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Facts about cinematic subsidies
For every dollar received in global (non-Austrian) box office by Austrian films, 28 dollars are spent on film subsidies.
Scroll through this document to page four for comprehensive -- and scary -- EU figures. Only the Czech Republic and Poland, both of which have very low subsidies, have ratios under one. France and Denmark, two of the more successful European film-producing countries, have ratios between three and four, meaning that four dollars are spent to produce one dollar of overseas revenue.
It is remarkably difficult to make movies that people in other countries wish to see, and it is not obvious that film subsidies are helping matters.
Posted by Tyler Cowen on May 29, 2007 at 04:02 PM in Film | Permalink
Comments
Guns or films? I prefer to waste tax money on bombarding foreigners with celluloid.
Posted by: jaywalker at May 29, 2007 4:51:41 PM
Is not the whole (ok, maybe not whole ... but large part) idea of subsidices to produce domestic language and culture films. Blockbuster megamovies are abundantly supplied from Hollywood. Why on earth these 'narrow' films should be particularly interesting to foreigners I don't know. And why would you want to subsidize films that are internationally appealing. Surely they can get all the financing they want from other sources. Strange post.
Posted by: Morten at May 29, 2007 5:23:57 PM
This data lacks the main channel these days for foreign (non-US) movies: DVDs and cable. Also, investment in movies do spill over in tourism, as the French case can prove.
Posted by: Ricardo Amaral at May 29, 2007 5:29:05 PM
View it as an arts subsidy. What sort of ROI does an arts subsidy typically generate? I suspect even worse.
Posted by: Jody at May 29, 2007 6:02:51 PM
Movie subsidies are meant to encourage culture more than commerce. It's one of the places where I think there's a market failure, because films are so expensive to make. Writing Madame Bovary took little more than a typewriter and the leisure to write; making even an inexpensive film, even one shot on DV, can cost millions of dollars. At what price beauty?
Posted by: Dave McDougall at May 29, 2007 6:05:56 PM
jaywalker:
Guns and films isn't the only choice. Neither guns, nor films is a totally valid choice. Just because the U.S. wastes a lot of money on guns, doesn't mean EU countries aren't wasting a lot of money on films.
Dave McDougall:
Except that subsidized "culture" tends to be irrelevant crap. For example, Hip-Hop and Jazz music were the most culturally relevant forms of music the U.S. produced in the 20th century... but it is Classical Music and Opera, and maybe some really difficult to enjoy avante-guarde music that recieved the subsidies in the U.S.. (Yes, I realize that Jazz is starting to be more subsidized, now that it is being taken over by the wealthy middle aged white bourgeois.)
Since great art tends to be counter-culture, or produced by minorities or disadvantaged people, great art is the least likely to be subsidized. Subsidized culture is like the cheesy French music being pumped out of loudspeakers at Paris tourist streets.
Posted by: Rex Rhino at May 29, 2007 7:10:01 PM
"It is remarkably difficult to make movies that people in other countries wish to see..."
Wait a minute! Didn't Pirates of the Carribean 3 rake in about $250 million outside the U.S. in its opening weekend, in addition to the $140 million in U.S. box office.
Of course, Disney probably manage to finance its film without subsidies.
Posted by: SCC at May 29, 2007 7:32:33 PM
Actually, I would bet Disney invented some ingenious piece of financial engineering that allowed them to collect subsidies from five or six countries.
Posted by: Neel Krishnaswami at May 29, 2007 7:52:49 PM
I wonder how much the copyright extension was worth to Disney. Does that count as a subsidy?
Posted by: Bernard Yomtov at May 29, 2007 8:00:32 PM
I would also like to see similar ratios for total revenues (including domestic) vs. subsidies. One could make a case that, sometimes, the point of subsidies is to produce movies on topics that are inherently interesting only to the country itself.
Posted by: Adrian at May 29, 2007 8:04:45 PM
Producing and distributing non-mass market appeal goods is a tough business: "The Lives of Others" grossed 10 mil. in the US, the brilliant "Little Children" 6 mil. They opened in the US on 9 and 5 screens respectively and garnered only 14.000 and 10.000 votes on IMDB. On the little screen, "Veronica Mars" just got canceled.
The "winner takes all" co-evolution of blockbusters, multiscreen cinemas and audience expectations has created a hostile environment for small films which is only partly cured by Netflix/DVDs.
Public subsidies bring their own can of worms with them, but the market crowds out some form of programming. Besides, cutting small scale pork is not efficient.
PS Rex, guns and butter are the textbook examples in a two-goods world.
Posted by: jaywalker at May 29, 2007 8:15:05 PM
Rex,
My knee-jerk reaction to this topic wasn't well thought out. Let's try again:
This is going to come down to a test of what qualifies as art. It seems to me that the quest for great art serves the collective good, and I don't trust individuals to value these things over financial rewards (see: corporate attitudes on pollution externalities). But do I trust the government to do this? Not really, but I suspect that some organization NOT explicitly seeking profits is necessary if we want to value art.
The subsidized classical/opera/avant-garde music you mentioned? I enjoy much of it. Can it succeed in the market? Sometimes not. But is mass appeal the measure of timeless art?
Perhaps it's limits (financial ones included) that make great art... following Bresson, "The faculty of using my resources well diminishes when their number grows." But if resources are scant, and state funding is the only way to marshal the capital to make a film, is the system broken because of its theory or its application?
A few films in France made with the help of subsidies during the 1960's, according to an article I read in The New Yorker: “Last Year at Marienbad,” “Cleo from 5 to 7,” “Jules and Jim,” “Diary of a Chambermaid,” “Two or Three Things I Know About Her,” and “Belle de Jour.” Also “The Umbrellas of Cherbourg,” “A Man and a Woman,” and “King of Hearts.”
Posted by: Dave McDougall at May 29, 2007 10:14:12 PM
Someone help me with the lead-up, but the punchline to this joke is that the EU economists couldn't account for the value of having Arnold Schwarzenegger as governor of California.
Posted by: Brad Hutchings at May 29, 2007 10:38:18 PM
Cowen notes that subsidization of film production in Europe does not translate into significant foreign (i.e. US) interest in these films. The main point of such subsidization is not to generate US interest in European films. This makes the target of Cowen’s critique difficult to identify. A better title for the post would be ‘Subsidization of films does not achieve what it is not intended to achieve,’ although I guess that would generated fewer hits.
Rex says,
1) Some subsidized art is poor quality and uninteresting
2) Much art that is high quality and interesting is not subsidized
3) Subsidizing art often reflects power structures in society and subsidizing art based on these structures is a causal factor that helps explains 1)
4) Therefore, subsidizing art only leads to poor quality and uninteresting art
Obviously 4) does not follow from 1-3 even if we accept these without qualification. Simply pointing to the worst results from subsidization and the best results from the market (if the examples given are those) is a patently disingenuous way to go about debating the issue.
Not that I particularly want to defend film subsidization, I just want to be informed by critics rather than just irritated by their quarrelsome trickery.
Posted by: aaron_m at May 30, 2007 4:24:31 AM
Subsidizing films hasn't always come up with disastrous results. In India it fueled an art movement in the 70's & many of these subsidized movies became cult films for a generation that was growing up unfortunately only to mainstream Bollywood. Many films from the list provided by Dave are considered artistic even today & taught in film appreciation classes across countries. Poland had a rich cinematic history thanks to this subsidy.
Having said that its surely not the most efficient way to tackle a problem given that it usually comes with governmental sanctions on creativity & may not encourage counter cultural art forms but without it many stories with no box office appeal may never be made. Filmmaking is expensive business but its not only a business and therein lies the fundamental contradiction
Posted by: dee at May 30, 2007 7:04:49 AM
"usually comes with governmental sanctions on creativity"
Is there evidence that there usually are sanctions and that they are anywhere near the creative restrictions impossed by market based film producers?
Posted by: aaron_m at May 30, 2007 8:08:26 AM
The restrictions come in two kind. One is approval by committee and connections. Secondly, subsidies are linked to local-content rules (filming locations, local actors). An interesting article about public film financing (in German; unfortunately, the Babelfish translation keeps the German sentence structure and garbles the meaning) appeared in the (highly recommended) German magazine Brandeins.
Posted by: jaywalker at May 30, 2007 8:36:50 AM
I always had the impression that one of the main purposes of arts and film subsidies wasn't to produce a product that paid for itself in revenue, but to provide employment for skilled workers, who then funnel part of their pay back into the local economy. (Similarly, to attract local audiences, who also spend money.) If you compare with live performing arts subsidies, any overseas revenue for films is gravy.
Rex said: Since great art tends to be counter-culture, or produced by minorities or disadvantaged people, great art is the least likely to be subsidized.
Bach was a counter-cultural minority?
Posted by: Matthew at May 30, 2007 5:03:05 PM
One of the rationales for film subsidies is that films are so important in the entertainment/culture cosmos that a country without its own cinema is lacking an identity. Frenchpeople need images of Frenchpeople to look at and identify with, etc; thereby "Frenchness" becomes more palpable and real. It's an investment in self-respect, in other words. I don't know whether it's worth it or not, but that's one of the rationales.
Another thing to take into account is this: Maybe some countries do govt-arts-subsidies well and others do it less-well. IMHO, this is a much-underdiscussed topic. People tend to yak on about arts subsidies as though there's one answer to the problem. FWIW, I think the U.S. does govt arts subsidies terribly -- too many interest groups, too much hostility, etc. And therefore even as an arts buff I'd love to see the NEA snuffed. But clearly some other countries do arts subsidies well. They tend to be smaller, more concentrated, and more centralized -- there's more of a shared agreement about what that country's culture is, as well as a shared agreement that reinforcing, enhancing, and promoting that culture is a worthwhile thing. The French, for instance, have none of our trouble with subsidizing sexually racy work. We get in a boring huff about a boob or two; meanwhile they merrily go on being naked, transgressive, despairing, chic, etc. Creating a lot of this work is considered to be an important part of Being French.
So my verdict: depends on the individual country. (And in most cases isn't any of my business anyway.)
Posted by: Michael Blowhard at May 31, 2007 1:35:51 PM
Last year was a bad year for American films in France. French subsidies have helped France to keep up their strong cinematic tradition and the French are very happy to have a wide range of quality films to see. Not to mention that France is heavily engaged in aiding African film production. Where does the US match up? Why does the US seem to think that cultural investments don't pay off?
France has mastered cultural politics more than any other country. I live in DC. Any major cultural event in DC doubtlessly has a strong French presence. The many DC film festivals are full of great French and co-produced French-Euro-Lebanese-Malian.... films. The French Embassy has a legion of specialized cultural workers that constantly work with American universities, organizations, and city events works (such as film festival productions). This way, France ensures its seat at the table.
France operates in the same way in every country where they are present. In Madagascar (when I was there), there is a French cultural center and cinema on the main street of the capital, Tananarive. It is bustling with activity and events. The American cultural center in Tana is more of a bunker -- with guards in place and anti-bomb devices protecting the building. Young Malagasy have to get special papers -- almost a visa- to use the library. Once in a while, the Embassy probably invites a jazz band to play for the public. (Yes, the US gives millions of dollars in aid to Madagascar, but the people still only really see the bunker. I am a lawyer, so maybe somebody on here can explain the economics of that!!)
French film subsidies can indirectly lead to great political victories. Think of the recent UNESCO Diversity Convention. 145 countries signed and ratified a convention with the US begging them not to. France and Canada spearheaded this initiative and the world lined up behind them -- cinema was a main rally point. France is seen as victorious in their efforts to maintain an independent cinema. (Of course, France is not scared to celebrate American film at Deauville and Cannes) The Diversity Convention and its buzz led to schmoozing and international pattings-on-the-back that, ultimately, can lead to economic opportunity -- i.e. film festivals and other events that can boost the economy -- see the Bamako festival.
Also, it is not like the Fench govt. is completely footing the bill when films are produced. The large French media corps. are putting up quite a bit of capital.
Blowhard: I agree with all that you say in your last comment.
You point out very well that it is a bad argument to extrapolate poor US arts subsidy practices.
France does not only subsidizes films but many cultural events throughout France. Recently, the city of Lille hosted a 5-month cultural festival dedicated to India. see http://www.lille3000.com There were exhibitions, speakers, films, life-size elephants lining the beautiful streets of Lille, music events, textile expos... People came from all over Europe. Inversely, all travel agents in Lille were offering package trips to India and, I understand, that thousands of people bought tickets. Sure, some people bitched that the city was spending so much money on elephants when there are "better things to do." And yes, rents went up in the city center yet again.
The cultural project cost millions and it was a phenomenal success. The city gained even more prestige as a cultural center (the city was European capital of culture in 2003 and similar events took place); more and more tourists flood into the city; the hundreds of restaurants in the city are full; the enormous bookstores are packed; the facades are renovated; the list goes on and on...
Nothing of the sort would ever happen in the US. Why? Because Americans seem to always look at the bottom line and I think that such a project would likely be deemed frivolous. I seriously doubt any American city could put on such a show. I have never seen anything close.
Lastly, don't forget that Paris is the world's #1 tourist destination spot. What is spent on films likely comes back in other ways. If the cock didn't sing a little, would people still come?
Look to the bigger picture. Its not all in the bottom line.
Posted by: pwedza at Jun 3, 2007 4:36:53 AM
Jaywalker-
Little Children was by no means brilliant. It just didn't get there, i thought it was pretty uneven. Lives of Others may be great, I haven't seen it. Veronica Mars followed up a killer season 1, with a great season 2 and a meh season 3. They gutted its core, dumbed it down and focused the spotlight on relationships. Rob Thomas deserved the cancellation. The most interesting and frightening character was introduced in the last 15 minutes of the season.
"The "winner takes all" co-evolution of blockbusters, multiscreen cinemas and audience expectations has created a hostile environment for small films which is only partly cured by Netflix/DVDs."
There are more films and more diverse films being produced today than ever before. That is not people's myopic perception, especially as they age, but it is true. It is not a hostile environment, certainly not relative to how is used to be. 50 years ago making a movie was an impossible endeavour for anyone independent due to the studio system. 30 years ago wtf was an indie movie? Now? I can see and experience movies from all over the world, from different domestic independents, from highschool kids putting shorts on youtube, etc.
Posted by: Johnny Debacle at Jun 4, 2007 4:13:14 PM
Johnny,
prosumer technology has certainly democratized film production. Distribution is the key, however: A third to half of the production costs are spent on marketing and distribution. The promotion of smaller (and especially foreign) films is more difficult and getting more so in view of the rising number of them. How many Iranian films do I even consider? How to create interest in films you don't know about? It is much easier to rely on the steady workhorses (the Jean Reno effect).
Small films rely on the slower but more reliable word of mouth which needs and takes more time. Time most smaller and independent cinemas cannot afford. I like viewing non-mass films in near-empty movie theatres (the rule), but it is commercially ruinous. By ordering a French DVD, I hurt its local distribution here (usually DVD releases take 6-8 months, French films arrive here 18-24 months after their original release) wich creates a downward spiral of decreasing distribution.
I agree on the merits of the seasons of Veronica Mars but not on its canceling. There is an audience out there for a not-dumbed-down VM. Current aggregators (by Nielsen proxy) do a poor job in capturing that audience (the Firefly effect). The same is true for the international promotion of local films. Government subsidies might not be terribly successful but the market offers few other venues for mid-size films either.
Posted by: jaywalker at Jun 5, 2007 7:15:28 AM
The fcat that despite some 400 millionin subsidies, French film hold only some 30% of the screen time is due to a massive preoccupation with production. Perhaps because all the beautiful people are there, besides the galmour of course. So Frech films are made, those who work in them get paid, part of that comes from the French state. They are less concerned with whether the films are shown. So a couple of obscure cinemas and they die.
But the Americans got their footwork together and did the tough unglamorous work: film distribution. That , plus the attrcation they build into thier moives, got them some 75% of the Frech atandance.
In far off Sri Lanka, during 1971 to 1978, they pulled off a triump for thier cinema by reoargaiazing film distribution and organizing a unique bank credit scheme where credit was issiued on the colataral of the negatives. The screen time for Sri Lankan film soared from 20% to 58% and film attenedance gallpoed from 30 million in 1971 to 74.4 million in 1979.
Film distribution is key to successful film industry- a point lost to Europeans and the French particularly. And certainly not to the Sri Lankans who founded a national film based on production AND distribution.
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