By Charles Newbery
BUENOS AIRES -- Argentina's film industry, the most prolific in Latin America with up to 70 features a year, is facing a decline after five years of growth as inflation and limited exhibition makes it harder to raise production coin and make a profit.
Rising inflation -- more than 25% annually -- and a slowing economy are slashing B.O. receipts. Attendance fell 11% in the first seven months of this year compared with the same period in 2007, according to Dis-Service.
This is cutting state coin for production, of which a big portion comes from taxes on ticket sales, and is making it harder for producers to scrape together funds for increasingly pricier productions. A feature that cost $1 million to make three years ago now costs twice that, says Oscar Kramer, who has produced hits like "Cronica de una fuga" (Buenos Aires, 1977) at K&S Films.
"The combination of lots of releases, few screens and declining attendance is not good," says Juan Vera, producer and artistic director of Disney-backed Patagonik Film Group, which is behind the hottest homespun pic so far this year, a remake of "High School Musical."
Partly due to higher ticket prices, Hollywood blockbusters like "The Dark Knight" and "Kung Fu Panda" are pulling in half the admissions this year they would have two years ago, says Kramer.
"Consumers are more cautious because they are worried about inflation, salaries and job security," says Maria Castiglioni, an economist in Buenos Aires. Production Slowdown
With B.O. lower, projects are getting put on hold.
Patagonik has postponed "Ataud blanco" (White Coffin), a $400,000 horror pic directed by Daniel de la Vega ("Jennifer's Shadow"), until the government clarifies an expected change in exhibition and subsidies policies.
"We have to work on projects that will reach an audience," Vera says, suggesting genre pics with star appeal or original stories. "It is more expensive to produce and there is a greater risk of not being able to recoup money."
Patagonik's latest production, "Un novio para mi mujer," is a successful example of this approach.
The romantic comedy drew a third of total admissions in its opening period of Aug. 14-19, besting "The Dark Knight" and "The Mummy: Tomb of the Dragon Emperor" in their second and third weeks, respectively.
State Help
Liliana Mazure, who took over the reins of the National Film Institute (Incaa) in May, reportedly is preparing measures to help producers face up to the rising costs and secure better exhibition.
Incaa, which gives $30 million a year credits and subsidies, reportedly wants to increase subsidies to a ceiling of 3.5 million pesos ($1.15 million) for each production by September, up from $825,960.
However, this likely will cut the country's high rate of production, with fewer pics getting made but each with higher budgets. To help new talent, Incaa plans to hold two competitions a year for production coin and airtime deals on TV.
Also in the cards are tougher enforcement of screen quota and continuity regulations that so far have failed to improve exhibition because loopholes and weak fines made it easy for exhibs to sidestep them.
The foreign exhibs that dominate the market, including Cinemark, Hoyts and Showcase Cinemas, have come under attack from Argentinean distributors and producers for providing few screens, poor times and less-popular plexes for homegrown films, as well as large time differences between each showing and excessively quick ends to runs.
"There need to be regulations so that all films play by the same rules," says Veronica Cura, who produced Lucrecia Martel's Cannes entry "La mujer sin cabeza" (The Headless Woman) at Aquafilms for an Aug. 21 release.
Only two to three years ago runs were longer, with local pics like "El aura" (The Dawn) and "Elsa y Fred" selling more in the third and fourth weeks.
"We didn't meet expectations because we didn't get enough screens," says Alejandro Gruz, executive producer of "100% lucha" (100% Wrestle), a wrestling adventure pic and one of the biggest local releases this year. It got two to three screenings a day at multiplexes, compared with 10 for "The Dark Knight," he says.
"100% Wrestle" pulled in 255,000 spectators, less than its potential for 1 million, given strong merchandising and a loyal audience stemming from a popular TV program, Gruz says.
For Leonardo Racauchi, head of the Argentine Chamber of Multiplex Exhibitors, an industry group of such leading exhibs as Hoyts, the chief reason for the B.O. drop was the absence of a big-draw blockbuster like "The Simpsons Movie" or "Shrek."
Even so, the local contingent failed to meet expectations because of competition with Hollywood, which takes an average of 80%-85% of admissions compared with around 10% for Argentina.
Genre Appeal
With fewer possibilities of breaking even at home, producers are gunning for projects with international potential.
"We are planning projects that have overseas commercial appeal -- this is the only way to make a profit," says K&S' Kramer, who plans to produce sci-fi thriller "El extranjero" directed by Szifron and alien-invader action pic "El Eternauta" by Martel.
The challenge, he says, is to land presales deals and find foreign co-producers, key for contending with the rising cost of production at home.
"Production is in decline," he says. "We are filming less this year than two years ago."
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