Latin American Film Industry May Receive Boost in the Global Recession

February 13, 2009

by Danielle Renwick

In the last few months conventional wisdom has said that all bets are off when it comes to investments. While most sectors of the economy are starving for cash and credit, Latin American film makers are hoping to attract foreign investors looking to lower costs by investing in non-U.S. projects.

Andres Calderón, executive producer at Dynamo capital, was in New York last week to test that hypothesis. Calderón, who worked as an investment banker for eight years before joining the Colombian production firm Dynamo, is hoping that the credit crunch affecting Hollywood will provide new opportunities for Latin American movie makers.

“There’s no money in Hollywood, so [investors] are thinking of ways to do more with Colombia and Latin America. One way to reduce budgets is to shoot in places that are cheaper to shoot,” he said, estimating production costs in Colombia to be between 30 and 40 percent cheaper in Colombia.

The film industry in general has become considered a relatively safe investment. According to The New York Times: “Wall Street, real estate, the art market — all of those other supposedly stable investment areas — are now such a mess that Hollywood is one of the safer places you can park money. Although the movie business has been hurt along with nearly every other industry, it’s proving far more resilient to recession than most.”

One of the reasons for that notion is that the film industry is one investment that creates a product. “People are looking for alternative investments and tangible assests—at least in the movies you have copyrights,” said Calderón.

The New York Times’ Brook Barnes notes: “…at least in the worst instance of Hollywood investing, you’ll probably catch a glimpse of Angelina and eat some really good shrimp.”

But in these times of tight credit, Latin America, with its cheaper costs and exotic locations can offer a real boom to investors.

Of course, outside investments in Latin American film existed before the crisis. Most notably, Francis Ford Coppola opened an Argentine subsidiary of his Zoetrope production company to film "Tetro," a drama about immigration, set in Buenos Aires.

In an interview with Screen International magazine he estimated that shooting in Argentina could turn out 30 per cent cheaper than the U.S.; however, he added, it is not just about the money; he was also attracted by "the creative inspiration I find on the streets."

Innovative investment incentives have been paving the way for a boost in Latin American filmmaking for the past few years. Dynamo capital, the management company for the Private Equity Fund for Hispanic-American Film I (FCPCH I), for example, takes advantage of Colombia’s liberal tax laws to promote foreign investment in local projects. Dynamo's six projects have included Satanás, Perro come Perro, La Milagrosa, and De Paso.

Of course the rise in Latin American cinema is about more than cutting costs. Latin American films are increasingly being met with critical acclaim. Last year at Cannes, two Brazilian films (Fernando Meirelles' Blindness; Walter Salles and Daniela Thomas's Linha de Passe) and two Argentine films (Pablo Trapero's Lion's Den; Lucrecia Martel's The Headless Woman) were among 20 films that competed for the festival’s coveted Palme d'Or.

Tags:: Cinema, Colombia

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