Until “revolution” arrives…the paradise of subsidies

As I said clearly before I don’t believe in any revolution let alone in the global kingdom of inflated egos. It is not the nature of the beast to eat its own guts and everybody can rest in peace about it: filmmakers, actors, producers and all the involved in the entertainment business won’t suicide as they see revenues dropping and sinking bellow the red mark, way bellow. At least in all the countries where subsidies are in place, the ball will keeping going. The game is too good to quit and they will fight it fiercely,  with bravery and stop at no ethical limits (the large majority at least) even if that includes censorship.

My intention here is to map as extensively as possible the production of film around the world with a special emphasis over the subsidized countries.  The US has its own set of rules, small state funded incentives, etc.etc. and for the purpose of this series of articles is simply not fun to drag its dirty out yet. Not yet.


Honoring the country which saw me coming to this world, I shall start with Brazil.  Yeah, I am Brazilian by birth (European National by option). Not equal, nobody in Brazil is born equal to anything (the law? no, specially not equal to the law) … Not easy, in the country easy is seen as weak so everybody poses a nasty attitude to life in general and to their “social-inferior-peers” in particular… AND everybody feels they have the supreme right to have all the benefits in the world, existent and to be invented, on all medias and in the whole universe. To whom is used to the language used in distribution rights contracts, doesn’t it sound terribly familiar?

That said I need to clarify somethings to the newcomers to the “Brazilian kingdom”. The country has a huge media oligopoly in place for the past 44 years called nothing less than GLOBO (globe) which produces an enormous amount of daily soap operas (four hours a day x 4 different shows x 6 days per week) and that is enough to keep an army of combatant soldiers (artists), well paid and living the glory of nationwide fame, happy and smiling all day long. To portrait the whole scenario would take a book and that is not the purpose of these articles so, keeping it short, they can have a mediocre production with some excellent talent but there is a huge fiction-drama production taking place in the country.

The GLOBO organizations (the media empire spreads to cable channels, newspapers, magazines, radio stations, cable networks, music publishing, etc.etc) were raised to a predominant position by the military dictatorship in the 60’s and never declined ever since.  The military regime went down but they kept their stake and pawns over the country, supporting rebrand right-wing politicians in a fake democratic state. Currently they support the center left government of Lula. Even if they say they do not support it, they do. It is their nature: always standing behind the factual powers.  And their dominant position has made that they bred inner-house talent, shaped to their aesthetic standards for generations (not unusual to find three generations of the same family working in the same company’s department) and that has spilled over to several other art forms: the cinema is made by the same actors and a great number of screenwriters and directors; the theatre is dominated by the same actors of the soap-operas; the music heard on the radio waves is the soundtrack of their programming, etc.etc. The “Global Production Standard”  which encompass a standardized mix of key elements such as same lighting, art direction, costume designers, set designers and 99% of poor camera angles composing the lower spectrum of visual (de) effects to keep audiences’ success and with rare exceptions is almost always the certainty of a mediocre product.

To further understand the GLOBO system is necessary to clarify that even the communists and left-wingers were incorporated and assimilated by the predominant standard. Exceptions can be counted within two hands, maximum.

Yet, as an oligopoly there was no need to invest in feature films neither there was a legal obligation to do so, as it is the case in many European countries. When the GLOBO organizations raised Mr. Collor de Mello to the presidency of the nation, he called to an abrupt end of the state funded film organism (Embrafilme) and the small feature film production halted completely. From 1990 to 1994 no long feature film was produced in the country.

The demand for financial instruments able to finance a film industry was always a major drag for the cultural elites and the government had in place an instrument that in fact was quite successful to reach the small goals of those “brilliant minds”: tax exemption for companies investing in film productions. Slowly but surely, the system started to work out.

The basics of it are: a director/writer comes up with a project. Usually they are not alone and have producers attached which will package the project, attach the talent (Globo actors) and register the project with the state organization for clearance (i.e. authorization to raise money). The project is then filed in the Stock Exchange (yeah, never underestimate the capacity for grandeur that the Brazilian elite’s have!) and then out they go for the money hunt. After that, it is all up to the Marketing Manager of big corporations to decide according to their own agenda’s which film to support or not.

BUT, and there is always a big but, the “investing” companies will not invest the so-called “good money”. Nay, nay!!! They will “invest” bad money, rotten money and whatever other disgusting name they come up with in the production of film or theatre or a ballet. It’s the same from the marketing director’s perspective and the money leaves from the same pot: the corporate taxes due to the nation’s Treasure. Needless to say there is no investment whatsoever. They take up to 4% of the corporate due tax and put it in one, two, how many productions they see fit and that amount is levied by the Treasure Department. So, every single production in the country departs fully paid even before pre-production. There is no risk attached to the producers, writers and directors. All salaries paid in full at rates that when compared to the European films are quite high. If a director writes and also produces the film (not unusual at all) the net profit of this “artist” is often 30% of the entire budget. Average budget of Brazilian features? Currently averages US$ 4 million. Some reach 8/10 million US dollars. Basically it’s all ” Global Production Standard” values. Not too different from  watching a soap-opera episode but in the “magical dark room” in a brand new Multiplex Cinemark. Rare exceptions, mediocrity is the standard.

If the film fails flatly in the box office? Who loses it? Nobody. It’s fully paid. Paid by the Brazilian State and ultimately by the Brazilian poor population who does not have health care, nor decent public services let alone the right to complain about another gigantic inequality of the rich up and coming world power player championed by the blue-collar president.

It’s worth to remark that the former Minister of Culture, singer Gilberto Gil, has received also subsidy money shortly after leaving the ministry for more than US$ 200,00 guess for what? To produce his music DVD! If Caetano Veloso wants to make a show with tickets costing US$ 100 per head, he demands subsidies as well. If any problems or complaints arise from the fact that one of the richest singers in the country gets subsidies, he himself will call the seating Minister of Culture and the rules will bend to accomodate his needs.

Is there any strategy in the works regarding the digital “revolution”? Yeah, Walkiria Barbosa, director of Festival do Rio has recently declared that it’s necessary to combine “education + punishment + alternatives”. As an old school Stalinist,  she has it all squared out. She and all the rest! To talk about the real alternatives in Brazil is to cast yourself out of the picture, I know! I’m doing it as I write these pages. Don’t think outside the dark room with a projector running a 35 mm print otherwise you are not cultivated enough at best. If it comes to worst you are a criminal and point period. End of discussion. Someone will find a way to punish you.

AT THE END OF THE DAY, it is an investment, done by a legal entity into another legal entity. If the product is good and has returns, the “investor” will receive the principal plus profits. The taxes the company owed? Forget it, nobody will ever recall that minor detail, for god’s sake!

Woody Allen and Rio

The bad news? It is all reserved to Brazilian nationals but if you are Woody Allen governments will line up to pay for your production. Bastardy is a highly appraised art in the country.

1 Comment

  1. As the question was raised after the post was published, I have to clarify that non-brazilian nationals are entitled to all the benefits of the current system of production financing as long as they are involved in a coproduction with a Brazilian company and the country of origin must have a coproduction treaty with Brazil or be part of a broad coproduction convention.

Comments RSS TrackBack Identifier URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s