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Film Industry Executive Summary

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Film Industry Executive Summary An In-depth Study on the Film Industry In the Philippines Submitted by: Dr. Leonardo Garcia, Jr. Project Head and Ms. Carmelita Masigan Senior Researcher August 17, 2001 1 FILM INDUSTRY EXECUTIVE SUMMARY Movies are a powerful force in Philippine society. Movies, more than just a source of entertainment, reflect a nation’s personality. On the silver screen takes shape all the hopes, dreams and fantasies of the common man: legends, love, the stuff of myths and make believe. Its heroes become larger than life, often attaining the stature of demigods. They are looked upon as role models, serving as resources of inspiration. But most important, the movie industry has become a vital part of the national economy. The paper aims to define the industry and its structure, examine the laws that hinder or facilitate its growth as well as the existing associations and what they have done; look into the market potential of the film industry and its foreign market demand; examine supply capability; identify opportunities and threats confronting the industry; prepare an action plan to enhance competitiveness; and recommend a performance monitoring scheme. The film industry shows that its gross value added is growing faster than the gross domestic product and gross national product. In other words, the industry has a lot of potential to improve further through the years. Extent of growth of firms is primarily Metro-Manila based with Southern Tagalog as a far second. There is more investment in labor or manpower than capital expenditures based on the 1994 Census of Establishments. Motion picture also called film or movie is a series of still photographs on film, projected in rapid succession onto a screen by means of light. Because of the persistence of vision, this gives the illusion of actual, smooth and continuous movement. The principal types of films are action pictures, social, historical, psychological films, comedy, religious, theatrical, documentary, dramatic, factual films, cartoons, non-artistic films, pictorial reports, and travelogues. Throughout the 1980s, the Philippines ranked among the top ten film-producing countries in the world. But the unstable nature of the country is reflected in the film industry. Numerous coup attempts, civil strife and an unstable economy have kept down investment in movies; while production costs and taxes have spiraled. The shortage of money has not allowed for updating equipment. It is also unique in Asia for not having placed a quota on foreign films. Since the 1960s, efforts to place quotas on imports have failed regularly in the Philippine Congress. The current trends center on the entertainment and commercial aspects of the movie. The viewing public prefers to watch films which will allow them, even for a while, to escape from the harsh realities of their environment. The motion picture industry pays one of the highest amusement taxes in the “entertainment category” while being the cheapest form of entertainment. It generates 2 more than 400 million pesos in taxes for the government. About 450,000 people directly benefit from the industry which includes people from the film production and distribution groups (that is actors, actresses, directors, etc.), employees and workers in the theaters, and other related cinema businesses. The dominance of foreign films could be traced back to the seventies, when foreign films started to eat up the market share of locally produced films. This continued to linger in the eighties up until today. On the structure of the industry, Filipino filmmakers tend to fall into five categories, namely: the major companies; the strong independents; wealthy individuals who finance a movie not necessarily for profit, but for some special purpose such as promotion of political views and religious beliefs; people who could not enter any of the major film outfits and produce low-budget films of the rated R or X genre; and finally filmmakers whose main concern is to develop alternative cinema. The business lines in the industry are composed of the producers, distributors, and exhibitors. There is also a threat of substitute products like pirated films or movies edited for television; and threat of new entrants like new players who can try the local market with more resources from abroad and then collaborate with a local film producer and do joint ventures. Laws hindering and facilitating are the MTRCB which is a government arm in charge of classifying films as Restricted, General Viewership, or Parental Guidance; Presidential Decree 1987 or the Act Creating the Videogram Regulatory Board; Republic Act No. 8293 known as the “Intellectual Property Code of the Philippines,” plus several bills in Congress that seek to strengthen the VRB and the National Telecommunications Commission’s power in combating piracy. There is also the private sector assisting the government in its anti-piracy efforts like the Motion Picture Anti-Piracy Film Council which forged partnership with the Motion Picture Association. On the other hand, the major players on industry associations and organizations are the Film Academy of the Philippines, the Mowelfund, and the Film Development Foundation of the Philippines International Film Festival responsible for funding and providing financial assistance to movie producers who are invited to participate in international film festivals. An examination of the motion picture production forward linkage shows that the market for film is motion picture distribution and projection. On the other hand, the motion picture distribution and projection forward linkage indicates that one major market to consider is radio and television programming or the development of more films for television broadcasting. Today, the internationally acclaimed local films are marketed in many parts of the globe like the United States, Europe and Asia. The venues are the international film festivals where foreign distributors can review our films and show them in their respective regions. One major region to reach is the Asia-Pacific region since its culture is similar to us and their people can empathize with our storylines. Vietnam, Indonesia, Malaysia, even Korean and Singapore are good potential markets for our films. Of course, the US, European and Latin American countries are good targets for our “exotic” films. 3 On supply capability, the motion picture distribution and projection backward linkage shows that a major supplier is motion picture production. On the other hand, the motion picture production backward linkage presents restaurants, cafes, and other eating and drinking places as the major supplier, followed by petroleum refineries and advertising services. On offered services, our filmmaking is a total production from conceptualization of the story and scripts translating them into a screenplay, actual production or shooting of the film, post-production, and marketing and distributing the film to various exhibitors. Our areas of specialization range from film writing, directing, production or laboratory services, and acting where we have an overflow of movie stars. We conduct training programs on scriptwriting through the Mowelfund or film production companies themselves. Our talents our honed while they are young by Star Circle and GMA’s talents to name a few. An analysis of the strengths and weaknesses of the films industry shows the following considerations: • Good story and believability. • Well-written scripts, good acting, competent directing. • Impediments of being world-class. • Budget and technology. • Marketing. • Taxation. • Limited government support. • The high cost of production. • The dominance of very few big production companies. • MTRCB as a “censorship” body. • The star syndrome. • Interpersonal and intergroup conflicts among the film industry players. On the other hand, the opportunities and threats confronting the industry are: • Financial capability as compared to foreign films. • International exposure and exhibition. • A luxury of options and abundance of sources. • Competitive advantage and a distinct image. • Piracy. • Television, Cable Television, VCD/VHS/DVD. • A chance to expand market base. • Adherence of the local film market to commercial films. With the preceding considerations, an action plan to enhance competitiveness is therefore recommended in the following areas: 4 • Market development and promotional strategies. • Promotion of Filipino films in international markets through participation in film festivals. • Discover, develop, and/or expand international mainstream or niche markets for Philippine films. • Encourage and facilitate the participation in international film markets as a step towards the discovery, development and/or expansion of demand for Philippine films abroad. • Continuous research and development. • Competition on the level of the country’s core competency. • Invest on technology. • Continuous training and development and education of current and prospective industry personnel. • Continuous development in collegiate education on courses related to film. • Laws and industry governance like major tax deductions, curbing piracy, and review of MTRCB’s role as a regulatory body. • A voice in the government through the formation of the Philippine Film Commission. • A closer look into the local film market. The various industry players can take charge in monitoring or regulating themselves to create a good Filipino film -- the association of producers, distributors, exhibitors, and the members of the Film Academy of the
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