05/02/2003

Investment in Cinema

Under the terms of Law n°122/98 (see box below), the Italian state broadcaster, RAI, must earmark part of its revenue from the licence fee (which is drawn up by the Services Contract) for the promotion of European audiovisual products. As of 1999, the quotas set down by the Services Contract cannot be less than 20 per cent.
The clauses that make up Law n° 122/98 were in part already being implemented by RAI in 1997 and 1998, based on a forecast of the Services Contract and the actual investments the broadcaster made during those two years were significantly higher than the required 20 per cent. In the exhibition sector in 1999, RAI invested a total of just under Lire500b (Euros260m circa) in Italian and European audiovisual products: around 23 per cent of their licence fee revenue and significantly higher than the 20 per cent minimum stipulated by Law n°122/98.

Law n° 122 dated 30 April 1998

The Law, which is an abridged version of d.d.l. 1138 on “guidelines for the communications system" and currently still being examined by the Italian Parliament, acted on the EU directives that had long been ignored by Italy. These directives defined the minimal programming and production quotas for European productions that state broadcasters were obliged to adhere to. The limits placed on state broadcasters were of particular interest to Italy’s independent producers because they should have guaranteed a continuous flow of money and resources.

In terms of company strategies in this sector, a policy of alliances between the leading industry operators gradually began to emerge. This strategy has already lead to perfecting agreements with operators like quali Canal+, Beta and Paramount, all of which raised the profile of RAI on the world’s audiovisual markets.

A company specialised in films, Rai Cinema, was set up on 1 December 1999. The aim of the company was to manage acquisition and sales of films and TV drama as well as other RAI film productions.
Rai Cinema’s mandate also included the development of initiatives in the film production field, using entrepreneurial techniques and also by means of joint ventures and alliances with distribution and sales, so as to guarantee Rai products a wider commercial exploitation with respect to just being included in the TV programming schedules.

Over Euros50m were invested in 2002 in Italian and European cinema. Last year, 35 films were green-lighted, the most costly one being Ermanno Olmi’s Contando sotto i paraventi, which got Euros2.7m. The average investment for a coproduction was Euros1.5m. The titles that benefited from this include Buongiorno notte by Marco Bellocchio, Il posto dell’anima di Riccardo Dilani, Il miracolo by Edoardo Winspeare and Il ritorno di Cagliostro by Ciprì and Maresco.
The total investment set aside for 2003 is the same as last year’s, and many of the projects by directors like Gianni Amelio, Giuseppe Piccioni, Marco Ponti, Oscar winner Danis Tanovic, Marco Tullio Giordana, Alex Infascelli, Alessandro D’Alatri, Silvio Soldini and Cristina Comencini are already in production.

Investment in TV Drama

TV drama production is rising with 765 hours’ worth aired in 2002 compared to 752 the previous year.
Rai passed a preliminary TV drama financing plan for 2003 with a total of Euros150m. “This is a clear sign of energy and continuity,” said Sergio Silva, the “godfather “ of La Piovra. It is also a step foward even if “the situation in RAI has not returned to normality and confusion with regards to investments is destined to continue for some time.”
This injection of cash means that the brothers Taviani will be able to produce their Tv-movie entitled Luisa Sanfelice, starring Laetitia Casta and Adriano Giannini. This international coproduction has an Euros19m, Euros8m of which contributed by RAI, and the rest from French TV and other partners. Max Gusberti, the head of Drama at RAI believes this is a sign that “despite all the tension in Rai at the moment, Drama is of fundamental importance and hugely popular with our viewers.”

Mediatrade, the drama arm of Mediaset, invested around Euros150m to produce 425 hours’ worth of drama and the forecast for 2003 is for an increase both of investments (Euros155m – Euros160m) and air-time (430-440 hours).
Guido Barbieri, the head of Mediatrade said, “There is no crisis at Mediatrade. The problems reported by APT (Italian TV Producers’ Association) regarging contracts still unsigned with production already underway, a drop in investments and in hours produced etc, are nothing to do with us. Mediatrade reported a slight increase in investments and in production which means more work for producers. Of course it is no longer possible for us to finance very high-budget mini-series on our own: quite simply, we must find new coproduction schemes, a solution to the problem much appreciated by the APT when we last met.”