Mexican film production

Mexico finally has elected a new president, but doubts persist as to whether the administration will aid the nation's troubled entertainment sector.

MEXICO CITY -- Filmmaker Luis Mandoki, who makes his home in Mexico City, feels betrayed. Acknowledging that he was "one of many naive people" who initially believed in President Vicente Fox's so-called government of change, Mandoki says the changes have not come.

Even as Mexico prepares to usher in a new leader, though, Mandoki and many others in and around the nation's beleaguered entertainment industry don't like what they see on the horizon. "Things are moving backward, rather than forward," Mandoki says. "It seems like we've gone back 30 years."

Fox won a historic election in 2000, ending seven decades of one-party rule. At that time, expectations were flying high as he promised sweeping reform in many areas, including the nation's entertainment sector.

Nearly six years later, though, reality has reared its ugly head. In broadcast television, two networks continue to control about 95% of Mexico's commercial stations. In the film sector, the administration's accomplishments have been somewhat-more debatable, but while Mexico's annual production output climbed from fewer than two-dozen features when Fox took the reins to 53 in 2005, fewer than half of the pictures produced locally last year made it to theaters -- and only a few enjoyed boxoffice success.

Free-market conservative Felipe Calderon of Fox's PAN party is set to take office Dec. 1. Much like the United States' George W. Bush/Al Gore dispute in 2000, fraud allegations swirled in the wake of Mexico's July 2 presidential election, but an electoral court upheld Calderon's narrow victory in a Sept. 5 decision.

Analysts say Calderon must focus on bridging the political and social divide that has been exacerbated by his controversial election, so while there are grumblings within Mexico's TV industry that the incoming administration must address long-simmering problems including the highly concentrated domestic broadcast market, insiders believe that it is not a priority.

Local media expert Raul Trejo notes that the dominant Televisa and TV Azteca broadcast networks also control Mexico's domestic TV production sector, as well as the nation's cable and satellite outlets. "If you look at Televisa, in addition to their broadcast TV channels, they have Cablevision and (satcaster) Sky Mexico," he says. "That leaves viewers with their hands tied."

Making matters even more difficult for would-be competitors, Fox signed into law in April a bill that critics say serves to strengthen the grip of Mexico's powerful television duopoly. The measure disappointed those who still believed that the pro-business administration might open the domestic broadcast sector to more entrants.

Even Sen. Javier Corral, a member of PAN, considers the new law a major setback. "Mexico has one of the most concentrated television industries in the world among democratic nations," he says.

The measure allows Televisa and Azteca to expand their digital and high-definition services without paying for new spectrum frequencies -- whereas players looking to enter the Mexican TV market, including Telemundo, would be required to do so. Opponents dubbed it the "Televisa Law" and accused legislators and political parties of giving in to pressure from that broadcaster and Azteca in exchange for favorable coverage ahead of July's election. Televisa repeatedly has denied such accusations.

On the campaign trail, Calderon and other leading presidential candidates offered no opinions about the controversial law, leading some observers to presume that nobody was willing to pay the price for speaking out against the two mighty domestic broadcasters. But now that Mexico has elected a new president and Congress, Trejo hopes the measure will be reevaluated.

"It needs to be changed," he says. "The media law looks the same as it did in the 1960s."

Looking ahead, though, local TV critic Alvaro Cueva sees Mexico's broadcast business undergoing few, if any, changes. "The next six years will be a prolongation of what we have now," he says. "I don't foresee a new competitor entering the market."

Cueva gives the Fox government a mixed report card. He notes that Mexico's domestic television has enjoyed increased freedom of expression under Fox but believes that the president has lacked authority to create conditions for a more-competitive industry.

Interestingly, because Televisa and Azteca hold such dominant positions, media analysts note that their growth opportunities at home are limited. Consequently, both companies continue to expand their presence within the lucrative U.S. Latino market.

Epigmenio Ibarra, who heads Mexico City-based Argos Producciones, believes that the two-network stranglehold on domestic TV broadcasting and production hurts independent players. "You would get a better and more-creative product with active competition from a third or fourth channel," he says.

As president-elect, Calderon has not yet set his administration's goals for the TV industry. As one might guess given Mexico's political situation, he hasn't outlined his plans for the film industry, either. Nonetheless, it is safe to assume that Calderon will not place a high priority on film financing.

Still, any suggested budget cuts will not be taken lightly, as Fox learned in 2004 when he called for selling off several state-run film schools and the historic Mexico City-based Churubusco Studios. The proposal sparked outrage -- with the Mexican Academy of Arts and Cinematographic Sciences going so far as to call it "an attempt to exterminate our national film industry and benefit the interests of the American film distributors" -- and Fox ultimately scrapped it.

Local film critic Cesar Albarran says Fox's failed privatization plan sends a clear message to Mexico's next leader: The nation's key movie entities are not for sale. Even so, he believes that the industry's interests will be placed on the back burner during the next six years.

"I don't think the film industry was a top priority during the current administration, and I don't think it will be a priority for the incoming government," Albarran says.

Mexico has seen a significant increase in production volume during Fox's term, but a lack of distribution opportunities has left many producers frustrated. "It's true that more films are being produced, but it's also true that many are not being seen because they do not have distribution opportunities," says Octavio Maya, a producer at Euphoria Films Mexico.

Alfredo del Valle, spokesman for state-run financing body Imcine, acknowledges that the government must take a more-active role in helping Mexican producers find distribution. "Unfortunately, a very small part of (Imcine's) budget is allocated to promotion, so it's very difficult to compete with the majors," he says.

But if distributors are to show more interest in local fare, then producers must do their part by offering films that can deliver at the boxoffice. A sizable number of Mexico's domestic features do not even stay in theaters beyond their second week of release.

All things considered, though, many within the local entertainment industry give due credit to the Fox administration for its tolerance of controversial subject matter. During the run-up to Mexico's 2000 presidential election, former ruling party the PRI -- which unilaterally held sway for 71 years before Fox took office -- attempted to prohibit the domestic theatrical release of Luis Estrada's political satire "Herod's Law" because it depicts the PRI as corrupt.

The recent domestic release of Estrada's "A Wonderful World," which criticizes Mexico's political and socioeconomic policies, endured no such censorship -- despite taking place during an election year. "I think people are making films today that would have been impossible to do under past administrations," Albarran says.

Another important Fox accomplishment is a recently enacted incentive that allows private companies or individuals investing in domestic pictures to have as much as 10% of their income-tax payments reallocated to local productions. Pedro Araneda, director of the film school Universidad del Cine/AMCI, believes that the incentive will boost activity.

"It's another way to get money for films, and it's a better way because it comes from the private sector," he says.

Observers expect private initiative to play an increasingly important role within the Mexican film industry, especially with the major U.S. studios showing more interest in local production. Warner Bros. Pictures Mexico recently released its first feature, Issa Lopez's comedy "Efectos Secundarios" (Side Effects), and Columbia Films Producciones Mexico has begun production on Fernando Sarinana's comedy "Ninas Mal" (Charm School).

Maya sees the majors' involvement as a move in the right direction. "It raises the bar and forces other production companies to produce better content," he says.

Mexico has proved during recent years that it is serious about increasing film-production volume, but the facts remain that domestic pictures need more screen time and that the nation must offer more financial incentives, as have Argentina and Brazil. Mandoki, who returned to Mexico several years ago after working in Hollywood for more than a decade, would love to see the incoming government create better film incentives and a more-level playing field in broadcast television, but he looks at his wish list much differently these days.

"The Fox election in 2000 was deceiving," he says. "Now that the country is polarized, my sense is that nothing is going to change."