White paper on creativity - ebla center

Chapter 7subsidiaries can guarantee an adequaterelease and better coverage nationwidenot only for US films but also for Italianfilms. Here the Italian distributors, onthe other hand, seem to lag behind andthis may be an important factor in theoverall explanation of the gap inperformances between domestic and USfilms.Beyond the box officeAs we said at the beginning of thischapter, one of the main changes in thefilm industry in recent years has been thelengthening of the economic life cycle offilms and the proliferation ofdistribution channels. The rise inconsumer platforms, on one hand, hasbrought opportunities for businesses inthe sector, but on the other, has raisednew organisational and strategicchallenges for the effective managementof film rights. In the followingparagraphs we wish to analyse the Italiansituation as regards distribution channelsparallel to cinemas, in order tounderstand how our country ispositioned compared to Europe and theUnited States, what results have beenachieved by Italian films, and what seemto be the main opportunities and risks.Films on televisionOne feature peculiar to Italy is the factthat television, in addition to being animportant consumer platform, is alsoone of the principal financiers of movies.The small screen is a major source ofincome through so-called “aerial rights”,often paid to producers before the filmis even released in cinemas. But theItalian networks also often intervenedirectly or through associate companiesin the joint production of films. TheItalian film market is mainly B2B, sincefor film producers, the main customer isanother company (television) and notthe audience. The situation is verydifferent, for example, in the UnitedStates, where the proceeds which comedirectly from the end consumer (movietheatres, home video, video-on-demand,the Internet, etc.) account for the highestpercentage of a film’s revenue.While, on one hand, Italian television’srole guarantees greater economic andfinancial security for film producers, onthe other, it raises a number ofproblems. For example, through directintervention in joint productions,television can condition and influence –according to a logic not always in linewith the traditional film market – thechoice of stories, genres and casts in filmprojects. This raises a twofold risk.Firstly, producers may not be driven toseek all possible distributionopportunities for films in their ownportfolios (e.g. in cinemas), since theycan almost wholly rely on the proceedsguaranteed by television for their returnon investment. Secondly, there may be agrowing gap between film-makers andfilmgoers. This makes it difficult togauge any changes in audiences’ taste,thus increasing the probability of makingfilms diverging considerably fromconsumer preferences. This way ofmaking and conceiving the portfolio ofrights can also lead to major economicand financial problems, if the demandfor films from the broker (television)should fall off, as effectively hashappened in Italy over the last five years.As we hinted earlier, the first figures thatemerge from studies of film on ItalianWHITE PAPER ON CREATIVITY 176