11

Hollywood's Presence in Latin America

Production Participation to Distribution Dominance

Tamara L. Falicov

Contemporary Latin American film production has a constraining, yet sometimes enabling relationship with the Hollywood film industry. Although industries of the so-called “Trinity” (Argentina, Brazil, Mexico) flourished autonomously at various times–for example between the 1930s and the 1950s, when a robust studio system thrived in those countries – there has always been some degree of Hollywood influence or some tangible competition at economic, political, and cultural levels. The present chapter will focus on this relationship between two Latin American countries that Hollywood has penetrated both as a viable export market and as a place where it can produce films offshore. Mexico and Argentina, which have developed film industries, will be profiled in terms of their differing finance models and of their sometimes strained, sometimes accommodating relationship with the Hollywood industry.

Historical Overview

In the film business, the relationship between Latin America and the United States begins as far back as the 1920s, when Hollywood looked to sell its motion pictures there and generated between 80 and 90% of box-office receipts in parts of Latin America (Armes, 1987: 47). Today that relationship continues. Data from 2001 show that overall grosses outside the US account for 55% of the total Hollywood studio box-office earnings and that Latin America has accounted for between 12 and 15% of foreign theatrical revenue (Toumarkine, 2001).

When European markets – historically, the largest buyers of Hollywood films – collapsed during World Wars I and II, Hollywood turned to Latin America to sell its product (see Schnitman, 1984). In 1927–1928 Latin America created more revenue for early sound features from Hollywood than Canada, Asia, and Europe combined – about 31.5% of the $7.5 million that comprised the annual total foreign return (Usabel, 1982, p. 80).

During World War II, Mexico's film industry was aided and invested into by the Hollywood studios – the most involved one was Radio–Keith–Orpheum (RKO); and Hollywood helped train technical crew and actors in Mexico. Mexican actors such as Dolores del Río, Ramón Navarro, and Lupe Vélez crossed the Rio Grande to the US before World War II, but then they returned to Mexico in the 1930s and 1940s. They became transnational stars – stars both in the US and in Mexico – and helped popularize what has been dubbed the “golden age” of Mexican cinema, the period from 1938 to 1953. That was also an age of transnational collaboration between the two industries in the fight against communism: the Mexican B-film Dicen que soy comunista (They Say I'm a Communist) (Alejandro Galindo, 1951, Mexico), among others, perpetuated Cold War propaganda (Fein, 2000, p. 93).

Argentina, by contrast, paid heavily for its neutrality during World War II. Amidst allegations that the Argentine film industry was producing pro-Axis propaganda, the US government banned the shipping of raw film stock to Argentina. Although one studio, Argentina Sono Film, did produce pro-Fascist newsreels, most of the film industry, which at that time was the most industrialized and successful of its kind in Latin America, was democratic and supported the Allies (see Falicov, 2007). The US government, heavily influenced by Hollywood, found a strategic way to distribute US films in the region by severely weakening the Argentine film industry, which had the most developed studio system among Spanish-speaking countries at the time (Getino, 2005, p. 28).

Since the 1950s both Argentina and Mexico struggled with the loss of an industrial film studio system and had to rely increasingly on the assistance of the state to support cultural production in the face of Hollywood's dominance. During the 1960s and 1970s Argentina and Mexico produced some commercial cinema, but the landmark was a cinematic movement on the continent, dubbed the “New Latin American Cinema Movement”: this was a highly politicized, anti-imperialist, low-budget cinema that arose as a reaction to the dominant Hollywood cinematic style, form, and purpose. Filmmakers during this period were experimenting with a different film language; their hope was to create a cinema of “underdevelopment” and to use it in order to raise the consciousness of the nation, rather than merely to entertain. Beginning in the 1980s and until the present day, cinema in Argentina and Mexico (as well as in most parts of the region) aimed to make fewer films, but films with higher production values, and the intention was to circulate them at home as well as abroad, in international film festivals. The films were less overtly political, and B. Ruby Rich describes Argentine cinema from that era as a shift from the “revolutionary to the revelatory” (1991, p. 14).

In 1994 the Argentine government approved legislation intended to protect the national cinema as an entity that forms part of the cultural patrimony, and also as an infant industry in need of protectionist polices. Among other measures, a 10% tax on movie tickets was instituted, to further investment in national cinema. A decade after production funds were secured, a new law was passed that was designed to strengthen national exhibition in Argentina, in response to Hollywood's long-standing film-exhibition hegemony. Historically, national films faced discrimination in theater exhibitions, where Hollywood movies would supplant national ones due to exhibitor preference. Moreover, to this day, the Latin American film market continues to be dominated by Hollywood films, which show, on average, on between 80% (current figures in Argentina) and 98% (current figures in Central American countries) of theater screens. For these reasons, in 2004 the Argentine congress enacted a screen quota measure to insure legally that national films would gain equitable screening space. Mexico passed a screen quota, designating 10% as the proportion of theater space to be dedicated to national cinema (Article 9 of the 1999 law modified from 1992); but the quota is rarely, if ever, enforced (see Ugalde, 2004).

Although Argentina has attempted corrective measures to wrestle some screen time away from Hollywood, another trend – perhaps as a response to the screen quota – has emerged from Argentina, Mexico, and Brazil, where the Hollywood majors have invested in co-production and distribution deals with Latin American film producers. Rather than relying solely on state funding or on co-production funding from Europe (usually Spain), there is currently more collaboration taking place between the Hollywood studios, represented by the Motion Picture Association (MPA) – which is the overseas arm of the Motion Picture Association of America (MPAA) – and Latin American producers. While Johnson (2005) has looked at the MPA's relationship to Brazil, this chapter will explore the Mexican and Argentine cases. Moreover, a general overview of runaway productions will further explain Hollywood's drive for ever cheaper locations to film and post-produce in.

The History and Impact of Runaway Productions in Latin America

In addition to marketing their films throughout Latin America, “the majors” have found ways of cheaply filming runaway productions there. According to a 1999 study commissioned by the Directors Guild of America (DGA) and by the Screen Actors Guild (SGA), “runaways” (or offshore productions) increased from 14% of total US film and television productions in 1990 to 27% in 1998 (Klein, 2004). The trend continued when the number of domestic theatrical releases shot outside the country increased from 35% in 1998 to 51% in 2005, the greatest shift occurring in productions with budgets greater than $50 million (CEIDR 2006, quoted in Davis & Kaye, 2010, p. 61).

In their edited volume dedicated to the study of runaway productions, Greg Elmer and Mike Gasher (2005, p. 2) caution researchers that studying outsourced productions needs to be tackled in a polyvalent way: “Understanding it requires consideration, at the macro scale, of economic globalization, screen aesthetics, narrative forms, and reception practices, as well as, at the micro scale, specific production communities, individual films and television programs and particular audiences.” Although it exceeds the scope of this study to encompass all the facets of studying runaway productions, it is important, in this discussion of mobility in production, to understand how new technologies have enabled companies to produce and post-produce films and television abroad in an efficient manner. New technologies, such as the rise of digital cameras and affordable editing systems, have allowed companies to shoot rushes abroad and then to send them via email as file transfer protocols (FTPs), thus enabling people to shoot and edit in varying parts of the world. As long as costs are low and labor is skilled enough for the work at hand, production crews are increasingly mobile.

Runaway productions are not a new phenomenon in Hollywood's history. Historians pin the period of consistent production when US film studios opened satellite branches abroad (such as Paramount's Joinville Studios in France in 1930), where low-budget, multiple-language versions of the same film were produced in order to cater for foreign audiences at 33% below the cost of the original film produced in Hollywood (see Shurlock, 1931, p. 22, as summarized in Nornes, 2007, p. 262 n58). A decade later, Hollywood studios teamed up with the US government to promote what was known as “the good neighbor policy,” through an orchestrated effort of creating Hollywood films with positive images of Latin America; these were designed to persuade Latin American nations to join forces with the Allies in World War II, and they were orchestrated through the Office of the Coordinator of Inter-American Affairs. Examples include cartoons blended with live action films, such as Walt Disney's Saludos Amigos (1943) and The Three Caballeros (1945). These productions were filmed partly in Latin American countries, and during the period 1939–1947 roughly 84 films with Latin themes were produced (although the majority were filmed at home; see López, 1993). The actual phrase runaway production appears in the 1950s (Davis & Kaye, 2010), after the famous Paramount Case (or Hollywood Antitrust Case) of 1948, when the US Supreme Court ruling mandated movie studios to divest themselves from their exhibition houses (lest they continue to be monopolies). This in turn remolded the studios, which started to produce films through subcontractors abroad. During the period of the 1950s independent studios in Europe were hired in order to regain the repatriation of profits lost from European quotas and other constraints on US film exhibition there (Davis & Kaye, 2010, p. 59).

The current debates on US runaway productions focus predominantly on the Canadian case, as Canada offers the most enticing tax incentives to Hollywood producers. Moreover, compared to Latin American countries and to other non-English-speaking nations, Canada has closer cultural and linguistic ties with the US (indeed, it is not for nothing that New Zealand and Australia are key places for Hollywood crews to film in, despite the enormous geographic distance). Nevertheless, in the quest for ever cheaper labor and exotic locales, Latin America has continued to be on US film producers' radars, and it has done so by marketing its low-cost and touristic locations. Their visibility is increased though tax incentives and legislation, as has recently occurred in Mexico; through the creation of national and regional film commissions, which is being championed by both Mexican and Argentine regional governments; through presence in location conferences (such as the annual Locations Trade Show in Santa Monica, CA); and through ad placement in trade publications. For example, in the most recent Locations Trade Show, the following film commissions were present: Buenos Aires Film Commission, Durango, Mexico Film Commision, and the Mexican Locations Commission.¹

The Mexican Film Industry from the Late 1990s to the Present

Mexican cinema has struggled to survive from the 1990s to the present. Unlike other Latin American film industries, especially those of Brazil and Argentina, the industry in Mexico has not been able to push its government to create a strong funding mechanism to work as an incentive for production. Since 1997, production figures have been low (see Table 11.1).

Although state support exists under the auspices of the Instituto Mexicano de Cinematografía (IMCINE; the Mexican Film Institute), increased attention has been paid to private film companies, which, without government funding, have produced both critically acclaimed films and box-office hits. From 1997 to 2004, between one half and one third of all the films produced in any given year were financed through 100% private monies. It is these film companies, most of them funded by wealthy entrepreneurs, that are now waking up the nearly moribund film industry. For example, the Mexican conglomerate Interamerican Entertainment Corporation (CIE) has partnered the venture-capital arm of the Grupo Financiero Inbursa (owned by billionaire Carlos Slim Helú) to create Alta Vista Films (Morales, 2001). Another company, Anhelo, is funded by chief executive officer (CEO) Carlos Vergara, who made his fortune through Omnilife, a herbal supplement company (Smith, 2003, p. 395). These production companies worked with film directors such as Alfonso Cuarón and Guillermo del Toro, who made films in Mexico, then became successful in Hollywood, but later returned to their home country to make quality films that are more personal. Currently del Toro and Cuarón are based in the US. Alejandro González Iñárritu has followed the opposite trajectory by making a hit film in Mexico, then directing in Hollywood. Y tu mamá también (Alfonso Cuarón, 2001, Mexico), produced by Anhelo, El espinazo del Diablo(The Devil's Backbone; Guillermo del Toro, 2001, Mexico), also produced by Anhelo, and Amores perros (Love's a Bitch; Alejandro González Iñárritu, 2000, Mexico), produced by Altavista, are small, artistic films that gained critical acclaim in arthouse circles abroad and were equally successful at the domestic box office. For the most part, lower-budget films such as these get limited US distribution, if any. In Cuarón's case, however, the independent US film distribution company Independent Films Channel (IFC) distributed Y tu mamá también, which became the most widely distributed foreign-language film in recent US history (Plasencia, 2004).

Table 11.1 Number of Mexican films produced, 1997–2009

Production year	Films
1997	15
1998	11
1999	19
2000	32
2001	18
2002	14
2003	29
2004	36
2005	53
2006	64
2007	70
2008	70
2009	66

Source: Vargas (2003); Cazares (2006a); IMCINE (2012).

The three directors of these films are friends and have remarked in interviews that they feel ostracized from the traditional film community for going to Hollywood (Puig, 2002, p. 14D). They do not lament the loss of state funding for films: according to del Toro, private funding signals that “that whole fossilized approach has now been overturned, thank God,” and Cuarón states his preference for private-investor finance over what he deems “corrupt Latin American governments” – by which he refers to the old-guard ruling-party politics of the once dominant PRI (Institutional Revolutionary Party) of the 1990s (quoted in Brooks, 2002). This reformist stance is partly a reflection of the so-called “new” (conservative) government party or National Action Party (PAN), which swept to power in 2000; but it is also these directors' defense against criticisms that people in the film establishment have leveled against them. In the Mexican press, Y tu mamá también was jokingly renamed “Hombre, Where's My Car?” or “Latin American Pie,” which implicitly likened it to recent Hollywood teen movies. Clearly some members of the established film community do not approve of national filmmakers having close ties to Hollywood. Cuarón stated: “Of course, I'm not going to defend America's attitude toward Mexico. Historically it is a very tense relationship. But you have to be pragmatic. Why should I turn down American distribution?” (quoted in Brooks, 2002). These newer directors share similarities with the transnational figures that helped fortify the golden age of Mexican cinema, such as directors Roberto Gavaldón and – notably – Emilio “El Indio” Fernández, who spent time in Hollywood in the 1920s and 1930s and learned their trade there (García Riera, as presented in Tierney, 2003, p. 227). There is therefore no lack of irony when those in the film establishment criticize the newer directors for working in Hollywood, while they themselves wax nostalgic over the bygone days of a more “authentic” Mexican cinema. These current directors represent a new, more youth-oriented film culture that, while not without its controversies, has helped revive Mexico's ailing industry.

The MPA in Mexico

Mexico is the number one market for the US audiovisual industry in Latin America, and it is ranked tenth by MPA member companies among all foreign markets (MPAA, 2005). The MPA has played an important role in producing and distributing commercial films made in large part by “industrial auteurs.” These directors work with multinational, corporate-owned production companies and produce television commercials in addition to film. Among the reasons for this involvement, apart from the desire to diversify the Hollywood portfolio, is the need to respond to nations that demanded cultural exceptionalism during the Free Trade of the Americas (FTAA) agreements. As a way of appeasing this sector and as an attempt to make a profit at the same time, the MPA began to collaborate in cultural production with the three most developed film industries in Latin America – Mexico, Argentina, and Brazil – to demonstrate how “the production and distribution decisions of MPA member countries also reflect this commitment to cultural diversity” (MPA, 2003).

In the case of Mexico, the MPA, via studios such as Disney, Warner Bros., Fox Universal, and Columbia TriStar, has produced, co-produced, and distributed film and TV programs throughout the Americas. The films co-produced with Hollywood studio money generally have very low budgets by Hollywood standards (typically between $1 million and $2 million dollars). Most Mexican films that receive co-production funding from Hollywood studios are relatively expensive by Latin American standards and they tend to be, not “quality” productions, but rather popular movies that appeal to younger, upwardly mobile, upper-middle-class audiences – the sort of audiences that enjoy comedies and trendy urban youth culture (described below). It is these very films that make money at the box office, but that are not being exported to film festivals for world recognition.

Mexican co-producers stand to gain from Hollywood involvement; in addition to the money invested, they also receive greater exposure from the wider distribution that the Hollywood studios command. For example, Miravista, the company co-created by Walt Disney Latin America and the Spanish telephone company Admira, signed the Argentine director Gabriela Tagliavini to direct its first Mexican co-production, Ladies' Night (2003, Mexico) along with Mexican producers Televisa Mexico and Argos Communication. This film, produced to the tune of $1.6 million, is a comedy about a woman who runs away with a male stripper on the eve of her wedding. According to Variety magazine, Ladies' Night reached number one at the box office in 2004 and was the second largest box-office hit in Mexican film history despite receiving little critical acclaim (O'Boyle, 2005). According to Mexican film statistics, the film was the eighth largest box-office hit from 1999 to 2004, with 2.2 million viewers (Cazares, 2006b).

Hollywood studios have been willing to distribute films after the latter have demonstrated success in their home territory. For example, Mexico's largest box-office hit of all time, El crimen del Padre Amaro (The Crime of Father Amaro; Carlos Carrera, 2002, Mexico), claimed 5.2 million viewers before being picked up by Sony Pictures Entertainment. This film outdid the previous record, held by Sexo, pudor y lagrimas (Sex, Shame and Tears; Antonio Serrano, 1999, Mexico), a film distributed by Fox studios (MPA, 2003). In 2009, the top six Mexican box-office hits were distributed by the US companies Universal, Fox, Warner Brothers, Disney, and Sony, selling a total of more than 11.4 million tickets domestically (Young, 2009). The smash hit that year, Rudo y Cursi (Alfonso Cuarón, 2008, Mexico) was distributed by Universal and became the third biggest box-office hit of all time, with 3 million viewers (CANACINE, 2012).

Mexico as Hollywood's Backlot

Despite the fact that government subsidies and incentives for film industry investment have not materialized in Mexico (to the same extent as they have for the private sector in Brazil, for example), there has been an attempt to encourage multinational investment by legislators. In 2004, Mexico created a 15% Value Added Tax (VAT) rebate on local film production services, on condition that they contract with a Mexican production service or a local producer (De la Fuente, 2004, p. 18), but by September 2005, despite approval from Congress, the government still had not issued the operating regulations for this tax incentive to draw Mexico's industrial wealth into filmmaking (O'Boyle, 2005). Anna Marie De la Fuente has argued that international producers have long been trying to convince Mexico to offer filmmaking incentives. They believe that Mexico, despite its proximity to the United States, has lagged behind Canada, and even behind New Zealand, because it offered nothing, fiscally, to producers. However, in recent years, there have been a handful of Hollywood films shot in Mexico, due to its lower cost options for higher budget blockbuster movies. Some of these US film studios have financed runaway productions such as the famous mega-blockbuster Titanic (James Cameron, 1997, US). More recently, in an attempt to lure Hollywood producers back to the country after a rash of drug gang violence in 2008–2009, an initiative was announced in March 2010, when President Felipe Calderón's administration rolled out a new policy of cash rebates. The initial funding pool of $20 million offers 17.5% rebates on Mexican shoots, in a combination of cash rebates and sales tax refunds (Hopewell, 2010). This policy also came out as a way of competing with other Latin American countries such as Colombia, Costa Rica, and Puerto Rico, which are currently offering deep cash rebates and highly competitive pay scales to foreign producers (Young, 2010).

The contemporary history of Hollywood filming in Mexico purportedly began when Night of the Iguana (John Huston, 1964, US) was filmed in the once sleepy town of Puerto Vallarta. The transformation of the town into a tacky commercial and tourist destination has been attributed to the film's fame. Restaurants and bars with the film's name cash in on the tourist market, and in 1999 the set of the film was resurrected into two theme restaurants based on the film (Koehne, 1999). During an earlier period, Hollywood westerns such as John Ford's Treasure of the Sierra Madre (1948) were partially filmed in Mexico, on account of the landscape (which was faithful to the western genre) and of geographic proximity to Hollywood. Beginning in 1954, over 100 Hollywood films were shot in the northern Mexican city of Durango. In that year a film commission was founded at Durango, and films such as White Feather (1954), The Magnificent Seven (1960), The Wild Bunch (1969), and True Grit (1969) were filmed there.

Big-budget productions of summer blockbusters didn't return to Mexico until the mid-1990s, when Titanic, the most expensive film in history ($200 million), was filmed at a huge custom-built studio in Rosarito, Baja California Norte (Hawley, 2004). Director James Cameron built a 775-foot replica of the ship, 10% smaller than the real one, and a 17-million gallon tank to sink it in, within a 40-acre complex that Fox set up in Rosarito (Masters, 1997). According to the Mexican government, the film injected $85 million into the local economy. The facility, now dubbed the Fox Studios Baja, has since produced Master and Commander (Peter Weir, 2003, US), Pearl Harbor (Michael Bay, 2001, US), and other special effects spectacles. More recent films include the comedy hit in both the US and Mexico, Beverly Hills Chihuahua (Raja Gosnell, 2008, US).

What are the advantages for Hollywood studios? Wages for Mexican film crews are about one quarter of those of their US counterparts, according to Hugo Alonso Reyes Mejilla, secretary for technicians in the Union of Cinema Production Workers (Hawley, 2004). Labor costs for the Hollywood studios are cut by one third (Tegel, 2002). The Mexican government benefits from a potential influx of money, including tourism dollars generated by having images of the Mexican landscape projected globally. In addition, the presence of Fox Studios Baja has helped develop a theme park element to the studio (following the production of Titanic), which has promoted tourism. As Ben Goldsmith and Tom O'Regan note:

Still, not all was successful in the field of labor relations within Fox Studio Baja during the filming of Titanic. For example, the shooting schedule ballooned from 138 days to 160, and crew members complained about long hours and difficult working conditions. This was punctuated by a food-poisoning incident with phencyclidine (PCP)-laced chowder that sent cast and crew members (including Cameron) to hospital (Graham, 1997, p. N1). Union leaders in Los Angeles labeled the Fox studio production nothing more than a maquiladora and lamented that, “in exchange for NAFTA (North American Free Trade Agreement)-sanctioned subsidies from Canada and elsewhere, the studios have turned their backs on their own community and have engaged in the wholesale destruction of the Hollywood jobs base” (Bacon, 1999). In 2007 Fox sold the studio in Baja to Baja Acquisitions, a group of private investors; then it was dubbed Baja Studios, a film studio and tourist destination, not unlike its earlier incarnation.

In an age of mobility and when many countries are competing for lucrative Hollywood productions to come and film, having a low paid but skilled workforce might prove to be a competitive advantage, paving the way for more specialized local technicians to work on future projects. Goldsmith and O'Regan discuss this fierce competition among various countries that build state-of-the-art facilities with the aim of giving competitive bids to foreign countries:

One reason why these nations have created policy initiatives and have coordinated with subnational (e.g., regional and municipal) governments to provide such competitive bids for what Canada calls “foreign service production” (Elmer & Gasher, 2005, p. 5) is to obtain financial investment, which is the bottom line. It is projected that nearly 20% of all out-of-state production budgets are spent within the local economy. More specifically, the following businesses are hired when a foreign shoot comes into town: labor, transportation, lodging, car and truck rental, motor fuel and service stations, food and beverage companies – to name only a few (Gnuschke, 2005).

On the downside, Davis and Kaye (2010, p. 58) state succinctly that there are three risks that host countries need to be concerned about if runaway productions are the main avenue by which indigenous production can be developed: opportunity costs; integration with Hollywood; and the race to the bottom. Moreover, there may be power dynamics between the foreign and the local crew that reflect hierarchies in the global world system. This happened for example when Roger Corman's production company worked in Argentina during the 1980s to make nine low-budget films of varying genres. Argentina was chosen at a time when the economy was faltering and costs were extremely low. According to production designer María Julia Bertotto, during the filming of a sword and sorcery film, Corman's above-the-line crew acted offensively toward the Argentine crew. She recalled that some members of the US crew felt uncomfortable working with the locals, despite the fact that many of the latter spoke English. She remembered that Corman's people “essentially gave orders and refused to hear our suggestions. It was as though they had preconceived notions of Argentina and thought we were ‘Indians with feathers on our heads’” (Bertotto, interviewed in Falicov, 2004, p. 33). Another problem stemmed from the plan to market the film for the anglophone market. In Wizards of the Lost Kingdom (La Guerra de los magos, directed by Héctor Olivera, 1985), the credits for the film had the Argentine names changed to anglicized pseudonyms; this was suppose to give the film a better chance of selling in the English-language market (for example, Américo Ortiz de Zarate's name was changed to Andrew Sargent; ibid., p. 34).

This power dynamic raises the following questions: Do countries such as Mexico and Argentina thrive, or do they get exploited under these conditions? In the example of the unskilled crew working on Titanic, most crew members were overworked and underpaid. In other situations, however, having an international crew composed of specialized technicians may provide an opportunity for locals to learn new skill sets; hence it may promote technology transfer. As a counterexample to the one above, using Corman as a test case, there were some positive outcomes: Film critic Diego Curubeto recounts from interviews how Argentine visual effects technician Alex Mathius and makeup artist Jorge Bruno never had the opportunity to work in the fantasy genre of film until Roger Corman came to Argentina in the 1980s to make films such as Deathstalker (1983). They gained valuable expertise by learning the craft from veteran special effects makeup artist John Carl Buecheler (whose credits include numerous B movies and horror films such as Halloween: The Curse of Michael Myers, 1995; Curubeto, 1993, p. 155). Therefore it is not a simple equation of costs and benefits when a foreign film crew goes to another country to make a film. Each case may vary; some local industries will benefit, and some workers will be exploited. Others may gain valuable technology transfer skills. Taking a cue from the Canadian case, where there has been a longer track record, Charles Davis and Janice Kaye conclude that one must distinguish between two different kinds of home-grown production: one is production capabilities, such as below-the-line crew positions, and the other is the higher order film and television “business and creative capabilities.” The authors argue that both are needed for a local film industry to thrive, but in the case of runaway productions there is a strengthening of the crew training and economic stability of the former, although there isn't so much advantage for local production houses or firms (Davis & Kaye, 2010, p. 58). In the two aforementioned Corman cases, there were winners and losers in the same runaway production scenario. In a nutshell, the benefits of runaway production help a host country if there are enough resources (cash that stays in the country, being spent on salaries and services) and skill sets honed in to allow for improved technical training of the local crew; and, over time, this might help the local film infrastructure to be invigorated in terms of new studios, post-production facilities, and so on, as a form of investment with potential for local films to be produced in situ.

The Argentine Film Industry from the Late 1990s to the Present

Argentina's film industry, which had very low production figures in the early 1990s, saw a revival in production after the passage of the 1994 Ley de Cine 24.377 (Film Law 24.377), which entitled the Instituto Nacional de Cine y Artes Audiovisuales (INCAA; National Institute of Film and Audiovisual Arts) to additional sources of film-production funding (see Table 11.2). Despite the 2001 economic crisis, the biggest to beset Argentina in decades (it was the largest default on an International Monetary Fund loan in world history), the film industry did not falter. This was in part due to the creativity of newer directors (many of them recent graduates of film schools), who made films on a shoestring that have gained worldwide festival accolades (see Falicov, 2003a). Fifty-one films were produced in 2004, the highest number in decades. Over the second weekend of October 2005, three national films – a police comedy, Tiempo de valientes (On Probation; Damian Szifron, 2005, Argentina), a Falkland Islands award-winning drama, Iluminados por el fuego (Blessed by Fire; Tristan Bauer, 2005, Argentina), and the old-age romantic comedy Elsa and Fred (Marcos Carnevale, 2005, Argentina) – took nearly 45% of the 370,000 total admissions, compared to an average 10–15% share of the market for the same time period the previous year (Newbery, 2005b). By 2009, the top grossing film that year, El secreto de sus ojos (The Secret in Their Eyes; Juan José Campanella), brought in 2.4 million viewers, drawing in an astonishing 45% of all the audience members who went to see Argentine cinema that year (Russo, 2010). This film was highly popular before it won the Oscar for Best Foreign Film (it was the second Latin American film to ever win in the history of the Oscars), but winning this prestigious accolade probably helped garner such a high number of viewers. The film beat out the Hollywood hits for that year, Ice Age 3 (1.9 million viewers) and Harry Potter and the Half Blood Prince (1 million).

Table 11.2 Number of Argentinean films released, 1997–2009

Production year	Films
1997	28
1998	36
1999	38
2000	45
2001	45
2002	37
2003	46
2004	51
2005	65
2006	58
2007	68
2008	71
2009	85

Source: Getino (2005); DEISICA informe (2011); Cinenacional.com (2012).

Argentina's film output ranges from low-budget independent films to glossier, more commercial films with budgets of $1.5 million to $2 million. These more mainstream films are produced by industrial auteurs who work with multinationally owned production companies such as Pol-Ka and Patagonik. Both these companies are partially owned by Buena Vista International, the distribution arm of Disney (Patagonik also receives investment funds from Telefónica Media, a massive Spanish telecom company). Pol-Ka produced a popular action film, Comodines (Cops; Jorge Nisco, 1997, Argentina), which was billed as “the first Hollywood blockbuster spoken in Spanish” (Clarín, 1997). It utilized television stars, special effects, product placement, and the buddy movie genre; and it drew record numbers of filmgoers. It irked some to know that this film received state subsidies despite being produced by a production company owned by a multimedia conglomerate (see Falicov, 2003b). Buena Vista International/Disney has actively co-produced and distributed films that have commercial potential, such as famed director Marcelo Piñeyro's Kamchatka (2002, Argentina/Spain), or the comedy Cohen vs. Rosi (Daniel Barone, 1998, Argentina). Two animated films for children were highly successful, and both were distributed by a Hollywood “major”: Patoruzito (José Luis Massa, 2004, Argentina) was distributed by Buena Vista International; and Columbia pictures distributed Manuelita (Manuel García Ferré, 1999, Argentina).

Argentina has witnessed worldwide acclaim with films such as Nueve reinas (Nine Queens; Fabián Bielinsky, 2000, Argentina) and El hijo de la novia (Son of the Bride; Juan José Campanella, 2001, Argentina), both of which were picked up for US distribution by Sony Pictures Classics. Dylan Leiner, senior vice-president of acquisitions and productions, stated that Nueve reinas appealed to Sony because it broke the stereotype of traditional Latin American cinema. “It was very smart and fast-paced. The broader comedies in Latin America don't usually work as well because they feature local television stars or address regional issues. We look for stories that have universal appeal and are easy to understand” (O'Brien & Ibars, 2004, p. 42). Nueve reinas was remade by Hollywood as the mediocre Criminal (2004, USA), directed by Gregory Jacobs for Warner Independent Pictures.

Although the economy faltered in 2001, causing the Argentine peso's value to plummet, this outcome, paradoxically, brought new opportunities for filmmakers and for television and commercial production companies. The shift from the Menem era, when the peso was pegged to the dollar (1 : 1 ratio), to a depression-era situation where the ratio was 4 : 1 (and it is currently 3 : 1) has meant that US and European producers found the prices to be extremely competitive. For example, in 2003 a television commercial company in Miami that caters to the US Hispanic market saved more on costs by hiring a local crew in Buenos Aires to shoot and post-produce a Pollo Loco commercial. Because the day-rates were very reasonable and the level of skill was very high (especially that of the Argentine directors), the company simply flew in its executive producers and the client (that is, a total of seven people), and the rest was done in Buenos Aires. This was more advantageous than to film in Mexico, although the latter was a much closer neighbor to the south (personal interview with Jaes, 2007). Although the commercial advertising sector differs from film and television companies, it is an industry that has had close ties to Argentine filmmaking in Argentina since the 1960s. It has had an international reputation for highly skilled labor, and it has often served as a training ground for successful feature-film directors. Another advantage to filming in Argentina is the reversal of seasons from those of countries in the North – a “vital scheduling plus” (Variety, 2008).

Instead of national tax incentives for foreign companies to come and film in Argentina, there were outcroppings of regional initiatives in the mid-2000s; they were made in the hopes of attracting companies to various provinces, in the wake of the horrendous financial crisis. However, while the economic situation stabilized in Buenos Aires by 2005, it was clear that citizens in large metropolises had access to greater resources than their counterparts in the provinces. In 2001 the province of San Luis fashioned itself as an outpost for production, which Variety characterizes as having “pretensions to become the Hollywood of Argentina” (Newbery, 2005b). By 2004 the state had passed its own regional film law, to help provide additional incentives for filming. However, not all citizens of the province supported the use of public funds to draw film production from the outside to the region. A flashpoint that brought this disparity to the fore occurred in May 2005, when arsonists in the province of San Luis, an area already established for national video editing and production, burned down a set of the telenovela Salvame Maria. This was one in a number of violent protests that occurred against the province's film program that week. San Luis was under fire because the provincial legislature approved a 10-million-dollar allocation toward film-sector development to the governor Alberto Rodriguez Saa and his brother Adolfo, better known as one of the short-lived presidents during the 2001 crisis (Newbery, 2005a). The province, dubbed “Hollyluis,” has granted credits, co-production money, tax, and technical assistance to 14 films (ibid). While business is booming for the film industry in San Luis and the main impetus is to create jobs, many opponents accused the Rodriguez Saa brothers of masking a poor administration under the guise of a new project of economic development. Many dissenters demanded the money to go instead to education, public health, infrastructure, and to increasing salaries for teachers and state workers (ibid.). Other provincial cities such as Mendoza and Rio Negro claim to be revamping their film commissions so as to attract film pesos from the capital as well as currency from abroad, but the results have yet to be seen (Minghetti, 2005, para. 9).

SOS (Save Our Screens): Enacting the Screen Quota in Argentina

In June 2004, due in part to the left-leaning atmosphere created by President Néstor Kirchner's administration, INCAA spearheaded the passage of new screen quota legislation to counter Hollywood's hegemony. It stated that movie theaters were obligated to show one national film per screen per quarter: so, for example, a 16-screen multiplex must screen 64 Argentine films per year. Another law, called the “continuity average,” obligated film exhibitors to continue screening national films if these domestic productions garnered an audience attendance of between 6 and 25% per theater in a given week. This act ensured that exhibitors could not arbitrarily drop national films in mid-week, or change screening times in mid-week (Newbery, 2004). By and large, Argentine film producers do not have the funds to market their films. A Hollywood blockbuster relies on high-priced “blitz” campaigns for an opening weekend for a film, but an Argentine film usually gains momentum through word of mouth. In 2009 the law was modified to give Argentine films a minimum of two weeks in a movie theater as time to build an audience. The earlier version of the law only guaranteed one week, unless the film was a national one, with less than five copies available for screening. The justification for this – according to Mario Miranda, an INCAA account manager – was the following:

Other measures enacted by the INCAA include subsidizing theaters whose national films who do not garner enough attendance to reach the continuity average mentioned above (thus allowing films to continue to be screened), and offering a cash prize every trimester to the movie theater that sells the most tickets to an Argentine film; the prize is to be reinvested in the theater itself (Clarín, 2009).

The screen quota issue, which was not passed into law without debate in the film community, has also been utilized in recent years by the South Korean film industry – as well as by France, Italy, and other countries, mainly European. The case of South Korea is the most famous one because of South Korean film industry's huge strides in producing popular films at the box office after the screen quota system was enforced in 1993. Korean film production rose to nearly 70% of the box office in 2004, up from 35% in 2000. This policy requires cinemas to screen domestically produced films 146 days a year and 40% of exhibition time (Lee, 2004). In 2006 the Korean government decided to heed the United States' call to delimit, or, better still, to abolish the screen quota as part of the Korea–US Bilateral Investment Treaty talks (BIT). Rather than doing away completely with the quota system, the number of days in which Korean films were required to be screened fell from 146 days to 73. This meant that only 20% of the local theaters' schedule would be set aside for homemade films (Jin, 2008). Clearly the United States, as represented by the MPAA, heavily pressured South Korea, arguing that the motion picture industry is a business and that the quota system was against the principles of free trade (Lee, 2004). The South Korean government very much wanted to resolve this issue, as Washington had urged it since 2003 to reduce the quota before the two sides met at the negotiation table for the BIT signing in 2007 (ibid.). Christopher Hill, the US Ambassador to Korea, warned that Korea could not have the screen quota and a free trade agreement at the same time (quoted in Jin, 2008). At stake here is whether the state has the license to regulate culture by adopting protectionist measures, a phrase that has become pejorative and stigmatized. Hence a new term has been embraced by those who support a screen quota: “exceptionism.” The exceptionists are appropriating it from the rhetoric of “cultural exceptionalism,” which was successfully championed by France and Canada during the 1993 General Agreement on Tariffs and Trade (GATT) against the United States. While the expression “cultural exceptionalism” has given way to the concept of “cultural diversity” (Frau-Meigs, 2003; Moisés, 2002), currently even organizations greatly influenced by the United States, such as the Organization of American States (OAS), have supported the declaration of the United Nations' Educational, Scientific and Cultural Organization (UNESCO) to protect the diversity of cultures against globalizing forces.

Jorge Coscia concludes his essay “The Screen Quota, a Fundamental Step Forward” with the following statement:

While the screen quota may function to the best of its ability at this juncture, it may soon become ineffective – according to Harvey Feigenbaum, who argues that cultural policy tools may be undercut by changes in technology to the point where direct satellite broadcasting, data-casting, near video on demand, digital compression, video on demand and distribution via Internet streaming may create more porous borders, may allow the floodgates of Hollywood's film and television in, and – in his words – may permit to “undermine the state's effort to protect national culture” (Feigenbaum, 2004 p. 256). This author recommends different kinds of subsidies (in addition to individual subventions in production, an emphasis on distribution and marketing, and in infrastructure such as production facilities and training as the antidote for preserving the health of a small national film industry: pp. 260–261).

Another strategy for filmmakers to continue producing films with less cash on hand has been the perennial quest for co-production funding, mainly from European sources, but sometimes from other Latin American countries – and occasionally from the United States, too. Co-production funding has occurred in the region, if not in all the film-producing countries, since the very inception of cinema in the 1920s.

Co-Production Between Argentina and Spanish Autonomous Communities, Catalonia and Galicia

A novel co-production treaty between Argentina and two autonomous communities in Spain – namely between the INCAA and various cultural entities of Galicia and Catalonia – was announced in January 2005. Named Fondo Raíces de Cine (the Roots of Cinema Fund), it was the brainchild of Argentina's INCAA president, Jorge Coscia. In an interview he stated that the project arose “out of necessity, that our country and these regions create alliances to confront a film industry such as the United States, which floods the movie screens of the world.” But, as if to answer any critics who might accuse him of setting up possibly problematic barriers to Hollywood (such as the ill-fated import quota set by Perón, which effectively shut down the exhibition sector due to a lack of screen product to show), he noted: “But let us clarify that no one wants to expulse Hollywood, but rather, Hollywood has expulsed us” (Coscia, 2005a). The fund totals $600,000 dollars, toward which each partner contributes equally. There are maximum four grants to be given out annually, and each grantee is awarded funding according to the needs of his or her film project. One of the criteria is that the projects should have the potential to be commercially viable and successful in their respective markets.

Thus far two films have come out of the Raíces de Cine fund: No sos vos, soy yo (It's Not You, It's Me; 2005), an Argentine–Catalan co-production directed by Juan Taratuto, and Cama Adentro (Live-In Maid; 2004), by Jorge Gaggaro. Both films have performed well at the box office, but No sos vos has defied expectations by playing in Madrid to packed houses for two months and thus earning the status of one of the top ten films most seen in Spain this year; it had almost 350,000 spectators and box-office receipts totaling 2 million euros. It has won the distinction of being the first Argentine film in the top ten most seen films for seven straight weeks (“No sos vos,” 2005).

Coscia has stated that the impetus to initiate the Argentine–Spanish regional agreement was two-fold: (1) the economic situation has made production in the country more favorable to those companies from abroad; and (2) the box office is like a cut of Argentine beef that is “less juicy” (menos jugosa) than in previous years, and thus “we have to find outside business that will compensate for this” (Coscia, 2005b).

Conclusion

Since their inception, both Mexico's and Argentina's film industries have struggled to create a space for themselves in the shadow of Hollywood. In its current configuration, Mexico has continued to support filmmaking through IMCINE funds, but it has also seen a proportion of films being made purely through the private sector – the approach that most closely resembles Hollywood. Moreover, with the emergence of transnational film directors such as González Iñárritu, del Toro, and Cuarón, the transition to a private model has been a format that directors themselves find more efficient and less politically fraught.

Argentina's film-industry model has differed from Mexico's in that the state has been relatively successful at distributing grants both to small producers/directors and to production houses owned by multimedia conglomerates (including Disney and other transnational companies). Argentina has created film legislation that has strengthened the nation's film development fund, and more recently it has passed a screen quota that seems to be functioning well at the time of writing. Argentina's film industry is modeled more closely on European film production than on the US model. However, both Argentina and Mexico are gaining access to markets and funds through new collaborations with MPA member companies. Hollywood studios have proven thus far to be friendly to both countries' film industries; but it remains to be seen what kind of effect this may have in the long run (for example, one can imagine the effects on the screen quota if eventually most of the funding comes from the majors). Regardless of these changes, Hollywood continues to maintain a strong foothold in Latin America.

ACKNOWLEDGMENTS

This chapter is an expanded and modified version of “Hollywood in Latin America: How Mexico and Argentina Cope and Cooperate with the Behemoth of the North,” in Janet Wasko and Paul McDonald (Eds.), The Contemporary Hollywood Film Industry (Oxford, UK: Blackwell, 2008). Many thanks to Manuel Pérez Tejada for his invaluable research assistance and feedback on the Mexico portion of this chapter.

NOTE

1 See, for example, the Comisión Mexicana de Filmaciones, 2012.

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FURTHER READING

Dawson, A. (2006). “Bring Hollywood home!” Studio labour, nationalism and internationalism, and opposition to “runaway production,” 1948–2003. Revue Belge de Philologie et d'Histoire, 84(4), 1101–1122. (Reprinted in Davis and Kaye, 2010.)

Wasko, J. (2003). How Hollywood works. London, UK: Sage.