETWORKS. The success of audiovisual development of countries like Chile, Colombia, and Uruguay is due to the close and constant work between the public and private

sectors, and within the public sector itself and its relevant actors, and the same for the private. The key is to put universities, guilds, schools, just like the intendance, the regional government, and public institutions, all at the service of the sectorial development. It certainly needs a strategic definition and an effective leadership.

g) LAW OF AUDIOVISUAL ADVANCEMENT AND ITS CHALLENGES. Si se recorren los textos de las distintas If we review the texts of the region’s different laws for audiovisual advancement, we will note that the funds’ faculties and

lines of support, in those countries where they exists, address the collection of problems and challenges previously mentioned. The full participation of the creative and productive ranks of the audiovisual sector, as well as those from the country’s regions and academics from all around the country, constitute a better guarantee of the fulfillment of the sector’s strategic goals. Important gaps can be detected that will have to be discussed to study an eventual modification, but this will be possible insofar as the different guilds and institutions manage to articulate in order to put forward their demands and install topics of interest on the public and legislative agendas.

The current public policies have been a contribution to the development of local film and audiovisual sectors. They prove that proper coordination between public organizations may optimize resources, focus on the weakest aspects of an activity, and generate greater levels of confidence for improving it. But they should not be left exposed to the

levels of commitment and political will of the government in turn, they should transcend governments in order to abide to the Strategic Plan for Audiovisual Advancement that each country should define together with their relevant actors.

INNOVATION AS VALUE FOR ENTREPRENEURSHIP AND DEVELOPMENT. The audiovisual sector will have to necessarily explore new ways of production and distribution in order to install new projects and business that include new variables for the sector development. Exploring the use, creation and implementation of different technologies should be a constant task.

i) RECOGNITION AND MANAGEMENT OF AUDIOVISUAL HERITAGE. The role of each National Cinematheque is key not only for the conservation of film heritage, but also to face the process of audience development and generate

a collective awareness on the relevance of this sector of the creative industry through regional programs to be implemented, since as every cultural work, it needs to be preserved for future generations in order to build the peopleâ&#x20AC;&#x2122;s memory. A network among these centers is fundamental to stimulate the cultural distribution of contents. STRATEGIC DIRECTIVES SUGGESTED All the accumulated audiovisual experience that was described and analyzed is inescapable when considering the development of initiatives for the advancement of audiovisual distribution, commercialization and exhibition. This is why today there is the possibility to think on the effects that it could have in Latin American countries, thanks to the important growth experienced in recent times by one of the main sectors of the creative industry. With the information given in this notebook, we conclude that this sector does not only get developed with productions, no matter their content or technical level. For distribution we require: 1. Political will to implement a middle- and long-term strategic plan for Distribution and Audience Development, both from the Ibero-American region (CAACI, Conference of Audiovisual and Film Authorities) and from each state with an interest in fostering the sector. 2. Innovating the distribution business models. 3. Generating new exhibition venues. 4. Fostering audiences (local market). 5. Expanding commercialization markets. 6. Awareness of the role of producers when deciding the contents to produce. 7. Redefining the role of the state to guarantee distribution and exhibition. Even when the support is not yet sufficient, regarding the number of projects approved and the financial percentage or production costs, it has contributed to increase the number of feature films released and positively impacted the development and formalization of the activity. Pretending to address distribution through public contests, and assume its effects by the sole fact of financing projects including Ibero-American titles, is the result of the lack of skills and political will to address the problem seriously. These issues require strategy and financing via long-term programs, considering the territorial characteristics of each country. The possibility to generate a strategic plan of development for the audiovisual sector, or a collection of focalized

strategies, obliges the creation of an agreement among the relevant actors, in order to redesign a system of support, while defining clear objectives to address these issues, which have seemed easy to support, but obey to particularities that occur in a free market economy, which might not be the best system insofar it leaves cultural (audiovisual) production alone facing the business logic of large foreign corporations applying their commercial formulas with the only result of almost null participation of local audiovisual production.

CLOSE UP

ARTHOUSE THEATERS AND THE PRODUCTIVE DEVELOPMENT OF OUR VENUES

IGNACIO ALIAGA RIQUELME / Filmmaker Artistic Director specialized in Cinema, studied at the School of Communication Arts, Catholic University of Chile. He is an expert in cultural policy and public audiovisual policy, and has been executive of different public institutions, participated in the design and coordination of public policy for the advancement of the Chilean audiovisual sector from the Cultural Division of the Chilean Ministry of Education, and the National Council for the Culture and the Arts. He participated in the drafting, parliamentary process, and implementation of Chile’s Law for the Advancement of Film and Audiovisual. He directed the IV Viña del Mar International Film Festival, and has been a consultant programmer for the same. He has been jury for local and international festivals, directed documentaries and short films, film critic, author of articles and essays on the subject, teaches film in many universities, and received distinctions for his work in the development of Chilean audiovisual sector (Antofagasta Film Festival 2003, Viña del Mar 2005, Ovalle 2007, and a distinction in 2007 by the Chamber of Deputies of the National Congress).

Currently, in the Chilean cinema, different generations of filmmakers take part. The films by the creators of the new Chilean cinema of the 60s are still resounding; Miguel Littin with a recent release and now preparing a new film, and Raúl Ruiz, who departed us in 2011, we see his posthumous work premiering these days. Those who started in the 70s, like Silvio Caiozzi and Pablo Perelman are still active. Another generation, the 80s, some trained in the schools of the 70s and others prepared in the exile, are still stubbornly releasing films, like Cristián Sánchez and Gonzalo Justiniano. Those prepared in the video and publicity of the 80s releasing their first works in the 90s, like Andrés Wood and Cristián Galaz, just the same. Then come the generations prepared in the Chilean schools that emerged since the late 80s and beginning their paths in the 90s; and the most recent ones, hand in hand with the digital formats, producing their work in the 2000s. The list of names increases with names like Jorge Olguín, Sebastián Lelio, Pablo Larraín, Matías Bize, or Torres Leiva. The emergence of the Funds for the Arts (Fondart) in 1992, the implementation of the public policy for the advancement of cinema, starting in 1988, and then the implementation of the Law of Cinema in 2005, constitute the venture of the Concertación governments for supporting the development of local film, which produced positive effects mostly in production. From the beginning of 2000s, the production of films increases, with a diversity of topics and styles with the sign of these characteristics. That is how the list of films made in the last decades raises our hopes in the conformation of a local filmography that, at last, exceed the fleeting dazzles of the 20s—the Chilean silent films—, the 40s, when Chile Films was founded, and the “new Chilean cinema” of the 60s.

The audience who reads these lines may ask where can they see these films. They seem to exist in the commentaries of critics, in the yearly overviews by the media, in blogs, and eventually in

the media when some titles become small hits in the box office. Most of them are quickly pushed away of the multiplexes when the orthodox laws of market thus decide. What was it worth the social investment made by the state to support the creation process of many films, if they don’t reach the citizens? The United Nations declaration of cultural diversity exhorts the countries to defend their difference through cultural manifestations in general, and art in particular. Countries make an effort to produce different types of manifestations of their own. In many parts of the world exist emerging local films with the mark of their people. In addition to the known examples of Japanese cinema, and then Iranian a few years ago, the Vietnamese cinema has followed, and the cinema of several African countries as well, the recent Turkish cinema, to name a few. Europe renews its efforts to promote the films from their countries. In Latin America we live times of an important production upsurge. But the processes of concentration of mass media and the commercial theaters have not favored the free circulation of artistic works. The market keeps scheduling a high percentage of North American films, while the European cinema has practically disappeared from the screens; occasionally we see an Argentinean, Brazilian, or Mexican one. This seems to be a fact not easy to turn around. What years ago seemed an ideological discourse against the imperialism today is a cultural and economic reason that shall concern all the citizens. This situation of the movie theaters repeats exactly the same in cable and satellite TV. We live the century of the image, as it has been said to the point of fetishizing the term. More than a decade ago, I saw a collective reflection of the European cinema; when considering the increase to unforeseen levels in the production of images in movement around the world, Gerard Depardieu asked whether the European and the French would only be witnesses of what is being produced elsewhere, or would they also be part of that surge. The same question is being asked by the Japanese, the Turkish, the Vietnamese, the Colombians, and of course, by us the Chileans. In this task for audiovisual diversity, there is an important role for many. To have movie theaters for the diffusion of our films and a fluent cultural exchange with Latin American cinemas, and to access the knowledge of world cinema, are fundamental requirements. The quality of education also has a very relevant content in the knowledge and aesthetic enjoyment of cinema to educate citizens with the skills to discern among the cultural offers that try to entice them. The use of new technologies towards these objectives seems affordable. In many other countries strategies have been put into practice to address this problem. For some time, in France and other European nations, the arthouse theaters and filmic archives have fulfilled part of this task, like the communal kino in Germany— joint public action and private management—, the French art and essay theaters, and the associations of these type of venues, the French Cinémathèque, the Cine Doré of the Spanish cinematheque, among so many possible cases to mention. In Latin America very interesting experiences exist, as the auditoriums of Mexico’s National Cinematheque, the network of more than 200 theaters in the Venezuelan provinces assumed by its National Cinematheque, the so-called Espacios Incaa, the network of theaters associated to the Argentinean Film institute. An exemplar case for many years has been the auditoriums of the Uruguayan cinematheque, responsible for the high cultural and cinematographic level of the country’s audiovisual movement, although facing an unstable financial situation in the last years. The experiences teach us, also in this case. First, that it cannot be the task of a private business without the support of the state, as is the case of the Uruguayan Cinematheque. Second, it is a task that should be sustained in time, as the cases of

European countries show. And the initiatives should be ambitious, determined, as the Venezuelan case. It is clear that it should be the result of policy that aims at being continuous and systematic. Also, in our case, it shall address the country as a whole. Independent theaters have practically disappeared along Chile, succumbing to the impossibility to access new technologies and unequal competition. Most provincial towns do not have cinema theaters working continuously, and our films practically do not reach these audiences. There are even regional capitals still lacking venues for film exhibition. A double discrimination is being exercised to these communities, by lacking the cultural life of cinema and the access to the cultural goods that the films from their own country represent. Filmmakers, in turn, do not have the chance that the citizens of their own territory can see their films. For this, a coherent policy aiming for audiovisual diversity and Chilean films, should consider an ambitious strategy, systematic, with continuity, spanning the country as a whole. The arthouse theaters and the venues of film diffusion along the country shall be considered in an articulate way with long-term perspective. But this requires that the logic of the market not be the common denominator of these policies. It is necessary to sustain it in spite of the market. May someone apply this principle to Ovalle’s municipal hall, a city where the habit of cinema was lost and a communal hall attempts to re-knit the social fabric of cinema? Therefore, it is about the need to implement a public social investment for a more permanent goal, which is the access of films to their proper audience, so much as the right of these audiences dispersed along our geography to access the cultural goods produced in their own country, and the access to the knowledge of films from all around the world—the essential traits of a cosmopolitan culture, although defined from itself, that will be part of the peoples of the future. Could it be said that it is an appeal for an active role of the state, or even statist? Yes, it is about appealing to a trait essentially active of the state for generating and maintaining over time a cinema space favorable to the above stated. Finally, for an ambitious and sustained policy to be possible without submitting to the logics of the market, it is necessary to address an essential modification of our cultural public institutions. Considering all the progress made in these years of public policy and law of cinema, but also that is necessary to urgently enter into a new stage that, in the saying of Octavio Getino, not only considers a productive growth—an increase in film productions—but to provoke “a productive development instead, that includes production, but also all the other factors that directly or indirectly, converge to guarantee its continuity and improvement” (Octavio Getino, Cine y televisión en América Latina, Lom, Santiago, 1998). It is about addressing the need to have in this new stage, an Institute of Cinema that may lead a strategy like the one we put in discussion. An institute with the attributions to conduct this policy, and that does not abandon the development of the diffusion conditions of our films to the logic of the market in every corner of our country. .

BA in Juridical Science, ARCIS University; graduate specialization in Copyright and Connected Rights by the University of Buenos Aires. She worked as Regional Director of Culture of the Metropolitan Region, for the Chilean National Council for the Culture and the Arts. She actively took part in the design and implementation of the instruments for the advancement of the arts (FONDART) and the Council for Audiovisual Art and Industry. She is currently coordinator of IDAC, ARCIS University’s Incubator of Cultural Business and Creative Industries.

Chilean film productions: problems with the content, the public communication, or the policies of advancement? I. STATE OF THE ART The reasons justifying the negative balance in the reception of local film productions by the potential audience, casting meager results when we look the numbers, range from the filmmakers opting to produce violent films, full of nakedness and vulgarity, the bad education, the price of the tickets, the lack of a school for film producers, the screen quota and the alternative exhibition circuits. In addition, the unequal competition with commercial Hollywood movies, productions that don’t need to cut a certain amount of tickets to stay on the screen, contrarily to the barrier that local productions need to surpass12. Thus the Mexican filmmakers and producers explain their results and their relationship with their local audience. Coincidently, this discourse is the same that can be heard in the evaluation made by the same actors in other countries just like Mexico, with laws for the advancement of film and audiovisual, or at least, on their way to having it 13; it is the case of Colombia (2001), Chile (2004), Ecuador (2006) and Peru 14.

PROBLEMATIC OF AUDIOVISUAL DISTRIBUTION

LAURA PIZARRO ARAYA

Then, what is the real difficulty facing the local productions? Why does the audience, evidently, want to see only foreign productions? What is the communication that hasn’t been reached with the local audience? Are the local films boring and the foreign, entertaining? Is it that the commercial genre produced by the majors is here to reign, and does not have among its goals to abandon any market? 12 La Puesta por Exhibir , film by Alfonso García Martínez, México 2011. 2 http://www.cinepata.com/peliculas/la-puesta-por-exhibir/ 3 Proyecto de Ley de la Cinematografía y el Audiovisual Peruano. 13.03.2012

Which are, definitively, the proposals of producers, distributors, and exhibitors to get around the lack of dialogue with the audience? We would also have to ask whether actors exist in the distribution and exhibition stages putting their bets on the local cinema and its massification, or if the market will keep determining what is seen in the movie theaters and who may enjoy a Chilean film on the screen, wherever the place they inhabit. In relation to the audience and their behavior as such, we would have to review what kind of Chilean films achieve a relative success, and if in that result there is participation of a large distribution company, or if it is the result of a strategy by an independent producer, or if it is the topic that the audience identifies with opting for the local films. To that effort and to approximate an answer, we will dedicate the following pages.

2. POPULATION V/S INFRASTRUCTURE FOR CHILEAN CINEMA

Chile—as the poet of the conquest noticed—is a long and thin strip of land, hosting 54 provinces and 346 communes in its territory, distributed over 15 regions. The population of the country, which according to the last census reaches 16,888,760 people (non-official), concentrates mostly in the communes heading each region.

Distribution of National Population. Projected INE 2008

The distribution of population according to INE projection for 2008, is the one expressed in the following table: Nº XV I II III IV V RM VI VII VIII IX XIV X XI XII

Region Arica y Parinacota Tarapacá Antofagasta Atacama Coquimbo Valparaíso Metropolitana de Santiago Libertador General Bernardo O’Higgins Maule Biobío La Araucanía Los Ríos Los Lagos Aysén del General Carlos Ibáñez del Campo Magallanes y Antártica Chilena

Capital

Population

Arica Iquique Antofagasta Copiapó La Serena Valparaíso Santiago Rancagua Talca Concepción Temuco Valdivia Puerto Montt Coyhaique Punta Arenas

187.348 300.301 561.604 276.480 698.018 1.720.588 6.745.651 866.249 991.542 2.009.549 953.835 376.704 815.395 102.632 157.574

Country total (projected to 2008) Source: wikipedia.org

16.763.470

Most of the population concentrates in the central strip of the country, being the Metropolitan Region of Santiago the one concentrating more than 40% of the total. Among the communes with the most population, there is Maipú, Puente Alto, La Florida, Antofagasta, Viña del Mar, Valparaíso, San Bernardo, Talcahuano, Temuco, Iquique, Concepción, Rancagua, Talca, Arica, Coquimbo, Puerto Montt, La Serena y Chillán. In this same sense, it is possible to verify that more than 86.5% of population resides in urban areas, and the trend of concentration is increasing15. But what is the chance of the population to access a film along the territory? How does the data on the number of inhabitants relate with the decision to open new screens along the country? Which has been the behavior of the independent exhibitors and those associated with the Camera of Multiplex Exhibitors in relation to the data? Life is hard and the market cruel, goes the saying, but in the socialization of cultural goods is even more, because if the business is not profitable, no matter the declarations of principle of the interested, the investor will look for a new business opportunity, abandoning their venue to look for another that delivers the profit. The decision to invest, does not consider the territorial distribution of goods, but the recouping of the investment and the maximization of profit in the shortest term. In this, reality certainly goes beyond fiction. 2.1. Movie theaters associated to the Camera of Multiplex Exhibitors Chile (CAEM) Out of the total theaters associated to CAEM (270), 63% is located in the Metropolitan Region. The remaining concentrate in 15 communes, that is, 4.3% of the communes in the country have a movie theater that is part of these chains. Another relevant fact, is that in regions other than the Metropolitan, there is no competition nor disputing for audience among the chains, as they locate in different communes, with only one exception in Temuco, where Cinemundo and Movieland are present with 5 and 6 screens respectively. In the same report by CAEM, it is indicated that by the end of 2012, four new multiplex complexes will have been inaugurated in Santiago (1), Concepción (2), and Osorno (1), adding up 32 new screens to the ones already existing. Nothing new under the sun, with the exception of Osorno, where the launching of the chain screens will disturb the placid life of an independent theater. 2.2. Independent movie theaters The independent character results from the fact of not belonging to the big chains, which is commendable considering the elusive audience rewarding the local productions with their attendance—but we have to mention that these theaters do not exhibit local films only. Another significant fact is that these venues —most of them—include art or auteur films in their programming, which not only means a definition of a particular niche, but also an editorial choice by the managers or owners. In this sense, the progressive advance of arthouse theaters to positive numbers contrasts with the recent definitive closure of the Cine Arte Tobalaba, not for lack of audience, but for the impossibility of renegotiating a debt. By re-inventing and searching for new formulas of diffusion and access to independent cinema, however, an auspicious plan had been designed from this venue: to open a new screen in its own space, and move ahead the project Road Movies Tobalaba—an itinerant regional exhibition of its programming. 15 http://geografia.laguia2000.com/geografia-de-la-poblacion/chile-poblacion

TABLE 2. Distribution of CAEM screens in the country

Chain

Cinemark

Cine Hoyts

Cinemundo

Movieland

Screens/MR

Seats

10.989

14.470

5.564

5.145

Regions

Screens

Seats

Iquique

1.477

La serena

1.323

Viña del Mar

3.044

Rancagua

1.246

Concepción

2.256

Valparaíso

1.123

Arica

1.477

Antofagasta

2.721

Calama

1.043

Talca

1.557

Los Ángeles

1.289

Chillán

445

Temuco

994

Puerto Montt

1.437

Temuco

1.644

Valdivia

993

CAEM. Informe El Cine en Chile en el 2011 – INE. Informe Cultura y Tiempo Libre 2010.

The statistics show that in the city of Ovalle there is the Cine Cervantes. Sadly, the data is wrong, because that venue was closed and used for other commercial ends. This means that this commune with 73,000 inhabitants is being left without a venue for exhibiting films... Who cares about the origin? With all, these circuits constitute a certain possibility of circulation for the local audiovisual works, particularly those not aiming at the box office or a mass audience, but rather to keep creative freedom intact. The territorial distribution is expressed in the next table.

TABLE 3. . Distribution of independent movie theaters in the country

Region

Commune

Venue

Screens

Cine Tacora

Copiapo

Cine Star

El Salvador

Cine El Inca

Arica Arica y Parinacota

Vallenar

Municipal

Quilpué

Mall Plaza del Sol

Quillota

Cine Paseo del Valle

Los Andes

Cine Star

Viña del Mar

Cine Arte Viña

Valparaíso

Cine Municipal

San Felipe

Cine Aconcagua

Santiago

Cine Huérfanos (BF)

Santiago

El Biógrafo

Santiago

Cine Normandie

Santiago

Cine Arte Alameda

Santiago

Centro de Extensión U.C.

San Miguel

Cine Pavilión Gran Avenida

Melipilla

Cinema Plaza

Ñuñoa

Municipalidad

San fernando

Cine San Fernando

Curicó

Cine Star

Talca

Cine Star

Los Lagos

Osorno

Cine Centro Lido

Los Ríos

Valdivia

Cine club Universitario

Coyhaique

Municipal

Aysén

Municipal

Punta Arenas

Cine Pavillón

Punta Arenas

Sala Estrella

Valparaíso

Metropolitana

O'Higgins Maule

Aysén

Magallanes

TOTAL

In regions different from the Metropolitan, there are 19 communes or 5.5% of the total with 31 screens of independent theaters; the rest are located in the Metropolitan region, representing a different behavior of the ticket price. Out of 48 independent screens, 17 are located in the Metropolitan region, or a 35.42%. The truth is that either the chains’ commercial screens or the independent theaters, the national coverage is infinitely lower that the amount of the communes in the country, reaching only 4.9% of the total, with the exception of the Metropolitan region, which constitutes a certain barrier for the access of important part of the country’s population to these cultural goods. The emotion to appreciate a film seated properly, with other people, with the right technology, with a giant image in great definition, is not known—according the data—to an important number of Chileans along the country.

3. WHAT IS THE CINEMA WE CHILEANS WANT TO SEE? A number of explanations have been given trying to explain why Chileans do not choose their own films. We said at first that one of the criticisms is that local productions use obscene language that the audience does not identify with. Also, that our viewer is willing to accept nakedness in international films, but not in our own, even considering it vulgar. Another justification for the lack of acceptance could be, in the case of the auteur films, the lack of preparation or education to enjoy this genre, requiring in some cases a major intellectual effort. Lets review the choices of the audience with numbers. 3.1. The majors and the family films Regarding the origin of the releases, out of a total 183 films in 2011, 70.5% comes from the United States, with a total 15,811,794 tickets sold; and 12.6%, from Chile, with a total 900,341 tickets sold. Regarding the raking of the top ten films of the period, it can be deduced at a glance that the films preferred by the Chileans are the one that bring the family together. If this conduct is a constant, we will know in the revisions to be made in 2012 and ahead, as unfortunately in this area, Chileans are not faithful. In the meantime, in the ranking 2011, animation, adventures, and action are the genres at the top.

TABLE 4. What do Chileans watch?

Nº

Title

Genre

Attendance

Harry Potter y las reliquias de la muerte (Parte 2)

Aventura

946.251

Río

Animación

928.630

Cars 2

Animación

805.087

Piratas del Caribe 4

Aventura

755.693

Kung Fu Panda 2

Animación

708.498

Animación

763.340

Acción

582.642

Animación

661.836

Aventura

508.390

Animación

418.939

Enredados

Transformer 3

Los Pitufos

Amanecer (Parte 1)

Oso Yogui

Total attendance 7.079.306 Source: CAEM. Informe de Cine para el 2011

3.2. The local productions: common places or collective imaginary?

TABLE 5. Ranking of Chilean films

Regarding local films in 2011, out the 23 releases, only 5 productions concentrated 97.38% of the audience according to the following distribution: Nº 1

Title Violeta se fue a los cielos

Attendance

387.443

43.03

Qué pena tu boda

200.679

22.29

3:34. Terremoto en Chile

181.906

20.20

Baby shower

65.804

7.31

El Limpiapiscinas

40.907

4.54

Regarding documentaries in 2011, there were 11 productions that obtained an attendance of 106,511 persons, that is, 6.9% of the total yearly attendance. Lacking the rigor of the statistical review, and resorting to the information provided by mass media, we will mention that until the first fortnight of September, 2012, the film Stefan v/s Kramer distributed by 20th Century Fox Chile, has managed to arouse the interest of more than 1,800,000 spectators in just 5 weeks. The box office for the first two weeks was close to five million dollars16, that is, more than all the Chilean films of 2011. This film is more successful than Sexo con amor, that in 38 weeks managed to bring 990,572 viewers, and it also surpassed Harry Potter and the Deathly Hallows, that in 2011 brought 946,251 people. 16 Diario La Tercera, 17/08/2012 . http://diario.latercera.com/2012/08/17/01/contenido/cultura-entretencion/

The good numbers were also for the film NO, based on a book by Skarmeta that tells the publicity campaign made for a plebiscite in a semi-imaginary Chile. This film during its first week of exhibition in August 2012 brought more than 46,707 people.

4. PRICE OF TICKETS AND FORMULAS TO ACCESS THIS CULTURAL GOOD According to the information on the websites of commercial chains, these are their prices:

Ticket

Price (CLP)

Monday to Wednesday

$3.300

Thursday to Sunday

$4.800

Children and seniors

$3.700

Students

$3.100

3-D

$5.500

To blatantly expose these values, is to assert that in our country is not cheap going to the movies, and buying a ticket can only be considered by an audience in condition to spend part of their income in goods beyond the basic basket 17. In this sense, a formula used by the chains to go around the barrier of cost is to partner with retail companies, mobile phone companies, or bank institutions, as their relation would serve as stimulus to buy tickets for a reduced price in exchange of their preference, which pays off in the long run. We Chileans are attending more to the cinema, and the numbers show it18. While in 2010 there were 14,714,031 tickets sold with a variation in respect to the previous year of 1.88%, in 2011 this number reaches 17,320,697 tickets sold, which in practice means a variation of 17.72% in relation to the previous year. That is, Chile obtained an annual average of 1 ticket sold per inhabitant. In the United States this annual average reaches 4.25 tickets per inhabitant; in Australia, 4.14; in France, 3,28; in Canada, 3,21; in India, 2,42; and Spain, 2.2119 Data is obtained from the CAEM and INE reports of 2010. Having reached this optimum relation of population and annual average of tickets sold puts us in the right path, although insufficiently, even more when we cannot assure that this will be a constant for the future. What is good for exhibitors is not so much for local producers, because this rise, unfortunately, is not proportional to the option for local cinema.

17 CASEN 2006. Going to see a film would be related to the average monthly income. People that declared not going to the movies, receive an average $154,000 monthly, while those who declared going receive a sum greater than $500,000. From 2006 to 2012, the minimum wage increased $65,500 (all prices CLP). 18 Data is obtained from the CAEM and INE reports of 2010.m铆nimo aument贸 en 65.500 pesos. 19 Source: FOCUS 2011 - World Film Market Trends

4.1. The renting of films We mentioned while reviewing the infrastructure for cinema along the country, that only 18 communes in average have movie theaters. This scarcity, certainly not optimum, can be supplemented by the existence of video clubs allowing the access to film productions at a cost much lower than what is offered by the commercial venues. For 2010 presented the following results: Rented Titles 2010 Chilean Films

Bazuca 3.7%

Foreign Films

Blockbuster 2.1% 96.3%

Source: INE. Cultura y Tiempo Libre 2010

In such modality, the data is, again, not positive for the local cinema, as out of the total rented titles, less than 4% corresponds to local productions; that is, even under this immediate and less expensive formula, people don’t choose the local productions. 4.2. The Festivals The release of local productions in festivals and their outcome may produce without a doubt a favorable result for all the actors participating in the circulation of this cultural good. Thus, in the case of the producers who opted for this strategy, obtaining an award would put them in a very good position at the time of negotiating distribution conditions for the film and the income. Regarding the audience, the outcome of a local production in festivals—international mostly—may anticipate a favorable outlook for the film, creating expectations and desire to see it. A good result could ideally mean a success at the local level and a good economic retribution for the producer, the distributor, and the exhibitor. If this strategy produces the desired effect, it can only be informed by the producers association, and the public organizations sponsoring and stimulating through different mechanisms the attendance to this kind of events. Even when we don’t have specific data, based on the data already presented, it is possible to venture that the positive results in these events will not necessarily produce a box office success, unless we consider that some productions will circulate in these events and go directly to a circulation mechanism other than theatrical. 4.3. Piracy Increasingly, the respectable audience has legitimated this cultural good by purchasing pirate copies on the sidewalks or open markets, just to name a few selling spots. From simple experience, it is possible to assert that a pirate copy costs around $1,000 pesos, whatever the film’s origin and the quality of the copy. The consideration that the pirate buyer used to have towards local productions doesn’t exist anymore, because there has been no change in the ways to access a Chilean film. Going to the cinema is still expensive and a privilege of few, and the pirate buyer, enticed by a good publicity campaign promoted within the parameters of the market, will have their copy before the production reaches the commercial screens. It is as if a Robin Hood syndrome had taken over them to oppose the majors and the expensive price of tickets.

6. COROLLARY When we asked if the problems faced by local cinema lie in distribution, we should reply, without fear of mistake, this is just one of the problems the Chilean cinema is facing. As we have seen, there is a missing dialogue between filmmakers and their audience that directly affects the results of the local productions when they are communicated to the public. We have also seen an important percentage of the population does not have access to movie screens, and such deficiency is not supplemented by any public or private organization taking care of the socialization of this cultural good constantly. On its part, in the diffusion stage of local cinema, we find that along the country, even in communes without a movie theater, a number of festivals take place, constituting a certain possibility of access and reunion, of which we ignore their impact, even when they are periodical, with a marked editorial definition, with an important participation of industry actors and audience, and with an endurance that necessarily requires participation of the state. The encounter is always good to be up to date with the state of the art, but it is also necessary periodical evaluations brought forward by all the intervening parties, even more when its realization may imply a certain path of internationalization of the local industry. A law for the advancement of film and the industry, to address the necessities of our incipient market, should contemplate mechanisms for tax exemptions and box office incentives for the local production. The application of public policy should translate in reduction of the cost of access for the viewer, increase of income for the producer, and tax reduction for distributors and exhibitors, whenever they share the uncertain contingency of winning or loosing that may occur to a local production. To insist in the proposal, it is important to note that out of the 23 films released in 2011, only 9 were distributed by specialized companiesâ&#x20AC;&#x201D;all these, however, were the ones that concentrated 99% of the tickets sold by Chilean films in the period. Distracting the attention from what is truly substantive, attempts have been made to locate the problem in an unequal treatment between local and the majorsâ&#x20AC;&#x2122; foreign productions, when the real difficulty is that they are treated in the same way. Particularly in the case of Hollywood films, the potential audience is exposed everyday on the TV to a series of codes defining their tastes, and putting them in tune with this kind of aesthetics and languages; therefore the box office results for 2011 donâ&#x20AC;&#x2122;t seem strange. Regarding the contents, it would seem that common places and collective memory is what produces this necessary dialogue between the filmmaker and the audience. That is, being ourselves in front of our own creative mirror. This identification, tied to effective mechanisms of advancement, will favor a progressive process of identification, of choice, and respect for filmmakers and their art from conviction and not by mandate of the laws of market.

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