SUPPORTING THE BRAZILIAN CINEMA INDUSTRY

ABOUT ANCINE

THE BRAZILIAN CULTURAL SECTOR

THE BRAZILIAN AUDIOVISUAL SECTOR

THE BRAZILIAN EXHIBITION MARKET

THE CHALLENGE

FILM INDUSTRIES OF THE WORLD

ECONOMIC STRATEGY

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1. ABOUT ANCINE

ANCINE, the Brazilian Film Agency, is a

financially and administratively independent

government agency, operating under the

supervision of the Brazilian Ministry of

Culture.

It was established in September, 2001 to

contribute to the regulation of, support to,

promotion and monitoring of the audiovisual

industry in Brazil.

2. THE BRAZILIAN CULTURAL SECTOR

2,6%of Brazilian GDP

900.000employees

251.000active companies in the market

3. THE BRAZILIAN AUDIOVISUAL SECTOR IN NUMBERS

Sources: 1 – OCA, 2- Valor Econômico, 3- IAB, 4-MPAA, AL 5 – PWC

Cinema

Pay-TV

VOD

Free-to-air

BRL 2,59 bn¹

BLR 13,35 bn³

BRL 25,00 bn²

Growth rate

+ 12%

- 10%

- 1%

+ 21%

Video Game

BRL 1,32 bn⁴

BRL 4,90 bn⁵ + 4,5%

RevenueSector

Data from 2016

Central Bank - Exchange rate Ptax: 3,26

4. THE BRAZILIAN EXHIBITION MARKET

61 6884 81

9879 80 79 80

97 109126 131 122

137151 154

77

7 22

16

11 10 10 9

16

2618 16 28

19

2330

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Brazilian Box office| Millions of tickets sold

2000 - 2016

11% 9% 8%

21%

14%12% 11% 12%

10%

14%

19%

12%11%

19%

12% 13%

16%16%19%

15%13%

16% 17%

22%24% 24%

26%24%

30%

25%

32%

29% 29%31%

´00 ´01 ´02 ´03 ´04 ´05 ´06 ´07 ´08 ´09 ´10 ´11 ´12 ´13 ´14 ´15 ´16

National share | % over the total

Growth 10% 21% 13% 11% -22% 1% -1% 0% 26% 20% 6% 2% 2% 4% 11% 7%

National -4% 6% 202% -26% -35% -8% 4% -14% 82% 60% -31% -11% 78% -31% 18% 35%

Foreign 12% 23% -3% 22% -20% 2% -2% 2% 20% 13% 15% 4% -7% 12% 10% 2%

National fims Foreign films

% Public % Features

Averageticket priceBRL 14,10

Central Bank - Exchange rate Ptax: 3,26

Brazilian Film Releases

2000 -20016

2330 29 30

49 46

7178 79 84

74

100

83

129114

132143

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

0

500

1.000

1.500

2.000

2.500

3.000

3.500

19

71

19

72

19

73

19

74

19

75

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76

19

77

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78

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79

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80

19

81

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82

19

83

19

84

19

85

19

86

19

87

19

88

19

89

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

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98

19

99

20

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20

01

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15

PEAK (1970) AND EXTINCTION OF

EMBRAFILME (1990)

"ESCURIDÃO

COLLORIDA"

"RetakingBrazilianCinema"

Creation of ANCINE

Creation of Paid TV and

FSA laws

Num

ber

of

Room

s

Bra

zili

anP

ubli

c

(in m

illi

ons

)

FIRST WAVE:

INDIRECT

ACTION

SECOND WAVE:

THE INSTITUTIONAL

TRIPOD

THIRD WAVE:

DIRECT

ACTION

Impact of Promotion and Regulation Policies

After a peak in the 1970s, the number of cinema screens started to decrease, only to rise again by late 1990s and mainly after the creation of ANCINE in 2001.

Today we have approximately 3200theaters, nearly the same amount of screens as in the 1970s.

Evolution of the number of theaters throughout audiovisual policies periods, from 1970 to 2015

Source: Zubelli (2017)

4. THE BRAZILIAN EXHIBITION MARKET

5. RANKING OF THE BIGGEST CINEMA MARKETS IN THE WORLD

Source: MPAA 2016

$11,35 bi

$6,6 bi

$2 bi

$1,9 bi

$1,7 bi

$1,6 bi

$1,5 bi

$1,1 bi

$900 MM

$800 MM

$700 MM

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In 2016 Brazil climbed 2 positions in the ranking of biggest film markets.

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6. THE CHALLENGE

How to keep growing and place Brazil among the top 10 film markets in the world?

Promoting systemic ties between all links in the chain: Production, Distribution and Exhibition

Combining direct and indirect investment policies with regulation (cinematographic screen and Paid TV quotas);

Convergence of interests among economic, politic and social actors in the audiovisual chain

7. ECONOMIC STRATEGY

SUPPORTING THE EXPANDING OF THE MOVIE THEATER’S MARKET

ENCOURAGING THE PARTICIPATION OF PRIVATE INVESTORS

INCREASING THE BOX OFFICE REVENUE OF BRAZILIAN FILMS

FIGHTING-PIRACY

REFORMULATING FSA PUBLIC CALLS

INVESTING IN TECHNOLOGICAL INFRASTRUCTURE ASSOCIATED WITH THE AUDIOVISUAL SECTOR

PROMOTION OF THE AUDIOVISUAL STRATEGY(CONTENT AND GAMES)

LOW INTEREST RATE LOANS FOR THE SECTOR

SIMPLIFICATION OF INFRA LEGAL RULES – “END OF RED TAPE”

TRAINING AND CAPACITY BUILDING

SIMPLIFICATION OF INFRA LEGAL RULES – “END OF RED TAPE”

Shorten the amount of infra legal rules

To grant agility to the processes, optimizing the traffic of information

Rules more simple and clear

Facilitate the access of new companies to the market

STIMULATING THE EXPLOTATION OF PUBLIC MECHANISMS BY PRIVATE INVESTORS

Offering Legal security

Simplifying the rules of FUNCINES’ (Private Movie Investments funds)

Predictability

How to attract private investors?

Shortening fund-raising time

FIGHTING-PIRACY

Debate at the Superior Film Council

Partnership and articulation with other public entities

Educational campaigns

Studies, data collection and creation of the Technical Chamber to debate and articulate solutions

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5 Internal structure at ANCINE with this mission

Ancine is responsible for execution of FSA’s budget, a

federal fund aimed at developing the Brazilian

audiovisual industry.

FSA’s resources come mainly CONDECINE, a tax applied

to broadcasting, production, licensing and distribution

of film and video works and service providers that

distribute audiovisual content, such as

telecommunications companies and pay-tv operators

REFORMULATING FSA PUBLIC CALLS: ABOUT FSA

The Ancine’s lines that we are launching now are more precisely focused: the promotion of audiovisual market development

The #AudiovisualGeraFuturo policy is composed of lines of investment that

complement one another. The resources are well distributed among the different links of the audiovisual chain.

REFORMULATING FSA PUBLIC CALLS

Definition of a new normative structure for the fund

New public calls for feature films

Continuous public calls for cinema and TV will work with automatic scoring and investment parameters

New calls for public TV

Supporting lines for festivals and market meetings

New international coproduction's including TV

Investment in digitization and preservation of the film collectionNew lines of credit for Infrastructure

REFORMULATING THE PUBLIC CALLS

REFORMULATING THE PUBLIC CALLS

Public calls for investment in electronic games

Investment in technological infrastructure associated with the audiovisual (AR, VR, special effects and post-production) animation

Financial support and investment in

training activities

FSA: TECHONOLGY

FUNDING PUBLIC CALLS

An investment of R$ 470 million in the brazilian audiovisual industry.

R$ 1 billion until the end of 2018

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REFORMULATING THE PUBLIC CALLS

INCREASING THE BOX OFFICE REVENUE OF BRAZILIAN FILMS

We have broken the record of films released over the past few years. Now we need to

stimulate the consumption of our films

Increasing budget limits as a way of stimulating the competitiveness of the

films in comparison with foreign blockbusters

FSA taking part in the distribution

Investment in international co-productions with higher production value and

gender cinematography as a way of increasing the sales potential in the local and international markets

Maintenance of current investment in minority co-productions