03/10/2006

2006 seems like a year of great change for Italian cinema. In September, during the Venice Film Festival, Minister of Culture Francesco Rutelli announced the details of an extensive legislative reform within the industry, which companies are now discussing before it begins its lengthy course in Parliament. Simultaneously, the Ministry’s General Direction for Cinema, headed by Gaetano Blandini, is continuing its meetings with numerous interested parties over "adjustments" to the existing law.

The producers

What are the shortcomings of Italian cinema, and what changes can film industry players expect? According to Riccardo Tozzi, president of the ANICA producers union, "in the past five years, Italian cinema has given off concrete signs of revitalization, yet criticism continues. The industry is very fragile, companies have few possibilities to take risks and renew themselves. The revenue system is depressed and piracy is a powerful threat. Furthermore, Pay TV in Italy [Sky] pays the same price to acquire films today, with four million subscribers, as when it had 1.8 million subscribers. We have to increase industry resources; hence the right choice is the tax on the entertainment industry, which regards all professionals within the field, including telephone service providers. I think that the resources from the tax, together with those of the Visual Aid Fund (FUS), must be allocated proportionally to the film, to producers, distributors and exhibitors. Obviously, one part of the resources will have to be invested in developing first and second films".

Giancarlo Leone, Vice Director General of RAI and CEO of RAI Cinema, agrees on the tax and adds that, “however, it must concern all those who deal with films, in any aspect. It’s true that the revenue system is depressed; theatrical and home video are no longer enough. General broadcasters acquire increasingly fewer films that have worse programming slots. It must be said, however, that when a film arrives on the free networks, it has already been abundantly exploited in its previous passages. Today, the television sector benefits the most from Pay TV. IF RAI and Mediaset together invest €100m in cinema, SKY, despite its four million subscribers, arrives at only one third that amount".

According to Roberto Cicutto (Mikado), "We must free up the FUS film funding system. We need authentic financing systems, like the exhibitors’ operating tax. You often hear talk of shelters. Why don’t the Ministers of Culture, Communication, the Treasury and Education instead come together to find solutions for the entire industry?"

The reform

The need to go beyond the FUS and introduce a film industry tax “on all professionals, producers, distributors, exhibitors, broadcasters, as well as Internet and telephone service providers”, has been maintained for some time by Andrea Colasio, Secretary of the Cultural Commission of the House of Deputies and author of the proposed law in favour of the Italian film and audiovisual industry that is meant to replace the current Urbani Law.

Minister Rutelli was also clear on the need for this reform: "We need collective rules, and we will create them. We are highly determined. I am driven by the conviction that the entertainment and film industries are ready for an overhaul. We will work as a team and, in the end, the new film law will be created".

Rutelli explained the changes at Venice, when he spoke of short-term and strategic long-term measures. "As far as the first series of legislative measures are concerned,” said the Minister, "we’re thinking of modifying and integrating [the “Urbani Law”] foreseen by the proxy law. We are already working on them and within six to eight months we will propose our changes". These include: an extension of the film season, which currently neglects the summer; a legal definition of the independent producer’s role; an examination of exhibition difficulties; and the creation of a national film agency that helps to "remove the structural conditions that hinder the growth of Italian cinema” and whose duties will have to be studied and defined.

There will be further economic measures, Rutelli assured. In that regard, and based on the indications of Minister of the Economy Padoa Schioppa, a workgroup led by Biennale President Davide Croff has been instituted, which must suggest new financial measures for the film and entertainment industry.

However, Minister Rutelli has specified that, above all, "we must create a new law and modify Law 122 of 1998", which includes production funding from Pay and free TV broadcasters. The long-term objectives include the reorganisation of the FUS, which "must not become an hypertrophic entity, but must accompany the growth of a reform that cannot be achieved within a context of impoverished resources".

The French model

The discussed reform is inspired by the so-called "French model", often cited by film professionals, which each year makes over €530m available for film and audiovisual projects, compared to the meagre €90 reserved for the big screen by Italy’s FUS.

"The French model unites market and quality, and that must be our goal", states Andrea Colasio. "Today, the Italian system goes through periods in which there is a lot of attention on quality and very little on the market, and then periods in which the market commands. In between is a grey zone, which is neither market nor quality, and which needs to be eliminated". Colasio wants to open a market that has been relatively closed thus far, "actually sealed shut. Currently, the system rests upon certain rigidities, mainly the oligopoly of the large broadcasters, RAI and Mediaset, and the state; a system that blocks both the market and artistic creativity. We want the system to become more transparent, and to give voice to a plurality of professionals”.

The French model "is centred on automatisms in film financing, not on political discretion". Colasio explains: "Today in Italy, financing is distributed problematically: the producer presents a screenplay or director, often also along with a co-production agreement with RAI or Medusa, and obtains significant ministerial funds. There is thus excessive attention placed on the creation of the product in and of itself, without any attention to the product’s theatrical results. According to my proposal, we will continue financing 70% (up to a maximum of €1.5m) of first and second films, which is the workshop, the hotbed of creativity. But as far as other films are concerned, we will keep in mind their market and commercial value, not only their artistic and cultural value".

Thus, contributions will not be allocated to companies that, within the 12 months after the first public screening of their previous film, have box office earnings below a pre-established minimum. "In any case, the sum of the contributions for a single film will not be allowed to exceed 50% of the film’s overall cost".

Colasio’s proposal includes backing for distribution and promotion, even abroad, and more specific incentives for theatres that commit to programming a quota of Italian films. The multiplexes will have to reserve no less than 35% of their screens for domestic films, without being able to set aside, in the space of 24 hours, more than one screen for a given film. "A film risks failure if not adequately backed by marketing and promotion. There isn’t just a production phase, but a promotional phase as well, and without both, Italian cinema does not exist. Our job must be to reinforce all of the elements of the industry".

Financing will be selective, but above all automatic, through a proportional taxation on every form of usage – or commercialisation – of the films. "It is important to create financial availability, to substitute today’s static and passive FUS mechanisms. The eventual and ulterior award must then arrive from the market", concludes Colasio.