Rio Film Fest: MPA Study Calls for New Policies for Brazil's Film Industry

Rio Film Festival 2014 - H 2014
Courtesy of Rio Film Festival

Rio Film Festival 2014 - H 2014

Figures show big potential interrupted by tax exemptions, piracy and theater shortage, among other problems

RIO DE JANEIRO – The Latin American branch of the Motion Picture Association and the Brazilian film industry union (SICAV) presented Monday at RioMarket a new study of the business' current state, calling for new policies to encourage the sector, as potentially shifting presidential elections are set for Oct. 5.

Conducted by Tendencias, the MPA’s "Brazilian Audiovisual Sector’s Financial Impact" was displayed at the Rio Film Festival's market sidebar, showing new figures that focus on problems such as tax exemptions, piracy and theater shortage as red flags for the audiovisual sector, which represents 0.57 percent of the Brazilian GDP with $8 billion (19.8 billion reais) in 2013.

“The growth potential of the audiovisual sector is such, that if we had the right public policies and initiatives, it could represent a lot more,” said Ricardo Castanheira, head of MPA Latin America at the press conference, held at the RioMarket's headquarters in Armazem da Utopia.

“In a country that ranks among the most creative ones in the world, this study shows the creative industry in Brazil has an extraordinarily high potential for development and competitiveness,” he added.

“Together with China, India, and Russia, we’re among the countries with the biggest potential for growth in the audiovisual industry,” said producer Walkiria Barbosa, who described several key problems to be addressed in an industry that reportedly grows at an annual rate of 8 percent.

A huge bureaucracy producers face when dealing with government aid is one problem, according to Barbosa, an experienced producer who also is a co-director at the Rio Film Fest. “The accounting department is the biggest one in production companies, because the amount of red tape forces us to spend more money in the legal preparation of projects in order to get them approved, than what we could invest in the project’s development,” she said.

The dynamics of tax incentives — granted on single projects — also was targeted at the conference, as it was said to perpetuate the dependence on government money instead of enabling production companies to eventually continue on their own. 

“They haven’t created stronger companies,” SICAV’s Silvia Rabelo. “When you ask for an exemption on your film, it doesn’t matter if your company has been there forever and you’ve already made dozens of films: you have to start from scratch, every time. And it takes too long to get them, so in the meantime you have to carry that weight financially. Companies can’t grow enough to start walking on their own two feet.

“A tax exoneration for the whole productive chain of the audiovisual sector would actually be a lot more effective than these direct tax incentives,” she concluded.

A reformulation of these policies is in the works with Brazil's film institute ANCINE, Barbosa said. “We expect to have effective advances by the end of next year,” she added.

On the other side, the problem of piracy and the resulting losses were also regarded as important. “I cannot accept that Federal Bank Heist, a film my company made, has more than 3 million views on YouTube with ads popping up everywhere, and we don’t make any money out of that. I don’t care if it’s a channel within YouTube. They’re selling advertising there. I love YouTube! But I think what fails here is the legislation,” said Barbosa.

“The issue is not new, both the executive and legislative powers are aware of this, but the truth is in recent years nothing has been made to fight piracy for real,” she added.

A different aspect of the same matter, Brazil's shortage of theaters was said to encourage film piracy, as 50 percent of Brazilians live in cities where there are no cinemas, according to the study. Nevertheless, the study acknowledges the extensive Cinema Perto de Voce (Cinema Close to You) program announced by previous president Lula Da Silva and set to build 500 theaters in smaller towns across the country.

Overall, the analysis presented at RioMarket pointed at the industry's "low internationalization," since the relation between audiovisual exports and imports fell significantly from 0.032 percent in 2000 to less than 0.01 in 2011, a gap that speaks of a less competitive industry that calls for redirecting public policies, such as the promotion of international co-productions to make local films more attractive in foreign markets.