Argentina acts to protect local films

[steveinbsas]

Yes by government. Taxing products or services to make people avoid them are extremely common in both the U.S and Europe. For example; the government taxes cigarettes so people smoke less. Is that also dictatorship?

The only purpose of taxing cigarettes is to generate revenue for the government. It is not intended to make people smoke less. The fact that people smoke less is an unintended consequence of the tax. It's not an example of a dictatorship, it's an example of state control of the individual, and a dictatorship is the most extreme example of state control.

This topic of this discussion was originally film. Then TV shows were included. I think that's great because both are forms of expression. Does the fact they are foreign really mean something should be done against them? What about foreign books? Should they be taxed at higher rates (especially "crap" fiction from the USA)?

The reason theater operators prefer to show foreign films is because they can make more money doing so. That's possible because (in contrast) not enough Argentines are interested in supporting national cinema directly by buying tickets to see the films made in Argentina. Higher ticket prices to see a foreign film don't necessarily translate into increased attendance for Argentine films.

 

[CarverFan]

Xibeca, if we extrapolate on your beliefs a little, I guess you'd like to see a tax on all children born here to US parents?

 

[John.St]

Yes, but watching a US-made film isn't bad for your health! Taxing "art" (whatever you might think of it) is akin to cultural dictatorship. No one should be financially penalized for wanting to see a US blockbuster over a locally-produced movie. And we're not just talking about US vs Argentine cinema either. The smaller European movies will also lose out. ...

According to the article in Financial Times:

"Big multinational distributors [are] quasi monopolies, “filling screens with a few products that are imposed on people almost as if that were the only thing on offer”." - that's the root cause.

"The maximum fee, for films shown in more than 161 screens, will be equivalent to 12,000 cinema tickets... Outside Buenos Aires, the tax is lower ..." - also lower for fewer screens.

Thus the maximum fee is the price of 75 tickets per cinema per movie - out here less, a total of app. 800 AR$ per movie. How much do they pay the semi monopolies for renting the film?

"Maxi Dubois, an Argentine filmmaker ... says his film was cut from 38 screens to three within three weeks despite attracting more than 600 viewers a week – a decent audience he says, which was matched by bigger budget US films that were not forced off the roster."

Do other countries protect their local products?

"Support to farmers by Japan’s and Korea’s governments is a large part of the total world subsidy for rice. The highest national average support equivalent rates, across all major commodities, are offered in Norway, Switzerland, and Iceland, with average subsidies of about 65–75 percent of the value of production, and in Japan and Korea, with support rates of 60–65 percent. ... The average support rate in the European Union is about 35 percent of the value of production."

"According to Organization for Economic Cooperation and Development (OECD) figures, the average rate of “producer support estimate” for the heavily supported commodities in the United States ranges from about 55 percent of the value of production for sugar to about 22 percent for oilseeds."

"Among OECD members (a group of high-income countries), “producer support estimate” rates average about 31 percent of total revenue for the main grain, oilseed, sugar, and livestock products. These estimates aggregate into a single index a large range of government programs, including price supports and trade barriers, that transfer benefits to farm producers and landlords."
http://www.econlib.org/library/Enc/AgriculturalSubsidyPrograms.html

"The [US] government still enforces restrictive tariffs to subsidize certain domestic crops, especially sugar, for which the U.S. tariff virtually eliminates all foreign import."
http://www.answers.com/topic/agricultural-subsidy

The forms of subsidy vary by country and commodity. The main forms of subsidy include: Direct payments to producers, price supports implemented with government purchases and storage, regulations that set minimum prices by location, end use, or some other characteristic, subsidies for such items as crop insurance, disaster response, credit, marketing, and irrigation water, export subsidies, import barriers in the form of quotas, tariffs, or regulations.

 

[John.St]

Yes, but watching a US-made film isn't bad for your health! Taxing "art" (whatever you might think of it) is akin to cultural dictatorship. No one should be financially penalized for wanting to see a US blockbuster over a locally-produced movie. And we're not just talking about US vs Argentine cinema either. The smaller European movies will also lose out. ...

According to the article in Financial Times:

"Big multinational distributors [are] quasi monopolies, “filling screens with a few products that are imposed on people almost as if that were the only thing on offer”." - that's the root cause.

"The maximum fee, for films shown in more than 161 screens, will be equivalent to 12,000 cinema tickets... Outside Buenos Aires, the tax is lower ..." - also lower for fewer screens.

Thus the maximum fee is the price of 75 tickets per cinema per movie - out here less, a total of app. 800 AR$ per movie. How much do they pay the semi monopolies for renting the film?

"Maxi Dubois, an Argentine filmmaker ... says his film was cut from 38 screens to three within three weeks despite attracting more than 600 viewers a week – a decent audience he says, which was matched by bigger budget US films that were not forced off the roster."

Do other countries protect their local products?

"Support to farmers by Japan’s and Korea’s governments is a large part of the total world subsidy for rice. The highest national average support equivalent rates, across all major commodities, are offered in Norway, Switzerland, and Iceland, with average subsidies of about 65–75 percent of the value of production, and in Japan and Korea, with support rates of 60–65 percent. ... The average support rate in the European Union is about 35 percent of the value of production."

"According to Organization for Economic Cooperation and Development (OECD) figures, the average rate of “producer support estimate” for the heavily supported commodities in the United States ranges from about 55 percent of the value of production for sugar to about 22 percent for oilseeds."

"Among OECD members (a group of high-income countries), “producer support estimate” rates average about 31 percent of total revenue for the main grain, oilseed, sugar, and livestock products. These estimates aggregate into a single index a large range of government programs, including price supports and trade barriers, that transfer benefits to farm producers and landlords."
http://www.econlib.org/library/Enc/AgriculturalSubsidyPrograms.html

"The [US] government still enforces restrictive tariffs to subsidize certain domestic crops, especially sugar, for which the U.S. tariff virtually eliminates all foreign import."
http://www.answers.com/topic/agricultural-subsidy

The forms of subsidy vary by country and commodity. The main forms of subsidy include: Direct payments to producers, price supports implemented with government purchases and storage, regulations that set minimum prices by location, end use, or some other characteristic, subsidies for such items as crop insurance, disaster response, credit, marketing, and irrigation water, export subsidies, import barriers in the form of quotas, tariffs, or regulations.

 

[shpunter]

Hey gang,

Sorry I am late to this thread but here are my 8.28 centavos...

First, I agree with steveinbsas that this law is really just going to get more revenue for the government. While the head of INCAA (the National Film Institute) claims that the aim is protectionist, the fact is that the films from major studios are still making so much money that this tax (which they are passing on to the consumers) is negligible, and I doubt this will cause a major decrease in the number of people who will go to see these films. What this will do is put more money to INCAA which will hopefully be used largely for increasing local production and, probably more importantly, distribution which is a problem for Argentine film as the large majority of Argentine film producers do NOT have even 1% of the resources for advertising that major studio film producers do.

Second, the tax is hardly censorship and it really is a drop in the bucket for these major studio films.

Third, putting aside the issue of what is "good" film or entertaining film, these major studio films have near monopoly power in terms of acquiring screens. Two U.S. "blockbusters" released in the same week will knock most local films off the screens BEFORE they have shown that they will be hits, and the theaters will discontinue the run of even successful Argentine films (like those of Berman and Campanella, who won the Oscar last year). Why? Because the distributors of the U.S. films will threaten to screw them over if they don't give them all the screens they want. How? They will say something to the effect of: if you don't give us our X number of screens in your multiplexes on film Y, then when we come out with a guaranteed blockbuster (for example, the next Spiderman movie) then we will only give you 30 prints instead of 40, and we will give the larger number to your competitor.

The concern of Argentine filmmakers and producers (and by the way, the "bureaucrat" President of INCAA is a producer and filmmaker, not just some hack functionary who is removed from the day-to-day struggles of producing and distributing here) is that even when they have a commercial film, they can't get it to audiences because 1) the theaters won't give them as many screens for fear of actions by distributors of U.S. blockbusters, and 2) they can't afford to advertise and reach as many potential movie-goers. Liliana Mazure, head of INCAA, is not saying "this is what consumers must watch," but rather we are being knocked out of the market and the consumers do not even know we are there! Which is to say...

Fourth, the fact that U.S. films are so "popular" is not necessarily for being better films but rather because they have the marketing muscle and advertising reach, combined with the ability to dominate the theater business, to dominate the market.

Fifth, on the subject of smaller European and even U.S. indies: INCAA is looking to balance the law in a way to not penalize ALL foreign films. Mazure, the head of INCAA, stated that the priority is to promote Argentine film, but the tax will hit blockbusters much harder than smaller foreign films. She stated that Argentine audiences want to see more of these small foreign films (maybe it is true but I don't know where she got that data) but these films aren't as accessible to most Argentine movie-goers.

Sixth, I think some of the people arguing on this thread are mistaking the current situation as some kind of fair free market, when in reality it is a market that is largely controlled by more powerful foreign private interests that would be happy to crush all foreign products and have everyone buying there products, in this case movies. Jack Valenti, who was head of the Motion Picture Association of America, made clear in many speeches that the MPAA's objective was get the maximum number of screens for their members, which implied of course knocking out U.S. independent films and foreign films. This is not about culture; this is about business. This is not about the freedom of the individual; this is about the freedom of businesses to limit the options available to individuals.

I'll stop there.

Saludos, Richard