the Report 2008 in PDF version

Report
The market and the cinema
industry in Italy
2008
fondazione ente
dello spettacolo
Report
The market and the cinema
industry in Italy
2008
In collaboration with
CINECITTA’ LUCE S.p.A.
With the support of
Editing and graphics: PRC srl - Roma
Published by: Area Studi Ente dello Spettacolo
Consultation: Redento Mori
fondazione ente
dello spettacolo
Introduction
ithin the broad outline of Italian publishing on
the cinema until now there has not been a
synthesis which permits a systematic vision of
the sector and as such measures the weight of
a productive reality which, in terms of quality
and quantity, represents one of the most significant aspects of
the whole national economy.
W
The 2008 Report on “The Market and the Cinema Industry in
Italy” has the primary aim of filling this gap, thereby offering to
both operators and analysts the broadest possible outline of a
sector which traverses both Italian culture and society.
The Fondazione Ente dello Spettacolo has been in operation since 1946 within Italian
cinema culture.
Over time it has become one of the leaders in cinema content and manages cinema
information for Sole24ore.it, Libero.it, Yahoo, Acotel-Noverca, Previewnetworks, MTV,
Comingsoon Television and others.
The Fondazione carries out activity in terms of both traditional and electronic publishing
at the web portal www.cinematografo.it, organizes cultural events, international
conventions, seminars and film festivals (www.tertiomillenniofest.org), film previews, often
in collaboration with important Italian and foreign partners, among which the Centro
Sperimentale di Cinematografia, Cinecittà Holding, Istituto Luce, “Cahiers du Cinéma”,
Fondazione Cineteca di Milano, Museo del Cinema di Torino.
It is also the publisher of ‘Rivista del Cinematografo’ the oldest Italian periodical of film
criticism.
The Report was carried out in such a spirit by the Fondazione Ente dello
Spettacolo in collaboration with Cinecitta Luce S.p.A. and is the result of
research conducted by a group of scholars based on a number of sources
and rigorous statistical data. Such rigour, in certain cases, is limited by
the relative indeterminacy of information resulting from the absence of
updated sources (for example, company accounts) and also by the flow of
information as regards subjects who operate within the sector according
to a logic which is, at times, temporary and occasional.
Up to now a great deal is known about Italian cinema but primarily in terms
of consumption. Market demand has been explored in terms of the number
and structure of cinemas, spectator frequency, ticket sales, box office records
of the most popular films, the sale of home video recordings, the range of
consumption through television, pay television and various other diffusion
channels. It should be pointed out, however, that market demand only
represents the terminal phase of such activity and the wealth of data and
research on its overall trends neglects the fundamental realities of the sector.
This Report adds something more and is important because it proposes
an analysis of the market in terms of supply, in other words from the point
of view of those who screen, produce, make and distribute films. It is the
result of research which examines, at the aggregate level, every single area
and all subjects of the industry, reconstructing, also through the analysis
of available company accounts, the true economic and operative
dimensions of the cinema industry in Italy: an industry constituted by over
9,000 companies, with a business volume of almost 5 billion euro and a
number of operators close to 100 thousand individuals, 50% greater
(without taking linked industries into consideration) than official estimates.
The Report also highlights how private entrepreneurship is the real fulcrum
of the cinema industry, also in light of a growing presence of public
intervention, in particular through local institutions which are in operation
due to the new competencies acquired by Italian regions and through
structural initiatives such as film commissions and promotions. Furthermore,
the Report reveals the notable fragmentation of the job market, with an
availability of subjects (primarily as far as professional artistic and creative
individuals are concerned) which is vastly greater than the demand and the
frequent recourse to occasional performances of brief duration.
As well as identifying the market leaders of the diverse cinema sectors,
the Report brings to light the hierarchy which exists between market
leaders of the sector and industrial companies and service companies.
As a result of such reasons it would not be an error to define to 2008 Report
as “unique” and as being of interest to more than just those involved in the
industry. Italian cinema with its traditions and creativity employing the
latest technology is something beyond a mere symbol of what is now
referred to as ‘made in Italy’. It is the vital expression of an artistic
innovation which requires the profound values of a dynamic and multiform
society which does not forget its roots but, nevertheless, looks steadfastly
into the future.
These are the values which concern the Fondazione Ente dello Spettacolo
and Cinecitta Luce S.p.A., two protagonists, albeit with different histories
and missions, of necessary and strategic renewal
Dario E. Viganò
President of Fondazione Ente dello Spettacolo
Luciano Sovena
Chief Executive Officer, Cinecitta Luce S.p.A.
INDICE
Part one - A WORLD IN CONNECTION
REFERENCE UNIVERSE
Chapter 1 – An atypical product
1. Between art and culture
2. The manufacture of prototypes
3. Immediate capitalists
4. Many diverse options
5. The prevalence of the economy
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12
13
14
16
17
Chapter 2 – The enlargement of the sector
1. Core business and total business
2. Informative asymmetries
3. Data for market efficiency
19
20
22
23
Part two - ONCE THERE WAS CELLULOID
WHICH ACTIVITIES AND RESOURCES
Chapter 3 – Regarding supply
1. The investments
• Private capital
• Public financing
2. Film Production
• Budget and project costs
• Operating capital
• Revenue structure
• Public contributions
• Product typologies
3. Integrated production
• Animation
• Documentaries
• Short films
• Television series
• Pornography
• Technical industries
27
28
30
33
38
39
41
43
44
46
47
47
47
49
50
51
53
4. Distribution
• Division of the proceeds
5. Business
• Real estate investment
• Urban and social profile
• Technological innovations
• Public incentives
• Cash takings
54
60
62
65
66
68
70
72
Part three - ARTISTS AND THE MARKET
CAPITAL AND WORK
Chapter 4 – Companies and private enterprise
1. The available data
2. Research of economic data
3. A Reference sample
4. The analysis of the factors
• Turnover
• Business scale
• Growth
• Patrimonial stability
• Profitability
• Profits
• Territorial distribution
77
80
83
88
89
90
92
95
96
99
101
103
Chapter 5 – Profession and the employment market
1. An Improper census
2. Screening of those responsible
3. The coordinates of the sector
• Employment
• Remuneration
• Earned income
• Turnover
• Professional qualifications
• Artists and technicians
• Workers and employees
107
108
110
112
113
114
120
123
126
129
130
4. Freelance and organized employment
• Associates
• Union members
• Assisted
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132
133
135
Part four – INTEGRATED AND CONCENTRATED
THE FORCE OF A CLASS
Chapter 6 – Groups and companies: the primary realities
1. Holdings and dominant groups
• Duopolio e Major straniere
• Organizational structure of rai and fininvest-mediaset
• Order and organization of the major companies
2. Operational companies and market leaders
3. The principle cases of production
4. The major distribution companies
5. The principle business circuits
6. The primary industrial and service companies
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142
145
148
149
151
165
168
172
177
Chapter 7 – The market quote
1. The nature of the parameters
2. King maker and player
3. Major, mini-major and indie
4. Where business is concentrated
• Production
• Distribution
• Business
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182
185
186
187
188
189
191
Part one
A world in connection
A reference universe
CHAPTER 1
“FILM IS AN ART,
CINEMA IS AN INDUSTRY”
Luigi Chiarini,
university professor, critic and director
An atypical product
ust like most cultural heritage, film making has a double identity, artistic and
financial. It is indeed an intellectual product in terms of its uniqueness,
originality, and strong artistic and creative components; and is, above all,
constantly reproducible, destined for the most ample diffusion possible and,
therefore, for mass consumption. “There exists three universal languages”,
explained Frank Capra, director originally from Palermo who was not only the creator
of his own success, but also the fortune of Hollywood, “and, besides mathematics and
music, there is only cinema”.
In connection with the world, cinema incorporates material and spirit and is, in turn, a
world of connections. Rather than being a product that is consumed in the literal sense
of the term, it is, in reality, a form of media that transmits values and communicates
content; it is an experience that the spectator (despite not having the possibility of
knowing the ‘sense’ of the film nor the sensations that it will give before purchasing)
decides to live out on the basis of their own capacity to give meaning. “There is no other
form of art like cinema”, maintained the Swedish director Ingmar Bergman “for striking
the conscience, stirring the emotions and reaching the secret chambers of the soul”.
Film belongs, in no uncertain terms, to the category of experience goods, which are
differentiated from search goods in which enter other types of gross market where the
general public decides what to purchase based on previous knowledge, from the
J
moment, in the case of mass consumer goods, the principle reasons of purchase involve
information and previously acquired purchases is sufficient to give value to the choice.
With relevant particularity (above all compared to traditional supermarket goods) that
every motion picture makes history in itself and, therefore, in its nature as good
experience, the cinema must manage, each time, on a daily basis, to convince the
potential spectator to invest economic resources and time for a good of which they cannot
understand the quality unless they have already seen it.1
Being a unique product, with original planning, every cinematic work represents,
moreover, a prototype and as such film making is often defined as “the industry of
prototypes”. Every film presents, in effect, peculiar and unrepeatable characteristics
with a high content of specialized work but also, a great amount of capital, where diverse
factors are constantly involved. The vast amount of creative and human components
renders the process of film production theoretically and technically impossible to
standardize, jeopardising the possibility of attaining the results of the so-called
experience economy (economic advantages derived from the implementation of
productive processes aimed at the realization of standardizable goods).
its single realization – however, they do interact with the logic of industry only in the
moment of their diffusion. They are, moreover, the fruit of individual performances by the
writer or designer and photographer for book illustrations, as well as the singer and the
musician (or at worst of choral performances in the case of orchestra recordings) being
institutionally destined for individual consumption instead of a public representation.
The work of the cinema, on its part, is a profoundly complex and articulated creation
that, by definition, requires the intervention and cooperation of many participants; it is,
essentially, an example of team work, the result of a combination of heterogeneous
contributions, and is realized with the interaction of diverse human, financial, technical
and intellectual resources. Whilst the cinema gives life to one of the most significant
artistic and cultural expressions of the contemporary world, at the same time it identifies
itself with the exact prototype of goods realized only through an entrepreneurial process
and a complete industrial cycle which is developed throughout the whole initiative, from
the original planning to the final entrance onto the market.2
2. The Manufacture of Prototypes
1. Between Art and Culture
Despite sharing various connotations with other aspects of cultural heritage, the work
of the cinema, nevertheless, can be clearly distinguished both from artists in the strict
sense, belonging to the visual and performing arts where the creative product is a unique
and authentic work as well as from those that more specifically can be classified as part
of the culture industry – for example books and CDs – reproducible and indeed properly
created to be reproduced.
In the category of visual arts (painting and sculpture) the work is realized in objects that
assume an artistic value but this does not require the participation of the artist, whereas
in the performing arts the realization requires the contextual presence of the public and
of the artists. The possibility of mass production, in this case, does not exist, or rather,
if and when possible, requires the direct intervention of the artist-interpreter in space
and time and does not produce copies of an original but rather new originals, such as
the repeat performances of concerts, ballets, or theatrical performances and musicals
(as well as so-called live performances such as, for example, circus performances).
In this second category productions are founded on the diffusion of copies which are
identical to the original – indeed, the intervention of the author-artist remains limited to
1
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Severino Salvemini: “Tra cultura e mercati: cenni sull’industria cinematografica”, Economia della
cultura, number 1-1992, pages 49–55, and “Il cinema impresa possibile” (edited by Severino
Salvemini), Edizione Egea, Milan 2002, pages 57-60.
In its complex nature the cinema amalgamates within itself numerous diverse
characteristics, each of which being paradigmatic of the single typologies of economic
production. Given the structural uncertainty that renders permanent forms of business
unsustainable the cinema is a typical example of a temporary system. The various
groups employed to make a film are, in effect, organized in such a way that they are
formed to carry out a project and deliver an objective (completing the project) and then
are dissolved when the project is completed. The very same assets which are
instrumental in the production (artistic resources, technical competencies, physical
structures such as studios) are used to carry out a single work and not necessarily for
others. Such cinema activity is, therefore, also a model of a limited apparatus, a flexible
matrix founded on outsourcing and on the diffusion of short term advertising contracts.
Against this, however, the research rationalizes and contains the costs and on the other
hand maximizes profits determining that which economists define as horizontal
integration processes (between companies which operate in the same phase of
production) or vertical integration (if companies that operate from start to finish in the
implementation process are included) and which usually distinguish the groups and
sectors of the large manufacturing process.
Like other forms of entertainment, that of the cinema is additionally a product of repeated
use, although its consumption is concentrated in determinate intervals of time which
are both restricted and circumscribed. In the opening cinema circuits films have seasonal
2
Fsbrizio Perretti and Giacomo Negro: “Economia del Cinema”, Etas-Rcs Libri, Milan 2005.
| 13
trends, with an average tenure – between first and second showing – of six weeks and
with a high percentage of takings accumulated in the initial days of scheduling. According
to economic theory it can, therefore, be assimilated to the so-called products of brief
duration such as items of style or fashion. All of those, that is, which, from the point of
view of supply impose a very high replacement level and, indeed, every year the cinema
sector is forced to produce and distribute a continuous stream of works with a constant
turnover of potentially innovative solutions.
With two ulterior implications. 1. Production expenses are represented by fixed costs which
are not recoverable due to the fact that they are entirely incurred prior to the circulation of
the film in the cinemas and, therefore, the relative investments undergo so-called
irreversibility effects: the investment decisions decrease, that is, the variety of choices
otherwise available and options eventually exercisable in the future in a particularly
significant measure and for long time periods. 2. As to the possibility of success and the
final outcome, production is afflicted by a level of uncertainty amongst the highest of all
business activity and the distribution revenue (above all that consisting of cinema takings)
are not representable by means of the normal curve of proceeds distribution.
The creation of cinema icons that principally characterized Hollywood productions
between the 1930s and the 1960s, the subdivision into genres and the employment of
ever more sophisticated special effects have been some of the solutions offered by the
major American film companies to enable productive elements and standards a greater
potential for success and thereby to reduce the elevated risk connected to such activity.
A system, at times applied so obstinately as to merit the Hollywood system the title of
industry of stereotypes, rather than prototypes.
The precariousness of covering the costs of production – undoubtedly one of the most
important problems (if not the most relevant absolutely) for the cinema industry – has,
moreover, favoured at a later date in Europe the birth of public support and in the United
States the development of ever more evolved marketing techniques. Indeed, the major
international companies assign huge amounts of resources for the promotional launch
of their titles, in some cases exceeding the very same budget of production, and a large
quantity of by-products connected to the same motion picture – from gadgets to theme
parks and videogames – which often become the principle business, consistently and
predominantly contributing to the projected and allocated investment coverage.
3. Immediate Capitalists
Claiming that as a merchandise film must confront itself with the market is not altogether
appropriate. Contemporary film making has little in connection with its first seventy years,
in the sense that it is no longer a specific and homogenous sector based on the film
product to be projected in cinemas and in all likelihood, even if much later, to pass to the
television. Film today is the product of diverse sectors and divisions. Conversely, the
14 |
making of a film, a work constitutionally of creativity, transcends the pure and simple
logic of the market, especially if the scope of the film makers is not, as a priority, to cover
the incurred costs, but rather to create something of genuine cultural value.
Even Federico Fellini himself, another great director who died a few years ago and
remains, like Bergman, an icon of modern cinema tended to make the following
distinction: whilst he claimed that “Cinema is a divine means for recounting life, for
competing with the divine father! No other profession permits you to create a world that
resembles so much from close up that which you know, but also those worlds which are
unknown, parallel, and concentric,” he also confessed that “I have the terrifying suspicion
that, once I’ve signed a contract to make a film, not even once have I thought that I would
commit myself to rendering more intense the rhythm of life of the public, the clearer
things are the more tolerable existence is. Is it wrong? I make films because I don’t know
how to do anything else. At least that’s how it seems to me”.3
Nonetheless, cinema has shown itself to be one of the purest, hardest and most concrete
expressions of capitalism since its very origins. It was ‘invented’ in Paris in 1895 by the
Lumière brothers and the first showings soon followed in numerous other countries in
the brief period of four years: in Germany in November 1895, Berlin (the work of
Skladanowsky); in France 28th December 1895, Paris (Lumierè); in England 17th February
1896, London; in Belgium 29th February 1896, Brussels; in the United States 26th April
1896, New York (Thomas A.Edison); in Italy in 1899, Rome (Luigi Topi). However, as early
as 1897 Edison began the first legal battles concerning the violation of patenting laws and
royalties for the production as much for the ‘hardware’ as for the ‘software’ components
of the supply of materials for the production and projection of his Edison Manufacturing
Company. Furthermore, between 1907 and 1910 the first concentrated groups were
created in the United States which were to later have such an enormous influence on
the cinema industry.4
Indeed, even the massive transference of the cinema studios from New York to
Hollywood, California has exclusively economic origins. Contrary to popular legend,
which maintains that the studios were transferred to Hollywood as a result of the latter’s
favourable climate which permitted filming twelve months a year (circumstances,
furthermore, which don’t refer to activity generally under the roof of the studios but
rather only to those sets filmed outdoors, above all linked to the specific geographic or
environmental settings of the individual scenes), it was, in fact, the introduction of a new
fiscal regime in the New York district which pushed film producers, who represented
85% of the total film production, to the other side of America between 1916 and 1919.5
3
4
Federico Fellini in “Intervista sul cinema” edited by Giovanni Grazzini (Laterza editore, 1983)
One example is MPCC (Motion Picture Patents Company) a cartel formed by sixteen of the most
important producing companies and film importers, among which Edison Manufacturing
Company, Biograph, Armat, Parhè Frères, Vitagraph and Eastman-Kodak. The district court of
New York declared such practices illegal in 1915.
| 15
4. Many Diverse Options
The difficulties in assigning a specific identity code are objective and not easily overcome.
In virtue of various common connotations, in the end, the cinema industry is considered
as somewhere between an artistic activity or, alternatively, a cultural activity; as a part
of the performing arts sector or as part of the entertainment sector in general, otherwise
it is considered as a way of spending free time or even as a component of the
communications market rather than that of e-contents, the so-called electronic editorial
contents all converging in the ocean of ICT – Information Communication Technology.6
The definition of the cinema industry’s real context, aside from its essential and prior
artistic content which constitutes the historical value of film, is not a formal question but
rather a basic problem as far as any organic, technically valid evaluation of its social,
political and economic worth is considered. One can, therefore, reasonably understand
even how determinate classifications can lead to diverse or even contradictory (at times
reductive) conclusions and analyses.
Any comparisons at times appear improper or impartial, if, for instance, the cinema is
compared to museums and archaeological sites, or with sports, or even if an entire sector
is separated – such as home video – rather than another sector on account of the diverse
physical supports upon which films are “transported”, or if determinate productive realities
dedicated to the cinema are separated only because their activity or their products are not
qualified on the basis of the destination market or on the type of consumption of the
manufactured goods but on the basis of the characteristic techniques of production.
5
6
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A testimony of this authentic exodus of the first United States production companies is given by the
Swiss economist Peter Bachlin in his book Der Film als Ware (Burg-Verlg, Basil 1945), a classic of
economics literature dedicated to the performing arts, in particular the cinema, published in Italy as
Il cinema come industria: Storia economica del Film by Feltrinelli Editore (Milan 1958). Bachlin wrote
“The American centre, Hollywood,…was created during the patents war (1909-1914), by certain
independents that refused to pay license fees and moved as far away as possible from New York out
of their own interests. The surroundings of Los Angeles were found to be an ideal destination due to
their vicinity to Mexico where the instruments subject to patenting could be hidden in the threat of
confiscation…Hollywood, administratively separated from Los Angeles, in 1913 it became the capital
of the American film industry.” Before the Second World War there were few attempts to return the
cinema industry to New York – where, furthermore, a large number of companies had, in the
meantime, situated their administrative services – thereby reducing certain determinate fixed costs
in case the production plants and equipment were no longer found at 3000 miles distance. However,
also these failed.
This is what emerges from the classifications used, in large measure, by public institutions,
statistics boards, study centres and also trade unions. The Ministry of Culture, for example,
includes the cinema among artistic and cultural activities; ISTAT (Instituto centrale di statistica)
among free time activities and entertainment; SIAE (Società italiana autori ed editori) among the
forms of performing arts; IOM (Istituto di economia dei media) of the Fondazione Rosselli
considers cinema as part of the communications industry and so on.
A clear example, in that sense, is the classification of the diverse methods of advertising
linked to the cinema as channels and sales revenues typical of advertising, totally
ignoring as such the proceeds from the revenue that combine to determine the volume
and total turnover directly generated by the cinema (something which, moreover, does
not occur in the financial analysis of television networks in contrast to that of radio or
publishing).7
5. The Prevalence of the Economy
An essential point of reference, therefore, for every analysis cannot be other than
substantially overcoming the traditional dichotomy between art and industry, being fully
conscious of the fact that if any evaluation becomes subordinated to the priority of artistic
content then any consideration of the cinema as an economic asset is reasonably
nullified. On the contrary, an analysis of the economic-financial order does not exclude
a priori the possibility of examining the nature, value and quality of the artistic and
cultural content of the film, nor, least of all, the form and instruments for safeguarding
also the management, the formation and the development of the new protagonists of the
cinema.
“Whilst painting and music have existed for thousands of years” , explains Louis Delluc,
theorist of the cinema considered the founder of film criticism “cinema hasn’t. The
contemporary world assisted in the birth of a new art form, in as much as it is not a sort of
virgin territory nor is it deprived of culture: it has rapidly obtained elements drawn from the
whole sum of human knowledge. That which makes the cinema great is the fact that it is
the sum – and even the synthesis – of many other art forms. The cinema is also an industry,
and many other things besides. A film maker cannot make a film wholly ignorant of
everything. The necessity of involving large amounts of capital places the artist in a precise
condition for the realization of their work. It is, therefore, impossible to carry out a study of
the history of cinema as an art form without referring to its industrial aspects. And industry
is inseparable from society, from its economics and from its technology”.8
7
8
A further example is that of the recording company Cam-Creazioni artistiche musicali exclusively
dedicated to the production of theme music (from the late Nino Rota to Ennio Moricone). As much
as it is correct to include theme music among the industries of “music recording” it appears
somewhat peculiar that in determining the value of film productions it is never considered a full
part of the total cinema sector including its directly linked industries.
In support of his convictions Louis Delluc added the following observation: “Van Gogh died without
having sold a single one of his paintings, Rimbaud could have disappeared leaving only the
manuscript of his poems, there work, however, would have equally made them famous. If such
work could have been created with the moderate costs of some paper and some ink or some canvas
and some colours, there is the need for a great deal of money before projecting a reel of film”.
| 17
CHAPTER 2
“YOU’RE NORMA DESMOND. YOU USED TO BE IN SILENT PICTURES. YOU USED TO BE BIG”
“I AM BIG. IT’S THE PICTURES THAT GOT SMALL”
William Holden and Gloria Swanson in Sunset Boulevard by Billy Wilder
The enlargement
of the sector
he uncertain classification of the cinema as a work of genius, as a cultural
entity, as a form of art, of the performing arts, or as an industrial product
represents an objective problem when it comes to analyzing trends or the
overall economic status of the sector. This is because it renders the
characterisation for comparison of all the activities which, for jurisdiction
are taken into consideration, as well as those sectors which are homogenous by nature
and structure, particularly difficult. It is necessary, however, to add that this difficulty
is not insurmountable. Anyone wishing to analyze the economic values of the national
cinema industry finds themselves working with a rich and timely availability of data on
the takings of the various screen titles but, at the same time, with a chronic lack of
certain and unequivocal data and information regarding almost all of the rest of the
sector. One type of “deafening silence”, that provoked by the excess of box office sales,
often prejudices the full understanding of how the market functions and, indeed,
creates the following paradox: the cinema industry, a media that essentially produces
and transmits meaningful content, finds itself with a considerable scarcity of
information.
This is not a minor complication. The same “Relazione sull’utilizzazione del Fondo
unico per lo spettacolo – Anno 2007” (“Report on the use of the Unique fund for
T
performing arts”) edited by the ‘Osservatorio dello Spettacolo’ and published by Mibac
(Ministery of Cultural Activities and Heritage) highlights the fact that “the statistics of
the sector refer to a series of institutions which reveal, and only in certain cases, publish
the results of the collected data” and that “in the national statistics program (PSN), with
which the statistical production of public interests are stabilized, at the moment the
carrying out of projects regarding the specific environment of the performing arts is not
foreseen”.1
The fact is that the true cinema market is neither limited nor strictly sectorial. Whilst the
original cinema industry saw a reduction from its origins (metaphorically recalled by
Gloria Swanson in the quotation at the top of the page), in turn, the cinema has in fact
broadened its diffusion channels even lengthening its life cycle; consumer platforms
have multiplied; the same product is no longer a unique product, but rather moulded
into diverse forms and enriched by new components and “by-products” or “spin offs”;
investment entity requests continuously involve more protagonists and, after the public
financing by the state and the European Community new private financing operators have
arrived on the market.
The availability of information only concerning box office statements does not justify,
therefore, the consideration according to which – it being the public who determines the
production and sales of film – any analysis of the market demand is more than valid and
adequate for evaluating that of the market supply. It would rather be like claiming that
any control of the purity and quality of sea water or the water of a swimming pool, is
useless because people still use it to bathe.
1. Core Business and Total Business
In attempting to overcome these objective difficulties it is, nevertheless, necessary to
construct a reliable map of every activity that the national cinema industry expresses
and represents today. For three principle reasons.
• Firstly, because the interaction of the data analyses relative to the purchasing of
cinema (objectively more available but certainly not exhaustive) arrived at the point of
consolidating an authentic void of information regarding the entire area of the socalled supply side, to the point of rendering it negligible. Thereby, it can be verified that
the absence of studies and reflections on the market supply of the cinema industry
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As is revealed in the chapter “Ricognizione delle fonti di produzione di dati statistici sulla cultura
e lo spettacolo in Italia” (‘Observations on the Sources of Production for Statistical Data regarding
Culture and Performing Arts in Italy’) (pages 47-52 of the report) by Anna Rosa Maselli, consultant
for the “Osservatore dello spettacolo” (MIBAC) the administration, the entities and public
organizations are obliged to furnish data and information that are requested of them only for the
surveys provided for by PSN and the same conditions are valid for private citizens.
•
has had, as a consequence, this lasting and, by now, structural shortage of references.
It can be noted in passing, furthermore, that if a certain ignorance of the mechanisms
upon which the market rests and also of the total activity of the market exists, the
responsibility certainly does not lie with the “outside world” nor with those
professionally involved (on various fronts: social, economic, political…) with the
performing arts, culture, communications, or entertainment be they scholars or
researchers as opposed to institutions or the media. Indeed, to a large measure the
fault lies with the “inside world” which is the very same cinema industry operators
who seem to have never felt the need to make available the instruments necessary
for analyzing their sector. Adjusting superficial evaluations and partial information to
objective facts demonstrates – fundamentally – how the industry puts aspects of the
promotion and development of the product (particularly in terms of sales profile)
before the real management contents and strategic values of the market in which
they operate, in the end also with an effective confrontation with other sectors of
industry, services and artistic activity.
In second place because insisting on the analysis of market demand, also and above
all from the point of view of those working in the sector, leaves aside a vast
archipelago of sector activity which forms an integral part not only of the realization
TAB. 1
THE “SPECIFIC SECTOR” AND “LARGE SECTOR” OF CINEMA INDUSTRY
SPECIFIC SECTOR
Production
Feature film
Short Film
Documentary
Pre/Post Production
Development and Printing
Treatment and Dubbing
Distribution
Cinema circuits
Home Video
Television rights
IPTV
Mobile
Business
Multi-screen
Multiplex
Single Screen
Art house films
Parish circuits
SECTOR
Production
Public financing
Product Placement
Product Service
Fiction-Publicity-Clip
Distribution
Overseas sales
Merchandising
FUS funds
EU contributions
Business
Publicity
FUS Funds
Booking services
Snack bars and restaurants
Industry
Film production
Digital systems
Publishing
Spin offs
Services
Studios and location
Representative agencies
Film commission
Instruction and training
Museums/Film archives
Welfare assistance
Protection rights
Events
Festivals
Competitions
Prizes
Cinema forums
| 21
•
and distribution of the product, but also of the essential profile of financial stability and
economic subsistence. Just as for the terrestrial world, also in the world of cinema,
you can speak of two hemispheres.
The revenue from film distribution directed towards the general public – in its various
forms – indeed reveals, in relation with the value of the whole sector, a slow and
progressive trend towards reduction. This reduction is such that it leads to the
estimation of the actual market quote as well below the 50% line. This is the
traditional part of the cinema-universe , that constituted by the historical sections of
production, distribution and business enterprise. Such sections comprise the heart
of what is meant by “specific sector”.
However, the other part of the proceeds, that which the keeps film industry alive,
emerge from new and differentiated product developments, in which new sectors
become the protagonists. Subsidiary and complementary, but by now, vital sectors
now from a part of what can be called (according to conventional economics literature)
the “large sector”.
The construction of a reference universe, moreover, presents particular difficulties
due to the lack of official data, similarly there does not exist a detailed, up to date
census or even a complete and reliable database. Such information is essential given
that at the quantitative level it conditions and determines any in depth examination,
even in qualitative terms, of the market supply of the sector considered as a whole.
Within an economic profile the individuation of assets and economic parameters and
considerations of the market as a form of consumption and reflection of lifestyle,
subject to the flow of income and financial trends, allows us to evaluate the effective
trends within the cinema sector in real time and with respect to the national situation,
to the economy in general, to public spending power and to consumer preferences
and, therefore, primarily in relation to the tendencies expressed (in terms of
competition or even of superimposition) by other productive areas.
2. Information Asymmetries
The difficulties are indeed more severe that at first glance. Just as it is true that within the
cinema sector much discussion is given to the content and quality of the film products of
major success as specific factors in the laws of the market, it is similarly certain that the
lack of information has, in general, concrete consequences on that which economists
define as market efficiency which, in substance, concerns the best possible use of
available resources. Moreover, beyond altering the correct functioning of the market the
information asymmetries (qualified as the uneven distribution of knowledge concerning
the trends and composition of the sector) and, even more so, the total lack of information
both also have important consequences on the competitive structure and on the measures
of industrial and cultural policy that are otherwise adopted in a context of “poor visibility”.
22 |
In the first case the uneven distribution of information has, as a consequence, a limitation
on the capacity to enter into competition for anyone structurally more “limited” in
operational choices, precluding in part or altogether the commercial results from
companies which, regardless, remain efficient in their production but which lack an
adequate prospective for decision making in a completely rational fashion. Such a situation
favours the dominant operators that, thanks to the possession of both greater and better
knowledge are able to operate on the market in an easier, more binding and, as a
consequence, more stable fashion – a fact often lamented within the cinema environment.
On the other hand, the absence of a clear reference frame also has negative repercussions
on the possible normative measures that a government may adopt to stimulate the
attainment of specific targets or to promote the development of a given sector.
3. Data for Market Efficiency
Any entity responsible for the management of important “parts” of cinema activity, from
the Ministry of Cultural Heritage to SIAE, from professional associations to the various
regional observational institutions, substantially operates with watertight sectors and,
furthermore, if the quantity of data gathered were actually congruous, the quality still
leaves a lot to be desired: it treats, in large measure of partial information and, therefore,
is often insufficient for obtaining a precise account of the productive reality of this sector
of activity. As is revealed by “Relazione sull’utilizzazione del Fus” (‘Report on the use of
FUS (Unique Fund for Performing Arts))’ edited by the organization ‘Osservatorio dello
spettacolo’ “if the comparisons of the obtained data were possible, it would also be
possible to calculate the indicators for observing changes in cultural phenomena or for
measuring the effectiveness of adopted policies”.
From this it can be reasonably affirmed that the persistent lack of information is, in itself,
a symptom of inefficiency and this reason alone ought to stimulate operators and
observers to fill in an enormous gap of this nature. In general, the first are those that can
furnish the most substantial contributions having direct access to the relevant
information. Nevertheless, until now such a choice has shown itself partially and
occasionally (with certain notable exceptions) at the point wherein even a simple datum
such as the total turnover from a film – including cinema takings, home video sales,
television rights, licensing, and various other concessions – is, to date, controversial and
not unequivocally available.
Perhaps the most convincing representation of the state of research for an adequate
statistical and economic documentation of the cinema industry requires a citation from
an explosive exchange of lines in the film Lover Come Back!. To an impertinent Doris
Day who asks “Excuse me…Excuse me, I’m looking for Mr.Miller” , Jack Oakie (drunkenly)
answers: “You’ll never find me!”.
| 23
Part two
Once upon a time
there was celluloid
Which Activities and Resources
CHAPTER 3
“THERE IS A NEED TO MAKE USEFUL
FILMS WHICH PRODUCE PROFITS”
Roberto Rossellini, director
Regarding
supply
I
n Italy, in the last nine years, 1,706 films have been produced. The average is 120
film titles every twelve months – an expression of the capacity of national
production. Generally speaking, the whole sector revolves around such activity.
This is because the domestic film studios maintain the other sectors, including
that of the raw materials, of the pre and post-production activities and the market
in general. Without national production the very same international groups that
distribute their films around the world (the so-called major players: Warner Bros;
Universal-Uip; 20th Century Fox; Walt Disney and Sony) would have to face diverse
conditions in which to operate, beginning with quota restrictions on the import of their
films, as has already occurred in the past and occurs today in other nations. This is
due to market laws, which, in various ways (albeit with uncertain results) attempt to
avoid the formation of monopolies and to limit that of dominant positions; two situations
which put into question the tutelage and protection of cultural identity in every country.
The primary financial resources made available – those that fundamentally instigate
the entire economic cycle of the whole sector – are constituted by the investments
required to make national films. Such investments are “irreversible”, from the moment
that the global production costs are met up until the completion of the film and before
TAB. 1
NUMBER OF WORKS PRODUCED BY THE ITALIAN CINEMA INDUSTRY
Number of films
2000
2001
2002
2003
2004
2005
2006
2007
2008
Italian produced films*
With only private capital
With state contributions
86
57
29
68
37
31
96
44
52
98
45
53
96
55
41
68
50
18
90
69
21
90
61
29
123
82
41
Italian co-productions
Majority co-productions
Minority co-productions
17
8
9
35
22
13
34
17
17
19
12
17
38
15
23
30
16
14
26
11
15
31
17
14
31
20
11
103
103
130
117
134
98
116
121
154
Total
Information source: “Il cinema italiano in numeri” (‘Italian Cinema in Numbers’) (from 2000 to 2008) by ‘Ufficio Studi/Ced Anica (an
Italian national association for the cinema, audio-visual and multimedia industries)
* By ‘produced films’ we mean all films that have obtained the motion picture rating in the year referred to and from the calculation films
which are explicitly pornographic in nature have been omitted. ‘Italian film’ refers to works made only with Italian capital.
any form of income or revenue is made (the majority of economic returns arrive after
numerous months, if not years, after the original disbursement) without any practical
possibility of disinvestment, second thoughts, or changes of strategy.
TAB. 2
NATIONAL RESOURCES INVESTED IN FILM PRODUCTION
Amount in millions of euro
In produced films
In co-produced films
Co-production quota
Total
2002
2003
2004
2005
2006
2007
2008
-
237.1
64.6
21.4%
197.4
87.0
30.6%
152.0
62.4
29.1%
187.6
69.7
27.1%
221.0
91.4
29.3%
253.3
76.8
23.3%
277.6
301.7
284.4
214.4
257.3
312.4
330.1
Source: “Il cinema italiano in numeri” (from 2002 to 2008) by Ufficio Studi/CED Anica (National Association of Cinema, audio-visual
and multimedia industry).
Where do these resources originate? The source of such investments permits a better
understanding of the basis upon which the Italian cinema industry is based as well as the
centres of interest which determine the structure and organization.
1. The Investments
The Italian investors who gather the primary resources – usually from bank loans – are,
essentially, of two types: private and public. The former category includes effective
cinema entrepreneurs, or the shareholders of film studios, in turn distinguishable as
direct producers, those who directly manage the realization of films, and as indirect
producers or co-producers (Italian or foreign) who sustain the financial obligations of
the enterprise, the management of which, however, is substantially under the control of
another partner in the initiative.
28 |
To the public category, on the other hand, belong institutions, entities and public
organizations which supply the production companies with financial contributions (in
capital accounts, that is free grants, or interest accounts which require total or partial
repayment) aimed at the production of determinate cinema projects. The first resource
supplier in this sense is the Italian state through MiBac (Ministry of Cultural Heritage
and Activity), with a specific capital called ‘FUS’ (Unique Fund of the Performing Arts),
part of which is reserved specifically for the cinema. In parallel, for a number of years,
Italian regions have started to play a role with structures going under the name of ‘film
commissions’, similarly the European Union, with funds destined principally for the
promotion of single productions in the area of Media programmes and Euroimages.1
A further, highly relevant, category consists of public capital companies which act as
operational instruments such as Rai Cinema of the Italian public television (Radio
Televisione Italiana). Rai has a formal, private legal character in so far as it is a ‘spa’
(società per azioni or joint stock company similar to a Public Limited Company in the
United Kingdom), however, it is almost entirely in the possession of the Ministry of
Finance and Economics (99.9%), and Cinecittà Holding is also under the charge of the
Treasury, though under the control and vigilance of MiBac which exercises the rights of
the shareholders. Rai produces by itself but to a greater degree acts as a buyer in
independent cases; Cinecittà Holding works directly through the ‘Istituto Luce’ –
manager, also, of the national film archives – and is active in industrial aspects
(development laboratories, printing) and services (studies of manufacturing, equipment
and systems, scene preparation, overseas promotion).
On the margins of this synopsis of national production there is the need, however, to
add a quota of foreign capital that enters into the investment of Italian films. In actual fact
the investment results so little that those – few – financed and set up by filial-companies
belonging to international groups with sites in Italy are, therefore, considered of national
origin, and those – more numerous and clearly of greater weight – realized in coproductions, that is, in cooperation with national film studios and foreign operators.
As can be seen, the quota of public funds in comparison to private investment in 100%
Italian productions has followed, over the years, a vacillating trend. From little less than
a third in 2002 they passed to almost half in the following two years, then falling to less
than a sixth and little more than a fifth respectively in 2005 and in 2006, then again they
began increasing to a little less than 20% in 2007 and 2008. What emerges is the relative
convergence of the two trends: in correspondence with the decreases and increases of
state financing also private investment reveals highs and lows, changing or inverting
their tendency curves. The incidence of FUS contributions to the co-productions,
1
Every year numerous contributions of individual, regional, local and national administrations can
also be counted. These directly subsidize the production of works of public interest to various
titles, particularly under the promotional profile of their activity or their area of competence.
| 29
TAB. 3
Amount in millions of euro
2002
Private Investment
State Contributions FUS
Total national resources
State fund quota
Private Investment
State Contributions FUS
Sum of National Resources
Foreign Investment
Total Resources Employed
Italian quota
State funding quota
Private Resources
State Resources
State funding quota
TAB. 4
INVESTMENT IN PRODUCED AND CO-PRODUCED ITALIAN FILMS
2003
2004
2005
2006
2007
2008
Amount in millions of euros
2000
2001
2004
2005
2006
2007
2008
-
Films of National Production
138.4
114.0
130.2
98.7
83.4
21.8
237.1
197.4
152.0
41.6%
42.2%
14.3%
150.5
37.1
187.6
19.7%
179.5
41.5
221.0
18.7%
204.0
49.3
253.3
19.4%
Number of films produced*
Average Investment
Films with state assistance
Average FUS contributions
86
1.69
29
1.66
National Film Productions
68
96
98
96
2.04
2.13
2.42
2.06
31
52
53
41
3.22
1.41
1.90
2.03
68
2.24
18
1.21
90
2.08
21
1.76
90
2.45
29
1.42
123
2.05
41
1.20
-
Italian Co-produced Films
54.5
75.6
54.7
9.7
11.4
7.7
64.6
87.0
62.4
82.0
220.1
132.1
146.6
307.1
194.5
44.1%
28.3%
32.1%
6.6%
3.7%
3.9%
63.5
6.2
69.7
139.7
209.4
33.3%
2.9%
69.5
21.5
91.4
207.5
298.9
30.6%
7.1%
55.1
21.7
76.8
104.7
181.5
42.3%
11.9%
Number of co-produced films
Average investment
Average Italian contributions
Average foreign contributions
Films with state assistance
Average FUS contributions
30
6.48
2.08
4.40
4
1.92
26
8.05
2.68
5.37
3
2.07
31
9.64
2.94
6.70
17
1.26
31
5.85
2.48
3.37
15
1.44
204.0
73.6
26.5%
Total Italian Production
192.9
189.6
184.9
108.4
94.8
29.5
35.9%
33.3%
13.7%
214.0
43.3
16.8%
249.0
63.0
20.1%
259.1
71.0
21.5%
Source: “Il cinema italiano in numeri” (Italian Cinema in Numbers) (from 2002 to 2008) by the ‘Ufficio Studi/Ced Anica (National Association of Cinema, Audio-visual and Multimedia industries).
however, is inferior, with a fundamentally uninfluential trend in terms of the variance on
the movement of resources of private Italian producers.
The global entity of investment for Italian co-produced films results, on the other hand,
clearly superior to the total budget for national cinema projects. The time series of
average investment reveals the constancy of Italian investment, which assigns to the coproductions resources more or less the same, in quantity, as those intended for entirely
domestic productions.
PRIVATE CAPITAL
From the moment that they generate 78.5% of all the resources used, private investors
have fundamentally been responsible for Italian film productions. This generally refers
to invested capital, as stated, of the very same companies that then directly produce
films, managing the realization of the product. In respect to the titles effectively put on
the market – around 120 a year – and the data expressed in the statistics – there are
6,410 film companies registered by the Italian Chamber of Commerce – such a figure
appears somewhat excessive, even taking into consideration the so-called technical and
executive companies of pre and post-production, printing and reproduction and studios.
In actual fact, as is clearly seen in chapter five, limited companies amount to 3,064 and,
of these, the companies which can be described, to a certain point, as operational amount
to 1,124 almost equitably subdivided by class of sales revenue: the so-called minor
30 |
AVERAGE COSTS FOR PRODUCTIONS AND CO-PRODUCTIONS
17
-
2002
2003
Italian Film Co-Productions
35
34
19
7.68
3.38
4.30
4
2.42
38
8.07
2.29
5.78
5
2.28
Source: “Il cinema italiano in numeri” (Italian Cinema in Numbers) (from 2000 to 2008) by Ufficio Studi/Ced Anica (Associazione nazionale industrie cinematografiche audiovisive e multimediali).
*By film production is meant films which have obtained a motion picture rating in the year referred to. Films of an explicitly pornographic
nature are not included. By Italian films is meant all films produced with 100% Italian capital.
companies, of small or very small size amount to 652; the larger companies, from
average to large size, on the other hand, amount to 472.
A partial verification of this is provided by the “Elenchi delle imprese cinematografiche”
(‘List of Cinema Sector Companies’) created by the general direction of the cinema of
MiBac - Ministry of Cultural Heritage and Activity – with legislative decree number 28 of
22nd January 2004, with which the laws which regulate the concession of state
contributions through FUS (Unique Fund for the Performing Arts) have largely been
reformed. Registration on these lists (along with that of all film projects registered with
PRC – the public film register managed by SIAE which, from 1938 to the present includes
over 10,000 films and 22,000 short films), despite being of a formal nature and referring
only to vital statistics, constitutes a preliminary condition for the presentation of incentive
requests and the eventual assignment of contributions. The latest available results signal
– out of a total of 2,323 company titles – the presence of 529 companies in the production
sector: 424 exclusively in production and 105 companies also active in film distribution.
Of these, 504 are limited companies, 352 founded in the last fifteen years, a mere 69 with
a dependent staff of over 15, and 238 with a staff of less than 15 (the remaining 197 do
not give information regarding their staff turnover).
In substance, we can conclude that among the film studios, understood in the restricted
sense as a nucleus of 100 companies – as illustrated in detail in chapter 7 – show
themselves to be operative in a stable and fully continuous sense, the other 370 – due to
the limited number of Italian films annually put on the market – are involved in the
development of single projects that, within a period of one or two years, produce films and
that, in rotation complete the national film market supply, whereas another one hundred
| 31
companies have only managed, from their foundation to the present, to put on the market
a single title without ever again reappearing on the national distribution market.2
TAB. 5
Studios
1990-1998
NUMBER OF FILMS PRODUCED BY ITALIAN FILM STUDIOS
Production and Co-productions
made in the period
Studios
1999-2007
155
41
12
18
7
14
5
1
4
1
2
3
4
5
From 6 to 10
From 11 to 15
From 16 to 20
Over 20
436
65
43
18
13
17
5
6
5
257
TOTAL*
608
Data of the period 1990-1998 from the research “Il cinema tra arte e box office: reputazione e relazioni” by A.Usai, F.Montanari and
G.Delmestri (Artwork and Network, edizione Egea, Milan 2001) and for the period 1999-2007 by the corresponding edition of “Annuario del cinema italiano & audiovisivi” (edizione Centro studi di cultura promozione e diffusione del cinema, Roma).
* The calculated total of productions and co-productions under consideration results, for the period 1990-1998 equal to 804 productions,
and for the period 1999-2007 equal to 1,316 total films.
Over the years the resources that national cinema entrepreneurship offers have always,
nevertheless, been of a small scale. This is the case not only in respect to the “rich” cinema
industry of the United States, which has the highest average investment in the world for
around 600 annual productions (590 in 2007) nine times higher than that of Italy; but also
compared to other European nations:. Within the last ten years, for instance, Italian
investment corresponds to around 23.5% of that registered in the United Kingdom (national
titles for 2007 amounting to 46), furthermore, to 32.5% of German investment (78 motion
pictures), to 39.0% in France (133) and is 11% less than the average Spanish budget (for 115
films) – here we are dealing with the four other large European markets – whereas the total
for the European Union in general reveals an average index 2.2 times higher. Also Japan
2
32 |
They are reported with the indicative title – and without any value of statistical classification – the
records, emerging in the course of research, relative to the works nominally participated in and
signed (albeit through various companies) by the most actively engaged entrepreneurial
producers (with more than 5 productions) during the nine years taken into consideration: Riccardo
Tozzi with 39 database films; Domenico Procacci, Marco Chimenz and Giovanni Stabilini 37;
Gianluca Arcopinto 24; Marco Valsania 19; Donatella Botti 18; Marco Poccioni 18; Aurelio De
Laurentiis 17; Vittorio Cecchi Gori 17; Maurizio Amati 15; Luigi De Laurentiis 15; Umberto Massa
12; Elda Ferri 11; Alessandro Verdecchi 11; Luigi Musini 11; Tilde Corsi 10; Gianni Romoli 10;
Antonio Avati 9; Fulvio Lucisano 9; Maurizio Totti 9; Nicola Giuliano 9; Francesca Cima 8; Roberto
Cicutto 8; Giorgio Magliulo 8; Donatella Palermo 8; Lionello Cerri 8; Angelo Barbagallo 7; Beppe
Caschetto 7; Massimo Ferrero 7; Andrea Occhipinti 6; Carlo Degli Esposti 6; Andrea De Liberato
6; Matteo De Laurentiis 6; Federica Luciano 6; Gherardo Taglieri 6.
and Australia have higher average investment in this sector, 59.5% and 15.5% respectively
for their domestic productions, 407 and 24 in 2007. The only country inferior to Italy in this
sense is India with over a thousand films produced each year (1,091 in 2007), thanks also to
the modest investment of initial capital, on average equal to around 1.2 million euros.3
PUBLIC FINANCING
Public funding has always been a cause for much controversy due to the objective
difficulties in managing such concessions with absolute equilibrium and attention as
well as to the full satisfaction – something still more difficult and complicated – of all
applicants, especially those applicants whose requests are ignored. In actual fact, up
until the normative reforms of 2004 the concession of financing has been the target of
much criticism: of the 327 films financed in the nine years preceding the reform only 6%
managed to obtain box office results at least equal to the received contributions; 11% of
the projects were not even completed; 85% of assigned contributions have never been
recuperated, transforming themselves, principally, into lost funds.
In spite of the inevitable doubts and controversy it is, nevertheless, necessary to highlight
the extreme transparency of such a system of incentives regulated in terms of legislature
and entrusted to the general direction of the cinema of MiBac as regards the FUS –
Unique fund for the performing arts. The judicial contents examining the requests for
finance have become, over time, continually more detailed with mechanisms attributing
evaluation points which do not seem to leave much to discretion; the settlement of
applications is subject to continuous revision, even for the updates brought about by
decree or on the request of the constitutional court or the national audit office (Corte dei
conti); the reports on the allocation of finances are made public (a circumstance rarely
verifiable within the vast panorama of state contributions placed in favour of other
industrial, agricultural or commercial sectors) and indicate in great detail the decisions
adopted by the commissions that assess, according to the numerous costs, the presented
documentation; all of the deliberated amounts are reported (the pages dedicated to the
cinema are, in total, more than 200 out of a total of 550).
The support interventions of the national cinema industry – within the field of policies
favouring audio-visual systems – are, moreover, found in almost all the nations of Europe in
a countless number of ways. For example, the support interventions for audio-visual activities
is valued inside the European Union as equal to 22.35 billion euro, corresponding to around
a third of contributions (66.72 billion) conceded to other sectors, obviously excluding all those
of general interest regarding primary services (such as railways, transport, energy,
infrastructure etc.,). It is enough to state that the budget of the French minister of culture has
assigned in support of the cinema and audio-visual industry – through CNC, Centre national
3
Reference data treated by “Focus 2008 – World film market trends” of the EAO – European
Audiovisual Observatory of the European Union, edited by Martin Kanzler, analyst of the
Information on Markets and Financing Department of the same European observatory.
| 33
de la cinématographie – 540,6 million euros, 279,6 of which are directly destined to the
production, screening, and export of national films. In particular, Italy – which also depends
on a public network such as that of the RAI – a figure which results in tenth place in terms of
expenses of Italian nationals in support of the audio-visual system.4
In contrast to the majority of European Community members Italy has never acted in
favour of the influx of investments for the production of new national films and this gap
has only recently been closed. In 2009 an innovative regime of tax breaks, specifically for
the cinema industry, came into effect, operating for a three year period, with measures
consisting of two forms of assistance: tax credits and tax shelter. These benefits refer to
investment in Italian films, even if the extension into technical industries (for example pre
and post-production, development and publication, dubbing) employed in the production
of foreign films, can be foreseen. Of particular interest is the introduction of so-called
external tax credits, or rather the recognition of tax incentives for companies outside the
cinema sector which contribute to the investments destined for film productions.5
Such measures are largely in expectation, primarily intended to reinforce the influx of
investment resources, on the part of, for example, banks, mutual savings banks and
financial groups which, in virtue of the eventual capital contributions to production
(susceptible, in turn, to further positive economic returns) can avoid the gains tax
resulting from their principle activity. Outside of Italy the use of tax levers for financing
film production is far more widespread and established. The most advanced nation, on
this front, is the United Kingdom with a tax exemption of 100% and a tax offset of 25% for
every film which has a budget of less than 29 million euros and a tax allowance of 80%
with a tax offset of 20% for all of the others. In France private companies which decide
to invest in the national cinema industry deposit their resources in the Société de
financement pour le cinéma et l’audiovisuel thereby enjoying a 100% deductibility within
a 25% taxable income limit and a tax offset corresponding to 20% on admissible expenses
arriving at a level of 1 million euros.6
4
5
6
34 |
“Analyse comparative du financement du secteur audiovisual public” edited by Andre Lange, head
of the ‘information sur les merchés et les financements’ department of European Audiovisual
Observatory. (July 2008)
The normative dispositions are contained in article 1 of the law number 244 of 24th December
2007 (financial law for 2008) to paragraphs 325 – 327 in reference to the tax credits and to
paragraphs 338-341 for the abolition of utility taxes. A profound analysis of the new measures is
contained in “Agevolazioni fiscali per il cinema. Studio in materia di credito d’imposta per
l’industria cinematografica italiana” by Gian Marco Committeri and Mario La Torre December
2008.
An expositoin of the system of tax breaks in use in other countries is contained in “Il mercante e
l’artista-Per un nuovo sostegno pubblico al cinema: la via italiana al tax shelter” edited by Angelo
Zaccone Teodosi, President of SICULT (Istituto italiano per l’industria culturale) and by Bruno
Zambardino and Alberto Pasquale (Spirali Editore), in which the proponents of the new measures
Gabriella Carlucci and Wilmer Bordon trace the evolution of normatives in Italy in terms of
financing and maintenance of cinema production.
TAB. 6
Amount in euro 2007
THE ALLOCATION, PER SECTOR, OF F.U.S. FUNDS
Contributions
Symphony-Opera Foundation
210,789,230.05
Cinema Activity
76,834,180.00
Prose Theatre
73,525,160.00
Musical Activity
62,292,241.95
Dance Activity
7,775,203.00
Circuses and Travelling Performers
6,692,771.00
Total Financing
Running and research costs
437,908,786.00
732,479.00
Quota
Annual Spectators in millions
48.2%
17.5%
16.8%
14.2%
1.8%
1.5%
5.1
105.0
14.5
8.3
1.9
1.5
(3.75%)
(77.04%)
(10.62%)
(6.09%)
(1.39%)
(1.11%)
100.0%
-
136.3
(100.00%)
Taken from data of Sicoge (Servizio informativo contabilità gestionale) by the Ministry of Economics and Finance – Source: “Relazione
sull’utillizzazione del Fondo unico per lo spettacolo – 2007” edited by Osservatorio dello spettacolo of MiBac - Ministry for Cultural Heritage
and Activity.
The role of MiBac as regards the resources assigned to FUS every year on the basis of
financial laws has a highly complex articulation and concerns the six sectors of music,
symphony-opera, dance, prose, cinema and circuses, with different types of intervention
and recipient for each one of the above. In general the allocation of finances – largely
defined by the table below which recapitulates the various forms – reveals the cinema,
in terms of amount, to be in second place, after symphony-opera which, despite its small
size, benefits from the largest amount of assistance.
It should be pointed out, however, that the intervention of the state in the performing
arts is not solely in terms of resources originating from FUS-MiBac, in as much as such
contributions can also be assigned by the President of the Republic, from the Cabinet and
from other ministers (such as the Foreign Office and the Communications Office). Further
indirect forms of support are implemented in favour of single, specific activities through
financial incentives – however, the total amount is not known – and which, until the end
of 2008, did not involve the cinema industry.
As far as the specific sector of production is concerned there are two types of assignment:
contributions of quality for film projects, also defined as indirect financing of production,
and quality premiums on the film’s earnings. In terms of management profile, however,
only the former can be considered technically the same as investment capital and this
refers to four diverse types: feature films judged as being of cultural interest (initialized
as IC); primary and secondary works – defined as such on the basis of the professional
curriculum of the authors – of quality (OPS); original screenplays of a particular value
(with the acronym SSO), short films of cultural interest (CO). In the following table the
principle referents are shown by title, considering, moreover, that generally the
recognition time and that of material supply of contributions do not cover the same
calendar year and therefore certain inconsistencies may be seen among the figures.
The importance of state contributions supplied by FUS principally derives from the possibility
of film makers, as creators of artistic projects, to ensure added investments which often permit
| 35
TAB. 7
TAB. 8
HOW THE STATE CONTRIBUTES TO CINEMA INVESTMENTS
Fus-MiBac Funds
for production
NUMBER OF FUND REQUESTS IN 2007
Requested Received Rejected Withdrawn
CONTRIBUTIONS TO FILMS IN 2008
Supplied Average amount
Total
Feature Films
Primary/Secondary Works
Short films
Screenplays
68
130
81
90
36
32
27
20
23
92
53
70
9
6
1
0
25
22
30
20
491,000
1,224,000
40,000
35,000
10,800,000
0,600,000
1,200,000
700,000
Total productions
369
115
238
16
97
446.391
43.300.000
Source: “Relazione sull’utilizzazione del Fondo unico per lo spettacolo - 2007” edited by the Osservatorio dell spettacolo of MiBac - Ministry
for Cultural Heritage and Activities and “Il cinema italiano in numeri - Anno solare 2008” edited by the Ufficio Studi/CED (National
Association of Cinema, Audiovisual and Multimedia Industries).
the principle financers, such as film studios, to impose an estimated budget which is
compatible with the prospective economic returns, inducing them, as a consequence, to define
an investment plan (primarily through the credit system, starting with the Banca Nazionale del
Lavoro which has a department for cinema credits, in consolidation with that operational
branch of programs of intervention and state incentives) and thereby to begin production.
An example of this point of view is offered in the following table of allocation, by film
company, of the indirect contributions to production organized in 2007 by FUS.
State contributions, in every case, represent only a part of public financing for culture and the
performing arts, including cinema. According to the latest study, state contributions amount
to only 30%, in respect to 26% from the Italian regions and 44% from the municipalities.7
Throughout local institutions can be found the constitution of the so-called Film
Commission, an organization for the development of cinema activity in Italy, initially
promoting the offer of a location for work in progress, the organization of reviews and
festivals and the location of companies. Within a short time, however, such organizations
principally established at the regional level, have, with a specific intensity, dedicated
themselves also to directly sustaining the production of new motion pictures.8
7
8
36 |
Estimate of ISICULT – Italian Institute for the Culture Industry (convention “Una legislatura
innovative per lo spettacolo italiano”, Rome 9th April 2008).
An as yet incomplete list for the progressive institution of such structures can include: Abruzzo
Film Commission; Alberbello Puglia Film Commission; Afc – Apulia Film Commission della
Regione Puglia; Basilicata Film Commission; Bologna Film Commission; Calabria Film
Commission; Campania Film Commission; Capri Film Commission; Catania Film Commission;
Città di Palermo Film Commission; Emilia-Romagna Film Commission; Film Commission Regione
Campania; Friuli Venezia Giulia Film Commission; GenovaSet-City of Genoa Film Commission; Ischia
e Procida Film Commission; Italian Riviera-Alpi del mare Film Commission; Liguria e Genova Film
Commission; Lombardia Film Commission; Marche Film Commission; Portofino Film Commission;
Roma, Province e Lazio Film Commission (che agisce attraverso la finanziaria regionale Filas);
Sardegna Film Commission; Sicilia Film Commission; Siracusa Film Commission; Torino e Piemonte
Film Commission; Toscana Film Commission; Umbria Film Commission; Veneto Film Commission.
STATE CONTRIBUTIONS IN FAVOUR OF INVESTMENTS IN FILM STUDIOS
Most recognized companies
of cultural interest in 2007
Fandango
Rodeo Drive
Cattleya
R&C Produzioni
Lucky Red-Indigo-Parco Film
Lumiere & Co,
Bibi’ Film Tv
Ameuropa International
Andrea Leone-Baires
Gruppo Alcuni
Offside Film
Italian Dream Factory
Mikado-First Sun
Orione Cinematografica
Rizzoli Film
Other 84 companies
IC
3
2
2
1
1
1
2
1
1
1
1
1
1
1
17
Production Total
36
Type of allocation
OPS
CO
SSO
1
1
1
1
2
27
26
20
32
27
20
Amount in euro
of contributions
3,500,000
3,000,000
2,000,000
1,900,000
1,850,000
1,800,000
1,750,000
1,700,000
1,640,000
1,600,000
1,500,000
1,500,000
1,400,000
1,400,000
1,400,000
20,340,000
Total
quota
7.2%
6.2%
4.1%
3.9%
3.8%
3.7%
3.6%
3.5%
3.3%
3.3%
3.1%
3.1%
2.9%
2.9%
2.9%
42.2%
48,280,000
100.0%
Source: General Direction for the cinema of MiBac (from “Relazione sull’utilizzazione del Fondo unico per lo spettacolo - 2007” of the
Osservatorio dello spettacolo.
The region of Campania (a growth area within the tertiary sector and the promotion of
tourism) has, for instance, in 2007 allocated a fund of 1.35 billion euros for the
participation and co-production and, of the 148 requests of the audiovisual sector has
declared admissible 59 and directly financed 30 – among which “Il Divo” produced by
Indigo – for an amount of 1.154 million euros (8 out of 15 musicals for 108 thousand euros
and 10 out of 30 theatrical shows for 162 thousand euros.
Within this programme of film funding the Apulia Film Commission of the Apulia region in
southern Italy has, in turn, allocated 11 contributions in 2007 for seven films, three short
films and a documentary for 258 thousand euros and in 2008 another 30 for ten films and 20
for short films and documentaries for 463,2 thousand euros, amounting to a total investment
of 721,1 thousand euros. Fuori Film Fund has, furthermore, paid out funds amounting to 960
thousand euros to television films of the state broadcasting company RAI “Pane e libertàGiuseppe Di Vittorio” and 30 thousand to “Il grande sogno” by Michele Placido.
The Torino and Piemonte Film Commission, the first established in 2000, financed within
its first seven years of activity a total of 87 films with an average of 70 thousand euro per
title, and has recently signed an agreement with the American producers Endgame
Entertainment for the establishment of a new investment company with a capital of 14
million euros and prepared to operate at both the levels of finance and production as
well as being a guarantee fund for projects addressed to the international market. 20%
of the endowment will have to be used within the Piedmont borders and the intervention
for each film cannot exceed a maximum of 4 million euros nor 25% of the total budget.
| 37
The region of Sardinia has, on the other hand, allocated 7.5 million euros for the three
year period 2008-2010; the Friuli Venezia Giulia Film Commission has granted, through
the same Film Fund up to 140 thousand euros of contributions to productions which
intend to film scenes on regional territory; the Lazio Film Commission, in operation only
since 2007 has made available a budget of 7 thousand euros for ten interventions; even
the province of Milan has begun a support programme for local productions with an
announcement arranged by the departments of culture and innovation offering 700
thousand euros for documentaries and short films.
These are only a few examples to demonstrate a far more extended realm, but,
nevertheless, they are not entirely clear as regards the activity, the institutional
configuration and administrative organization which characterize such, still rather
informal, structures.9
2. Film Production
Preparatory to any investment there is, naturally, the creative phase of developing ideas,
the elaboration first of subject matter then of screenplay, activity in which participate
the writers and, in the majority of cases, those responsible for the production of the film.
After the establishment of a financial plan and the obtainment of the necessary resources
to cover it – by means of, as stated, the banking system, state contributions and, often,
also the anticipated transfer of all or a determinate number of rights (for example of a
television network) – the real production can begin with the editing of the work plan, the
formation of a cast and the search for eventual settings necessary for the screenplay. In
9
38 |
A film commission can be either a board, an agency, or a service supplied by a local institution
on a non-profit basis. Generally it has the scope of attracting cinema and audiovisual productions
in a determinate territory and offers production a series of free services, also as a form of
incentive, with the objective of creating opportunities and economic fall backs for the territory –
also in the sense of employment opportunities – and for the activities of local companies. The
majority of film commissions in Italy are associated with Italian Film Commissions and are
promoted and subsidized by public administrations of the Regions, Provinces and Municipalities
as well as, in many cases, the chamber of commerce. In the absence of a normative outline these
structures are customarily managed in terms of auto-regulation, taking as an example the
regulations of AFCI – the international film commission. The financial endowment of the film
commissions refers to diverse local authorities, which manage their direct interests for them –
those bodies with a judicial personality – also the preparation of the relative administrative acts.
As an agency of territorial attraction of a public character they seem to re-enter into the
administrative and managerial nest which disciplines the so-called public role in territorial
marketing. Aside from film commissions there also exists the less complicated Film Office,
generally adopted by municipal territories with a high rate of production (such as New York) which
intend to carry out activity primarily in the form of managing of permits and the offer of
information. This type of choice has also been made by the City of Rome, which also belongs to
the regional film commission.
general this is the period in which the initiative involves the maximum plurality of
subjects, of financers for production, of the director and his or her assistants and the
most direct collaboration up until those responsible for casting and the screenplay.
The second phase regarding the filming is, on the other hand, that which involves
contemporaneously the greatest number of individuals, however, almost all of these
belong to the film crew and its various components (including the cast of principle and
secondary actors), then there are the technicians who provide the set, equipment and
technical means for filming, specialized vehicles for filming and other services and
materials considered instrumental for production (by now no studio possesses, unlike in
the past, all of the means of production).
Apart from being the first investors of the whole sector feeding the national market, the
producers are, therefore, also those who give life to the creative ideas of the film makers.
They constitute the principle and the base of the industry according to the process which in
corporate research is defined as the sequence of operations which transform the primary
materials into a finished product, later destined for the consumer. After being firstly
developed as an idea and creation, the film in its final phases is marketed and promoted
through distribution and then proposed to its users with business which represents the first
act of circulation of the work – within the film’s life cycle – to reach the cinema going public.
BUDGETING AND PROJECT COSTS
The production costs of a motion picture tend to correspond to the investments; in reality,
however, it would be more correct to speak of project costs. This is because, by and large,
film studios and film distributors do not coincide and, in these cases, the costs of
promotion and circulation (beginning with the printing of copies) are not met by the
producers but by the film distributors, despite being essential accompaniments to the
product when it appears on the market, and therefore constituting marketing costs
attributable to the film’s production.10
Budgets are traditionally imposed, therefore, on the so-called negative components of
earnings, calculated by a definite system of job order cost accounting which comprises
10
There are numerous ways and habits when it comes to the application of systems of amortization
which principally depend on the length of these processes (on average, the investments referring
to new productions are distributed and reported on balance for at least five years) and on the
exploitation channels of the work whose life cycle is, more or less, long in connection with their
circulation in the cinemas as opposed to home video circuits or those of the television. This
involves essential technicalities for the representation – positive, more or less, - of the activity of
a company, its accounts and, certainly, its general state of financial health, which there is no
need to investigate in this report. If anything, it is opportune for signalling that the film does not
necessarily find its distribution in the business in which its production was terminated and, on the
contrary, it can remain unused for more storage companies rather than finding a commercial
outlet. At the same time the circumstance that not always the first distribution is effected by the
business of cinemas and it comes directly on other channels, such as that of the television.
| 39
three categories of costs: of artistic production (above the line), technical production
(below the line) and those of post-production, including insurance costs, costs of editing,
dubbing and the registration of rights. Normally, the full costs of the project constitute
a reference employed for the definition of the assignment expenses of the film and of
the relative utility rights.11
The amount of production costs on the international market – meaning those properly
called projects – reveals a typology of films according to a general classification:
• Films of a low or limited budget with production costs less than 1 million dollars
(approximately 750 thousand euro).
• Films of medium budget with production costs comprising between 1 and 10 million
dollars (from 750 thousand to 7.5 million euros).
• Films of high budget, when costs are placed at between 10 and 40 million dollars (from
7.5 to 30 million euros).
• So-called blockbuster films, with costs over 40 million dollars (30 million euros).
As can be ascertained from the average investments of recent years, the Italian cinema
industry is largely placed between the first and the second categories above, both for national
productions and co-productions. Together with Spain, Italian film productions are those most
present in the second category, but with average values inferior to those of France and
Germany and, above all, to those of the United Kingdom. In the third ‘high budget’ category,
however, the Italian position is recovered placing itself behind the UK leadership, and, in
comparison to the values of the other four principle European markets the Italian presence
is also marked in the fourth ‘blockbuster’ category, where, for instance, Germany is practically
absent and both France and, even more so Spain, can claim only sporadic inclusion.
Naturally, it is possible to produce film with a so-called zero budget, in other words, even
with a few thousand euros, thanks to the free services of a technical and artistic cast and
to ‘natural’ settings, without recourse to the preparation of an authentic set or in virtue
of digital filming (High Definition Video or even digital cameras). Film festivals have
indeed started to show no budget as opposed to low budget films. Making these titles
appear in local cinemas, however, does create problems, both as a result of the technical
ability required to reach an adequate standard (such post-production treatment of the
required sort can cost an average of 150 thousand euros) as well as for the structure of
the distribution market which, practically, leaves little room for independent or isolated
artists who search, alternatively, to directly offer their work to single traders.12
An extraordinary example of this was obtained between 2008 and 2009 by “Il vento fa il
suo giro” by the director Giorgio Diritti, shot without state contributions and shown only
at the ‘Cinema Mexico’ of Antonio Sancassani in Milan. Shortly afterwards it won the
Bergamo Film Meeting award and totalled 40 thousand spectators over an extremely
long tenure of 500 days promoted by word of mouth of its viewers.
11
13
“Il cinema e la misurazione della performance” by Giovanni Tomasi, study & research Egea
Editions, Milan 2004.
12
Recent examples of films produced economically can be considered “Un altro pianeta” by Stefano
Tummolini and presented to the Venice Film Festival, costing 970 euros and then “adopted” from
Ripley’s film of Angelo Draicchio for cinema access, “Il maestro di lingue” by Federico Castagner,
produced with 1,500 euros and “Italian Dream” by Sandro Baldoni (his third experience) costing
a few thousand euros.
40 |
OPERATING CAPITAL
It is difficult for any company to support itself with only investment capital, companies
almost always draw on bank loans destined to be entirely used with the progressive
undertaking of the project. From the moment that film studios – particularly those
independent studios of medium to small size – organize the purchase and use of the
necessary productive and technical resources through outsourcing in such a way that
they are not obliged to sustain the maintenance or the substitution (as a result of the
rapid outdating of technology in the sector)of those resources once filming has stopped
and the resources are returned to the suppliers, the investments in fixed assets are
indeed very few.
Furthermore, resources are necessary for the normal activity of the company – so-called
‘working capital’ – and in particular to acknowledge the fact that cost and revenue
components are seen in relation to the availability of a product and not at the moment in
which an engagement is undersigned. It is the case of the acquisition of rights for a subject
matter, rather than a publication, from which derives film, very much in anticipation of its
effective exploitation; or even of the production of a motion picture before its concrete
diffusion on the market; or also of outlying credits in terms of distribution enterprises,
businesses and of other diffusion channels, that can be practised only in the context of the
real use of the film and which mature gradually on the basis of the period of concession.13
To this end the so-called operating capital is finalized (as well as capital assets) which
depend on the level of material and non-material fixed assets obtained. Being, as stated
earlier, materials of short duration, the investments in such non-material goods assume
significance in the management of Italian film studios, principally identified by the
utilization rights of the production. They are, in substance, constituted by the so-called
film archives or, rather, by the film libraries and include the film titles upon which the
film company can boast one or more property rights for economic use.
Given that the costs of every produced film include the utilization rights, such a library
The treatment of cinema works in the balances of the production companies is controlled by the
civil and fiscal laws of various nations. However, in Italy specific book keeping principles are not
enforced and the balance charges observe the civil normatives (article 242 and following in the
civil code) and those which are fiscal (TUIR), with particular reference to the relative regulation
of the treatment of the creative work (article 68 of TUIR). Other national rules regard explicit and
specific administrative principles, such as in the case of the United States and of SFAS – Standard
Financial Accounting Set (number 139, December 2000)
| 41
constitutes absolutely the most important asset of the company, defined as non-material
given the lack of materiality of the rights connected to the property and to their
connection with licensing, to the maturation of economic benefits over a period of further
economic activity and to the quantification of the asset through production and acquisition
costs (and not the eventual, effective commercial valuation).
The considerable lengthening of the life cycle of the film product, also in virtue of the
multiplication of potential diffusion channels, entails that the value of the ‘library’ tends,
in the majority of cases, to consistently disassociate from the so-called “book value”, in
other words effectively from how much the film company has invested in the production
of a film or its eventual purchase and from how much, as a consequence, has been
contextually attributed to the budget in the first financial year of reference. Sometimes,
the real capitalization becomes so manifestly elevated that it is necessary to request
intervention in the revaluation budget (which also serves, however, in the opposite case
in which supplementary resources must be found in order to face the eventuality of
management crises or to resolve emergency situations).14
Also for this reason the ‘library’ takes on major relevance in the business plan, in general
functioning as a guarantee for loans accessed in financial operations and in the
assumption of debts in support of investment in new projects or in the case of eventual
difficulties regarding unfortunate outcomes in the marketing of new productions.
Furthermore, from the analyses of the financial records of the film studios clearly emerges
the increase in the importance of non-material fixed assets with the growth of company
sizes; the ever increasing presence of durable resources (net capital and medium to long
term debts) in larger companies, as confirmation of the inferior financial solidity of the
smaller companies; and also the superior capacity of self-financing and of recourse to
the debts of the larger companies – guaranteeing a cash flow generated by the ownership
of more famous titles. This indicator of the relationship between net borrowings and cash
flow, defined by financial flexibility, varies in the grand groups between 1.8 and 4.0
whereas in those of smaller size it is generally placed at over 5 points.
Such a circumstance is also referable to a phenomenon subject to the relative
consistency – due to the number of films in portfolio and of the respective values of their
commercial use – of the ‘library’ according to corporate dimensions, or rather, to the
fact that among the major players in the sector the ownership of productions is constantly
maintained and, indeed, continuously fuelled also through acquisition investments,
whereas in the small scale, independent film studios total or partial cessation operations
of the film portfolio and of film rights are frequently registered.
14
42 |
As often occurs for certain material goods – those of real estate – the balance charge of the
values of immaterial goods, such as those represented by the library, and by the values of
amortization depend on diverse types of approach to book keeping; in particular by the counter
position between the so-called approach to costs (the method of discounted cash flow, the method
of royalty taxes, the method of real options).
The size of the ‘library’, furthermore, contributes to the consolidation of trademarks,
something which until a few years ago was considered more or less of no influence in the
activity of independent studios in the sense that trademarks did not characterize their
productions as much as the individual producers, directors, and actors. If anything, their
reputation was tied to their capacity to renew successes in terms of quality or of cassettes
of a series of product titles. Nowadays, on the other hand, the company logo is enough to
qualify an entire catalogue of home videos or all of the channels of pay television, rather
than simple video on demand, and to transform them similarly into brand names.
REVENUE STRUCTURE
The evidence then is clear as to how the box office results do not faithfully represent the
actual consistency of activity within the cinema sector and also of how the cinema takings are
not sufficient indicators of the true efficiency and vitality of the production companies, which
divide the amount between distribution companies and business circuits and which, in their
own financial statements, therefore register the relative incidence on total turnover values.
The revenue structure of the production companies is closely connected to the
management of the utilization rights of the production and conforms to the types of
channel for their diffusion; among these channels primary channels are distinguished
from secondary channels in economic terms due to the diverse calculations of the
proceeds that originate from, and of the diverse contributions that result in, management
economy. In general terms, by ‘primary channel’ the real business enterprise is intended,
in as much as it constitutes the market for which the films are institutionally created and
on which their representation has priority. ‘Secondary channels’, however, are considered
as a separate form for the commercialization of distribution rights, which include:
• The market for paid domestic viewing (home video purchases or rental and ‘pay-perview’, or satellite channels, Digital Terrestrial Television or private cable television
where viewers pay for single screenings in the formula VOD – video on demand);
• Actual television (free television or free commercial television, pay television and licensed
television, or digital terrestrial networks and satellite and cable television on subscription);
• Internet channels through the various IPTV (internet providers) in terms of VOD – Video
on demand in terms of direct connection or through downloading.
• Mobile telephone networks with free viewing, in exchange for publicity or with fees (in
other words VOD);
• Publicity in terms of ‘product placement’ (showing of products within the context of a film
story), a technique by now widely employed, or, more rarely the direct sponsorship of films;
• Merchandising of products, spin offs, and publications closely linked to the contents
of the film;
• The diffusion, onto the recording market, of the musical content that is included in the
film as part of the soundtrack of the film.
These are markets which have been progressively open to the cinema over a period of
time: starting from the 1950s, for example, as far as television is concerned and from
| 43
1976 with the development of the VHS standard created by Shizuo Takano, Vice-President
of the Japanese JVC (Matsushita group) which gave the decisive impulse to the diffusion
of domestic video-registration following years of uncertainty determined by the choices
of the competition Sony to impose its own system of Betamax. Their growth has never
been halted and since the 1990s the proceeds of primary channels, constituted by cinema
takings, have been caused to decrease below the threshold of 50% the value of the total
production registered on the financial statements of the company.
PUBLIC CONTRIBUTIONS
A further source of revenue for production companies consists in the contributions which
the public administration, above all from the state and the regions, supply not to finance
the investment in new productions (as previously seen) but rather to sustain – with more
or less targeted interventions – determinate objectives of interest in the political
tendencies and general development of the national or regional cinema. The state
regulations which control the interventions of FUS-MiBac define them as support
directed towards the production representing a transfer of capital to the producers or to
the authors of two types: prizes for quality and contributions to the takings. Regional
funding, however, with its variegated management, takes on a very diversified
appearance and it is not possible to approximate its quantification, even if the larger part
of the subsidies reward activity which production companies, as indicated earlier, carry
out within their field of competence in the production of a film.15
For a number of years the rewards for quality assigned by a ministerial evaluation
commission have been 10 for an average unit amount of 250 thousand euros and are
presented to authors (screenwriters and directors) and producers who have distinguished
themselves in terms of “particular artistic and cultural qualities”. On the other hand,
contributions to cinema takings are directly correlated to the success obtained in local
cinemas and are founded (with a certain ambiguity as well as disputed) on the intention
of establishing an incentive for film producers, with ample reference to the general
public, to represent an alternative to the blockbusters of the major foreign film
companies and also to have a larger appeal to the international market.
The total amount of resources paid out in 2007 amount to 19,638,887 euros, of which 60%
was given to six individual companies and the remaining 40% to the other 23; even if in
the general estimate of the available funds a quota of 1.18 million, equal to 6.1%, is
15
44 |
This is revealed by the fact that Italy constitutes in the Europe an exception in the sense that it
does not have a board dedicated at the central level nor of specific boards at the local level for
the assignation and management of funds. In comparison to the limited role of MiBac in the
administration of FUS, other nations have organizations responsible for all support activity of the
sector, the CNC (Centre nazionale de la cinematographie) in France, the Film Council in Great
Britain, the FFA – Filmforderungsanstalt in Germany and the ICAA (Istituto de la cinematografia
y de las artes audiovisuals) in Spain.
TAB. 9
DISTRIBUTION OF STATE CONTRIBUTIONS ON PRODUCTION COMPANIES EARNINGS
Beneficiary and film titles
Amount in euros
Quota of total
Filmauro
3,529,187
18.1%
Manuale d’amore (2.14 million) – Il mio miglior nemico (0.99) – Natale a Miami (0.39)
Rai Cinema
2,472,085
12.7%
La seconda notte di nozze (0.92) – La febbre (0.79) – Ma quando arrivano le ragazze? (0.61) – La vita che vorrei (0.13)
Fandango
1,571,453
8.1%
La terra (0.62) - Le conseguenze dell’amore (0.42) – Lavorare con lentezza (0.28) – Tickets (0.11) – Altri (0.11)
Levante
1,485,600
7.6%
Ti amo in tutte le lingue del mondo (1.48 million)
Medusa Film
1,360,636
7.0%
Tu la conosci Claudia? (1.16 million) – Troppo belli (0.18) – Come se fosse amore (0.01)
Sacher Film
1,341,063
6.9%
Il caimano (1.34 million)
R&C Produzioni
859,625
4.4%
Cuore sacro (0.83 million) – La finestra di fronte (0.01) – Kippur (0.01)
Bess Movie
666,059
3.4%
Melissa P (0.66 milioni)
Colorado Film Production
624,950
3.2%
Quo vadis baby? (0.55 million) – Io non ho paura (0.07)
Bim Distribuzione
606,902
3.1%
Niente da nascondere (0.34 million) – Per sesso o per amore? (0.25)
Immagine E Cinema
569,415
2.9%
Il mercante di Venezia (0.56 milioni)
Kairos
549,401
2.8%
L’impero dei lupi (0.28 million) – una top model nel mio letto (0.26)
Secol Superbo E Sciocco
465,199
2.4%
Viva Zapatero (0.46 milioni)
Itc Movie
444,921
2.3%
Se devo essere sincera (0.35 million) – E se domani (0.08)
Cattleya
439,370
2.3%
Romanzo Criminale (0.43 milioni)
Lucky Red
427,205
2.2%
Così fan tutti (0.25 million) – La donna di Gilles (0.04)
Other 12 companies
851.062
4.5%
Total 28 Production Companies
18,264,301
92.8%*
Source: General Direction for the cinema of MiBac from “Relazione sull’utilizzazione del Fondo unico per lo spettacolo – anno 2007”
edited by the Osservatorio dello spettacolo.
* The sum of the percentage quota does not add up to 100%. as the total of available funds involves the restitution to the Banca nazionale
del lavoro of 1,189,107 euros (6.1% of the total) and the competencies of SIAE (Società Italiana autori e editori) for the assessment of the
takings equal to 185,749 euros (1.1%).
destined for the ‘Banca nazionale del lavoro’ for the recuperation of part of the loans
conceded – and still to be repaid – as well as to the companies that had initiated them
(for the films “Alle luce del sole”, “Il siero della verità”, “La vita che vorrei” , “Nessun
mesaggio in segretaria”, “Notte prima degli esami”, and “Volevo solo dormirle addosso”,
and the competencies owed to the SIAE (Società italiana degli autori ed editori), which
receives a compensation equal to 0.96% inclusive of VAT for every single reward for the
| 45
survey of the takings effected in the course of 18 months following the release of a title.
As a matter of fact the 2007 contributions refer to films of the preceding two months.
The adjudication criteria fixed for this category of incentives do not refer to the global
takings of every single motion picture but provide for four diverse box office income
brackets – until 2.6 million euros, from 2.6 to 5.2 million euros, up until 10.3 to 20.7
million euros – to which four different contribution percentages are applied: 25%, 20%
10% and 7% respectively.
Apart from their privileged diffusion channels this involves works of specific, technical
characteristics and content, but which fully belong to cinema production nevertheless,
and which combine to form a value of production for the entire sector equal to, at least,
that generated by the distribution of films to local cinemas.
PRODUCT TYPOLOGIES
The statistics regarding national productions are generally concentrated on the film product.
In reality such sector activity is a great deal more variegated and much more abundant than
at first glance. A relative indicator emerges from the composition in terms of film genre of
the works put into circulation, where films are characterized in terms of content together
with the technical nature of the film on the basis of the probable assumption that animation
films can be institutionally considered for younger viewers and scientific, popular or more
generally informative documentaries. The animation productions and documentaries
reported in the table in reality correspond to the – very few – titles shown (generally first
showings) which compose the reference sample Cinetel for the daily survey of attendance
and takings. Aside from the few animations (such as that of Disney) conceived and expressly
produced for cinema screening, practically the entire sector of animations and
documentaries – as, moreover, for the short films or series – are destined for home video
and television channels, as well as, in part, education and didactic purposes.16
Together with entertainment and documentaries there are at least another four categories
of activity that complete the vast group of companies and businesses within this sector
despite the fact that they are not usually considered in the studies and statistical analyses
of the cinema consumer market through which genuine film production is constantly
monitored: sections of short films, films produced for the television, pornographic films,
and the cinematographical technical industry. The first three of the aforementioned
categories – just as with cartoons and ‘doc’ are distinguished by their respective diffusion
channels, the fourth category, on the other hand, covers the whole production sector.
TAB. 10
Films produced in year
THE PRODUCTION OF ITALIAN FILMS IN TERMS OF GENRE
2000-2005
QUOTA
2007
QUOTA
2008
QUOTA
Drama
Comedy
Action-Adventure
Thriller
Horror
Film noir/Detective
Animation
Documentary
279
209
18
25
10
16
50.1%
37.5%
3.2%
4.5%
1.8%
2.9%
51
35
6
5
4
4
16
42.1%
29.0%
5.0%
4.1%
3.3%
3.3%
13.2%
72
52
6
3
4
17
46.8%
33.8%
3.9%
1.9%
2.6%
11.0%
Total
557
100.0%
121
100.0%
154
100.0%
Elaborated from data relative to the period 2000-2005 from “È tutto un altro film” by Francesco Casetti and Severino Salvemini (Egea,
Milano 2007 edition) chapter “I film nelle sale” by Fabrizio Montanari, source Cinetel and “Giornale dello spettacolo” and for the years
2007 amd 2008 from “Il cinema italiano in numeri” edited by Ufficio studi Anica (Associazione nazionale industrie cinematografiche
audiovisive e multimediali).
16
46 |
Cinetel is a survey company constituted equally by ANEC (Associazione nazionale esercenti
cinema) and by ANICA (Associazione nazionale industrie cinematographiche audiovisive e
multimediali).
3. Integrated Production
ANIMATION
Italian animation has existed for around sixty years. The first two Italian feature films: “I
fratelli Dinamite” of Pagot Film River by the brothers Nino and Toni (Antonio) Pagot who
created the brothers Din, Don and Dan, and “La rosa di Baghdad” by Anton Gino Domenghini
were released in 1949 – a distance of 41 years from the prototype “Fantasmagorie” which
lasted two minutes and which the French creator Emile Cohl showed in Paris on August 17th
. Since then Italian cartoons have maintained a primary position in the area of children’s
(and not only) entertainment, above all due to the television.
Widely used in the field of advertising, also today animation techniques find their principle
role on the television market – in particular with exclusive satellite and digital channels
on pay television – and home video, with a prevalence of United States (Walt Disney and
Marvel) and Japanese products but also with a growing number of Italian productions,
early transformed by computer graphics in 1982 and by 3D since 1995. An example of the
latter was the extraordinary success of Rainbow by Iginio Straffi, which launched the fairy
character Winx around the world thereby creating a group of 60 million euros in sales
revenues in five years. In total it is estimated that today at least 100 companies operate in
the cartoon sector concerning production, both internal and overseas distribution, for a
sales revenue of 100 million euros (20 million of which comes from television productions)
and to which, moreover, can be connected merchandising activities (rucksacks, toys,
music, diaries and other spin offs) for around another 20 million euros.
DOCUMENTARIES
According to what can be obtained from PRC – Pubblico registro cinematografico (Public
Register for Cinematographic Works) managed by SIAE (Società italiana autori ed editori)
| 47
an average of 300 documentaries are produced each year. Practically 100 works added
to the traditional annual list of national films which are considered, as film productions,
as of less importance with an implied and tacit recognition of their intrinsic condition as
works of minor importance.
This is despite the fact that many of the major and most qualified independent producers
of the national cinema are among the most active and attentive operators in the same
area as the so-called specialists and as such employ significant resources as was well
documented in research carried out by ISICULT (Istituto italiano per l’industria culturale)
on behalf of DOC/IT – the association of Italian documentary makers founded in Milan in
1999 and which counts 120 authors and 80 companies amongst its membership.17
In reality, rather than being of minor importance due to their length and production costs
resulting – even if not necessarily – greatly inferior, the documentary sector involves
creations which are diverse as a result of their narrative structures, oriented towards
documenting reality as opposed to recounting a narrative (which, of course, is at the
basis of every film). Furthermore, the character of the film content is obviously of a
diverse nature, typically divided internationally into two separate categories: civilisation
and nature. The vast majority of documentaries, equal to 79%, belong to the first
category, a category which includes films of a social character (52.6%), of art and culture
(13.2%), anthropology (7.9%), and science (5.3%). 15.8% of documentaries belong to the
second category, which also includes history and archaeology (13.2%) as well as nature
and animals (2.6%) whereas the remaining 5.3% are considered unclassifiable.18
It is, moreover, in terms of their typology that these films have as their principle
commissioners terrestrial and satellite television networks, both free and paid, with a
scheduling which only on general channels – those more easily detectable – exceeds
over 2 thousand hours per year. The majority of these programmes concern information
and divulgation (1,300 hours) and of lesser frequency those programmes in autonomous
form (500 hours) or those concerning schools and education (400 hours).19
17
“Indagine sul settore del documentario in Italia” (ISICULT-Doc/it, Rome 2006) directed by
Francesca Medolago Albani.
18
According to the same research the preferred format is 52’ (51.4%) followed by those shorts of
10’ to 15’ (28.6%), by the intermediate 26’ (8.6%), by full length feature films (8.6%) and by fillers
(2.8%). Due to the types of support production in DV Cam/Mini DV (59.5%) excels, in comparison
to that of DG Beta (18.9%), in HD (10.8%), in Beta SP (8.1%) and in motion picture (2.7%)
19
With the term ‘film’ is intended any filming made with cinema techniques and transmitted in
video. The word’s meaning has been defined by the linguist Tullio De Mauro and is today
unanimously shared in the significance of “filmed sequence or filmed insert proposed in the
course of a television transmission with documentary endings”. The term, in Italian a noun of
masculine gender, belongs to the “semantic and lexical innovation introduced by television into
the Italian language”. (cf. “Lingua parlata e Tv” by Tullio De Mauro in “Televisione e vita italiana”
by various authors, Eri Editino, Torino 1968)
48 |
In its congenial capacity, by definition, as industrial film documentaries have, furthermore,
a second important market outlet in both the private commissioning of industries and
large service groups as well as public commissioning represented by administrations and
companies, of which in first place come local administrations for promotional reasons. For
example, the most consistent regional and national resources of the Film Commission
are reserved for the production of documentaries, second only to those resources in favour
of cinema films in the strict sense of the word. The distribution in local cinemas results,
nevertheless, the prerogative of a few, selected “classics”: on average 15 documentaries
per year with a total of around 265 thousand viewers.
With a total production value of 60 million euros – 20 of which from the commissioning
of the three principle national broadcasters – this category of film has among its principle
operators Vivo Film which has produced 17 films in the last five years, Fandango (15),
Palomar (15), Suttvuess (11), Komedì Production (10), Zelig (10) and Stefilm international
(8), aside from the RAI with a total of 52 films produced by RAI cinema (13), RaiTre (10),
RAI Educational (9), Rai TV (7), Rai Teche (6), RaiSat (4), Rai International (2), Rai Trade
(1) and 10 from the Swiss-Italian broadcaster RTSI.20
SHORT FILMS
The distinction of documentaries and cartoons from short films is not always obvious. The
definition of the latter is sometimes extended to include commercials and music videos.
However, in the most consolidated and most professionally diffused international sense the
so-called ‘shorts’ are a specific sector of cinema production identifying brief works – of a
duration no more than twenty or thirty minutes (the length of the film varies from 900 by a
few metres)- with a typical cinematographical structure and an authentic narrative storyline,
as is confirmed by the assignment of specific quota of contributions from FUS for the cinema.
The possible uncertainty of identification for the genre would appear, in reality, to depend
on the substantial overlap of diffusion channels which commonly converge in the
television networks and in public and private commissioning. In the latter the interests
and resources dedicated by the regional and local Film Commission show themselves to
be still relevant to their production. Also the production of short films involves, together
with a number of operators exclusively dedicated to this genre, numerous production
companies which are highly active within the primary channels of this sector.
20
From the surveys conducted in the course of the drafting of this report there emerged certain
indications – not exhaustive and reported, therefore, as purely informational titles, without any
statistical classification value – due to the nominally participating and signed (through the respective
companies of reference) by the more entrepreneurially active producers within the documentary
area (with at least five productions) in recent years: Gregorio Paonessa (17), Gianluca Arcopinto (10),
Nicola Giuliani (10), Federico Schiavi (9), Carlo Cresta Dina (8), Elena Filippini (7), Stefano Tealdi (7),
Gabriella Manfré (6), Corso Salani (6), Rean Mazzone (6), Andrea Occhipinti (6), Domenico Procacci
(5), Danilo Caracciolo (5), Edoardo Fracchia (5), Francesca Gatti (5), Giuseppe Tumino (5).
| 49
Italian short films amount to an average of 105 titles which are released every year ( 80%
of which normally request access to FUS funding) amounting to a value of total production
of 2 million euros.
internal production but rather acquisition from foreign companies. The production value
furnished by the producers of independent, national cinema working in the sector
(amounting in total to few more than 50) is estimated at 60 million euros.22
TELEVISION FILMS
Since its origins, television has been supplemented by the cinema, which has been a life
force for the former’s development. Over the years television has developed and more
recently has consolidated a decisively impending presence and elaborated its own
specific language.
On the one hand, television has found within the industrial structure of the cinema, with
its pre and post-production companies, technical partners capable of sustaining the
evolution of the cinema above all during the phases of expansion in the 1960s and even
more the 1970s and 1980s. There are small number of so-called executive companies
from which emerges that large sector of television linked industries which, working in
outsourcing, nowadays absorb over 50% of television production.
On the other hand, television has arrived at the point of shaping almost autonomous forms
of cinema products such as television movies and, as a suborder, the so-called television
serials, through the experience acquired during the growth of Italian cinema and, primarily,
through the collaboration of artistic resources. Also today a large number of production
companies which are integrated in the cinema industry with their creative contributions
furnish that added value which characterizes a certain part of television supply.
If television serials, in all of their diverse forms – dramas, original titles, soap operas, sitcoms, mini series, and so forth – are not and, in general, cannot be confused with cinema
films, the television movies, nevertheless, maintain a proper identity as a film product.
Created and produced for the small screen, principally destined for immediate use and
a profitability primarily linked to transmission through the channels of commercial
television, television movies are similar to certain strategic, industrial products of double
or mixed use which lessen the primary and background research into the containment
of costs that originally characterized them. The possibility of their parallel use remains
somewhat limited and not entirely foreseeable, and yet it is no longer improbable now
that distribution companies are registered also in theatrical channels, pay television, and
even more, home video.21
Nowadays, television films occupy 11.9% of transmission hours of the larger national
networks (19.9% on Canale 5; 13.7% on RaiUno; 13.5% on RaiDue; 11.8% on Rete4; 3.7%
on La7) and 39.8% of this scheduling is formed from outsourcing by around 150 external
production companies (the quota of the contiguous category television serials amounts
to 53.0%) as regards the unique alternative post of the major broadcasters which is not
PORNOGRAPHY
Pornographic cinema would appear to have nothing in common with cinema considered
as an art form. As far as the industrial basis of the cinema is concerned, however, the
situation requires a notably diverse evaluation. Despite being entirely parallel to and a
hidden part of official film production (more or less since the time of George Méliès), the
xxx rated category, for example, traverses the very same structural sectors in phases of
pre and post-production as official films. Furthermore, it is subject to the same systems
of vigilance and administrative control of the Società Italiana Autori ed Editori (the Italian
Authors and Publishers Society) concerning distribution channels of the cinema and
home video (in particular through newsagents and sex shops).
These red light products are, nevertheless, supporting the principle distributors to
channels – by now somewhat consolidated – of pay television and of ‘pay-per-view’
television and, even more so, the new areas of mobile telephones and the internet.
The most consistent section of this sector is the market supply of pay television. Sky
Italia offers, on subscription, 20 channels of ‘Hot Club’ with a repertoire of films as well
as ‘Hot Première’ with a preview each day and, according to the most recent estimates,
over 200 thousand daily acquisitions from subscribers with average costs – including
subscription costs – of 10 euros per view, amounting to an annual total of 730 million
euros. Considering that which is accredited to the total of 4.5 million users of satellite
television of Rupert Murdoch it is estimated at 1.41 euros per person per day, Sky’s sex
industry would arrive, therefore, at covering 29.2% of the entire proceeds of 2.5 billion.23
As an alternative to Sky there are Conto TV with a regime of encryption and parental
control and which integrates satellite transmissions with digital systems and proposes
two hard-core channels Superpippa channel and Sin, as well as the more recent Glamour
Plus on digital terrestrial television, thereby accumulating proceeds estimated at around
21
50 |
One can cite the cases of “La Meglio gioventù” by Marco Tullio Giordana, “Camera: La Montagna
che cammina” by Renzo Martinelli and “Sbirri” by Roberto Burchielli.
22
The principle indications as to the category of TV films are taken from the research “L’industria
della produzione di fiction – Metodo, regole, prospettive” and “La domanda di contenuti in Italia”
produced by IEM (Istituto di economia dei media) of the Fondazione Rosselli and presented,
respectively, at the “Rome Fiction Fest” (July 2007) and at the “Quinto summit della
comunicazione” in Rome (December 2007). In the area of the second study were signalled among
the cinema companies most active in terms of TV films for the principle, national broadcasters
Palomar, Film Master, Cattleya, ITC movies, Colorado Film Production. Among the companies
involved in already budget works for the new season were Albatross, Cattleya, Sacha Film,
Sanmarco Film (by Raoul Bova and his wife Chiara Giordano), Leone Cinematografica and Titanus
by Goffredo Lombardo.
23
“Sex and the money – Viaggio nel settore che non conosce recessione” by Daniela Stigliano and
Filippo Astone, Il Mondo (rcs Periodici – 9 May 2008)
| 51
70 million euros. On the other hand, the annual report on the market of digital contents
in Italy arranged by Fita-Federazione Italiana of the high-tech sector (adherent of the
Italian industrial association ‘confindustria’ of innovative services and technologies) had
already been explicit about the situation in 2006, stating: “Football matches and adult
contents are considered the content capable of getting the diffusion of digital television
off the ground…the area in notable growth and of future successes is certainly that of
content accessible in the form of pay-per-view or video on demand”.24
Considerably more problematic is the economic evaluation of videos on mobile phones.
Pornographic films are among the contents of major interest offered by all active
administrators in Italy, however, of the four national telcos: Tim, Vodaphone, Wind and 3
only the last of these publicizes such a service acknowledging its efficiency, despite not
supplying like its three competitors any indication of the relative turnover. Among mobile
telephone executive staff, however, there is a common conviction that the traffic
generated by pornographic videos by now accredits proceeds near to 150 million euros.
Equally difficult is the estimate of showings of ‘streaming’ via internet in relation to a tariff
of 0.07 cents per minute of connection and to the average cost of 6 euros for the “rental”
of pornographic films, almost all filmed in digital, with a time limit of 48 hours. Only
Cybercore of Maya Checchi and Faronet of Roberto Campisi, companies with respectively
14 and 8 staff members claim ‘leadership’ of the industry, also claiming to have 60
thousand and 25 thousand users per day with gross earnings in 2008 equal to 3.2 million
and 1.4 million euros respectively.25
As opposed to the ever increasingly digitalized consumption of pornography, the
traditional market supply of red light cinemas (by now reduced to a tenth of what they
were 15 years ago) and pornographic home videos is notably diminished. At the same
time the national Italian production of films of an explicit sexual nature has dropped as
a result of competitiveness in terms of costs from Eastern Europe (with Hungary in first
place): 5 thousand euros of average investment as opposed to 25-30 thousand euros for
Italian domestic productions. In actual fact, of the 1,500 films put on the pornography
market in Italy, only 300 are produced internally – with a total investment of 6.5 million
euros – by 35 companies, among which the recognized major players are Showtime, Sin
Video, Salieri Entertainment, Rocco Siffredi Production, and Kamasutra. These are
production companies which earn between 20 thousand and 50 thousand euros every
year from the networks for licensing rights on xxx rated channels; 400 to 500 euros for
every title put on air by minor broadcasters; 6000 euros on average per title from video
shops for DVDs sold, with a global budget from home videos of 150 million euros.
From the above orders of size a turnover of 1,45 billion euros can be reasonably assumed for
pornographic cinema; a figure which has grown extraordinarily with respect to the last report
24
“Rapporto e-Content 2006” edited by Federcomin, today known as Fita-Confindustria innovative
and technological services (November 2006).
25
“Più tasse? Il porno emigra” by Roberto Galullo, Il Sole 24 Ore, 13th December 2008.
52 |
– the quarterly “Rapporto sulla pornografia” (Report on Pornography) carried out by Roberta
Tatafiore – conducted on prohibited business in 2005 by the research centre Eurispes with the
patronage of the Papal council for social communication. At the time, however, the supply of
films prohibited to minors on pay television, pay-per-view, IPTV, and on streaming videos of
the internet was only in its origins and a cumulative turnover, amongst all of the diffusion
channels, of 350 million euros was the most that could be accredited.
TECHNICAL INDUSTRIES
A common denominator of all of the sectors within cinema production is that consisting of
technical and executive service companies which are involved in all aspects of filming, and
which complete the production of motion pictures. In Italy there are estimated to be over 2
thousand technical industries, 43% of which are represented by individual companies or
persons (and not by capital) composed of autonomous operators, craftsmen, and
entrepreneurs which practically work freelance, whereas a further 30% of joint stock
companies (eight out of ten of which are private limited companies) present very reduced
dimensions.
Four diverse, principle areas can be distinguished in which the various activities are
carried out, revealing a remarkably variegated overview:
1. Services of edition and post-production in the strict sense of the term, where the major
operators, of medium to large scale, are concentrated as referred to in table 11.
2. Services of production, relative to components of set design and photography, the
preparation of costumes and the supply of special technology;
3. Production agencies, principally consultancy agencies and financial and administrative
assistance for the sale of rights, budget arrangements, work plans and financial montage;
4. Creative services which collaborate with the production of photographic and special
effects, music and sound-tracks, choreography and also script adaptation and revision.
TAB. 11
TRENDS OF TECHNICAL AND EXECUTIVE SERVICES WITHIN PRODUCTION
Turnover in millions of euros
2003
Studios-TV studios-Filming
225.1
Management of technical
resources and transport
19.2
Printing and Development-Video duplication 216.2
Audio and Video post-production
46.5
Electronic cinema and TV filming
123.9
Total Sector
630.9
2004
2005
2006
2007
2008
226.1
150.0
160.0
157.0
165.0
19.2
216.2
46.6
123.9
19.0
190.0
49.0
125.0
19.0
192.0
45.0
150.0
20.0
190.0
57.0
147.0
25.0
189.0
55.0
140.0
632.0
533.0
566.0
571.0
574.0
Source: “Il cinema italiano in numeri” (from 2003 to 2008) edited by the Ufficio studi Anica on data provided by companies adhering to
UNITEC (Unione Nazionale delle industrie tecniche cinematografiche e audiovisive, an associate of Anica.
The majority of the larger companies – 45.5% situated in Rome and a further 18.5% in
Milan – belong to the first category, as is illustrated in table 12 and count for 20.8% from
6 to 10 persons involved and for 20.3% over 20 dependents with full-time contracts.
| 53
TAB. 12
AREAS OF TECHNICAL INDUSTRY ACTIVITY FOR PRODUCTION
Revenue amount in millions of euros
Turnover 2008
Quota
Estimated staff
Quota
Studios-TV studios-Filming
Management of technical resources and transport
Printing and development-Video duplication
Audio and video post-production
Electronic cinema and TV filming
165
25
189
55
140
28.7%
4.3%
33.0%
9.6%
24.4%
1,750
90
850
270
350
52.9%
2.7%
25.7%
8.1%
10.6%
Total Sector
Digital Technology*
574
165
100.0%
-
3,310
1
100.0%
140
first, great phase of cinema development, when the unique outlet channel was
represented, in every nation, by the thousands of local cinemas across the country and
where a distributive, logistic network was formed for the rental of newly released motion
TAB. 13
Film nationality
ALL FILMS DISTRIBUTED ON THE ITALIAN MARKET 1999-2005
Distributed
First Releases
Quota
First
Releases/Total
100
104
174
278
378
26.5%
27.5%
46.0%
73.5%
100.0%
54.0%
74.2%
57.8%
63.0%
60.3%
86
87
195
282
367
23.4%
23.5%
53.1%
76.6%
100.0%
48.8%
65.9%
57.0%
59.5%
56.4%
106
89
174
263
369
28.8%
24.1%
47.1%
71.2%
100.0%
56.4%
65.4%
53.3%
56.9%
56.7%
114
83
171
254
368
44.9%
32.6%
67.3%
69.0%
100.0%
52.7%
56.4%
56.8%
56.7%
55.4%
113
97
177
274
388
29.3%
25.0%
45.7%
70.7%
100.0%
47.4%
62.5%
54.1%
56.8%
53.7%
104
45
152
265
369
28.2%
12.2%
41.2%
71.8%
100.0%
continued
1999
Italy
Europe
United States
Overseas Total
General Total
185
138
301
439
624
Within the audio-visual market there does not generally exist a net separation between
the cinema sector and the television sector and, therefore, the distinction is based on
the principle activity of the company (the service companies which prevalently operate in
television production are more than 1,500).
As a result of this it is possible to reconstruct the quota of work employed in the
production of the various products: 35.6% of production is dedicated to films and feature
films; 12.6% of services regard television films and serials; 7.5% of the services concern
documentaries and industrial films (including promotional films and publicity); 5.2% for
filming and journalistic reportage; 3.4% is destined for short films; the remaining 26.5%
is divided between television programmes and other products, such as animation. Out of
the total activity the quota of operations completed with digital technology amounted, in
2007, to 17.1% and is registered as being in constant expansion.26
On the basis of the indications offered by the same entrepreneurs of the sector, the global
contributions of the technical industries and executive services to the cinema sector are
valued in economic terms at 735 million euros.
Italy
Europe
United States
Overseas Total
General Total
176
132
342
474
650
4. DISTRIBUTION
Elaborated from data contained in “Il cinema italiano in numeri – 2008” edited by the Ufficio studi Anica and from surveys of companies
belonging to UNITEC.
*The data relative to companies active in digital application are the result of independent estimates, referring only to the cinema sector, with
respect to the global values of the activity calculated as 950 million in turnover and 850 staff units.
Quota
29.6%
22.4%
48.0%
70.4%
100.0%
2000
27.0%
20.4%
52.6%
73.0%
100.0%
2001
Italy
Europe
United States
Overseas Total
General Total
188
136
326
462
650
Italy
Europe
United States
Overseas Total
General Total
216
147
301
448
664
Italy
Europe
United States
Overseas Total
General Total
238
155
327
482
720
28.9%
20.9%
50.2%
71.1%
100.0%
2002
32.6%
22.1%
45.3%
67.4%
100.0%
2003
Distribution is the strategic area for the entire cinema sector. The cinema industry
market is, in fact, a highly intermediated market and the companies which produce films
do not have consumers as clients, but rather, other companies which take the
responsibility of delivering the product to its final user. Such a structure results from the
26
54 |
This information, as with part of the precedine sections, refers to the research “Le imprese
dell’audiovisivo nel Lazio” conducted by CENSIS (Centro studi per gli investimenti sociali) Rome
2007.
33.1%
21.5%
45.4%
66.9%
100.0%
2004
Italy
Europe
United States
Overseas Total *
General Total
-
-
| 55
continued TAB. 13
Film nationality
TAB. 14
Distributed
Quota
First Releases
Quota
First
Releases/Total
Film nationality
ALL FILMS DISTRIBUTED ON THE ITALIAN MARKET 2006-2008
Distributed
Quota
First Releases
Quota
First
Releases/Total
2005
Italy
Europe
United States
Overseas Total *
General Total
-
24.7%
19.6%
53.8%
75.3%
100.0%
98
62
166
294
392
25.0%
15.8%
42.3%
75.0%
100.0%
-
Elaboration from source: “Il cinema italiano in numeri” (from 1999 to 2005) edited by Ufficio Studi Anica.
The total of foreign first releases for the years 2004-2005 does not include films produced outside of European Union apart from those of
the United States.
pictures or those of a second or third showing following a first showing in the more
important cinemas.
As a catalyst this situation resulted in a very restricted number of distribution companies,
thereby progressively reinforcing their negotiating power against both the purchasers
both at the top of the industry and the traders at the bottom. A remarkably powerful
position which the great producers of Hollywood intercepted immediately absorbing the
principle distributors into the United States and becoming directly responsible for the
diffusion of their films and then exporting this commercialization model onto their own
external market references, starting with Europe.
As a result of this, at first glance, the analysis of the sector demonstrates a marked
hourglass shaped conformity. In the upper parts thousands of production companies
(70.6% of the entire sector) are tens of thousands of staff members and direct
collaborators (80% of the global employment); in the lower parts are situated businesses
– equal to 20.1% of all registered company titles – with the other relevant portion of
personnel (14.1%) being sectorial. In the centre, the hourglass funnel, are found the
relatively few distribution structures, through which pass, similar to grains of sand, the
motion pictures which their creators, the film makers, must show to the public.27
This is the cinema sector which materially manages the flow of capital resulting from
public consumer spending which arrives, through successive and gradual repartitions,
at the top of all the film industry systems and sectors. It is, above all, a result of this
capacity as monetary collectors that certain settlements were agreed on – few, in reality
and so far only partial – having the current conformity as a consequence.
The first of these settlements originates in the period when television began to constitute
an interesting supplementary source of revenue in comparison with the prior exclusive
source of local cinema screenings. At a certain point transmission rights covered a
27
56 |
The technical Italian term ‘cineasta’ (most readily rendered in English as ‘film maker’) is based
on the definition given by cinema theorist and critic Louis Delluc.
2006
Italy 100%
Coproductions
Italian total
Europe
United States
Other nations
Overseas Total
209
89
298
242
330
90
662
21.8%
9.3%
31.1%
25.3%
34.3%
9.3%
68.9%
100
53
161
71
285
26.0%
13.8%
41.8%
18.4%
74.0%
33.5%
21.9%
48.8%
78.9%
43.0%
General Total
960
100.0%
385
100.0%
40.1%
Italy 100%
Coproductions
Italian total
Europe
United States
Other nations
Overseas Total
195
73
268
234
317
68
619
22.0%
8.2%
30.2%
26.4%
35.8%
7.6%
69.8%
110
51
154
55
260
29.7%
13.8%
41.7%
14.8%
70.3%
41.0%
21.8%
48.6%
80.9%
42.0%
General Total
887
100.0%
370
100.0%
41.7%
Italy 100%
Coproductions
Italian total
Europe
United States
Other nations
Overseas Total
214
74
288
196
300
61
557
25.3%
8.7%
34.0%
23.2%
35.5%
7.3%
66.0%
130
43
163
40
246
34.6%
11.5%
43.3%
10.6%
65.4%
45.1%
21.9%
54.3%
65.6%
44.1%
General Total
845
100.0%
376
100.0%
44.5%
2007
2008
Elaborated from data source “Il cinema italiana in numeri” (2006-2008) edited by Ufficio Studi/Ced Anica.
proceeds quota varying between 30% and 35% and production companies began to offer
opposing parties direct to the television broadcasters in order to avoid the relegation of
the relative commissions to the distributors. Then, also under the encouragement of
licensing laws which had obligated them to directly make and schedule a determinate
number of national productions, the same television networks (Rai and Mediaset) came
directly into operation catalyzing, in short, resources and activity at the level of the major
foreign companies and, thereby, paving the way for already well-known companies like
Filmauro and Eagle Pictures.
In the end, home video channels were strongly developed, channels which only partly
affected the volume of takings of the primary channels, but, nevertheless, did undermine
the income from television, progressively reducing it to 15%, and, in this phase, the
| 57
TAB. 15
producers understood that they could manage the distribution in certain specific sectors
themselves, above all that of the new formations resulting from the innovative
technological developments which had transformed the world of communication.
The opportunity of new economic advantages, therefore, induced other independent
production companies to provide themselves with real operative divisions for distribution
and this sector is now beginning to present a host of operators – at least for the
alternative diffusion to screening circuits – more varied than in the past.28 (cf. table 15)
The market leadership exercised through their vertically integrated European branches
by large Hollywood groups still has results today, results which are clearly preponderant
in terms of cinema takings. Over time they have selected the number of films entirely
admitted onto the market every year, and as far as the launch of new releases is
concerned, their influence appears, also today, of indubitable importance. In five they
maintain a constant productivity quota of 50% The other four major Italian operators (if
Eagle Pictures is included) can attest, on their part, to 40%, demonstrating themselves,
therefore, to be among the most equipped within the European Union: of the first ten
largest continental volumes of trade Medusa is in fourth place, 01 Distribution in sixth
place and Eagle Pictures seventh. The remaining positions are occupied by an alternating
group of another 20 independent, national production-distribution companies.29
The idea that the American cinema product has diverse characteristics from that of
European or Italian cinema is persistent. Keeping with the results is the deduction that,
in effect, United States cinema manages to more efficiently intercept the average
preferences of the public. Of the 20 films which, in Europe, had the largest number of
spectators, 18 were, for instance, American productions and even the European
“Mr.Bean’s Holiday” positioned in seventh place with 15.2 million cinema viewers,
involved U.S. participation, whereas the French-English-Czech production “Le Mome”
remained relegated to the penultimate position.30
It is, in reality, certain that the United States product, having vast available resources,
bases itself on a diverse ‘star system’ adopting play scripts which represent authentic
best-sellers and is, undoubtedly, promoted much more effectively. Marketing investment
by major US companies is practically incomparable with that of European production and
28
There are also those who use the typical technique of ‘guerrilla marketing’ in order to ensure
the possibility of producing a film and for organizing the distribution of that film for screening (in
film circles this is defined as self-production). Tickets are received on the basis of the project, in
a type of ‘popular shareholding’ whose value is constituted by the quota of participation in
investment and the rights of first screening. Certain examples include “Tu devi essere il lupo”, “Il
vangelo secondo Precario” and “L’estate del mio primo bacio”.
29
“Les enterprises del distribution cinématographie en Europe” edited by the Oservatoire européen
de l’audiovisuel. Strasbourg 2007.
30
“La frequentation des salles de cinema dans lrd vengt-sept Etats del l’union européen – 2007”
edited by the European Audiovisual Observatory, (Strasbourg, May 2006)
58 |
THREE YEARS AMONG THE FIRST 20 DISTRIBUTION COMPANIES
Number of films distributed
and market quota
W. Disney-B. V.
Sony Pict. Italia
Universal-Uip
20th Century Fox
Medusa Film
01 Distribution
Filmauro
Eagle Pictures
Moviemax
Mikado Film
Lucky Red
Bim Distribuzione
Fandango
Teodora Film
Dnc Distribuzione
Mediafilm
Year 2007
Quota
N.
Subsidiaries of major foreign companies
59
12.03%
48
9.25%
45
9.25%
45
6.35%
46
13.07%
49
13.11%
43
11.77%
45
11.00%
31
24
49
44
7.74%
5.12%
19.86%
6.42%
82
70
8
40
21
71
44
48
21
15
9
17
16.60%
11.20%
8.04%
3.97%
2.37%
1.58%
2.92%
2.47%
0.38%
0.33%
0.21%
0.07%
N.
Year 2006
Quota
86
61
10
40
14
94
55
48
32
15
7
14
N.
Italian Companies
12.98%
75
9.49%
67
8.18%
13
6.02%
42
1.09%
17
1.00%
70
0.84%
44
2.39%
43
0.45%
26
0.18%
17
0.35%
11
0.79%
16
17.33%
9.90%
8.21%
3.68%
1.86%
1.56%
1.36%
0.87%
0.10%
0.31%
0.26%
0.22%
Year 2008
Quota
Elaborated on Cinetel data from “Il cinema italiano in numeri” (2007-2008) edited by Ufficio studi/CED Anica.
is often greater than the same budget assigned to production, in a ratio which, with Italy,
can be measured, for example, in tens of millions of euros against – at most – a handful
of millions (however, the figures stop at five zeros much more often).31
On the other hand, it is clearly apparent, amongst those working in the sector, that films
distributed on a national scale which do not ‘survive’ the first weekend of screening – in
the sense that they fail to meet even the lowest of expected earnings – are definitely ‘lost’
as far as the circuits of local cinemas are concerned and are duly rejected immediately.
As a result of the latest settlements within the sector and the strategy adjustments,
national cinema has demonstrated an ability to better interpret and apply the
manufacture of so-called blockbuster films, as indicated by the fact that in the last eight
years, the absolute box office hits have been national titles (the unique exception being
‘The Da Vinci Code’ of Sony in 2006 which interrupted a series of four “cinepanettoni”
(comical Italian Christmas films) of Filmauro) as seen in table 17 below.
The fact is that despite generating proceeds greatly inferior to home video channels, the
film industry conserves its indisputable primacy, what remains for now indispensable.
The first link in the distribution chain is, in fact, a determining factor for the formation of
31
On the different base assets of the cinema systems in the United States and Europe direct
reference is made to the study “Europa-Stati Uniti: differenze strutturali e manageriali – Il settore
cinematografico negli Stati Uniti e nell’Unione Europea” by Fabrizio Perretti and Giacomo Negro,
professor at the Bocconi University of Milan (March 1999)
| 59
commercial values of the film throughout its
life cycle, given that success in local
cinemas creates the first clear credential of
a film which, due to the public, conditions its
possibilities on all of the successive diffusion
channels. It is, above all, in this light that
both the aggressive policies on international
markets and the resolved defence of their
own advantageous position by the major
production companies, in support of which
they have more recently started investing
more assiduously in productions abroad
giving a domestic flavour to productions of
which they are the first and major investors
(as is the case with the Harry Potter saga
and of the James Bond 007 series, one
stamped UK and the other NWZ, or rather,
New Zealand).
TAB. 16
ITALIAN AND FOREIGN BOX OFFICE
DISTRIBUTION
Average takings
per film in euro
Year 2007
Year 2008
Italian Companies
Medusa Film
1,425,790
01 Distribution
912,030
Filmauro
3,895,162
Eagle Pictures
540,828
Moviemax
674,932
Mikado Film
137,825
Lucky Red
190,575
Bim Distribuzione
125,324
Fandango
24,222
Teodora Film
113,216
Dnc Distribuzione
145,092
Mediafilm
86,212
1,201,937
941,787
5,916,895
584,593
665,076
131,517
391,140
303,091
132,267
131,065
137,795
254,534
Films of the Major Foreign Companies
Warner Bros
1,379,797
949,322
W, Disney-B, V,
1,188,751
1,469,242
Sony Pict, Italia
871,147
1,256,946
Universal-Uip
1,161,245
2,384,942
20th Century Fox
1,508,063
859,397
DIVISION OF THE PROCEEDS
The distributive system as takings collector
Elaborated from data of Cinetel by “Il cinema italiano in numeri”
from the various channels is at the centre of year 2007 and 2008 edited by Ufficio studi/CED Anica.
the process of subdividing the resources
generated by market demand. The standard procedures for division follow innumerable
modulations according to the various diffusion channels, but in general – as far as the
business of first showings is concerned, and where SIAE registrations prevail, just as with
the royalties obtained from the same SIAE, these procedures model themselves on two
principle systems, depending on the initial relationship between producer and distributor.
1. Fixed fee or flat fee licence. The production companies, not assuming the risk of either
success or failure of their films, ceded the exploitation rights – usually before initiating
TAB. 17
THE EVOLUTION OF ITALIAN FILMS IN MILLIONS OF TAKINGS
Italian film samples of takings
From 1 to 5 millions
From 5 to 10 millions
From 10 to 15 millions
Over 15 millions
Blockbuster Number
Takings in millions of euros
2001
2002
2003
2004
2005
2006
2007
2008
11
4
2
17
13
2
3
3
21
15
3
3
1
22
21
3
4
28
18
3
4
25
13
4
1
2
20
17
7
3
2
29
19
5
3
1
28
94.5
100.5
110.5
120.0
125.5
98.5
171.7
142.3
Source: “Il cinema italiano in numeri” (2001-2008) edited by Ufficio studi Anica.
60 |
the manufacture of the film – to the distribution company in exchange for a fixed amount
(licence) that can be budgeted in three diverse forms: full industrial costs, covering the
artistic costs and technical production costs attributable to the film; full company costs,
including a cover charge for the general expenses and financial interests on the
investment; cost plus with the addition of a predetermined profit in absolute value.
2. Gross Margin Percentage. The producer assumes the company risk. Nevertheless, the
producer can choose whether to divide the eventual earnings (i.e. the gross margin)
with the distributor or not. If the distributor is completely assumed – once the rental
licence has been transferred to the film exhibitors – they are charged only with their
expenses and commissions; in cases of condivision the distributors credit that part of
the proceeds corresponding to their quota of invested capital. Normally, distribution
companies find no advantage in holding less than 50% within a partnership, this is
because the distribution company commission generally corresponds to 30% of the
gross margin and promotion costs, publicity and the physical circulation of the film
which has to maintain what amounts to an average of 20% of the same gross margin.32
A recent production of which the economic coordinates of costs and takings are well
known as well as the terms of the relationship between industrial and investment
partners, may serve as an example. The production of ‘Gomorra’ (English version
‘Gomorrah’) cost 4.55 million euros. The production company Fandango, along with 01
Distribution of Rai Cinema, 2.55 million euros, integrating the remaining 2 million with
an FUS state contribution in interest account (meaning under the form of loans to be
reimbursed). At the box office ‘Gomorrah’ took 10.2 million euros, which, for Fandango and
its partner 01 Distribution, generated 3.05 million, once the financial commissions had
been deducted, along with compensation for the same 01 for distribution. The investment
also respected the rules which the international entertainment industry conforms to:
equalling, at least, the domestic market income, later followed by further proceeds as the
entertainment product is exported. This also explains why it is not possible to obtain from
the official financial statements of the companies – thereby knowing the true assets of the
sector and its market – any indication of the real business activity carried out and, above
all, in which operational area (whether in participation or not, and eventually, to what
degree). Furthermore, it explains how every eventual consideration of the box office
results, of the economic returns of a specific title, burdening the companies which are its
potential recipients, always end up rather uncertain, slightly suspended in the void.
Despite the fact that the success and the cinema takings, which are more or less in the
millions, of the cinemas are assumed with standard interest of the film and they condition
the exploitation, for the rest of their life cycle, on other consumer platforms.
32
The value system within the cinema sector is the subject of a profound analysis in “Il cinema e la
misurazione della performance” by Giovanni Tomasi (edition Egea, Milan 2004) to which reference
was made for the brief expository description.
| 61
In the costs and proceeds trends taken from the company reports the general,
managerial and financial equilibrium is reflected of a film industry business which is
also the product of the collective comparison, thanks to the public, of produced and
distributed films; however, there is no direct reflection of the genuine economic results
that every individual film generates.
In comparison to the overall takings generated by local cinemas, in general, that specific
operational division is assigned to distribution companies a value of production –
consistent with the exercised rights of exploitation, a net of the eventual promotion costs
met and of the commissions of the traders – including between 20% and 30%. Against the
total earnings of local cinemas of 593.7 million euros, according to the sample report of
Cinetel , and of 669.3 million euros collected by SIAE, the net proceeds obtained by
distribution companies for their characteristic activity within the primary channels of
local cinemas can be placed, therefore, within the range of 120-178 and 133-200 million
euros per year. To this figure, furthermore, can be added the value of secondary channels,
which together are three times superior, a quantity which varies according to the various
segments and the relative, contractual parameters of use.
5. BUSINESS
As far as all of the activities of entertainment, culture and performing arts are
concerned, the cinema has demonstrated itself to be one of the most influenced by both
economic developments and technological innovation. Economic trend cycles reveal that
in periods of stagnation cinema attendance drops dramatically, as in the spring of 2004,
for example, when attendance dropped by 30%. Also in the initial months of 2008,
following a robust recovery from inflation caused by a constant rise of raw quotes,
recreative goods and services revealed a monthly reduction of between 4% and 5% – less
than only one other area, that of the mobility sector, with average decrements of 6% – and
in the specific calculation of the relevant areas those relative to cinema attendance
emerged among the lowest cost figures of January and July.
To the sensible exposition and fluctuating economic cycles the particular typology of the
cinema-going public can be superimposed, where the age group between 13 and 26 years
old dominates, and which, for a number of years, orient part of their resources towards
alternative consumption, principally in telephone communications for the purchase of
new mobile phones, prepaid cards and credit for calls and text messages. A passion for
mobile telephones which, among the young, finds its principle motivation actually in the
evolution on the multimedia level, expressed, primarily, in the entertainment contents
based on sounds and images.
Threatening cinema attendance and takings, technological innovation has, moreover,
introduced a sensible re-conversion of cinema consumption towards alternative forms,
constantly more evolved and functional towards the personalized fruition in real time: with
62 |
TAB. 18
THE BUSINESS STRUCTURE WITHIN ITALIAN CINEMAS
Number and quota
2004*
2005
Numeri
Quote
Numeri
TOTAL
Cinemas
778
778
62.6%
27.8%
779
779
TOTAL
Cinemas
383
-
TOTAL
Cinemas
2006
2008
Numeri
Quote
Numeri
Quote
58.9%
23.3%
659
659
56.6%
21.3%
612
612
54.2%
19.5%
30.8%
-
Between 2 And 4 Screens
403
31.6%
325
26.9%
1.256
41.6%
864
28.2%
327
878
28.1%
28.4%
324
875
28.7%
27.9%
1.180
42.1%
Between 5 And 7 Screens
93
7.3%
69
5.7%
1.256
41.6%
405
13.2%
71
418
6.1%
15.0%
80
470
7.1%
15.0%
TOTAL
Cinemas
82
844
6.6%
27.8%
Multiplex With Over 7 Screens
93
7.3%
103
8.5%
981
32.5% 1.080
35.3%
108
1.132
9.3%
36.7%
113
1.184
10.0%
37.7%
TOTAL
Cinemas
1.243
2.802
100%
100%
1.275
3.016
1.165
3.087
100%
100%
1.129
3.141
100%
100%
2.25
Numeri
2007
Quote
Average Cinemas
Quote
Single Screen
61.0%
713
25.8%
713
TOTAL STRUCTURE
100% 1.210
100% 3.062
2.36
100%
100%
2.53
2.64
2.78
Elaborated from data of Cinetel. source ANEM (Associazione nazionale esercenti multiplex) from “Il cinema italiano in numeri” (20042008) edited by the Ufficio studi/CED Anica.
The data relative to 2004 only register the sum of the complexes with between 2 and 7 screens.
the offers of home video, first in VHS and then on DVD, then with television offers, via
satellite and digital both as pay television and as pay-per-view, finally through the internet
(with streaming videos, downloading and peer to peer sharing) and video mobile phones.
In this sense, business and finance is the sector which seems to be the object of the most
intense restructuralisation process within the whole cinema industry for at least a
decade. This is because in comparison to the evolution of the mix of diffusion channels
(and in spite of its effects), which seems to have put in discussion the centrality of the
demand market and, thereby, the cinema system, business and finance has been and
remains at the centre of a much more complex and profound transformation.
Interpolation, under the aspect of the policies and commercial practices is neither only
a superficial expression; the emerging point of that which could be defined, nevertheless,
as an authentic generational change. In the last 15 years, the apparatus of the cinemas
has changed as far as the types of system of first and second showing are concerned, in
that these have been modified by over 50% and the supply of operational cinemas
(working, that is, 120 days per year) in the complexes which constitute the primary
commercial network – where over 80% of all cinema consumption is concentrated, have
almost tripled. This is a mutation which has brought about, from 1994 to the present,
almost 300 new polyfunctional exercises, in other words multi-screen and multiplex
| 63
TAB. 19
TOTAL OF PRINCIPLE PROJECTION CIRCUITS IN ITALY
Availability of screens
Type of cinema
Single Multiscreen
Screen
Operating Screens
Always
120 days
Other Screens
Total
Less than 120 days Cinemas Screens
Campione Cinetel
Cinema d’essai
Sale parrocchiali
612
828
1,000
517
2
3.141
355
425
500
403
150
1,129
828
1,000
3,141
828
1,005
Totale generale
2,440
519
3.496
925
553
2,957
4,974
cinemas, including 110 of the latter – being those with at least eight stalls – 90 of which
were created as recently as since 2000.
The structures which are considered an effective part of the commercial business do not
exhaust the effective national availability of sites for film showing. Even if there lacks a
complete and definitive overview, in outline certain contours can be reconstructed, unfolding
the (little) data known resulting from the surveys which tend to intercept every small entity.
A further statistic, however, concerns the offer of posts in all of the diverse types of
premises for film projection, without, moreover, any indication of the number – which is
quite significant – of the screens, and in particular whether they are active or otherwise
for more than 120 days (a figure individuated to signal an activity limited only to the
weekends). According to the Italian ‘Osservatorio dello spettacolo’ based on data of the
general management for the cinema of the Ministry for Cultural Heritage, the total
number of posts is a total of 1,300,456, of which 43.26% (523.2 thousand) in single screen
cinemas; 26.79% in multi screen complexes (348.4 thousand); 19.40% in cinema theatres
(252.3 thousand); 9.62% in arena theatres (125.1 thousand); 0.49% in multi screen cinema
theatres (6.3 thousand); 0.41% in arena cinemas (5.9 thousand); 0.34% in ‘drive in’
cinemas (4.4 thousand); plus a further 2.65% which are not specifiable in any specific
sense (34.4 thousand).33
The process which has redesigned the landscape of cinema screening has, naturally,
brought with it a profound re-evaluation of the commercial strategies of the production
companies and distribution companies, accentuating the approach to the more structured
managerial models of the major international groups. This process has, furthermore,
been accompanied by the implementation of all the principle technological innovations
introduced into the sector, a factor which continues today, and for which the expected
effects – as well as, more incisively, in terms of sector policies and the use of resources,
33
64 |
A curiosity: The smallest cinema in the world is found in Italy. The ‘cinema dei Piccoli’, with 63
seated posts is found in Rome inside the Villa Borghese park, and originates from 1934. It was
created by Alfredo Annibali and today covers an area of 71.52 square metres. It was originally
called Topolino. Restored in 1991 it has a screen of 5 by 2.5 metres, with stereo sound and air
conditioning. It is also included in the Guinness Book of Records.
of financial and industrial culture, of organizational choices aside from the integration of
entrepreneurial assets – should unfold in the next season or in the short term.
However, such restructuralization of the commercial network for Italian cinema, in all of
its sizes and its social and economic implications, remains an unpublished phenomenon.
REAL ESTATE INVESTMENT
The development and restructuring of the so-called outlets have been carried out as a
result of the business and finance sector convoying upon itself investments of over 3
billion euros in the last 15 years: an influx of capital (according to the most reliable
estimates, even if they are necessarily approximate in this type of evaluation and for
similar size orders) almost equal to the amount of resources with which all of the
production activity of national films have been financed.
In the footsteps of Great Britain, France, Germany and, even more so, the United States,
the so-called developers have also concentrated their operations of development on the
real estate market in Italy, towards that which is defined as the leisure sector, or rather
of performing arts and all other forms of entertainment. The choice on the part of
investment banks, investment funds, and private equities – precisely, the developers,
the majority of which are of Anglo-Saxon origin and which operate in connection with the
major real estate groups and construction groups – to dedicate 70% of their investment
in projects of this type can be explained, on the one hand (but in a very limited measure),
by the objective opportunity for renewal outlined in determinate activity sectors such as
that of entertainment and, on the other hand, (above all) by pure economic convenience.
In the case of Italy, with cinemas far inferior to the European standard (indicated by the
fact that only 10% have air conditioning), the business desirability of multi-screen
cinemas and multiplexes is expressed for real estate investment in average productivity
of 10.5%, greater, for instance, than the assured profitability from the construction of
shopping centres with a spread of 1.5%, with returns time limited to 5-7 years and now
moving towards the pay-back-period of the United States of 3-4 years.34
This extraordinary influx of money has also permitted the requalification of the business
as a place of consumption. If planning, land, lots division, and construction with basic
services demonstrate a variable incidence between 45% and 60% on total investment, the
plant design for cinemas (sound, projection, lighting, furnishing and equipment) and socalled professional services almost entirely represent the remaining quota, with an
estimated cost per cinema of around 500 thousand euros. The offer of complementary
services remains fundamental: car parks, catering space, large foyers, air conditioning,
34
Symbolically one can recall as an emblematic citation the Furlan circuits of the homonymous
dynasty of impresarios, Safin, Arco Film and Arco Program of the De Pedys family, Ifas, Lucky
Strike of the group Stella, Giometi and Quilleri-Di Sarro of the homonymous family, GermaniPoggi, Fumangalli, Missaglia, Bernardi.
| 65
large screens…All elements which permit the eventual extension of activity of the cinemas
for events, conventions, other shows or forms of entertainment and above all to attenuate
the proverbial seasonality of scheduling and of film viewing which afflicts Italian cinema.
Such elevated financial commitments have also re-styled the map of the principle
projection companies, that 3% of management (1,815 company names) which are under
around 75% of the revenue of the entire sector. The circuits of multi-screen cinemas and
multiplexes that belong to the large international chains or are integrated into the large
production groups, have reinforced themselves even more, thereby being capable of
moving the necessary capital for intercepting projects at the centre of the latest
peremptory development inserting themselves in the investment pool which they have
nourished. (as noted in chapter 7).
Other than constituting the most innovative element of the cinema industry in recent
years and, undoubtedly, being a growth factor for the market, the achievement of the
multiple structures has also contributed to increasing the competitive dynamics of the
sector and, in this sense, the spirit and quality competition of the ‘independent’ national
entrepreneurs has emerged. In time these have understood how to construct solid
circuits with a national character, arriving at the control of from 30 to 50 single screen
cinemas. In alliance with foreign financers or autonomously, they have invested in the
development of their chains, knowing full well the two ‘principles’ inherent in the same
market in which they have developed their activities.
On the one hand, the effect of the mixing and substitution between the diverse cinema
businesses which the multi-cinema model has triggered in consumer choices confirms
that the influential capacity between supply and demand can be reciprocal and
proportional, and not necessarily one way. The first impact hit traditional local cinemas;
the second is of interest to the same multi-screen cinemas of small size. On the other
hand, awareness of the value that real estate property of such a type (and often brought
as a guarantee of new initiatives to undertake) represents, in an absolute sense, as well
as in an enduring fashion. Now, they continue to represent, at the primary level, in the
parterre of cinema managers.35
URBAN AND SOCIAL PROFILE
The progressive erosion of that grand catchments area in the context of competitive
dynamics, which was constituted, until 20 years ago, by single screen cinemas in the
historical centres of the more populated urban areas and in the communes of less than
40 thousand inhabitants, is consistently maturing. According to the most recent
TAB. 20
Data in millions
66 |
“Le Multisale cinematografiche”, part of the research “Multisale cinematografiche e centri
commerciali: potenzialità di sviluppo immobiliare e sostenibilità economica” by Cesare Ferrero
in collaboration with Ezio Poinelli, conducted for ANCE (Associazione nazionale costruttori edili)
and published with the same title by Edizione Egea (Milan 2000)
2004*
2005*
2006
Single Screen Cinemas
88.0 16.4%
77.9 14.2%
15.9 17.5%
14.0 15.2%
Takings
Admittances
116.0
20.6
20.0%
21.2%
Takings
Admittances
217.2
-
37.6%
-
198.6
-
Tra 2 e 4 sale
37.0%
117.0
20.6
Takings
Admittances
37.6
38.4%
34.3
Tra 5 e 7 sale
82.2
37.8%
13.8
Takings
Admittances
244.6
39.5
Takings *
Admittances**
577.8
97.9
2007
2008
78.3
14.1
12.7%
13.6%
63.4
11.4
10.7%
11.5%
21.4%
22.4%
126.4
22.4
20.5%
21.6%
117.4
20.7
19.8%
20.8%
15.0%
15.0%
96.0
16.0
15.5%
15.4%
93.0
15.4
15.7%
15.5%
42.3%
40.4%
Multiplex con più di 7 sale
251.2 46.7%
270.0 49.3%
40.5 44.7%
43.7 47.4%
317.0
51.1
51.3%
49.3%
320.4
51.7
53.9%
52.1%
100%
100%
537.0
90.6
617.7
103.6
100%
100%
594.2
99.4
100%
100%
Totale strutture
100%
547.2
100%
92.2
100%
100%
Elaborated from Cinetel data from source ANEM (Associazione nazionale esercenti multiplex) from “Il Cinema in Numeri” (2004-2008)
edited by Ufficio studi/Ced Anica.
The data relative to the years 2004 and 2005 only register the sum of cinema complexes with from 2 to 7 screens.
**Le cifre relative a incassi e ingressi sono arrotondate alle centinaia di migliaia, pertanto i titoli delle percentuali si possono discostare
leggermente dalla somma del 100% indicata in tabella.
estimates of ANEC (the National Association of Cinema Traders) a good 356 have closed
their shutters for good in as few as the last five years.36
This phenomenon has not gone unnoticed and the chronicles of the local newspapers
refer to it constantly. This is both because part of the discussed phenomenon of the
‘abandonment’ of city centres by traditional services and grass root businesses in favour
of boards, institutions, and firms, in the main banking and finance; as well as on account
of certain sometimes paradoxical aspects which accompany them. An example for each
is the disappearance of every single screen local cinema from the centre of Venice – the
city of cinema festivals.
Conversely, the same context recounts, moreover, how the grand multi-purpose
complexes of the contemporary, technological and innovative cinema, have become an
36
35
MARKET QUOTA: WHO LOSES AND WHO EARNS
The oldest Italian cinema still in use, inaugurated 15th December 1905 and created by the
architect Luigi Bellincioni is found in Pisa behind the Agostini Palace: the Lumiere cinema. On 19th
October 1906 the first experiments with film sound were carried out by professor Pietro Pierini
of the University of Pisa, patented as the ‘Pisa factory of speaking films’ (Fabbrica Pisana di
Pellicole Parlate) under the diction ‘Electronic system for synchronizing of movement’ and, later,
following technical improvements as ‘Isosincronizzatore’.
| 67
irreplaceable (and already, therefore, questionable per se) element of the urban
landscape. Their planning, sometimes within the context of and within the creation of a
pole of services created and set around a shopping/commercial centre, has become part
of the administrative local planning and of the interventions programmed for redesigning
the landscape and to requalify entire points of the urban belt or of the suburbs.
The structures of the new generation are total real estates of 30-40 thousand square
metres, of which, normally, 25 thousand are for parking, with a volume of 50 thousand
metres cubed of construction, with a covered area of at least 4,500 square metres plus
another 1,500 of flooring, demonstrating that such new structures are, therefore, a
formidable instrument of urbanization. Created according to parameters which have
become a benchmark of reference, thanks to the first organic projects of Italian architects
like Renzo Piano adopted overseas until the beginning of the 1980s, they are,
furthermore, furnished with bars, ice-cream parlours, pizzerias, music shops and other
spin offs, they host conventions, demonstrations and shows, maintaining the attendance
of at least 6 thousand persons.37
From the simple local cinema to the shopping centres of modern cinema they have, in
substance, substituted those places of social aggregation, primarily for adolescents and
young families in traditional cinemas of city centres and have fully entered into the social and
urban policies of the public administrations as well as in the lives of entire communities.
TECHNOLOGICAL INNOVATIONS
In this evolution the role of technological innovation should also be included.
Technological innovation always renders the film experience more sophisticated among
the cinema complexes of the latest generation, otherwise known as the multiplexes.
37
68 |
As a benchmark reference for European multiplexes certain followed parameters in the creation
of recent structures are reported (to 9 screens for a total of 2,500 posts) in Italy. Screen surface
area: 667 square metres. Unit area for seating: 2.4 metres squared. Average posts per cinema
hall: 250 for inferior cinema halls. Box office: computerized and digitalized. Parking: an average
car space for every 2-3 rows (however, recent trends are even more demanding: a car space every
2 rows. Surface area for parking: 25 square metres including manoeuvre space. Equipment for
internal services: from one to three bars, always positioned before the ticket inspection zone.
Diverse commercial space: two or three for the sale of gadgets, film spin offs, posters, sweets.
Catering: from one to three businesses, according to architectural size and conformity and, above
all, the demand in the immediate vicinity. Seating: 70 – 90 centimetres, with at least 120 cm leg
room. Slope of seating floor: (high slope permits optimal vision): up to 20% is obtainable without
structural or functional problems; beyond that much leads to entrance and exit problems, with
an increase in costs. Cinema Planning: The most common is rectangular (cinema halls, by now,
tend to develop in terms of size rather than length); the present normative permits rows with a
maximum of 20 posts. Format and development of the structure: horizontal construction prevails;
vertical developments are actually more expensive but, nevertheless, are justified by the presence
of elevated area costs and size restrictions.
Informational Communication Technology has taken space away from business and
finance, thereby opening new avenues for consumption. It is, in substance, united with
management in the defence of that consumption mode – public viewing – which
represents a plus. The ongoing competition between the chemists of celluloid and the
bits of digital technology presents itself as economically decisive, but also complicated
in the interrelationship between sets, editing studios, laboratories for post-production
and places for film projection. Even today there does not exist a single film,
notwithstanding the fact that it may be traditionally made, that does not contain within
its master-copy the result of certain digital interventions.
Bits have entered into the celluloid world through special effects and such contamination
has never stopped. Ever since George Lucas filmed “Star Wars Episode II – Attack of the
Clones” in 2002 the first completely digital film, the erosion of traditional celluloid has
continued without end and now the star system of Hollywood is lending its technology to
videogames. Whilst the major international companies and the information technology
multi-nationals (Microsoft, Apple, Texas Instruments, Sun, Oracle etc) are pushing
towards the channelling of products on the domestic scene which Sony (with its Blue
Ray DVDs, perfected for the ultra-flat, high definition television screens in LCD and in the
interactive version BD live), Philips, Panasonic & Co are constantly developing and
refining, the large producers of systems of cinema filming and screening, such as Kodak
and Fuji are already in the third generation of digital products.38
Nevertheless, the cost cuts estimated for digital productions are of the order of 20% to
30%, and the technology – which transfers the focus of film production from the moment
of live filming to that of post-production – indubitably permits an increase in creativity.
Within the business a mixture of opportunities appears analogous. Using the transmission
of films via satellite the logistical costs are significantly lowered: the traders no longer pay
for the printing of rental copies nor for their transportation and insurance (the only cost
which rises is the investment in projection units which have DLP cinema technology, 4K
or 8K, having a price of around 100 thousand euros), whereas the flexibility of the entire
system is increased, allowing it to serve, in real time, every structure – even in the most
distant or poor quality cinemas – and to manage scheduling more autonomously, up to the
point of having, for example, more film titles to screen within a single day.
The “packet” also includes publicity films, with a saving for investors of 65% thanks to
the elimination of the dumping onto film of commercials and Walter Villane, absolutely
one of the most important circuits, is completing the digitalization of publicity space for
the 172 screens of his 17 multiplexes. Sony Pictures Releasing, the groups’ distribution
company, in the mean time is preparing to offer an extension of digital applications with
38
The first company to digitally produce a film in Italy was Intelfilm as early as 1998 with “Due volte
nella vita” , a dark comedy by Emanuela Giordano with Lorenza Indovina, Antonio Manzini, Dodi
Conti and Neri Marcoré.
| 69
cinema projections of important events – such as concerts and sports competitions – in
live, simultaneous projections.
In Italy, the first and unique experience in this respect has already been in operation for
a number of years, the result of the collaboration between ACEC (Associazione cattolica
esercenti cinema – the Association of Catholic Cinema Traders) and other private
investors (Strategia Italia Sgr, Piemontech, Club degli Investitori) which, with the
technological support of study centres and research by Rai in Turin have, in joint venture,
created Microcircuito, a network of 27 cinemas found primarily in North Italy which make
available a total of 8 thousand posts.
D-cinema seems to still have, in sum, business and finance in its future, despite already
moving towards 3D and stereoscopic vision, in other words vision through spectacles
thanks to which the images seem to float in the cinema before the viewers. Technological
innovation is, by now, also applied without problems to full length feature films and the
proposed titles with this technology are in constant increase, just as the multiplexes
which are being equipped as a result (in Italy, for the time being, there are 40 such
cinemas, belong to the circuits of Cinecity, Giometti and Arcaida).39
PUBLIC INCENTIVES
The investments which have led to the development and requalification of business and
finance have also been maintained thanks to public support. For a number of years the
programme of intervention of FUS – Unique Fund for the Performing Arts – administered
by the minister for cultural heritage and cultural activity allocates resources for the
business companies aiming to “produce new cinemas, restructuring existing cinemas,
and the structural and technological adaptation of implantations”, conceding capital
contributions (based on the type and dimension of the interventions) or on behalf of the
interests in reducing the total burden of contractual loans for financing the work of
restructuring, with increasing maximum amounts for the increase in number of screens
for each interested complex.
Alternating between the one and the other, the two forms of incentives foresee a
supplementary organization when they concern the activation of projection complexes
in areas with less than 10 thousand habitants or rather the transformation into multiscreen cinemas in areas with less than 20 thousand habitants: with the intention of
favourably promoting the diffusion of national cinema against the prevalent influx of the
major foreign companies. In both cases the cinema manager is obliged to schedule a
determinate number of Italian films or European productions.
In 2007 3 million euros were assigned in contributions in favour of 52 restructuring
interventions. – with an average amount of 57.7 thousand euros – out of 300 requests
39
70 |
Dedicated to the effects of the diffusion of digital technology within the cinema is “Il cinema
nell’era virtuale” Olivares Edition, (The Virtual Life of Film) by David N.Rodowick.
presented with a gross investment value of little more than 5 million. To access the
contributions on account of interests for lowering the service costs of the debt a mere 15
requests have been advanced – “that typology is scarcely used” explains the annual
report of the same FUS – of which only one has been accepted (the report does not
indicate, however, the measure of tax breaks).
TAB. 21
ITALIAN FILMS AND FOREIGN COMPETITION ON THE CINEMA MARKET
Film nationality
Titles
Quota
Italy 100%
Coproductions
Italian total
Europe
United States
Other nations
Overseas Total
General Total
-
-
Takings in euros
Quota
Attendances
Quota
2004
80,855,906
36,474,915
117,330,821
62,895,766
357,562,945
39,745,511
460,204,222
577,535,043
14.0%
6.3%
20.3%
10.9%
61.9%
6.9%
79.7%
100.0%
20,070,754
60,064,219
77,802,000
97,872,754
20.5%
61.3%
79.5%
100.0%
18.7%
6.0%
24.7%
19.6%
53.8%
1.9%
75.3%
100.0%
22,500,963
68,052,078
90,553,041
24.8%
75.2%
100.0%
2005
Italy 100%
Coproductions
Italian total
Europe
United States
Other nations
Overseas Total
General Total
-
-
100,336,324
32,190,191
132,526,515
105,938,522
287,759,577
10,296,906
403,995,005
536,521,520
Italy 100%
Coproductions
Italian total
Europe
United States
Other nations
Overseas Total
General Total
209
89
298
242
330
90
662
960
21,8%
9,3%
31,1%
25,3%
34,3%
9,3%
68,9%
100,0%
111,967,460
23,335,199
135,302,660
61,359,943
338,412,621
11,309,788
411,082,352
546,385,012
2007
20.5%
4.3%
24.8%
11.2%
61.9%
2.1%
75.2%
100.0%
18,890,686
4,161,018
23,051,704
10,669,983
56,491,668
1,900,627
69,062,278
92,113,982
20.5%
4.5%
25.0%
11.6%
61.3%
2.1%
75.0%
100.0%
Italy 100%
Coproductions
Italian total
Europe
United States
Other nations
Overseas Total
General Total
195
73
268
234
31
68
61
887
22,0%
8,2%
30,2%
26,4%
35,8%
7,6%
69,8%
100,0%
166,134,716
29,384,162
195,518,878
71,615,253
342,131,463
7,823,729
421,570,445
617,089,323
26.9%
4.8%
31.7%
11.6%
55.4%
1.3%
68.3%
100.0%
27,094,310
5,137,339
33,041,649
12,270,057
56,812,191
1,376,053
70,459,201
103,500,850
26.9%
4.9%
31.8%
11.8%
54.9%
1.3%
68.2%
100.0%
continued
2006
| 71
continued TAB. 21
Film nationality
TAB. 22
Titles
Quota
Takings in euros
Quota
Attendances
Nation
2008
Italy 100%
Coproductions
Italian total
Europe
United States
Other nations
Overseas Total
General Total
214
74
288
196
300
61
557
845
25.3%
8.7%
34.0%
23.2%
35.6%
7.2%
66.0%
100.0%
164,204,765
7,627,275
171,832,040
58,141,618
357,678,917
6,049,645
417,870,180
589,702,220
27.7%
1.3%
29.0%
9.8%
60.2%
1.0%
71.0%
100.0%
27,715,086
1,374,435
29,090,521
9,914,053
59,224,299
1,074,683
69,313,035
98,403,276
27.9%
1.4%
29.3%
10.0%
59.6%
1.1%
70.7%
100.0%
Information source: “Il cinema italiano in numeri” (2004-2008) edited by the Ufficio Studi/CED Anica.
Another part of the resources re-enters in the area of support interventions for the
initiative of the promotion of Italian cinema and exclusively regards the exercises
recognized by the general directors of MiBac as art films (a category also extended to
parochial church cinemas). The concession of assistance – in capital accounts, that is
free grants – tending primarily to maintain the activity in the name of the attention
dedicated to the diffusion of quality cinema and regarding unitary amounts of a meagre
figure.
In 2007 788 supplies out of 834 received requests – on the part of practically 50% of all
the potential destinations – of which 788 were collected with the assignment of 2.84
million euros, for an average unitary amount of 3,611 euros.
CASH TAKINGS
At the macro level the development of the sector obviously depends on the choices of
the public towards film consumption and the interest raised by the films which, every
season, cinema production puts into circulation. In the first case, for example, the
frequency of Italian film attendance reveals itself to be not particularly high in respect to
other developed markets such as the United States (being first, with a cinema entrance
index which is double that of Europe) or the other principle European nations. In the
second case, however, the repercussions depend upon both internal and external factors:
the predomination of American productions exercises a rather homogenous influence
with its first releases onto the various markets, whereas national cinema – in second
place as far as importance is concerned – can effectively mark out the takings trends in
relation to the popularity expressed by the viewers as regards the latest releases
proposed in the course of a year. The sector of business and finance appears, in
substance, to have no determining role in the film industry as a whole (cf. table 22)
Nevertheless, the decisive catch area does belong to the business and finance sector
because the viewer base is that of the first instance, where the first economic returns for
the whole sector and its employees matures, as a consequence influencing the
72 |
TICKETS SOLD IN RELATION TO WHOLE POPULATION
Quota
France
United Kingdom
Germany
Italy
Spain
Millions of tickets
178.1
162.4
125.4
114.3
112.2
Population in millions
58.7
58.2
82.4
57.2
39.8
Entrances per habitant
3.03
2.79
1.52
1.99
2.81
Elaborated on data from MPPA (Motion Pictures Association of America) for the United States, and EAO (European Audiovisual
Observatory) for the European Union and SIAE (Società italiana autori ed editori) for Italy.
acceptance and the economic success of the motion picture also in other distribution
channels and other consumer platforms (table 23.)
The question is how many resources divide the business and finance sector from the
other areas of the cinema industry? The calculation is complicated by the incidence of
innumerable variables and it is only in an indicative manner that an outline of the division
of proceeds can be stated, an outline which sees the film projection sector issuing 40.4%
- 42.2% of how much collected from the public to the distribution sectors and then those
of production. However, as far as the interest quota is concerned it arrives at between
45.7% and 47.5%, from the moment that the box office gross earnings have had both 10%
VAT and 2.10% SIAE royalties (for the creators of the film) deducted.
The net proceeds from the cinema takings for the managers of cinemas and multiscreens can, therefore, be estimated as averaging around 245 million euros according to
Cinetel reference data and 276 on the basis of SIAE official registration.
The turnover of the management companies corresponds, in reality, to that which in the
cinema environment is usually defined as “net bordereau” whose elaboration is,
furthermore, the result of a series of variables which render an average reference
estimate for all of the companies uncertain. On the basis of agreements and occasionally
undersigned licence contracts, the final sum relegated to distribution companies is
calculated in percentage of the net proceeds of the business – deducting, in other words,
author royalties and VAT arriving at around 43%-44% – in function, however, of the week
of ‘tenure’ (for those succeeding the first of the scheduling a progressive scale of
percentages is applied), of the mix of involved distributors, of the insertion, or less, of
titles for projection in a pre-prepared ‘packet’ of films to rent only as a block and so on.
This rental commission, which for traditional cinemas located in city centres often arrives
at 46%-48%, is, however, one of the lowest levels in Europe. France and Belgium, for
instance, do not go below 46%, whereas Spain arrives at 49%.40
40
The economic impact of the times of retrocession of the rental commission compared to the
everyday running of trader income does not appear irrelevant: the distributor invoices their
payment on a weekly basis and the payment is made within 21 days.
| 73
TAB. 23
WHERE ATTENDANCES AND TAKINGS ARE CONCENTRATED
Takings in thousand of euros
2006
Attendances in thousand of euros Complexes
Screens
2007
Complexes
Screens
2008
Complexes
Screens
AVERAGE TAKINGS
Average attendance
109.3
19.7
Single Screen
109.3
118.9
19.7
21.4
118.9
21.4
103.5
18.7
103.5
18.7
AVERAGE TAKINGS
Average attendance
360.2
63.6
Between 2 and 4 Screens
135.5
385.1
23.9
68.2
143.3
25.4
362.3
63.9
23.7
23.6
AVERAGE TAKINGS
Average attendance
1.191.7
200.5
Between 5 and 7 Screens
203.0
1.351.5
34.1
225.2
229.5
38.1
1.163.1
116.8
197.9
32.8
AVERAGE TAKINGS
Average attendance
Multiplex with more Than 7 Screens
2.620.8
249.9
2.935.8
424.3
40.4
473.3
280.0
45.1
2.835.6
458.1
270.6
43.7
199.8
33.5
526.3
88.0
189.1
31.6
AVERAGE TAKINGS
Average attendance
452.2
76.2
Total Structure
178.7
529.9
30.1
88.9
parallel businesses have a value of over 77.3 million euros: 3.6 million for publicity and
sponsorization and a good 73.7 for all of the other services. This means that to the gross
income of the ticket offices under their responsibility, cinema traders can add a further
20% turnover which is solely theirs and is such as to increase the value of the sector’s
total production – on the basis of available estimates – to 465 million euros.
Elaborated from data Cinetel of source ANEM (Associazione nazionale esercenti multiplex) from “Il cinema italiano in numeri” 20062007-2008 of the Ufficio Studi/Ced Anica.
Two other factors are involved when we consider the profitability of the sector. The first,
clearly, concerns the incidence of structure costs (season tickets and tickets amount,
for instance, to 1%) as well as maintenance, staffing, marketing, cleaning, and so on.
The second is linked, however, to the area of collateral business, such as publicity (the
contact value is 0.30 – 0.50 euros per viewer, plus a minimum guarantee), the telephone
or internet booking services (from 0.50 to 1 euro per ticket), restaurant or catering
services which can gain a 25% turnover profit added to the box office takings (the
average spending is 1.3 to 1.7 euro per viewer; the profit margin on soft drinks is equal
to 25%, that of popcorn 8%), the rental of cinemas for events or conventions (increasing
the total business volume by 10%), the management and location of eventual sales
outlets and so on.41
According to the surveys of SIAE, which also observes such activity in as much as it is
considered an integral part of entertainment sites and paid for representations, the
41
74 |
A part of this information is dealt with in the research “L’economicità e le determinati di risultato
nelle strutture multiplex . Aziende di esercizio cinematografico o società di real estate?” by
Giuseppe Delmestri, Luigi Proserpio, and Giovanni Tomasi of the Bocconi University of Milan
Cinema Laboratori, promoted by the regional Union in Lombardy of AGIS (Associazione generale
italiana dello spettacolo) in collaboration with the region of Lombardy.
| 75
Part Three
Artists and the Market
Work and Capital
CHAPTER 4
“ITALIAN CINEMA?
TWO ROOMS PLUS A KITCHEN”
Maurizio Porro,
film critic of Corriere della Sera
Companies
and private enterprise
he most appropriate image to capture the panorama of Italian
cinematography brings to mind one of the most suggestive and noted long
takes in the history of the national cinema: that in which Sergio Leone opens
Once Upon a Time in the West, with the camera lens first being pointed inside
the waiting room of a tiny wooden railway station to reveal the two
protagonists, then exiting from the window to frame from above all of the surrounding
area, further and further out with an increasingly vast horizon – vast enough to render
the main setting of the opening scenes almost indistinct.
If one attempts to reconstruct the sector from the point of view of supply – in which all
of the companies, the firms and the workers are the protagonists – one finds oneself
dealing with a universe so fragmented as to seem pulverized. The resulting image is
far removed from the descriptions that the traditional repertory of analyses
(schematically presented in only a few large United States companies and in a certain
significant, albeit much smaller, number of Italian producers and distributors) by now,
almost with resignation, has taken for granted. Whilst it is true that the market makers,
as suggested by their own definition, carry the major part of the demand (and at the
same time dominate the flow of supply), nevertheless, it is the consistency of the
T
complementary or subsidiary market and the extension of the marginal or residual
market – the so-called “rest of the population” – that represent the constitutive features
of cinematography in Italy, indicating the nature, quality, size and, above all, fixing the
confines of the market.
To come to a satisfactory definition of the every aspect of the whole sector, is, therefore,
a necessary condition to describe, in every detail and as coherently as possible, its real
current identity.
The main features of the few studies so far carried out on the demand market do not
offer, as seen in the previous chapter, valid contributions for selecting a research area
to explore. As well as reconstructing a census of vital statistics, already in itself difficult
and not easily accessible, there is the need to trace the values of all the activities carried
out and their property and administrative contents, all necessary for evaluating, from an
economic and financial standpoint, both the single and comprehensive profiles of the
various operators, both within the diverse sectors and within the whole market. Our
ultimate intention then is to outline a reliable assessment of collected and invested global
resources and a picture of the existing equilibrium between employment and total
earnings and the problems of verification regarding, in successive order: the quantitative
census of effectively active subjects, their anagraphical identification, research on their
respective accountancy elements and therefore the classification and analysis of data
rendered available.
1. Available data
The lack of knowledge, in reality, is not absolute. A preliminary but nonetheless reliable
source for consultation is ‘ENPALS’, the national board of welfare and assistance for
workers in show business and in sport, in the role of which figure all of the companies
that sustain with staffing costs (including owners registered on the payroll) the obligatory
payments to the state for healthcare and pensions and the intervention of the state for
workers in financial difficulty. According to the most recent report on the actuarialstatistical coordination of public institutions the contributing companies on 31st
December 2007 were a total of 25,872, subdivided into eight categories: music (5,742), the
theatre (2,381), radio and television (1,430), entertainment and various performing arts
(6,606), sports institutions (4,358), professional sports players (222), other unclassifiable
activities of various types (1,613) and cinema with 3,520 companies – up from 3,288 in
2004, 3,241 in 2005, and 3,471 in 2006 – active in eight areas: stabilizing production;
production enterprises; various productions; development and the media; dubbing;
distribution and rental; exclusively cinematographical enterprises and more general
cinematographical enterprises.
A second source of reference is FUS – ‘Fondo unico per lo spettacolo’ (unique show
business fund) the instrument of incentives with which MiBac – the Ministry of cultural
80 |
assets and activities – divides the allocated contributions every year in order to sustain
activity within the areas of music and opera, as well as dance, theatre, show business,
travelling performances, and cinema (as far as the latter sector is concerned the
requests for financial assistance presented in 2007 were a good 1,931: 702 from
organizations, establishments and associations and 1,229 from companies involved in
production, circulation and enterprise). The recapitulative reports of the fund
management permit us, for instance, to ascertain that from 2000 to today the turnover
of requests for access to public tax breaks – considering only full trade names and
excluding those who in the past have represented other requests and independently of
those whose subsequent acceptance of the request for assistance has been conceded –
has, on the whole, been little more than 3.5 thousand diverse companies and
cooperatives. Aside from the demographic aspect, what counts is, nevertheless, the
actual description offered. This description, in fact, deals with 97% small companies and
their numerical strength signals that which is the real operative and “environmental”
context of the national film industry.
It is, moreover, possible to carry out further verification of vital statistics in the archives
and digital databases of private publishing companies, marketing firms and IT
specialists. This is the case with the historical “Annuario del cinema italiano &
audiovisivi” (Year-Book of Italian Cinema and Audiovisuals) founded by Alessandro
Ferraù; and also with “Trovaset” of Star Edizioni; or of “chi è” on the internet site
cinemaitaliano.info, or indeed of the analogous Who’s Who (which is also available online)
set up by Filmitalia – the company of Cinecittà Holding which deals with the overseas
promotion of Italian cinema1. These are practical and certainly invaluable tools for those
operating in the sector – thanks to a wealth of registration data that confirm the extent
1
“Annuario del cinema italiano & audiovisivi” in the edition 2008-2009 (number 57) reports the indications of around 2 thousand companies: 306 of television and cinema productions; 134 for distribution; 1000 for business and finance; 144 for technical means; 91 for services; 87 for
post-production, 72 for communications and graphics, 53 for dubbing, 90 for artistic agencies of representation, 47 for casting, 42 for photography studios, 22 for development and printing and 17 for
product placement, as well as 4 thousand actor and director records, 315 for foreign artists and 2200
of films produced in Italy from 1985 to 2007. ‘Trovaset’ lists 15 thousand operators, divided into 200
professional categories, of cinema, television, publicity and audiovisuals in general. In the ‘Who’s
Who’ of cinemaitaliano.info there are 1,266 companies and organizations of production (among
which 489 are active only in the area of documentaries), 78 producers of home video, 186 distributors for cinema circuits, as well as 389 producers (in the sense of persons), 109 companies which
are involved with foreign sales, 157 printing offices and 285 organizations (230 of which are Italian
at the national, regional and communal level, plus 55 foreign companies), classified for received
emanations to various titles of subsidizing for production of films and, above all, of documentaries.
The online repertory of Filmitalia numbers 668 production companies, 119 involved in international
co-productions and 107 of distribution, plus 45 representation agencies (on the mandatory power
of film makers) or promotion. (Last consultation of internet sites:31st March 2009).
| 81
and real composition of the cinema system. However, sources of this type do not
legitimately conceive and permit the user to draw on added information aside from
simple names and logistics.
On the other hand, not even recourse to category organizations is enough to give a wholly
reliable picture. Although there are a high number of associations of film makers present
in Italy they do not unify all of the operators within the sector and their representation,
rather than being general, appears circumscribed (for some observers, being the
expression of a limited and highly homogenous group, these associations seem to
assume some of the characteristics of corporatism). Practically none of them publish
the names of the persons enrolled, few declare the real number of members and the
vast majority limit themselves to offering “official” and general data concerning the
amount of production and the directors of associated companies, without considering
the more significant issues.2
2
82 |
ANICA – the Italian ‘Associazione nazionale industrie cinematografiche audiovisive-multimediali’
(National Association of Cinema,Audiovisual and Multimedia Industries) is the most consolidated
and forms a part of (through the federal organization ‘Sistema cultura Italia’) of ‘Confindustria’
(the Italian version of the Confederation of British Industry), the major national organization of private entrepreneurship. It is the signatory of all trade union agreements and national work contracts of the sector even if configured with a type of structure that can be assimilated to that of
second order organizations, with specific sectors where the operators of diverse areas converge:
film studios, distribution companies, so-called technical companies (development and printing,
film studios, means rental, post-production audio and video, transport); the companies specializing in short films, publicity and documentaries; the companies of multiplex management, which,
in this case, (they are the major 11) have given legal personality to their re-grouping: ANEM –
Associazione nazionale esercenti multiplex (National Association of Multiplex Trading). This primarily represents the operators of large and medium sizes – including major foreign companies,
Mediaset and the public groups RAI and Cinecittà Holding – for a contribution to the sector in
terms of business volume and of employees greater than 60% as opposed to a numerical consistency that is estimated at less than 20%. For production it is also necessary to count API – Autori produttori indipendente (Independent producers and authors), with 29 members, APT –
Associazione produttori televisivi with 11 members, APE – Associazione produttori esecutivi with
13 principle elements of the industry and for distribution Univideo – Unione italiana editoria audiovisiva (Italian Union for Audiovisual Publishing), which, with 66 company affiliates claims to represent 90% of the home video market (among the adherents one again finds the major United
States, and Japanese, companies as well as the major national operators from RAI and Medusa
to Mondadori and RCS, from De Agostini and Hachette to Filmauro, Mondo TV, Istituto Luce and
the like) whereas the minor operators are included in UNIDIM – Unione nazionale imprese distribuzione multimediale. Other factors in the field of business and finance include ANEC – Associazione nazionale esercenti cinema (National Association of Cinema Traders) which principally
involves the management companies of single and multi screen cinemas; ACEC – Associazione
cattolica esercenti cinema (Catholic Association of Cinema Traders) which includes 1,050 much
sought after cinema halls (but not all) which are generally parochial and FICE – Federazione italiana cinema d’essai (Italian Federation of Arts Cinemas) with 450 of the other thousand active
structures.
2. Research concerning economic data
As difficult as it is, the possibility of accessing various aspects of reliable, statistical
data directly takes one to the possibility of using homogenous and linear measures
concerning all of the various activities of the whole sector and of the identifying
elements that permit the analysis of the dynamics and values of the market in relation
to the specific sectors and their respective employment staff, and, above all, to judge
their economic results in relation to their nature, origin, characteristics and the
company typology of the various groups and business categories rather than the single
reality of the companies and of the most important operators with the greatest
strategical influence.
In this direction the richest and most complete source to draw on for research into the
evaluation of economic and financial results offered by the companies and firms of every
system of production in the country is found on the database of Cerved Business
Information. On this database both material documents of the Italian Chamber of
Commerce (statistical data and annual balance sheets) as well as the reclassification
and elaboration carried out by Cerved on that data are memorized on the databank
‘Infocamera-Telemaco’.
The trade names of all the companies found on national territory are subdivided into
groups of ten ‘macro sectors’ on the basis of their activity. Incorporated into each ‘macro
sector’ are various other sectors similar to diverse and more homogenous operative
sectors which are, in turn, subdivided into still more specific sectors. On the basis of this
classification, which was given the title ‘Ateco’ and in operation up until 2008, the macro
sector being referred to is number 92 “Attività ricreative, culturali e sportive”
(“Recreational, cultural and sports activity”) in which are included the companies of the
cinematography sector – to be more precise “Produzione e distribuzioni
cinematografiche e di video” (“Production and circulation of film and video”) with code
92.1 (given that 92.2 is dedicated to television “Attività televisive”) – divided, in turn, on the
basis of the purposes and aims indicated in their respective social statutes into:
• Cinematographical production and video (92.11);
• Cinematographical circulation and video (92.12);
• Cinema projection (92.13).
It appears that this registration could only be adapted in part to the realities of the Italian
film industry, in virtue of the interrelations which have developed in time – above all with
the influence of technological developments – with other “adjoining” activities, just as the
same cinematic service-products can have diversified uses often linked to other types of
business, to the point of falling into diverse categories. In large measure pre-production
and post-production services provided by companies, considered, for example, by Enpals
as falling within the cinema category, do not fall within the classification of Italian
Chamber of Commerce code 92.1. The fact that a part of the companies of the sector
92.1 do not carry out only activity of production, edition, and circulation but also work in
| 83
other colligated markets: in particular in terms of general video products, is also not
excluded.
For this reason, in the same ATECO cataloguing it occurs that the total number
summarized in section 92.1 never exactly corresponds – always in excess – to the
numerical sum reported in the corresponding entries of the three single sub sectors. It
is always for this same reason that the ATECO classification of economic activities was
recodified in conformity with the statistical classification of economic activities in the
European Community commonly referred to as NACE and in effect from 1st January 2009.
Thereby a new macro sector 59 “Servizi di informazione e comunicazione” (Information
and communication services) was created and in which are found sector 59.1 “Attività di
produzione cinematografica, di video e di programmi televisivi, di registrazione musicale
e sonore” (Cinema production, video, television programme, musical and audio recording
activities) which now refers to five different sectors:
• Film, video and television production activity (59.11);
• Cinema, television and video post-production activity (59.12);
• Film, video and television circulation activity (59.13);
• Film projection activity (59.14);
• Audio recording and musical publishing activity (59.20).
In all likelihood the announced reform will have little prospective for improving the
transparency of the actual ‘core business’ of the companies (the sector of activity to which
they belong, the type and destination of the products and the services), nevertheless, it
has been evident for some time that a large number of companies set up to work in the
cinema sector have preferred to work with clients from the television system.
The picture that emerges on the basis of the ATECO codification , in force up until 2008,
substantially remains the basis for studies which are useful for clarifying, with a
satisfactory level of reliability, the confines, dimensions, economic value and operational
segments linked to the sector and which function to evaluate the real protagonists. It
represents a starting point, a first step (worth repeating) with the objective of defining the
market supply and productive system of the film industry in Italy; valid – before a process
of multimedia integration in full course and with the evolution of digital technology
reaching maturity – for elaborating also the role, contents, and new values that the
national cinema is starting to represent.
The first element of analysis of the actual state of the sector and of the classification of
its general magnitude is summarized in the table below.
At first glance the magnitude of the numbers is surprising (almost 9.9 thousand
registered companies and a further 9000 companies active in the sector). However, they
do necessarily demand profound consideration, in common with the whole company base
of economic activity in the country. In general, a large part of the company names
registered by the Italian Chamber of Commerce, are not companies with continuous
activity. This circumstance is well adapted to the particularities of film production; above
all to that of smaller companies, as demonstrated by the alternation of works carried
84 |
TAB. 1
CINEMATOGRAPHICAL COMPANIES ACTIVE AND ENROLLED ON THE BUSINESS REGISTER
Number of cinema
and video companies
Operating companies
2001
2004
2007
Variation
2007 SU 2001
Registered Companies
2001
2004
2007
Production
Distribution
Screening
2,971
314
1,459
5,625
574
1,856
6,410
529
1,815
+115.7%
+ 68.4%
+31.8%
3,480
372
1,533
6,108
641
1,939
6,997
598
1,924
Total Sector *
4,889
8,403
9,071
+ 85.5%
5,467
9,084
9,887
Elaborated from data of Infocamere-Cerved.
* As already shown, the values calculated by Cerved and referring to the whole sector do not express – due to the objective difficulty in
classifying certain activities – the numerical sum of the specific data that the same Cerved attributes to three single.
out over time by the thousands of companies proposing themselves for public financing,
a fact affirmed in the documentation of FUS (Fondo Unico per lo spettacolo).
Almost always, from the moment that new entrepreneurial initiatives are started, the
foundation of the companies destined to carry out those initiatives is formalized; often,
however, the project remains on paper – for relatively long periods and sometimes even
permanently – and therefore the formal registration of the company is requested by its
promoters and is invalidated or autonomously becomes null and void (and the same
cancellation request is, in turn, ratified and dealt with years later). Very often then, after
an initial operational period, a large number of companies drastically reduce their
commercial commitment, for a host of diverse reasons, or literally enter into a state of
dormancy, waiting (according to the best intentions and hopes of their founders) to once
again become operative. It would therefore appear comprehensible that enrolment on the
register, to avoid repeating in future the administrative and bureaucratic practices that
legally serve for setting up an activity, continues to be renewed in the majority of cases.
These circumstances entail that the Chamber of Commerce census (relative only to acts
TAB. 2
DISTRIBUTION OF COMPANIES IN TERMS OF LEGAL FORM
Corporate trade name
of activity
Total
Sector
2007
New
Production
film and video
2007
New
Circulation
film and video
2007
New
Cinema
screening
2007
New
SpA (Joint Stock company)
1.9%
Srl (Private Limited Company) 40.3%
Other limited Companies
6.3%
Limited Companies
48 .5%
0.2%
17.6%
4.2%
22.0%
2.0%
39.8%
6.0%
47.8%
0.2%
18.2%
3.5%
21.9%
3.2%
63.3%
5.7%
72.2%
0.2%
0.0%
33.2%
33.4%
1.4%
28.6%
6.9%
36.9%
0.0%
12.8%
10.3%
23.1%
Partnerships
Sole traders
Other Forms
Privately held Companies
15.0%
32.6%
3.9%
51.5%
8.6%
63.3%
6.1%
78.0%
13.6%
38.0%
0.6%
52.2%
9.0%
67.9%
1.2%
78.1%
14.6%
12.3%
0.9%
27.8%
33.3%
33.3%
0.0%
66.6%
21.6%
24.4%
17.1%
63.1%
2.6%
17.9%
56.4%
76.9%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Total
Data provided by Cerved up until 30th September 2007.
| 85
of enrolment) normally shows a relatively broad overestimation of company names
actually operating in the sector.3
3
86 |
They are not joint stock companies the individual proprietorships and partnerships. An individual
proprietorship has a juridical subject which is a physical person who answers to the eventual company shortages with their own assets. Such a company, therefore, does not enjoy patrimonial autonomy: if it is declared a failed company, also its management are considered failed. As far as
fiscal taxes are concerned, the income of the company is subject to IRAP (Imposta regionale sulle
attività produttive – Regional Tax on Productive Activity) and IRPEF (Imposta sul reddito delle persone fisiche – Income Tax on Individual Persons). There exists, furthermore, simplifications relative to the accounting that financial administrations concede: for example, the simplified
accounting which consists solely of VAT. These are conceptually similar to the individual proprietorships of family businesses (formed by 51% family heads and 49% relatives) and those which
are conjugal (formed only by husbands and wives). Partnerships are characterized by an imperfect patrimonial autonomy, that is in which the property of the company is not perfectly distinct
from that of the associates, against which creditors may take legal action (if the company property
is not sufficient) also from the property of an associate. One can have a ‘simple company’ in the
case in which it is not necessary to perform commercial activity, however, there is the necessity
to manage an activity (agricultural or professional, such as, for example, an associated studio); an
unlimited partnership in which all of the associates are equally responsible and with all of their patrimony of obligations of the company or a limited partnership in which the associates who are
general partners respond in the same foreseen measure for the company in the name of all associates, whereas the associates which are limited partners respond, in a limited sense, to conferred capital. In all three cases there is no need to enter a minimum of capital, however, it is
necessary to arrange a constitutive act and to draw up a balance sheet (which, however, need not
necessarily be deposited – as occurs in the vast majority of cases – in the register of companies).
The joint stock companies, however, are subject to their own juridical person and enjoy perfect patrimonial autonomy (their property is distinct from that of their associates). The recognised forms
from Italian rights are: società a responsibilità limitata (private limited company), società per azione
(a joint stock company similar, in the United Kingdom, to a public limited company) and società in
accomandita per azioni (a hybrid form involving two categories of shareholders, some with and some
without liability). In the latter, the general partner associate (administrator) responds in an unlimited sense with his or her property to the company obligations if the patrimony of the company is not
sufficient. Joint stock companies have the obligation to deposit a minimum capital and to approve the
annual balance which is given to the register of the Italian Chamber of Commerce in which the company has a legal site. They are, therefore, subjects obliged to edit and publish their financial balance
sheets or their patrimonial situation: the limited or joint stock companies (article number 2423 of the
Civil Code); the società in accomandita per azioni (article 2454), the private limited companies (article 2478), the co-operative companies (article 2519) and their consortiums; the mutual insurance
companies (article 2547); the so-called GEIE or European Groups of Economic Interests (decree
number 240 of 1991); the consortiums of foreign activity (art.2615); the consortium companies of
limited responsibility (article 2615); the autonomous lyrical organizations, the concert institutions
and all the other institutions operating in the music sector, the theatre, dance, which have been
transformed into foundations of private rights (article 16, paragraph 5 of the decree number 367 of
1996 like article 6 of legal decree n.134 of 1998). For the joint stock companies there remains the obligation to make public – through the deposit of the register of the Italian Chamber of Commerce –
the true patrimonial, financial and economic situation. (Source: Italian Chamber of Commerce).
This phenomenon principally refers to those companies which are not limited companies
– generally smaller companies – but to those that correspond to two typologies found in
the civil code: partnerships and sole traders, into which merge 51.5% of the entire
‘corporate population’, equal to 4,671 company trade names (in the new companies
registered in later years the percentage rises by as much as 70%).
To a lesser extent the phenomenon regards another of the legal forms defined by the
civil code – in this case for the 4,400 limited companies – which registers, in this case, a
high number of companies including those of extremely small structure: the private
limited companies (in Italian S.r.l. or “Società a responsabilità limitata”) which, on their
part, amount to 40% of the corporate total. This is not necessarily equivalent to claiming
that these enterprises are by now finished. The MiBac report on the use of FUS for
example, testifies that it is in fact the partnerships (società di persone) that access 73.1%
of the funding of the sector as opposed to 26.9% of that destined for limited companies,
with an allocation of the latter of 24.4% regarding the S.r.l (private limited companies) and
a mere 2.5% the S.p.A.4 (“Società per Azione” – a joint stock company similar to a Public
Limited Company in the United Kingdom).
This is why the composition of cinematographical companies in terms of legal form is
significant.
These terms of division between the various legal forms are equivalent, as stated, to
those of all the other sectors of activity, without particular fluctuations. Furthermore,
the same mobility of the companies, both large and small, is confirmed in line with the
general trend of national entrepreneurial productivity.
TAB. 3
Absolute values
and average
percentage Italy
BIRTH AND EXPIRY OF CINEMATOGRAPHICAL COMPANIES
Newly registered
Number Respect Average
to 2007 registrated
Italy
Ended/Liquidated
Number Respect Average
to 2007 registrated
Italy
Failed
Number Respect Average
to 2007 registrated
Italy
Production
Distribution
Screening
580
14
54
8.8%
2.2%
2.7%
5.6%
5.6%
5.7%
423
33
101
6.4%
5.2%
5.1%
6.6%
6.6%
6.6%
24
6
3
0.3%
0.9%
0.1%
0.1%
0.1%
0.1%
Total Sector *
654
6.8%
5.6%
576
6.0%
6.6%
33
0.3%
0.1%
Data provided by Cerved at start of 2007.
The values calculated by Cerved and referring to the whole sector do not express – for the objective difficulty of classifying certain activities
– the numerical sum of the specific data that the same Cerved attributes to single considered sectors and the figures always result in excess of
the arithmetical total.
4
The percentage subdivision of funds refers to both the number of contributions deposited as well
as the value of the conceded finances. These proportions change solely as far as the incidence of
collected requests in comparison to those presented: to the specific entries of direct sustenance
for production the met requests correspond to 40% of those advanced for the non-limited companies, and 50% for public limited companies and a mere 10% for private limited companies.
| 87
TAB. 4
TAB. 5
INDEX OF COMPANY LONGEVITY IN THE CINEMA SECTOR
urvival rate
Up to 1 year
Up to 3 years
Up to 5 years
Production
Distribution
Screening
95.7%
95.4%
98.9%
83.9%
86.7%
96.5%
73.4%
72.1%
90.9%
Total Sector
Average Macro Sector
96.3%
94.7%
86.1%
82.9%
76.0%
72.3%
Italian Average
94.0%
81.2%
71.3%
Data from Cerved January 1st 2007.
The macro sector of reference (Ateco) is “Attività ricreative culturali e sportive” (Recreational. Cultural and Sports Activities).
In the same measure also the indices of the longevity of the active cinematographical
companies result in line with the average of all Italian companies. Indeed, for reasons
already explained – and even if in counter-tendency to how much one would think – all
companies in the cinema sector that have been operating on the market for over a year tend
to have a higher survival rate not only than those generally in industry and services of the
country, but also to those belonging to the macro sector “Attività ricreative culturali e
sportive” (Recreational, cultural and sports activities).
3. A reference sample
In the company overview distribution in terms of legal form is a tell-tale demonstration
of the levels of size in which the various subjects operate and furthermore the situation
of the film industry is seen to be analogous to those of all other Italian companies, among
which structures of a small or indeed very small dimension predominate – reaching, as
noted, 90% of the total. The organic layout of the national cinema is clearly shown by the
subdivisions in terms of classes of turnover of all the limited companies, this permits us
to appreciate – despite certain difficulties – the state of evolution and the extent of
development of the sector in its entirety.
In the following table, divided into groups of ten in terms of value of total proceeds, one
can, for example, individuate in the first instance an imaginary borderline of one million
euro, where the percentage distribution seems to signal with sufficient clarity a relative
divergence of action potential – with relative prospects of market visibility.
Of the 4,400 limited companies which operate in the sector, over 3,650 (equal to 83.3%) with a
turnover of less than one million cover just 10.7% of the total turnover; of the 3,064 production
companies, little more than 2,590 (74.6%) contribute solely 12.9% of the cumulative total
proceeds; of the 382 companies involved in film distribution, around 290 (corresponding to
76.0% of the entire category) earn only 4.7% of the total revenue; of the 670 operators involved
in the industry – always as limited companies constituted in terms of legal form – over 540
(equal to 80.9% of the total) contribute only for 17.2% of the global value of the sector.
88 |
DISTRIBUTION OF CINEMATOGRAPHICAL COMPANIES IN TERMS OF REVENUE
Classes of
revenue in euro
0-5 thousand *
5-250 thousand
250-500 thousand
500 thousand-1 million
1-2 million
2-5 million
5-10 million
10-20 million
20-50 million
Other 50 million
Total
Total Sector
Production
Distribution
Screening
% of total
% of total
% of total
% of total
Companies Revenue Companies Revenue Companies Revenue Companies Revenue
19.6%
41.6%
12.0%
10.1%
6.9%
6.0%
1.6%
1.0%
0.9%
0.3%
0.1%
2.7%
3.0%
4.9%
6.8%
13.3%
7.5%
9.8%
16.7%
35.2%
19.7%
43.6%
11.6%
9.7%
6.2%
6.0%
1.4%
0.9%
0.7%
0.2%
0.1%
3.3%
3.7%
5.8%
7.5%
6.0%
8.4%
11.2%
17.5%
36.5%
100.0%
100.0%
100.0%
100.0%
22.6%
33.2%
11.8%
8.4%
8.4%
6.7%
3.9%
1.1%
2.2%
1.7%
0.1%
0.9%
1.6%
2.1%
4.4%
8.9%
8.4%
6.5%
20.5%
46.6%
17.7%
36.8%
14.3%
12.1%
9.6%
6.2%
1.3%
1.2%
0.6%
0.2%
0.1%
3.8%
4.9%
8.4%
12.7%
17.9%
8.8%
14.9%
14.7%
13.8%
100.0% 100.0%
100.0%
100.0%
Elaborated from Cerved data.
* The global revenue raised by the companies belonging to this class in reality is less (even if by little) than the 0.1% of the total accumulated
by the diverse sectors. however, the data has been rounded off to that value to simplify the understanding of the economic picture outlined
in the table.
Aside from their size, in large measure small, the question is which revenues really divide
companies in the film industry and which effective capacities and economic forces do
they actually express?
4. The analysis of the factors
The data is not readily available given that in 52.3% of the cases, in virtue of the legal
nature of non-limited companies – which, as revealed, is almost a corollary of the activity
of relatively limited size – there is no obligation to deposit annual financial statements
(statement of assets and liabilities and income statements). This is why all of these nonlimited companies, which are registered with the Italian Chamber of Commerce,
practically escape any attempt at a quantitative analysis of their economic and financial
profiles, in sharp contrast to limited companies.
The first reliable indicator, therefore, regards only this sector of companies and it is Cerved
who assess it through the associated data of sales revenue, extracted from the balance
sheet reports of the companies which form part of the total sector of limited companies
(such an operation is rather complex and in general the results do not refer to the latest
calendar year, but rather to the preceding year). They are orders of economic size to consider
in the knowledge that a portion of the operators – especially in the case of larger structures
with greater organizational development – can also be present in other activities of the
sector, with the consequence that the results in terms of turnover of pure cinematographical
extraction, and excluding possible overlapping, do not permit the required clear attribution.
| 89
TURNOVER
The data processing carried out by Cerved furnishes us with further, indirect reference
in terms of relative orders of size regarding the reconstruction of the incidence reports
of the sections of the cinematographical-video sector on the GDP, the gross domestic
product, and on all of the complex of activity of the so-called macro sector “Attività
ricreative, culturali e sportive” (Recreative, cultural and sports activities).
TAB. 6
INDICATIONS OF ASSOCIATED TURNOVER OF LIMITED COMPANIES
Data relative to compartments
of sector
Cumulative turnover
in millions of euros
Ratio of macro sector
Estimate of Impact on GDP
Production
Distribution
Screening
2.225.954
487.080
545.190
3.39%
2.93%
3.27%
1.51%
0.33%
0.37%
Total Sector*
4.011.225
24.12%
2.72%
Elaboration on data of Cerved relative to the final financial statements of the year 2006.
* The values calculated by Cerved and referring to the total sector do not express – due to the objective difficulties of classification of certain
activities – the numerical sum of the specific data that the same Cerved attributes to the single compartments under consideration and the
figures always result greater than the arithmetic total.
It is not easy to evaluate the extent to which these economic magnitudes adhere to pure
cinematographical activity and to stabilize therefore also how much, on the basis of the
parameters set by Cerved, the total revenue of the non-limited companies amounts to,
even if we consider that the estimate of their weight in terms of economic value leads to
calculate a hypothetical contribution to the total volume of trade that can be collocated
(in the best of hypotheses) between 12% and 15%, in presence of a numerical quote that
oscillates according to the diverse compartments – as seen – by 50% to 60% (with the
exception of distribution companies which remain at 28%).
However, if on the one hand the total values expressed by the financial statements of the
limited companies and elaborated by Cerved seem, at first sight, over-estimated with
respect to current valuations – it should be remembered that the SIAE (Società Italiana
degli Autori e Editori – Italian Society of Authors and Editors) values the total takings of
Italian cinemas at 603 million euros, whilst Prometeia (an Italian consultancy firm of
economic and financial research) fixes the proceeds of the home video sector at almost
1 billion euros – on the other hand it is also necessary to take into consideration the fact
that the examined data emerge from the preliminary enquiries of the commercial
register: they are balance sheet items with legal value and in the responsibility of the
administrators and social organs.
In order to offer a better outline of the situation it is necessary to descend even further
into the details of the results given in the account books. By focusing on the accounts of
the limited companies one can calculate, for instance, precisely how much every single
company, of the various sectors, would earn from its activity by simply dividing the total
90 |
revenue by the number of companies. In such a case the figures and the relative orders
of size that the statistics of market demand (which is of the public in terms of takings
from paid cinema tickets and of proceeds from home video rental) have by now given as
a datum of cinematography, can be ignored. It is an investigation that tends to value (as
seen in the following table) the theoretical, unitary turnover of all the limited companies
that in the Italian Chamber of Commerce result formally active.
Even if, on paper, these values are undoubtedly correct, in experience they sincerely
seem to badly adapt themselves to the managerial practices of a normal
cinematographical company. The unit amount actually signifies a compensation between
two diverse scales of values: to the turnovers of a limited section of the companies that
clearly place themselves above such a scale correspond in reality those absolutely
inferior to the average level of the other part, greatly more consistent, of subjects of
“small size”. Furthermore, the virtual average of the revenues extrapolated from the
total of the financial statements is not wholly convincing because the entity of average
level signals a limit under which it is difficult to believe that a cinematographical company
TAB. 7
ESTIMATE OF AVERAGE, VIRTUAL TURNOVER AND REVENUE OF LIMITED COMPANIES
Economic Value
in thousands of euro
Total
Sector***
Production
Film and Video
Distribution
Film and Video
Cinema
Screening
Active Companies*
Limited Companies**
Total Turnover
Average, virtual revenue
9,084
4,396
3,383,168
769.6
2004
6,108
2,919
2,029,066
695.1
641
463
608,255
1,313.7
1,856
685
479,891
700.5
Active Companies*
Limited Companies**
Total Turnover
Average, virtual revenue
8,809
4,263
4,122,247
966.9
2005
6,039
2886
2,158,611
747.9
553
399
606,917
1,521.0
1,872
690
542,252
785.8
Active Companies*
Limited Companies**
Total Turnover
Average, virtual revenue
9,056
4,383
4,228,341
964.7
2006
6,331
3,026
2,303,225
761.1
541
390
633,651
1,624.7
1,850
682
536,454
786.5
Active Companies*
Limited Companies**
Total Turnover
Average, virtual revenue
9,071
4,399
4,011,225
911.8
2007
6,410
3,064
2,225,954
726.4
529
382
487,080
1,275.0
1,815
670
545,190
813.5
Data processing on data of Cerved on 1st January of every year.
* The data relative to active companies are referred to 30th September 2007.
** The number of limited companies represents an average, given the considerable volatility in the course of the year of new inscriptions and cancellations.
*** The values calculated by Cerved and referring to the total sector do not express – due to the objective difficulties of classification of certain
activities – the numerical sum of the specific data that the same Cerved attributes to the single compartments under consideration and the
figures always result greater than the arithmetic total.
| 91
TAB. 8
finds itself in the condition to materially operate on the market (this does not refer to
simply operating with some evidence or other or with the hope of reaching any objective,
but of working even with the minimal number of hours possible to separate pure survival
from the certain risk of closure or bankruptcy).
The simplest explanation turns, then, to the consideration of the effective operativeness
of a vast section including limited companies, which result active and as such every year
draw up their financial statements, in these, however, the entries that compose the asset
and liability statements and the profit and loss accounts express – as highlighted by a
more extended naked eye analysis of the index of the accounts – rather symbolic values,
owing to the absence of initiatives, business, employment, and commercial operations.
BUSINESS SCALE
In this way a maximum situation can be constructed that is reflected in the statistics of
the distribution in terms of turnover of the limited companies. The accounting and
financial audits reveal five principle groups of companies that operate in the diverse
sectors under consideration.
• The first consists of a tiny group of companies described as ‘dormant’ or ‘ghost’
companies which result formally active but that denounce economic and financial
coordinates – that is activity which amounts to less than 5000 euro a year! – a figure
incompatible with an authentic, effective operativeness.
• The second is represented by a cluster of companies of minor importance, in virtue of
a volume of trade of between 5000 and 250 thousand euro; a range that in the industrial
sector is defined as “narrow gauge” and which is considered more appropriate for the
service industry and the tertiary industry, well-suited, for example, to the group of
commercial enterprises (bars, shops and restaurants) and certainly to the shops of
lesser appeal and in complete exclusion of the boutiques most visited. In other words
companies of “low voltage”, presumably orientated towards the development of a single
project, not necessarily of annual duration, a circumstance easily verified among
cinematographical operators.
• The third can be attributed to that sector of companies that could be defined (obviously
at the level of quantitive reference and certainly not qualitative, in terms of the content
of their objects clauses) of minor visibility – they obtain a turnover of from 250 thousand
to 1 million euros – with respect to the parameters with which the number of
protagonists of the sector and their blockbuster successes are traditionally measured.
• The fourth “department” virtually corresponds to the presumable “hard core” of the
national film industry, that is to that group of operators that have consolidated their
position on the market, that are in a good position thanks to a consistent turnover and
are capable of setting up– with annual proceeds of between 1 million and 5 million euro
– significant projects and initiatives. Possessing a certain dynamism these companies
can also count on organizational models and autonomous managerial structures, their
very own structures and maturity.
92 |
OUTLINE OF MARKET SEGMENTATION IN TERMS OF ACTIVITY
Economic Value
in thousands of euro
Total
Sector***
Production
Film and Video
Distribution
Film and Video
Cinema
Screening
First Group: Ghost or Dormant Companies (0-5 thousand euros)
Limited Companies *
862
603
86
Percentage of total
19.6%
19.7%
22.6%
Approximate average turnover
3.7
2.9
4.4
Cumulative revenue
3,208
2,219
383
Market quota **
0.1%
0.1%
0.1%
119
17.7%
4.5
546
0.1%
Second Group: Narrow Gauge Groups (5-250 thousand euros)
Limited Companies *
1,830
1,337
126
Percentage of total
41.6%
43.6%
32.9%
Approximate average turnover
59.2
54,3
34,8
Cumulative revenue
108,303
73,460
4,387
Market quota
2.7%
3.3%
0.9%
247
36.8%
83.9
20,717
3.8%
Third Group: Groups of Minor Visibility (250 thousand-1 million euros)
Limited Companies *
972
652
77
Percentage of total
22.1%
21.3%
20.2%
Approximate average turnover
326.0
324.3
234.0
Cumulative revenue
317,695
211,468
18,124
Market quota
7.9%
9.5%
3.7%
177
26.4%
409.6
72,510
13.3%
Limited Companies *
Percentage of total
Approximate average turnover
Cumulative revenue
Market quota
Fourth Group: ‘Hard Core’ (1-5 million euros)
564
374
58
12.9%
12.2%
15.2%
1,392.4
1,399.6
1,116.9
806,256
523,100
64,781
20.1%
23.5%
13.3%
Fifth Group: Upper Classes (from 5 to over 200 million euros)
Limited Companies *
171
98
35
Percentage of total
3.8%
3.2%
9.1%
Approximate average turnover
16,232.5
14,445.9
11,411.5
Cumulative revenue
2,775,767
1,415,707
399,405
Market quota
69.2%
63.6%
82.0%
105
15.8%
1,588.8
166,828
30.6%
22
3.3%
12,935.9
284,589
52.2%
Elaborated from Cerved data.
* In this classification the data relative to the number of limited companies is to be understand as approximate in as much as they are the
estimates that (for the present mobility of the sector) can differ by some verifiable, absolute, quarterly units of value.
** The cumulative market quota of all the companies of the first group (dormant) is actually inferior, even if by little, to 0.1% of the global
total, however, this figure has been rounded off to such a value to simplify the reading of the summary traced in the above table.
*** The values calculated by Cerved and referring to the whole sector do not express – for the objective difficulty in classifying certain activities
– the numerical sum of the specific data that the same Cerved attributes to three single considered sectors and the figures always result superior
to the arithmetic total.
• The fifth classification is, ultimately, conferrable to the so-called ‘high bracket’ of the
sector, to which ideally belong the guiding groups or groups of major substance with
production values starting from 5 million and rising up to even 200 million euros,
sometimes for a good period of time. These guiding groups express at least half (and
often up to over 70%) of the assets of the sector even if they constitute in three diverse
sections a tiny section of the group operators (5% - 6%). This is the elite that includes,
| 93
by definition, the upper classes of the film industry with its leaders and their more or
less immediate competitors, given that often the strategies of placement conduce them
to work in partnerships of reciprocal interests and mutual protection. The table below
has the same value as a description or outline summary.
Composed through the various phases of progressive focalization, the above
segmentational map permits two important points.
• With respect to the extraordinary figures in the first instance of Cerved’s registers of the
total panorama of the Italian cinema – 9,887 registered companies of which 9,071 are active
– one can perceive the real dimensions of the sector, with reference to real, concrete
activity that has been carried out, and of the market that is its basis and of its value.
• The typology of the companies that are at the source of this sector can be, moreover,
further specified with sufficient reliability and clarity.
The summary table for example, permits us to infer that the film companies that can be
literally classified as ‘dormant’ are in the order of 3,800. To the 1,670 companies of the
first group one in effect adds those which, even if re-entering into the second group – the
largest with 3,540 members – placing themselves into the inferior group, registering a
balance of economic activity comprising between 5 and 40 thousand euros. Even if
missing a specific statistical quantification it is possible on the basis of the effected
balance statements – by necessity a sample, given the high number of company titles
belonging to this group – to estimate the quota at around 60%; a level already useful in
itself to understand exactly over 2,100 subjects. Above such a threshold, however, can be
placed a further number, always elevated – almost 1,400 – of operators defined as minor.
In the so-called middle ground – represented by the third group with a revenue inferior to
1 million euros – is placed around 1,900 members of the acting profession which, on the
whole, have an impact on the economic and structural flow of the further reduced sector.
As such, if of the 4,400 limited companies active in the film sector, around 2,690 result
as holding a marginal role – due to the literal absence of any type of production or for the
materially residual value and nature of that which has been produced – a further 970
appear to move in the grand agglomerate of the central group and can, therefore, be
counted as belonging to the average.
The personnel of major representation is seen to be constituted on the other hand of
companies (a few more than 730) inserted in the other two divisions and which appear
to be characterized by activity which is undoubtedly more continuous.
In the largest group, with its 567 members of the ‘hard core’, the connecting tissue of the
national film industry can be identified in the sense of how much it concerns the three
principle areas of production, distribution and business. It is in this area, as stated earlier,
that the vast number of operators are to be found which, although contributing in a
significant and characteric manner to the market supply, usually escape from the
analysis of market demand and thereby are systematically ignored.
In the limited group – with ‘only’ 171 members – of the upper class one finds the
protagonists of the national scene; an elite of film makers who, borrowing the term from
94 |
the gossip columns, can properly be called the jet set of cinematography. Visibility aside,
it is to the composition of such an ‘enclosure’ that the sector conforms its framework,
also because this nucleus demonstrates itself to be able to address, in a determinate
manner, the market, to the point that even if constituting only a small part of the field is
almost always considered as if it represented the whole.
GROWTH
That same market in truth presents itself, almost since the dawn of history, as having a
very particular physiognomy. In large measure it is anti-cyclic. Its trends are not directly
linked to the state of the economy in general and its indices of growth and contraction are
normally neither synchronous nor proportional to the variations of the indicators of the
general order such as the GDP (gross domestic product) or the cost of living. The trends
of film industry activity are, in substance, confirmed to be not constant and, principally,
closely tied to the capacity of its operators to attract attention – as in all forms of art ,
culture, and entertainment – rather than to the standard of living, the conditions and
lifestyle of the nation and its public.
TAB. 9
CYCLES OF ACTIVITY IN THE CINEMA SECTOR
Variation in sales revenue
2001
2002
2003
2004
2005
2006
Production
Distribution
Screening
18.5%
9.7%
17.2%
-14.2%
-15.5%
17.4%
-11.1%
9.4%
6.4%
6.4%
-0.2%
13.0%
6.7%
4.4%
-1.1%
-3.4%
-23.1%
1.6%
Total Sector
Average macro sector
18.0%
7.6%
-9.0%
-0.6%
-0.7%
14.1%
7.5%
7.9%
2.6%
4.6%
-5.1%
-24.6%
4.8%
3.7%
3.4%
4.1%
2.3%
3.7%
Italian GDP
Elaborated from Cerved data to 1st January 2007.
The macro sector of reference (Ateco) is “Attività ricreative culturali e sportive”.
If the “periodicity” of the performances (reconstructed up until the point where Cerved
began to evaluate and elaborate the data) seems a constitutional feature of the cinema –
where the general trends do not appear homologated to that of the general economy as
indicated by the prospect of variation mentioned above – nevertheless, we can state that
even the trends of the single companies active in the sector do not follow any law or uniform
tendency, as confirmed by the data related to the single sectors reported in the same table.
Taking as a reference the year 2006 – with a loss of total turnover within the sector equal
to 5.1% – one can observe, for example, how the growth or the loss of revenue of the
diverse companies is distributed in a dissimilar manner and in such a measure that
despite the companies in a period of growth (up to 5%, from 5% to 10% and then over 10%
compared to the income of the previous year) resulting in a net majority, the vast quantity
of global revenue, ultimately, reveals itself to be in decline. A first, simple deduction
leads one to believe that the periodic curve of results of the large groups would be
| 95
sufficient to determine the economic cycles of the sector and is capable of defining the
vitality on behalf of all its components even when some or many of them, in opposition
to dynamics, conserve with their sectors a positive trend.
TAB. 10
HOW THE TURNOVER IN CINEMA COMPANIES CHANGES
Revenue in last balance
Loss
Growth
From 0 to 5%
From 5% TO 10%
Over 10%
Production
Distribution
Screening
47.6%
49.4%
52.4%
50.6%
19.9%
25.0%
6.6%
4.5%
25.9%
21.1%
Total sector
43.0%
57.0%
19.4%
3.9%
33.7%
Average macro sector
37.1%
62.9%
22.6%
5.5%
34.8%
Italian average
33.0%
67.0%
24.9%
6.4%
35.7%
Elaborated from Cerved data to 1st January 2007.
The macro sector of reference (Ateco) is “Attività ricreative. culturali. e sportive”.
In processing the financial data in their entirety the remarkable lack of homogeneity
emerges with which the variation in revenue is “spread out” on average according to the
diverse sizes of the companies, confirming both the peculiar typology of cinematographical
activity as well as the heterogeneity of the same operators involved. That last element can
be considered as the evolution in time of the single sales revenues of the companies that
show how the historical series of loss and profit (left out here in order to later show in its
entirety) alternate without any solution of continuity or relations of objective reason.
TAB. 11
AVERAGE VARIATION ON PROCEEDS FOR TURNOVER CLASSES
Turnover in
Millions of euros
Total sector
2005
2006
0-5 thousand *
5-250 thousand
250-500 thousand
500 thousand million
1-2 million
2-5 million
5-10 million *
10-20 million *
20-50 million *
Over 50 million *
5.3%
0.1%
4.2%
19.1%
-6.4%
33.8%
7.8%
0.4%
3.8%
1.6%
-6.5%
-8.4%
-4.8%
-6.9%
24.9%
-19.9%
29.8%
-27.4%
Production
2005
2006
4.7%
-0.4%
7.2%
17.1%
1.7%
34.1%
-3.4%
-7.0%
7.1%
0.1%
5.3%
-8.0%
-3.9%
4.8%
-10.3%
42.4%
-25.0%
60.4%
-6.8%
Distribution
2005
2006
-12.7%
-8.4%
4.0%
16.2%
-25.3%
-14.0%
46.6%
-18.8%
7.2%
-12.1%
-31.3%
-28.8%
30.5%
-2.4%
-4.8%
-
Screening
2005
2006
5.8%
12.7%
-1.5%
1.9%
-2.1%
-4.8%
-
-5.6%
-8.5%
-13.5%
-10.7%
-9.0%
-4.8%
46.0%
-
Elaborated on data from Cerved 1st January of each year.
* For these classes of turnover it was not possible in certain cases to calculate the average proceeds variation due to the lack of a panel of values
homogenous and suitable for their comparison.
PATRIMONIAL STABILITY
Given how inhomogeneous and anticyclical the economic results of the film industry
companies are reflects on the one hand, the accentuated volatility of the cinema product
96 |
(or rather of the market response to the operators offer) and, on the other, the extreme
heterogeneity of the companies which are active in the various sectors. In the absence of
any trend constants – whether positive or negative – the sector appears, moreover, to
suffer from a persistent growth crisis; an observation supported, furthermore, by the total
comparison of the activity. Recording the global turnover of 4.011 million euros raised by
the joint stock companies of production, distribution and screening according to the
accounts deposited in the chamber of commerce on 1st January 2007, it can be observed
that the figure does not represent the result of an evolution, but rather of an involution:
4,228.3 were actually the millions totalled twelve months prior, and 4,122.2 the year still
before that (which had signed a turning point in comparison to the preceding two year
period, opening with 3,858.5 million and closing with a quota of 3,833.2 million euros).
The undoubted and objective uncertainty which accompanies the management and the ‘sale’
of the film – just as with any other performing arts work, or works of creativity and originality
in general – renders all planning strategies and financial resource management problematic.
A good deal more than that found in industrial or service sectors. For example, the search for
capital to invest in new projects is difficult from the moment that the cinema companies, in
the majority of cases, are the holders of only immaterial goods and do not make their own
real estate property assets and system or technical equipment assets available.
The only exceptions are those companies which operate in the sector with buildings and
cinemas: integrated groups such as Rai and Mediaset, holders of sites, apparatus and
technical means for the transmission and diffusion of their programmes onto diverse
platforms and for the development of all their other connected activities; the major,
historical production companies (of which there are few) have the principle and authentic
asset upon which cinema companies can still count: a sufficiently consistent library, above
all, with archive titles of major success which may well be used in the distant future.
A largely significant value for this is the average ratio of debt; an indicator of the
patrimonial composition that evidences the weight of external financing in comparison
to invested capital, calculated on the basis of its incidence on total assets.
As can be noted, the indexes of the cinema companies are clearly greater than those of
other recreational, cultural or sports activities. As a further element of valuation one
can, moreover, add that from the data broken up according to the different classes of
TAB. 12
HOW MUCH AVERAGE RATIO OF DEBT AMOUNTS TO
Balance values
2002
2003
2004
2005
2006
Production
Distribution
Screening
86.4%
93.5%
83.3%
87.6%
92.5%
84.3%
82.5%
91.4%
83.1%
80.1%
114.2%
81.5%
79.3%
91.5%
81.4%
Total Sector
85.7%
88.1%
83.3%
85.3%
81.1%
Macro sector average
76.6%
76.3%
73.1%
69.8%
66.2%
Elaborated from Cerved data 1st January 2007.
The referred to macro sector (ATECO) is “Attività ricreative e sportive”.
| 97
turnover there emerges a level of recourse to outside financing superior to the average
for companies of smaller size which produce or distribute one film a year (or even for
longer periods) or manage only one cinema, and clearly inferior for those more developed
and stronger with a continuous activity putting them in the high category of annual
proceeds greater than 50 million euros.
This separation of conditions in reference to patrimonial and financial solidity also finds an
indirect verification in the risk levels which the market – on the basis of financial statement
data – attributes to the joint stock companies of the sector. This involves an essentially
TAB. 13
CINEMA COMPANIES AND LEVELS OF MARKET RISK
Classes of risk
profile
Total
Sector
1 – Solidity
2 – Superior Solvency*
3 – Sufficient Solvency
4 - Vulnerability
5 – Moderate risk
6 – Major risk*
7 – Elevated risk
ND – Non calculated
4.1%
17.2%
20.9%
8.8%
17.8%
20.9%
7.1%
3.2%
Film and video Film and video
production
distribution
3.9%
17.0%
23.4%
8.2%
16.5%
19.3%
7.9%
3.8%
2.8%
19.3%
17.0%
14.8%
18.2%
21.0%
4.0%
2.9%
Cinema
Screening
4.0%
19.2%
16.0%
7.6%
19.8%
25.7%
6.1%
1.6%
Macro
Sector
Total
Italy
3.7%
12.7%
16.1%
11.4%
18.6%
24.7%
8.4%
4.4%
4.1%
16.6%
23.9%
12.4%
20.2%
11.4%
4.4%
7.0%
Elaborated from Cerved data 1st January 2007.
* For the terms ‘solvency’ and ‘ risk’ the respective definitions of ‘superior’ and ‘major’ are intended ‘respect to average’.
The macro sector of reference (ATECO) is “Attività ricreative culturali e sportive”.
The data of ‘Total Italy’ are relative to the companies of the entire sector of activity with the exception of those classified as agricultural. credit
and banking and insurance companies.
indicative rating, constructed through a process of analyses which also consider a certain
margin of discretion, nonetheless of moderate reliability, judging by the frequency with
which they require the services of banks and real estate institutes for preparing and
evaluating the concessions of mortgages and loans and the potential capacity of their
clients to maintain in a determinate time period bank overdrafts. The same regulation of
FUS, nevertheless, contemplates 40 of the 100 points that the commission of the general
direction of MIBAC assigns in the examination of the requests for contributions to
production, be they reserved for the valuation of the ‘company stability’.5
5
98 |
According to the norms regularly applied throughout 2008, the decision to award 30 points regarding the stability of production companies is distributed over four parameters: the years of activity from the first production (7.5 points); the number of films produced and released in cinemas
in the last five years (another 7.5); quota of capital greater than the base of 50,000 euro (5); valuation of the company on the basis of the absence of preceding financing or, as an alternative,
on the basis of the capacity to pay back funds already received. The other two considered criteria are relative to the parameters of quality of films already produced (40 points) and to the
demonstrated commercial capacity.
Even in this case the origin of the “scissors” of revealed values can be made to rise to the
net distribution of the sector agents between two diverse poles of attraction: a restricted
nucleus of consolidated operators and market protagonists against a far more ample
agglomeration in which subjects dedicated to the development of single projects are
concentrated, alternating the intensity of their activity as far as the continuity of services
and with a low capital intensity in terms of economic commitment.
PROFITABILITY
The outline of the economic and financial assets of the companies of the sector can be
further defined with the analysis of that element which can be considered as a form of
final synthesis, given its very important significance for total company trends, for the
capacity to generate turnover and for the development potential in both the short term
and the long term: profitability. A first indicator is constituted by the average turnover of
invested capital which is expressed by the relationship between the business revenue
and the total number of active companies and which tends to measure precisely the quota
of financial resources invested in the activity in respect to the value of all available assets
(table 14)
TAB. 14
THE EFFECT OF CAPITAL INVESTED IN COMPANIES
Average turnover
2002
2003
2004
2005
2006
Produzione
Distribuzione
Proiezioni
62.9%
32.7%
40.4%
54.8%
33.3%
43.1%
62.5%
38.3%
42.8%
62.5%
46.3%
44.7%
67.4%
68.9%
42.9%
Complesso settore
52.6%
48.2%
50.6%
53.5%
59.7%
Media macrosettore
55.5%
53.4%
53.4%
57.0%
51.5%
Elaborazione su dati Cerved all’1 gennaio 2007.
Il macrosettore di riferimento (Ateco) è “Attività ricreative culturali e sportive”.
This involves values which are not substantially exalted and which are placed at the
lowest level of the range in which are found the average indexes of the other sectors
(somewhat diversified by characteristics and exigencies) of manufacturing and the
tertiary sector. In general, there seems to emerge an awareness that the general
external agreements and those more specific of the market impose a major propensity
to use company financial resources in activity investments, in comparison to the
research for a more “reassuring” but static – and necessarily unproductive – availability
of cash reserves and property. Furthermore, if we observe distribution for average
turnover of invested capital it can be verified that such an awareness is confirmed by
the higher percentage assigned to the category of more mature and developed
production and distribution companies, not only in terms of size but also for
organizational and managerial origins.
| 99
TAB. 15
Class of turnover
in euro
0-5 thousand *
5-250 thousand
250-500 thousand
500 thousand-1 million
1-2 million
2-5 million
5-10 million
10-20 million *
20-50 million *
Over 50 million *
TAB. 17
AVERAGE TURNOVER OF CAPITAL PER SALES RANGE
Total Sector
2005
2006
19.8%
22.3%
47.5%
45.1%
47.6%
59.5%
49.0%
52.1%
56.5%
51.4%
42.2%
49.2%
57.5%
63.2%
81.8%
88.2%
59.4%
73.8%
Production
2005
2006
26.6%
28.1%
50.8%
46.3%
54.0%
93.1%
63.2%
68.9%
74.7%
67.3%
56.6%
67.5%
60.4%
75.3%
79.6%
76.2%
113.3%
94.0%
Distribution
2005
2006
6.2%
5.4%
30.3%
44.8%
30.4%
49.2%
66.9%
54.4%
20.1%
39.1%
25.4%
23.1%
60.7%
130.2%
139.3%
48.6%
143.1%
Screening
2005
2006
15.0%
23.7%
45.3%
48.9%
40.2%
32.3%
30.9%
32.6%
41.6%
29.3%
36.1%
41.7%
57.0%
48.9%
-
Elaborated from Cervid data 1st January of each year.
* For this class of turnover it was not possible. in certain cases, to calculate the average capital turnover due to the lack of a panel of values
which were homogenous enough and appropriate for their comparison.
TAB. 16
Roi to balance values
HOW MUCH INVESTMENT IN CINEMA ACTIVITY YIELDS
2002
2003
2004
2005
2006
Production
Distribution
Screening
2.5%
1.7%
-0.4%
2.5%
1.7%
-1.9%
2.5%
1.8%
-3.6%
1.6%
-0.4%
-3.7%
1.2%
-12.0%
-6.6%
Total sector
1.9%
1.5%
1.6%
0.1%
-2.1%
-8.5%
-8.4%
-4.2%
-3.7%
-6.6%
Average macro sector
Elaborated from Cerved data to 1st January 2007.
The macro sector of reference (ATECO) is “Attività ricreative culturali e sportive”.
Another indicator which belongs to the technicalities of financial analysis and which
attests to the fluctuating profitability and efficiency of investments in cinema activity can
be calculated through the ratio of operating income, accrued in the specific daily business
of the joint stock companies, and the total activity. Referred to as ROI (return on
investment) the index in question interrelates the result – either profits or losses – of
the typical management of the company with the invested capital, that is, with the
employment of financial resources in the single characteristic activity purifying the
investments which bring about other earnings (real estate, shareholding and the like).
Generally, the limitedness of economic returns reveals scarce efficiency on the part of
the companies themselves, however, in the sectors of the cinema industry there seems
to be a further certainty and objective inefficiency, still more diffused (as far as the
inferior intensity of activity in comparison to the entire macro sector of cultural
activities, of entertainment and of recreation is concerned): that of the same market in
which they operate. Even if they do not state it directly, the data relative to the
distribution of average ROI for the classes of turnover constitute a rather valid indication
100 |
AVERAGE OPERATING INCOME FOR CLASS OF TURNOVER
Category of turnover
in euro
0-5 thousand *
5-250 thousand
250-500 thousand
500 thousand-1 million
1-2 million
2-5 million
5-10 million
10-20 million *
20-50 million *
Over 50 million *
Total Sector
2005
2006
-1.9%
-15.5%
1.1%
-2.4%
0.3%
1.9%
0.1%
1.7%
1.4%
-2.4%
-0.6%
-9.7%
-5.9%
-1.6%
-3.3%
-1.0%
2.9%
-2.2%
Production
2005
2006
-0.6%
-4.6%
3.8%
-3.4%
2.0%
6.6%
0.6%
5.0%
1.7%
-2.0%
3.6%
-14.9%
-7.8%
4.3%
3.1%
1.2%
10.9%
3.5%
Distribution
2005
2006
-0.7%
0.0%
-2.9%
-0.2%
1.0%
4.1%
6.0%
-0.1%
2.2%
3.3%
-4.7%
-5.0%
0.9%
-13.1%
1.6%
2.3%
-15.1%
Screening
2005
2006
-4.8%
-3.2%
-3.4%
-2.4%
-1.7%
-2.5%
-1.6%
-2.3%
-0.2%
-5.6%
-4.0%
-8.6%
-6.4%
-9.8%
-
Elaborated from Cerved data 1st January of each year.
* For these classes of turnover it was not possible. in certain cases, to calculate the average operating income due to the lack of a panel of
homogenous values appropriate for an adequate comparison.
of the operating difficulties which cinema companies find, at their respective levels,
themselves affronting, save perhaps only those production companies in the highest
categories of turnover.
PROFITS
It is well known that public success can be, for cinema companies, a formidable
multiplier of earnings. However, market fortunes in general look favourably on only a
handful of films and the success of the sector depends on the average level of
profitability, on the result that is of the activity of all of its operators: large, medium,
small and very small; more or less managerially ‘equipped and structured’ or capitalised
on the property side. On the basis of the single management parameters, it can be
maintained that for the operators of Italian cinema the objective of obtaining valid
margins of utility to justify the engagement and activity – leaving aside, for now, artistic
motivations or cultural intentions – appears realistic. Then it is a question of film quality
TAB. 18
RELATIONSHIP BETWEEN EBITDA AND TURNOVER REVENUE
EBITDA to balance value
2002
2003
2004
2005
2006
Production
Distribution
Screening
30.6%
28.1%
12.9%
28.2%
27.5%
9.2%
22.3%
26.7%
4.6%
24.5%
25.1%
5.3%
25.6%
7.7%
-1.0%
Total sector
27.8%
26.8%
23.7%
24.1%
19.5%
5.1%
3.4%
11.1%
11.5%
11.9%
Average Macro Sector
Elaborated on data from Cerved to 1st January 2007.
The macro sector of reference (ATECO) is “Attività ricreative culturali e sportive”.
| 101
and the public response, whose eventual or lack of appreciation precisely constitutes an
essential element which, in the end, determines the true market value (and thereby the
theoretically authentic price) of the product.
Based on the average ratio of EBITDA (Earnings before interest, taxes, depreciation and
amortization) to turnover – the most widely employed means of measuring the capacity
of an active company, in as much as it permits the calculation of the difference between
sales revenue and the total costs met for the realization of a determinate product,
independently of sustaining the financial compatibility – all of the joint stock companies
of the various sectors can be said to be capable of generating profits. This is on the level
of purely typical management, taking into consideration that is the single costs closely
connected to the operating (including that of work) and the revenue from product sales
and excluding the structure costs, the financial burdens, the income and spending and
taxes.
TAB. 19
Range of turnover
in euro
0-5 thousand *
5-250 thousand
250-500 thousand
500 thousand-1 million
1-2 million
2-5 million
5-10 million
10-20 million *
20-50 million *
Oltre 50 million *
EBITDA PER TURNOVER RANGE
Total Sector
2005
2006
7.0%
6.5%
14.8%
10.0%
13.4%
12.0%
15.2%
15.4%
16.6%
13.1%
23.7%
12.5%
1.9%
16.7%
10.5%
5.2%
35.4%
14.8%
Production
2005
2006
13.7%
7.0%
19.0%
10.2%
16.4%
14.7%
14.7%
17.3%
15.0%
14.7%
27.5%
12.5%
-4.6%
26.3%
14.2%
7.8%
25.1%
8.9%
Distribution
2005
2006
9.4%
7.4%
12.4%
12.6%
27.3%
16.5%
26.6%
31.1%
43.0%
32.4%
26.5%
30.2%
30.7%
-7.9%
3.1%
39.9%
-1.4%
Screening
2005
2006
-14.6%
0.6%
2.8%
5.3%
7.0%
5.2%
9.0%
6.6%
12.1%
-5.2%
13.0%
-5.6%
-1.4%
-5.8%
-
Elaborated on data from Cerved to 1st January of each year.
* For these ranges of revenue it was not possible, in certain cases, to calculate the contribution between EBITDA (Earnings before interest,
taxes, depreciation and amortization) and turnover due to the lack of a panel of values adequate for their comparison.
The substantial profitability, at most, of the cinema industry operators also emerges
from the decomposition of the average ratio between EBITDA and revenue for classes
of turnover which demonstrates a distribution of indexes clearly more equilibrated
between the various categories in how much it does not result for the other indicators
which have been analyzed. In particular, the level of the parameters signals a
productivity which is satisfactory for all companies of all sizes and not only for the two
highest categories, those which include the medium sized and large companies to
which, among other things, can be attributed the incidence of structural costs in a more
sensible manner; for example, for permanent employment, for general costs and for
administrative management.
Despite the fact that they are noticeably more substantial than those of the macro sector
which includes the other cultural companies, as well as those of entertainment, sports
102 |
and performing arts, the ratio between EBITDA and turnover for cinema companies is
revealed to be of a limited measure in comparison to the generality of economic activity
and national products, the signal of a likely deficit, somewhat considerable, of
management formation and preparation on the specific front of strategies and
technicalities of financial planning.
The measurement of ‘earnings before interest, taxes, depreciation and amortization’
does not, in substance, touch the overall picture which results from the analysis of the
financial statements: if the companies denounce a reasonably limited property and
financial solidity as well as a general profitability of modest consistency, it would appear
both reasonable and comprehensible that the economic trends of the sector demonstrate
– as seen – an oscillatory character. Furthermore, results which are relatively positive do
not deflect therefore, in the end, the image of a certain congenital, structural weakness
which the plurality of cinema companies has, so far, neglected.
TERRITORIAL DISTRIBUTION
The geographical location of the operators of any sector could be considered a simple
descriptive or statistical element. In reality, however, political economy and systems
theory teach that the relative concentration or rarefaction in a determinate geographical
area of active companies in the same environment directly influences the productive
context in terms, primarily, of research and development of consumer awareness and the
diffusion of innovative processes, followed by, as a consequence, under the profile of
qualitative and competitive standards for the creation of infrastructural synergy and of
services (principally technological, thanks to the progressive installation of partners and
of better prepared suppliers) as well as technical instrumentation; in the end at the level
of attractiveness both to superior minds and to the most promising brains of both private
and public investment, thereby favouring the collection, the availability and the
investment of necessary financial resources to fuel along with the growth of single
activities also the overall entrepreneurship.
This involves, therefore, not only a better hardware, but still more – and in a decisive
form – a somewhat richer software.
The cinema industry does not differentiate as is testified by the route from Hollywood to
Bollywood. Making use of the personal data of all the active companies (not only of joint
stock companies) and of their local unity one can therefore obtain a map of the sector and
its divisions that is valid for qualifying the supply market of the cinema, a good deal more
than how much the collocation of the branches of the single business systems and the
single cinema halls serves to describe the trends and the composition of the demand
market (cf. Table 20)
In extreme summary, the territorial distribution of cinema companies recounted in the
historical and strategical role of Rome and Cinecittà (with a third of the production
companies and almost three fifths of the distribution companies) and the importance
of Milan – together with Rome representing over half of national production and 70%
| 103
of the distribution sector – principally thanks to the activities connected to film
productions in the strict sense of the term (television films, commercials, video clips,
themed videos). The growth of three areas of relative aggregation in Piedmont is also
registered, with Turin which boasts of its traditional, albeit selected presence, in Emilia
Romagna (which is, by character, more diffused regionally although Bologna
constitutes the epicentre) and in Campania with Naples, which has cultivated its own
– rather contained – productive capacity on two platforms: on the one hand, the
characteristic cinema of the region (often, also in dialect) for a predominantly local
destination and, on the other hand, activity triggered by the choice to move a portion
of production to public television and thereby more specifically linked to genres of
television series and television films.
In practice, the backbone of the cinema industry in Italy proceeds along these five central
points, among which capital remains indubitably focal. 70.1% of the entire production
and 82.0% of distribution centres are under these five central points. If one only wished
to understand the quite significant quota of Veneto and Sicily, it would be necessary to
surpass 80% and 90% respectively.
TAB. 20
The supply market has, in substance, well individuated fulcrums and projects a
physiognomy which contrasts with the intrinsic heterogeneity and of the sector. Any policy
system or example of development and sustenance drawing inspiration from the theory
of complexity of Chris Meyer rather than from the philosophy of ‘clusters’ of Michael
Porter or from the configuration strategy for maps and landscapes developed by Richard
Norman – should, as a consequence, follow in the footsteps and adhere to the pace.
WHERE CINEMA COMPANIES IN ITALY OPERATE
Percentage of companies
per region
Piedmont
Aosta Valley
Lombardy
Trentino Alto Adige
Veneto
Friuli Venezia Giulia
Liguria
Emilia Romagna
North
Total
Sector
6.6%
0.2%
18.3%
1.4%
4.6%
1.3%
2.6%
7.6%
42.6%
Production
film and video
6.0%
0.2%
20.0%
1.6%
4.0%
1.3%
2.0%
6.2%
41.3%
Circulation
film and video
2.0%
0.0%
13.2%
0.5%
3.3%
0.3%
1.2%
2.7%
23.2%
Cinema
screeninge
8.1%
0.4%
15.8%
1.1%
6.3%
1.5%
4.5%
12.4%
50.1%
Tuscany
Umbria
Marche
Lazio
Central
5.6%
1.1%
2.4%
28.8%
37 .9%
4.7%
1.1%
1.8%
33.1%
40.7%
2.1%
0.1%
1.1%
57.4%
60 .7%
8.8%
1.6%
4.2%
9.2%
23.8%
Abruzzo
Molise
Campania
Apulia
Basilicata
Calabria
Sicily
Sardinia
South and the Islands
1.7%
0.3%
5.5%
3.5%
0.4%
1.6%
4.7%
1.8%
19.5%
1.9%
0.4%
4.8%
2.8%
0.4%
1.8%
3.8%
2.1%
18 .0%
0.5%
0.0%
6.7%
3.8%
0.2%
0.8%
3.9%
0.2%
16 .1%
1.7%
0.3%
7.0%
5.4%
0.6%
1.5%
7.8%
1.8%
26.1%
Elaborated on data of the Register of companies in the Italian Chamber of Commerce 30th September 2007.
104 |
| 105
CHAPTER 5
“IT’S FUNNY HOW THE COLOURS
OF THE REAL WORLD ONLY SEEM REALLY REAL WHEN
YOU VIDDY THEM ON THE SCREEN”
Malcolm McDowell in A Clockwork Orange by Stanley Kubrick
Professions
and the job market
ccording to classical economics literature the cinema industry is not
particularly intensive in terms of work but rather in terms of capital. This is
determined by the principle characteristics of the product. By its nature the
sector is characterized by production on request and, therefore, is affected
by the life of the single projects. The sector is seldom structured on periods
of activity which last a long period of time and, indeed, even if it were, it would never
be definitively programmable a priori, in the sense that eventual successes are always
determined by the finished product, and by public opinion.
In particular European cinema – and, all the more so, Italian cinema – is otherwise
qualified by what economists call ‘pure additionality’; in other words that factor,
determined by the characteristics of the base market and by the fundamental
structures of the activity sector, which places a number of companies (above all smaller
companies) in the condition of not being able to produce and incapable of offering their
films to the consumer-spectator without some form of external intervention, an
intervention which, in the end, is almost always translated into the providential – in as
much as it is limited – public maintenance under the form of irreplaceable
contributions of capital, assistance and financial incentives on the part of the state,
regions, local organizations, government institutions or central emanation bodies.
Lacking continuity, it remains particularly difficult to elaborate management strategies
A
which permit the realization of the so-called economies of scale, in other words, the
rationalization of every process and passage of production common to all the ranges and
types of manufactured product which a company puts onto the market. This is the case
in general, and still more in the cinema industry.
In terms of the cinema industry, it is not possible to have any uncertainties regarding the
fact that in any working circumstances – even outside of the diverse sizes or business
volumes – there are commitments which require a very high level of professionalism and
specialization in every individual area; including those of distribution, business and
finance, and the diverse services, from pre-production to post-production.
These few undercurrents enable the delineation of the specifics of the job market in the
cinema industry; a characterization found reflected, moreover, in the same nature and
composition of its productive apparatus.
1. An improper census
Just as seen with the corporate designation (in Italian ‘forma giuridica’) of the cinema
companies, the quota of non limited companies (51.5% among the 9,071 active in 2007, but
with a growing trend confirmed by the 78.0% of new inscriptions in the course of a year) is
greatly elevated. Furthermore, between these companies 32.6% consist of sole
proprietorships (actually 63.3% of those registered in 2007), whereas 15.0% are represented
by partnerships and 3.9% by other forms, such as co-operatives and consortiums.
This does not necessarily entail companies without other employees apart from the
founding owners, because, in reality, also a part of these have dependent personnel;
however, in correspondence with their corporate designation such companies are
structured to have a limited number of employees. Moreover, it can be observed that
among the same limited companies over half (over 2.6 thousand out of almost 4.4
thousand) are so small that only a very meagre number of employees can be counted.
Considering the cinema sector in a limited sense – and not in the more expansive sense
which includes all areas of pre and post-production services, outsourcing, and professional
and marketing intermediaries – certainly does not correspond to a vast amount of stable
employment. Nevertheless, it remains less simple to estimate how many individual factors
the industry is composed. This is a result of the fact that not all financial statements – only
deposited obligatorily by limited companies – state the number of persons on their pay
books and even Cerved is incapable of obtaining the elements necessary for qualifying the
number, typology, distribution, costs and incidence on the turnover.
The primary basis of such an investigation remains the annual report of ISTAT (the Italian
National Institute of Statistics) on the job market and on the overall state of employment
in Italy. This does not involve a census, in as much as the gathering of data originates
from a sample investigation and therefore from the declarations which the companies –
of all sectors – make, voluntarily answering to questioners sent by the organization; in
108 |
any case, on the basis of the latest elaboration the cinema sector employees (or rather
those companies identifiable in ATECO code 92.1) amount to 47,527. Despite including the
employees of companies which supply services and equipment, the data does not include
those dependents of the industry who produce systems, technology and primary
materials (and which constitute the sector in its totality, as mentioned previously)
destined for cinema companies and who would bring the total number of work units
having direct reference to limited companies to almost 55 thousand. In any case, the
arithmetic mean of dependent personnel is definitely 5.2
A second element for extending a rather more circumstantial and detailed report is
supplied by the study – “Le imprese dell’audiovisivo nel Lazio” (Audio-visual companies
in Lazio) which CENSIS (Centro Studi Investimenti Sociali – Centre for the Study of Social
Investment) carried out in collaboration with Videoplay at the end of 2007, directly involving
403 companies. It is a study which focuses on only local activities, however, being Lazio –
the region which more or less represents national cinema – of which Rome and Cinecitta’
are the symbols, assumes a value of representation which is wholly reliable (and, to
respect the exigencies of a better adherence to real, entrepreneurial quality the activities
of the two major groups, Rai and Mediaset, were not revealed, which would have, as a
result of their balance posts and interests, inevitably influenced the general outline).
Even if regional cinema companies are necessarily considered as the best ‘equipped’ within
the Italian panorama it is also true that despite contributing, according to Cerved, only 28.8%
of the total national group, according to ISTAT they can boast 45.5% of global occupation – the
results of the research can be considered certainly adequate and completely meaningful.
TAB. 1
CLASSES OF STAFF FOR CORPORATE DESIGNATION OF COMPANIES
Staff per social reasons
Individual Proprietorship
Partnerships
Limited Companies
Cooperatives/Consortiums
Other
Total
Total
sector
20.4%
15.6%
58.8%
2.3%
2.9%
100.0%
Distribution per Range of Employees
From 0 to 1
From 2 to 5
From 6 to 19 From 20 and over
69.1%
9.4%
4.5%
2.0%
4.3%
17.7%
25.5%
13.3%
23.4%
69.8%
61.8%
78.6%
2.1%
2.7%
4.1%
3.2%
1.0%
5.5%
2.0%
100.0%
100.0%
100.0%
100.0%
Source: Censis Report “Le imprese dell’audiovisivo nel Lazio”, 2007.
The other source of information capable of adding diverse extras is the mutual
organization ENPALS, which, for the 3,471 cinema companies enrolled registers 76,442
personal contributory positions (who have the rights to at least one day of contributions
per year). With a theoretical average per company of 22 employees – on whose behalf
contributions are paid – far greater than the number revealed by the ISTAT study.
However, according to the registrations of the institute, the dependent personnel with
indeterminate contracts amount to few more than 18,700: a figure which brings the
company average to 5.3 – more or less in line with the 5.2 estimated by ISTAT.
| 109
In fact the provident and assistance systems of the organizations can also enter
associates and owners who enrol on the pay books of their companies, as such the
contributions paid by companies for subjects from time to time put on contract generally
end up in the accounts of the institute which, directly managing their services (through
representative agents or on their own) find themselves in a condition similar to that of
freelance professionals or autonomous workers. They are equally compensated, with
retributive forms for services and in large measure find themselves in the category of
‘artists and technicians’ containing over 58,700 subjects (corresponding to 77% of the
entire cinema industry perimeter).
The second ENPALS category ‘workers and employees’ numbers, in fact, little more than
17,500 individuals, identifiable in dependent personnel, and indeed it is true that despite
being equal to only 23% they “cover” the major section – 63% – of working days included
to calculate the extent of so-called “social contributions”. On the other hand, of the eight
areas of codified activities (production companies, various productions, production
establishments, development and printing, dubbing, distribution and rental, exclusively
cinema businesses, all-purpose cinema businesses) the first two – those of major culture
and industrial tradition and generally having a permanent staff, even if of few persons –
number a large majority of fixed positions, as well as those of a temporary nature: over
25,900 with an incidence of 34% out of a total of old and new contributors.
2. Staff screening
Thanks to the data and statistics of ENPALS – significant, in particular, as will be seen,
for arriving at an estimate of the retributive levels of the sector and of the economic
values of the various types of efficiency – one can, for example, delineate a territorial
map of the entrepreneurial and human resources which animate the national cinema.
Keeping in consideration as a first, preliminary two circumstances.
The first concerns the effective consistency of entrepreneurial and company patrimony
within the Italian cinema industry. The discrepancy between the number of active companies
(9,071 active, of which 4,400 are limited companies for the databanks of the Italian Chamber
of Commerce; 3,471 in 2006 and 3,520 in 2007on the ENPALS register) appears
comprehensible in light of the real practicality of the same companies, from the voluntarity
which submits, in such cases, to the adhesion of the providential and assistance regimes,
whereas to the Register of companies it is obligatory and indispensable for launching any
activity, but, above all, for having dependents on contract for an unlimited period of time or
a limited period of time with the consequent necessity of regularizing the position and from
the choice on the part of the owners or the associates of the smaller companies to enrol or
less on the pay books or to put themselves as an eventual occasional collaborator.
The second circumstance concerns a certain incongruence between the various
“repertories” as to the geographical distribution of the productive apparatus and to the
110 |
relative weight of the Roman and Lazio cinema poles on the national total, given their
concrete incidence, decisive to the equilibrated measurement of the potentiality and
territorial capacity. Also in this case the statistical dichotomy – 28.8% of companies for
Cerved and 45.5% of employed for ISTAT, as opposed to the respective quotas of 42.9% and
62.3% for Enpals – depending on the nature of both the studies (those of Cerved and Enpals
are censuses, one on the whole sector, the other internal to the sphere of competence;
that of ISTAT is a survey) as well as the diverse bodies. In particular, as stated, the focus of
the mission of Enpals and of the motivations for adhesion is tied to the occupational and
contractual status with the purpose of providential and assistance treatment, for which the
structural and company entrenchment of the operators of capital become emphasized,
rendering plausible, in this sense, the separation of certain orders of size.
The data of the mutual societies – which confirm the role of Milan as second region as well
as the importance of the three poles of Piedmont, Emilia Romagna and Campania, according
to the statistics of Cerved permit a profound analysis of the job market and to verify the
occupational structure of the sector. A portfolio, that of cinema activity, so various as to
represent in reality, from a professional point of view, a type of improper reference sample.
TAB. 2
GEOGRAPHICAL DISTRIBUTION OF CINEMA SECTOR EMPLOYEES
Percentage of staff
per region
Active Companies
Contributors registered
on Enpals
Average staff
per company
Piedmont
Aosta Valley
Lombardy
Trentino Alto Adige
Veneto
Friuli Venezia Giulia
Liguria
Emilia Romagna
North
201
1
605
28
122
27
64
224
1,272 (36.7%)
1570
5
19.128
89
1.916
230
347
2.481
25,776 (33.7%)
7.8
5.0
31.6
3.2
15.7
8.5
5.4
11.1
20.3
Tuscany
Umbria
Marche
Lazio
Central
142
31
81
1,492
1,746 (50.3)
859
161
362
46,585
47,967 (62.7%)
6.0
5.2
4.5
31.2
27.5
238
6
1,013
513
45
88
619
207
2,729 (3.6%)
5.7
2.0
8.0
5.3
3.8
3.4
5.1
8.0
6.0
Abruzzo
Molise
Campania
Apulia
Basilicata
Calabria
Sicily
Sardinia
South and Islands
42
3
126
97
12
26
121
26
453 (13.0%)
Elaborated from data of “Lavoratori e imprese dello spettacolo e dello sport professionistico: principali dati occupazionali e retributivi” edited
by the statistical-actuarial coordination of Enpals, Rome 2008.
| 111
Above all, in consideration of the rapid and constant evolution which continues to pass
through, as substantiated by the quota of new companies out of the total of activity: for
over 60% were founded in the last twenty years (only 12% and 20.4% in the twenty years
prior to that), with 66.6% in the area of production. Furthermore, in light of the company
disintegration as a result of corporate designation, size and class of turnover, which has
its active principles in the same nature of the product and in its means of production:
the two basic conditions which finish rendering paradigmatic the fragmentation of the job
market in all areas of the sector.
3. Sector coordinates
The artistic nature and particular conformity of the cinema sector expresses a certain
segmentation with the intensity and high frequency of specializations required and the
concentration of professionalisms involved is where the creative performance constitutes
the most important input. The work involved can, in effect, be summarized, according to
conventional, management nomenclature, as being of at least five types1
• Creative, creative staff, including authors, screenwriters, set designers, composers,
costume designers;
• Artistic, artistic labour, in which are producers, directors, directors of editing, filming
and choreography;
• Of stage, performing labour, including actors and extras, eventual musicians and
dancers;
• Technological, technical line, which includes director’s assistants, those responsible
for casting, filming operators, sound and lighting technicians, electricians, prop
handlers, set assemblers, tailors, make up artists, hair dressers and the like;
• Administrative, administrative work, with agents of production, accountants,
purchasing, rental and provisions staff...
Within each division there is, in turn, full-bodied areas of specific competencies, among
which one can trace perhaps only one common element: the project services, which are
actually tied to single phases of production as opposed to the individual film in its entirety
(this is valid, primarily, for the first four categories, listed by ENPALS under “artists and
technicians”, whereas the fifth tends to be that classified as “workers and employees”).
The continuous working presence which materializes for the entire cycle of film
production from the initial planning to the processing of a master copy, also this only
exists during the development of a determinate work. Potentially, such a condition is not
suitable for either the figure of the producer or the role of the director.
1
112 |
Fabrizio Perretti and Giacomo Negro: “Economia del cinema”, ETAS-RCS Libri, Milan 2003, pages 64-90.
OCCUPATION
The deficit of integration and stability of the job market finds is well testified by the
extreme containment of the permanent work force, estimated at a mere 20.8% of the
total – however, in the area of production the percentage of hired, permanent labour
stops at 15.1% – before which contributions are registered as 27.8% for short period
employment and 23.6% for so-called independent individuals: entrepreneurs in the strict
sense of the term, cooperative associates, freelance professionals, artisans and
autonomous workers (which, for very small companies arrive at 63.3%).
A second particular which implies the very slight occupational nature of the sector
consists of the low incidence, also on the preponderant area of flexibility, of untypical
work in the strict sense of the term, with a weight of collaboration on projects equal to
14.7% and of occasional collaborators equivalent to 13.1%.
If one amalgamates the area of independent workers ascribed as freelance
professionals, autonomous workers, artisans and cooperative associates or consortiums
to those who collaborate with projects and occasional workers as well as those on short
term contracts, it confirms how much the numerous forms of precariousness – as is
emphasised by in the study by Censis – “are structurally joined in a sector which works
on order and in which, for every project, the exigencies and the composition of the bodies
involved varies”. (Incidentally, one can cite as an example the occupational situation
illustrated in a balance note of one of the first ten production companies, with little more
than 150 staff members on the payroll during the year: 9% result as having a permanent
contract and 91% with a short term contract, with a unit cost of employment on average
equal to 23.3 thousand euro; as opposed to a sales proceeds for dependents, as can be
shown from the accounts of the group, of more than 490 thousand euro).
TAB. 3
TYPES OF CONTRACT FOR EMPLOYEES
Placement of dependents
for class of employees
Fixed-term contract
Open-ended contract
Independent and autonomous
Project Collaboration contract
Occasional Collaboration contract
Total
Total
sector
Distribution per range of those in employment
From 0 to 5
From 6 to 19 From 20 and over
20.8%
27.8%
23.6%
14.7%
13.1%
21.2%
4.4%
63.3%
8.0%
3.1%
27.0%
11.5%
33.7%
14.3%
13.5%
19.5%
32.6%
19.2%
15.1%
13.6%
100.0%
100.0%
100.0%
100.0%
Source: Censis survey “Le imprese dell’audiovisivo nel Lazio”, 2007.
The same Censis report reveals, furthermore, that a large section of companies –
precisely 46.5% of those sampled, a value which, in the production area rises to 55.3% –
also has recourse to young interns and personnel with work grants.
The frequency of unstable work terms with ample and constant recourse to negotiations
concerning contract endings or projects (which are very often resolved within a single
production) which raises the considerable superiority of the general number of
| 113
enrolments to ENPALS in comparison to those individuals effectively employed on a
yearly basis. This asymmetry, which is shown in the following table and which
distinguishes the whole macro sector of cultural activity and performing arts is verified
by the number of days in which contributors of the cinema sector work on average.
TAB. 4
AVERAGE AMOUNTS OF OCCUPATION FOR PERFORMING ARTS AND SPORTS
(+36%) as well as an ascent in annual working days for artists and technicians (by almost
20%), the number of which, nevertheless, was raised by a further 25%. Such contrasting
trend is also illustrated by the following table dedicated to the most recent period, from
2002 to 2007, the latter being the last year for which the data relative to the principle
indicators is available (in particular the number of employees, the number of average
working days in the course of 12 months and the average, annual remuneration).
TAB. 5
Activity sector
in Enpal
Cinema
Music
Theatre
Radio/Television
Various Entertainments
Sports Facilities
Various
General Average
Working days per year for every professional unit
All categories
Artists and technicians Workers and Employees
81
53
80
215
54
182
40
39
44
63
158
37
91
31
228
238
188
262
189
194
103
96
50
214
Source: “Parametri fondamentali della distribuzione dei piu significativi caratteri quantitative” edited by the actuary-statistical coordination
of ENPALS, Rome 2008.
From the moment that the number of annual working days totalled in 2007 of the
contributors of the cinema sector arrives at a little more than 6.2 million, one can
hypothesize what would be the total number of staff – if full time – necessary for
achieving it: a few more than 26,950, as opposed to 76,241 actually registered. Such
virtual calculations permit, therefore, the deduction, purely as an exercise, that the
employment is so occasional that it would be necessary, within the category of “artists
and technicians”, to have the contributions of a good six subjects to combine together to
form, with their average services, an eventual effective year of working days.
Comparisons aside, the modest sample of utilization (rather than true and proper
occupation) of the artistic and technical population, expressed by the annual number of
days worked, is put in correspondence to two contextual factors: the rate of development
of the sector and the density of staff.
REMUNERATION
Between 1980 and 1990 there was registered an increment of that sample close to 90%
and an increase in “performance” professionals close to 75% thanks to a renewed vitality
in the activity of the sector, indeed, this in turn had also fuelled a robust injection of new
personnel on open-ended contracts into the category of “workers and employees” equal
to 56%. However, in the following decade company activity underwent a contraction –
resulting in a consequent reduction of over 40% of so-called permanent dependents –
also affecting the rate of employment by increasing the number of available artists and
technicians. From 2000 to 2007 production returned, albeit by little and between highs
and lows, thereby favouring both a resumption in the assumption of full time personnel
114 |
Percentage Variation
On Preceding Year
JOB MARKET TRENDS FOR OCCUPATION AND REMUNERATION
Active
Contributors
Days Worked
Average Remuneration
Cinema
Registered In Sector On Average Per Worked
Annual
Companies on Enpals
per Year
per Unit
Day
per Staff
Total
Remuneration
Amount
2002
2003
2004
2005
2006
2007*
+1.5
+0.9
+1.5
-1.4
+7.1
+1.4
-4.1
-6.0
+5.2
+8.5
+2.4
+2.3
Staff Total in Cinema Sector
+1.8
+6.2
-3.5
+2.7
+6.3
+1.0
+3.8
-4.3
+0.2
-2.2
-4.6
+1.0
+0.1
-5.1
-0.3
+9.4
+7.2
+2.5
+2.8
-0.4
+0.5
+13.4
+0.6
+6.0
-0.2
-6.4
+6.0
+13.6
+7.4
+4.0
2002
2003
2004
2005
2006
2007*
-
-5.6
-7.3
+4.5
+10.6
+1.4
+2.8
Artists and Technicians
-3.0
+2.7
-4.7
+2.9
-4.7
-4.0
+17.5
+0.6
+1.4
0.0
+2.1
+10.8
-0.1
-6.2
+1.2
+6.4
+7.6
-5.8
+2.3
-3.1
-1.0
+13.0
+7.1
+18.7
-3.3
-3.1
+1.9
+25.0
+9.1
+15.0
2002
2003
2004
2005
2006
2007*
-
+1.7
-1.4
+7.0
+1.5
+5.6
+0.9
Workers and Employees
+2.7
+2.7
-2.8
-1.3
+9.2
+2.0
-2.6
-4.1
-0.5
-5.8
+0.8
+2.0
0.0
+1.4
+1.5
-4.1
+5.5
-2.5
+4.4
-1.5
+3.5
-0.7
-0.6
+6.1
+4.4
-1.2
+10.8
-0.7
+4.9
+2.5
Elaborated from ENPALS data: “Occupazione e retribuzione dei lavoratori dello spettacolo e dello sport – Parametri fondamentali della
distribuzione dei piu’ significativi caratteri quantitative” 2007, “Statistiche sull’occupazione e sulla retribuzione dei lavoratori dello spettacolo
e dello sport – serie storiche” 2008, “Le attivita d’impresa nel mondo dello spettacolo e dello sport professionistico” 2008, “Lavoratori e
imprese dello spettacolo e dello sport professionistico: principali dati occupazionali e retributivi” 2008, edited by the ‘Coordinamento statisticoattuariale’, and “Report Direzionale 2007” edited by the ‘Ufficio organizzazione e controllo gestione’ of the ‘Ente nazionale di previdenza
e assistenza per i lavoratori dello spettacolo e dello sport’.
* The certainty of the parameters relative to the year 2007 still cannot be considered definitive and, therefore, the reported percentage
variation refers to projected estimates.
If attention is focused on the relation between the indexes of occupation and
remuneration the frequent divergence within the same year of the distance between
them will be noted. This is a sign which both implies and signals how much the job supply
within the sector is constantly greater than the demand on the part of the companies, as
a consequence influencing the level of remuneration. The elasticity of such fluctuations
and their response (more opportunities for work but at less cost and less job offers ,
however, with better pay conditions) serves as a rival attraction to the natural flexibility
| 115
of the types of employment, distinguished from those often infinitesimal employment
areas.
Nevertheless, the effect of two key factors – sector trends and number of occupied
individuals as opposed to individuals in search of employment – translates into a
combined willingness which accentuates the tendential, structural rigidity which
characterizes the job market within the cinema sector: also when they turn towards a
positive confluence they do not manage to start an authentic evolution of the system nor
to modify, above all, their personal status as well as the professional and economic
conditions of the vast majority of its components. This can be clearly seen observing the
quartile subdivision of professional units employed in the cinema sector below.
TAB. 6
STAFF DIVISION BY EMPLOYMENT TIME AND REMUNERATION
Quartile distribution
and monetary value in euro
First 25% of staff
Male
Female
Average
Maximum number
age
of days worked annually
Upper limit
on daily remuneration
Maximum annual
Remuneration
25
26
25
2
2
1
63.31
65.50
58.83
161.00
183.00
138.00
Artists and technicians
Male
Female
251
25
24
1
1
67.00
67.00
65.50
122.00
136.00
100.00
Workers and Employees
Male
Female
29
29
28
156
156
154
48.13
52.77
43.77
7,217.50
8,310.75
6,135.25
50% of staff
Male
Female
33
34
32
10
12
8
82.00
86.50
76.50
1,106.00
1,341.00
847.50
Artists and Technicians
Male
Female
33
34
31
3
4
3
86.50
90.93
81.33
411.00
499.00
300.00
Workers and Employees
Male
Female
35
36
34
286
296
277
69.46
74.38
63.58
16,992.67
18,746.50
14,752.50
75% of staff
Male
Female
44
45
42
148
150
146
142.80
150.00
134.26
13,396.50
15,000.25
10,966.00
Artists and Technicians
Male
Female
44
45
42
31
40
20
156.59
162.50
150.00
4,427.25
5,915.50
2,793.00
Workers and Employees
Male
Female
43
45
42
312
31
312
109.24
115.88
101.28
30,032.50
32,507.25
27,555.00
Source: “Parametri fondamentali della distribuzione dei piu significativi caratteri quantitative”. edited by the ‘Coordinamento statisticattuariale dell’ENPALS, Rome 2009.
116 |
The consolidated differences between the treatment of male and female personnel
remains perceptible, in the same way the level of appreciation of younger staff members
remains modest, as a result of their lack of experience. Applying mode parameters, the
manner of statistical distribution for ascertaining the maximum frequency (or rather the
units of measurement common to the maximum number of individuals) one can verify,
for example, that for artists and technicians with an average age of 23 years of age, solely
one working day per year with a compensation of 55 euro, which, rather than constituting
the average daily remuneration represents the annual total.
The benefits, when they exist, reveal themselves to be of relative consistency for the average
range of staff members, from the moment that they are distributed in arithmetical proportion
to a superior number of recipients, and they assume, instead, a particularly rewarding form
(almost a geometrical projection, creating, in turn, a real “fortune”) for only a few.
This “parcelling out” of resources can be considered for some as a congenital syndrome
of the job market within the cinema sector, the understood result of both the fascination
and forces of attraction which the cinema continues to exercise for a great deal of artisticprofessional and technical categories as well as for inexperienced youngsters who reply
to the call almost without hesitation, even when they are conscious of the difficulties that
they must face in order to cope with daily expenses.
If one broadens the analysis of the employment outline, proposing a further subdivision in
terms of deciles rather than quartile subdivision (giving two essential values, those which
are the most representative) as in the following table, there is a clear confirmation of the
remarkable availability of work units in comparison to the occupational and economic
resources which the market offers. The extent of ENPALS contributors which compose,
for instance, the first 6 deciles concerns merely 45,850 persons. This adds up to 370
thousand total days, with an average index of 7.9 days per person, and any full-time staff
would reduce them 40 times, to 1,185. Of this group of staff occupied in a myriad of microoccupations, half are less than 25 years old whereas the other half is less than 35 years old.
TAB. 7
DISTRIBUTION OF EMPLOYMENT PERIODS AND REMUNERATION
Value of deciles
for all staff
Until 10% of employees
Until 20%
Until 30%
Until 40%
Until 50% of staff
Until 60%
Until 70%
Until 80%
Until 90% of staff
Last 10%
Upper limit on annual
working days
1
1
2
4
10
34
99
196
312
312
Maximum annual
remuneration in euro
68.00
130.00
218.00
463.00
1,106.00
3,557.20
9,357.00
18,061.80
30,083.20
9,253,050.00
Source: “Lavoratori delle imprese dello spettacolo e dello sport professionistico: principali dati occupazionali e retributive” edited by
‘Coordinamento statistic-attuariale dell’ENPALS, Rome 2008.
| 117
On the other hand, the recourse to labour on standby and short term contracts of minimal
commitment have always been a part of the cinema industry. Once they were the
instrumental yardsticks such as the lists of special placements for the performing arts
(which, already in 1976 could count 10,842 enrolled actors, of which 3,492 were female,
in the various sectors); today further studies can be relied upon. These more recent
TAB. 8
DISTRIBUTION OF PERIODS OF EMPLOYMENT IN ACTIVITY SECTORS
Values of deciles
for all staff members
Until 10% of employees
Until 20%
Until 30%
Until 40%
Until 50% of units
Until 60%
Until 70%
Until 80%
Until 90% of staff
Last 10%
Cinema
1
1
2
4
10
34
99
196
312
312
Maximum annual remuneration in euro
TV and radio
Theatre
18
73
156
229
285
312
312
312
312
312
2
4
10
21
39
67
100
147
246
312
Music
1
2
3
5
9
18
34
75
233
312
Source: “Lavoratori delle imprese dello spettacolo e dello sport professionistico: principali dati occupazionali e retributive” edited by the
‘Coordinamento statistic-attuariale dell’ENPALS’ Rome 2008.
studies certify that their pathological application in recent years is leading to elevated
levels of intensity, with a progressive concentration of the same fragments of utilization.
Only in the music sector, where production is centred on activity which is substantially
more “episodic” such as that of discography and concerts, reveals annual employment
periods inferior to every division of the cinema sector, which, however, in turn, registers
a rate of annual employment decisively limited for the 70% of employees and manages
to “overtake” that of the theatre only with the remaining 30% of the three higher levels.
Clearly outside quota, as shown by the previous table, is the radio-television sector, dutybound to the production of programmes and transmissions benchmarked for continuous
diffusion.
Maintaining observations limited to sectors of the performing arts in the strict sense of the
term through the comparison of the levels of annual remuneration for deciles (following
table) renews the observation that the major criticality of the sector emerges from the base
of its full-bodied professional structure. Leaving aside musical activity, the cinema industry
discounts remunerative handicaps for 60% of its employees, whereas the peak of
compensation also belongs to the cinema – doubling even the top of television remuneration
– thereby defining the tenth and highest range, that which is defined as the ‘richest’.
It is true that the employment supply and demand and remunerative levels are similarly
structured in measure and form within all creative, cultural, sports, performing arts and
entertainment categories, registered, for instance, by ENPALS, the public social security
organization. Neither, for that matter, can it be excluded, given the proximity of artistic
118 |
TAB. 9
CLASSES OF REMUNERATION FOR ACTIVITY SECTORS
Values of deciles for
all employees
Until 10% of employees
Until 20%
Until 30%
Until 40%
Primo 50% of units
Until 60%
Until 70%
Fino all’80%
Until 90% of staff
last 10%
Cinema
68.00
130.00
218.00
463.00
1,106.00
3,577.20
9,357.00
18,061.80
30,983.20
9,253,050.00
Maximum annual remuneration in euro
Tv and Radio
Theatre
1,139.00
4,018.00
8,606.50
14,173.00
18,596.00
23,380.00
29,477.00
36,245.00
45,347.00
4,315,782.00
99.40
250.00
600.00
1,296.00
2,592.00
4,590.00
7,637.00
12,595.20
21,142.40
3,161,572.00
Music
41.00
90.00
173.00
325.00
608.00
1,153.00
2,456.00
6,165.00
24,944.32
1,600,924.20
Source: “Lavoratori delle imprese dello spettacolo e dello sport professionistico: principali dati occupazionali e retributive”, edited by ‘Coordinamento
statistic-attuariale dell’ENPALS’, Rome 2008.
TAB. 10
AVERAGE ANNUAL REMUNERATION IN SPORTS AND PERFORMING ARTS SECTORS
Activity
Sector
Cinema
Music
Theatre
Radio/Televisione
Various Entertainment
Sports Installations
Various
General Average
Sports Professionals
Income from work per unit in thousands of euro registered by ENPALS
2004
2005
2006*
2007*
10,145
6,891
8,587
25,810
6,997
10,960
2,452
11,508
7,529
9,035
24,391
8,362
13,733
2,899
12,175
7,642
8,706
25,779
8,966
12,871
2,584
12,912
8,105
9,233
27,339
9,508
13,650
2,740
9,122
9,590
9,767
10,137
126,993
147,199
149,453
152,090
Source: “Parametri fondamentali della distribuzione dei piu significativi caratteri quantitative”, edited by the ‘Coordinamento statistico-attuariale
dell’ENPALS, Rome 2008.
* The data relative to the years 2006 and 2007 are not considered definitive and are the result of revisional estimates by ENPALS.
performances, that professional groups classified by ENPALS in a single sector dedicate
part of their commitments in diverse areas, predominantly television productions and
advertising. Nevertheless, there remains the fact that the majority of commercial
performances within the film industry are of an enormous number, a fact which also
transpires from the observations on a larger scale of the work force involved and their
remuneration.
Among all the professional sectors of the ENPALS universe, the cinema constitutes, with
29.8% of enrolments, the most populated sector – as opposed to 24.2% for music, 13.5%
for various entertainments, 10.8% for radio-television, 8.1% for the theatre, 7.5% for
sports installations, 2.6% for sports professionals and 3.5% for other activities – as a
result the cinema sector pays the majority of contributions, greater than 30%, to the
annual remunerative amount of the whole ENPALS institute.
| 119
EARNED INCOME
For this, returning to the origin of the difference in positions, reconfirms itself based on
the reference to the diverse and higher frequency of professional contributions tightly
subject to quota restrictions: a process which is natural to cinema production and
thereby, over time, becoming a system; not, however, free from latent exasperation which
introduces into the job market certain standards (with growing rhythms, also today) which
are formally classed as borderline. These also appear in respect to strategies of
containment of work costs of a particular cogency, such as those induced by the evolution
of the multimedia market with the gradual convergence of cinema and television which
has had its forerunner in the principle television networks.
TAB. 11
AVERAGE REMUNERATION VALUES FOR CINEMA ACTIVITY
Average compensation in euro
Artists and technicians
Workers and employees
Staff total
Daily remuneration
165.87
83.32
162.11
TAB. 12
Annual remuneration
8,931.94
20,351.95
10,937.99
Source: “Parametri fondamentali della distribuzione dei piu significativi caratteri quantitative” edited by the ‘Coordinamento statisticattuariale dell’ENPALS. Rome 2008.
This is reconfirmed by another element of comprehensive valuation as the average index of
remuneration of the services furnished by the two principle occupational categories which
includes for ENPALS anyone who is called to employment or to collaborate with the cinema.
The ‘artists and technicians’ which form 77% of the professional cinema category against
23% for ‘workers and employees’, produce 59% of the remunerative amount precipitated
from the total of sector staff (519 of the 818 million of euro, to which can be added the
complementary quota of 41% of the others, equal to 299 million) and, moreover, they
manage to accumulate solely 2.2 million working days annually against 4 million (63% of
the total) of workers and employees, however, their average daily remuneration amounts
to practically double those applied as “guaranteed colleagues” generally with permanent
contracts, on average their earned income precipitated in a year to 43.8% in comparison
to that recognized for workers and employees.
More focused indications emerge from the details of the “payslips” specific to the various
professional qualifications and competencies individuated in the area of artists and
technicians and in that of workers and employees (revealing that such a subdivision is not
at the discretion of ENPALS, but rather regulated by norms and laws of the state)2.
What is particularly noteworthy is the consistency of the group which corresponds to the range
of services “on scene” (performing labour) where 41,902 subjects are concentrated: precisely
2
120 |
71.1% of artists and technicians – corresponding to 54.8% of all cinema sector staff – in
comparison to 5.7% of the “artistic” nucleus (artistic labour), 1.9% creative staff and the
remaining 15.4% of the technical line, plus 5.9% administrative work which, on the basis of the
fixed-term contractual placement do not enter into the category of ‘workers and employees’.
The first is fundamentally the area with a high rate of instability which traverses the
whole sector of production and where the position of major precariousness is found
having a maximum point of micro-engagements and occasional employment. This is a
professional area with absolutely the lowest level of utility (on average 11.5 working days
pro capite in the course of a year), equally reporting compensation for daily services less
than 17.7% of the same average range of all fixed-term categories, being the component
of presences – seven out of ten – most limited.
Legislative decree number 708 of 16th July 1947; law decree 182 of 30th April 1997; law 289 of 27th
December 2002; ministerial decree of 15th March 2005.
CONSISTENCY AND TREATMENT OF PROFESSIONAL TITLES IN THE CINEMA SECTOR
ENPALS activity category
and relative
how many annual working
days
average daily
compensation
in professional euro
Artists and Technicians
58,926
Actors and Utility Actors
40,102
Fixed Term Employees
4,408
Organizers, Directors, Inspectors and Secretaries
3,447
Directors, Assistants, Screen Writers, Dubbing
3,102
Filming Operators and Assistants
2,032
Editing, Sound, Development And Printing Technicians
1,899
Prose Actors, Variety Performers and Attractions
1,459
Set Designers, Interior Designers, Architects, Costume Designers 1,116
Make Up Artists and Hairdressers
740
Terpsichoreans and Dancers
224
Scene Directors and Dubbers
158
Concertists, Orchestra Conductors and Orchestra Members
113
Choreographers, Choruses and Special Figures
76
Administrators of artistic formation
33
Lyrical Artists
8
Orchestra Directors and Prompters
5
Fashion Models
4
38.8
11.5
87.0
111.5
100.5
118.7
124.3
41.6
112.3
74.9
26.5
127.1
21.1
77.2
221.6
23.7
15.2
18.0
211.18
173.69
122.84
150.16
393.60
126.79
148.21
459.84
186.66
201.78
226.97
193.34
273.86
225.41
103.25
205.10
780.11
183.68
Workers and Employees
Administrative and Technical Staff*
Operators and Cinema Assistants
Ushers, Caretakers and Cleaning Personnel
Rental and Distribution Staff
Permanent Contract Staff
Drivers and Personal Staff
Rental and Distribution Shop Assistants
17,506
13,778
1,641
1,173
614
210
69
21
223.8
231.6
218.0
177.7
255.6
290.4
182.7
251.6
85.50
88.15
60.02
44.84
114.22
76.14
95.29
48.55
General Total
76,432
81.2
131.80
Source: “Lavoratori delle imprese dello spettacolo e dello sport professionistico: principali dati occupazionali e retributive” edited by the
‘Coordinamento statistic-attuariale dell’ENPALS’ Rome 2008.
Dependent administrative and tecnical staff of production, dubbing, development and printing.
| 121
The cross checking of the data of the latest prospect, with figures pertaining to the
division in quartiles and deciles of the cinema sector population permits certain
considerations on the dynamics and economic coordinates of the job market in relation
to diverse professional titles, as well as on their real valorisation as arts and occupations
of accentuated specialization and creativity. The high number of staff on the margins of
inactivity is the threshold which signals the limits of such scarce utilization (less than 12
working days per year) showing the excess of supply of services in comparison to demand
also brings with it the consequent phenomenon of forced rosters with a remarkable quota
of persons. From one year to the next, in other words a certain number of general actors
– around 7.5 thousand – do not manage, within a period of twelve months, to earn any
income which is subjected to fiscal or welfare withholding. There does, however, exist a
range of slightly ‘less impoverished’ where the compensation appears correlated to
commitments lent for such brief periods within the arc of 365 days that they result in an
extremely reduced entity: less than 3,550 euro for 60% of all the subjects with such a
title and less than 9,350 euro for a supplementation of 10% units.
The “lightness” of basic salaries, in reality, indistinctly involves all professional figures,
even if the effects are commensurate to their relief showing themselves to be diffuse in a
manner which is principally extended to the grand “invasion” of secondary actors and
technicians with little experience, with less tutelage and less protected, as well as being
without their own contractual power. However, descending further it is possible to verify
that according to the reports of ENPALS the slightness of the forms also hits a large range
of thousands (over 5,600) of artists, directors, and directors’ assistants, set designers,
authors and creative personnel who live exclusively from their work. Not only; also within
these professional figures one can individuate a handful of quantitatively stable (around
10%) not immune from the turnover which is also forced for 12 months thereby suffering,
in the course of a year, the lack of remunerative credit which is a regular feature.
On the contrary, the route leading to the vertex of the remunerative pyramid truly appears
restricted. Beginning with the progressive disaggregation of the data (that naturally
requests growing caution) there is the possibility of estimating that of the over 7.4
thousand film makers for whom insertion in the latest deciles takes off, there are around
100 who can be described as millionaires, in euro.
It is impossible to objectively exclude the presence of practices of elusion and tax evasion
within company activity. This is a difficult aspect which escapes any possibility of census
or even of summary certainty in as much as it is hidden. The majority of subjects who are
placed at the base of the staff pyramid legitimizes, furthermore, the assumption that a
certain part of personnel – generally very young given the average age – and occasional
employees, primarily in so-called minor productions (promotional documentaries,
educational videos, or documentaries concerning the industrial and corporate sector)
managed through intermediaries (often special representatives) end up supplying that
area of activity in the black which, according to the estimates of research and surveys of
the sector, subtract from the official accounts in all of the sectors and, at the national
122 |
level, from over 20% of the work force and from produced earnings. Certain trade union
organizations maintain that apart from employment in the black and tax evasion tout court
there are also a number of illegal and illicit practices, principally in the form of unpaid
rehearsals and (still worse) the payment of contributions without remuneration.
In every case one can observe, through the time series of surveys carried out, that in the
last decade a slow but perceptible process of creeping impoverishment at the base of
the whole system has begun. The development of serial productions with a budget which
is constantly more limited, principally in the television field, has been accompanied by
only a partial adjustment of the costs of goods and services destined for the video-cinema
industry, whereas the prospective enlargements of work opportunities has induced a
“repopulation” of the staff base (thanks to the new enlistments since 1998 the number
of available personnel has doubled) certainly in excess of the effective work opportunities.
In the film Day for Night the French film maker François Truffaut defined the condition
of every director during the making of a film: “The production of a film is similar to the
journey of a stagecoach in the Far West: at the beginning one hopes for a good voyage,
then one begins to wonder whether it will arrive at the destination”. Today such a remark
is also valid for describing the situation of actors and numerous other professionals of
the cinema sector at the beginning of their career as they confront the job market.
In the same annual relations of ENPALS on carried out activity and on the state of the
sector one can trace a recurring phrase as to that major part of members (always greater
than 50%) who remain below the “vital” occupational and remunerative parameters,
meaning those conditions which permit a livelihood with a single performance activity.
Such a situation is not exclusive to Italy, at least according to the study “Age, Gender and
Performer Employment in Europe” commissioned by EuroFia, the European group of
FIA- International Federation of Actors (to which over 100 organizations from across the
world adhere, including the Italian SAI – Sindacato attori italiani) and also thanks to the
financing of the European Commission of Brussels. Coordinated by the researcher
Deborah Dean of the Industrial Relations Research Unit of Warwick University in the
United Kingdom and also forming part of the European Observatory on Industrial
Relations of the European parliament, this study confirms that “the majority of artists
cannot securely live with such conditions” and, according to the average of the studies
conducted in 25 diverse countries “5% of these, in the course of a year, have total
earnings of zero by means of this profession”.
TURNOVER
The absence of income in the course of a year is a phenomenon which primarily affects
workers in the cinema sector, however, ENPALS documents register for a number of
years a positive turnover and today enrolment is rife. This is also because cinema activity
is, above all, together with theatrical activity, the first to attribute, as a norm, the label
“artist” and the title “actor” to any youngster, as opposed to that of “director”, a label or
title which will accompany them every time they apply to production companies or casting
| 123
agencies in search of engagements. Practical experience with television companies is
recognized as a “power of investment” of an inferior character and authoritativeness:
generally speaking, in the world of entertainment and performance it is less important
on the CV. The category of cinema professionals, from actors onwards, is so difficult to
enter that, indeed, entrance is ratified also under the profile of fiscal-administration and,
in the end, welfare. Furthermore, given the scarcity of employment opportunities on set
in comparison to the number of applicants, it appears inevitable that such activity
develops in the direction of major employment prospectives.
What is also significant is the comparison between the staff members for the principle
professional titles of the category “artists and technicians” of the cinema and that of the
two major contiguous sectors, in other words the theatre and, above all, the television.
As can be noted, the television sector is the only sector lacking the presence of a
predominant artistic figure. In cinema this position is taken by actors (68.0% of the ‘artists
and technicians’ sector and 52.0% of the total sector), for the theatre there are prose
actors (56.4% and 47.9% respectively), and for music there are singers (68.0% and 64.3%),
whereas for television and radio the title of actor and of utility actor does not exceed
27.1% and 11.6% demonstrating the latent “draught” which the television –
predominantly consisting of utility actors – accomplishes in the contiguous professional
fields; a form of siphoning off which both mitigates and explains, albeit partially, the
abundance of staff of those sectors and, in particular, of the cinema sector (not forgetting
that the television sector takes over half of the economic resources generated by
activities of entertainment and performing arts).
Such a spurious form of horizontal turnover, however, does not have relevant effects on
vertical turnover, in other words, on incoming cash flow (continuous) and outgoing
TAB. 13
3
ARTISTS AND TECHNICIANS BY PROFESSIONAL TITLE IN ACTIVITY SECTORS
Staff numbers for the principle
artistic titles
Cinema
Tv and Radio
Theatre
Music
Gartists and technicians total number
58,926
Actors and utility actors
40,102
Directors, assistants, screen writers, dubbing
3,102
Prose actors, variety performers, amenities, singers, djs
1,459
Set designers, interior designers, architects, costume designers
1,116
Make up artists and hairdressers
740
Terpsichoreans and dancers
224
Concert performers, orchestra members, orchestrals
113
Orchestra conductors, chorists, choreographers and minor figures
76
Lyric artists
8
Orchestra directors, prompters
5
13,263
3,604
2,199
2,442
235
230
1
339
32
17
19
18,063
413
473
10,187
264
52
1,348
1,676
280
66
27
62,448
215
205
5,393
287
197
3,549
42,504
5,211
1,887
707
General total of sector
30,896
21,262
66,068
76,442
Source: “Lavoratori delle imprese dello spettacolo e dello sport profesionistico: principali dati occupazionali e retributive”, edited by the
‘Coordinamento statistic-attuariale’ of ENPALS, Roma 2008.
124 |
(limited, indeed almost irrelevant) cash flow which interests the theatre, music and in
primis the cinema. It should be remembered that in Italy there are at least 30 active
schools at the national level which offer over 200 courses for all professional activities
of the entertainment and performing arts sector and which “send out” every year
thousands of young artists (not counting the vocational training centres and courses
across the country which number over 100). The most accredited of these is the
‘Accademia Nazionale d’Arte Drammatica’ (National Academy of Dramatic Arts) of Silvio
D’Amico, which forms part of the university system MIUR – Ministry of Research and
University Education (similar to the ‘Istituto di Stato per la Cinematografia e la Televisione
Renzo Rossellini’ (Renzo Rossellini State Institute for Cinematography and Television)
of secondary level in Rome) with three year courses of study, plus a fourth year of
specialization, the only institution which offers an academic degree which has the value
of a university qualification. Furthermore, of equal prestige is the ‘Scuola Nazionale del
Cinema’ forming part of the CSC – ‘Centro Sperimentale di Cinematografia’ with a rich
history of over seventy years and which expressly prepares students for film production.3
Along the same lines the latest “Relazione sull’utilizzazione del Fondo unico per lo
spettacolo” (Report on the Use of the Unique Fund for the Performing Arts) prepared by
the ‘Osservatorio dello spettacolo’ (Observatory of the Performing Arts) of MIBAC reports
in a significant chapter – ‘The professional influx of graduates in artistic and performing
arts disciplines’4 – on the entrance into the job market of youngsters leaving so-called
“universities of the performing arts”, that is, from the classes of three year or five year
degree courses offered by a good 25 schools with courses that define such disciplines as
“Science and technology of arts and performing arts” rather than “multimedia
productions”.
The National School of Cinema numbers, for example, in Rome 60 students per year (other diverse
courses of specialization are carried out in Turin, Milan and Palermo); the NUCT – ‘Nuovo Universita’
del cinema e della television’ (New University of Cinema and Television) of Rome, promoted by the
autonomous funds CALT, numbers 180 for seven different professional activities (recitation, direction of
photography, visual effects, set design and screenwriting, directing, production with 15 students and
editing with 64); the School of Cinema, Television and New Medias of the Polytechnic of Culture, Art and
Language (which forms part of the civic school system of Milan) organizes 22 different courses. For
informational purposes and further evidence of vocational activities in response to every increasing
demand, one can point out among the most well-known initiatives the Pietro Scharoff Academy of
Dramatic Arts in Rome, that of Lazio, the Nico Pepe of Udine, that of the Teatro Bellini in Naples and
the Teatro d’Europa of Cesinali; then there are: Accademia dello spettacolo; Accademia europea di
cinema e television Griffith 2000; Accademia internazionale per le arti e la scienza delle immagini;
Accademia nazionale arti cinematografiche; Accademia della Luce; Corsi di Doppiaggio; Corso superior
di recitazione cinematografica; Link Academy; Master in gestione delle imprese del cinema e dell’arte;
Magica – Master europeo in gestione di impresa cinematografica e audiovisiva; NABA – Nuova
Accademia di belle arti; Professione Cinema; Scuola Romana di Fotografia; SFX – Studio Academy;
Virtual Reality and Multimedia Park; Visionario; Zelig-Scuola di television e cinema; plus the writing
schools Golden and Omero.
| 125
This is a ‘cross section’ of the first occupational range of the sector, that of major
turbulence, on the basis of statistical information regarding the education-employment
transition produced by ISTAT in the area of investigations (carried out every three years)
concerning the insertion into the job market of graduates, and which has interested
almost 2,500 youngsters on leaving such academic courses (974 from three year courses,
a little less than 1,500 from the longer courses). At the quantitative level, the chances of
employment of graduates in the science of performing arts demonstrate differences
which are relevant to the entrance onto the job market of youngsters who have obtained
other university titles not so much on the quantitative level – 46.7% for three year courses
and 47.7% the previous, now abandoned, longer Italian university courses against,
respectively, 48.5% and 56.2% – but rather the qualitative level, from which emerge
considerable differences.
As to contract relations, whilst around two graduates out of three of those who are
employed (62.8%) have a permanent contract, the number of youngsters who have an
academic title in performing arts disciplines as well as a permanent contract result less
than half (47.6%). Among these, those with a fixed-term, temporary contract are, in
proportion, double those who have graduated in other courses or other faculties: 28.8% as
opposed to 14.1%. The search for continuous, long-term employment following graduation
also, for performing arts students, reveals itself to be longer and more demanding usually
taking up to 15 months (in comparison to 11 months for those graduating in other
disciplines) indeed, one out of five has to actually wait for two or more years (20.2% against
16.9%). Even the percentage who choose self-employment is decisively reduced, at 9.3%
rather than the 16.0% average from the rest of the reference sample.
Such figures highlight the difficulties faced in entering the job market which is already
more than compartmentalized and in which, as is so often lamented, there does not seem
to open up adequate room for putting the new and younger generations in a condition to
develop and demonstrate their potential.
PROFESSIONAL TITLES
Clearly, cinema activity does not consist of a single, unique element. Rather, it reflects
the contingent situation of the economy and national production and, as far as the job
market is concerned, it also reflections the conditions, compatibility and trends of the
employment system of Italy. However, the scope for comparisons become even more
limited when the features which “personalize” the professional regime – the total
integration and constitutional fragility – appear in objective countertrends to a patrimony
of human resources, such as those of the sector, with a high potential for creativity,
artistic capacity and technical specialization.
Together with the same economic values which the job market expresses, the
repercussions in terms of qualifications, indeed, of professional disqualifications are a
litmus test which every case of abundance of human resources can involve and which
the cinema system, for years, has complained about.
126 |
TAB. 14
ARTISTS AND TECHNICIANS BY PROFESSIONAL TITLE WITH MAJOR CREDENTIALS
Number of works (documentaries
and films) per professional activity
Directors
Screen Writers
Editing Directors
Cinematographers
Set Designers
Costume Designers
Sound Track Writers
Sound Engineers
Special Effects
Casting Directors
Total Value of Sample
Total
Film Makers
At least 10 works
Number Percentage
Of which at least 10 Films
Number Percentage
389
499
300
235
156
129
223
281
143
46
31
13
28
23
7
10
11
47
43
5
7.9%
2.6%
9.3%
9.8%
4.5%
0.8%
4.9%
16.7%
30.0%
10.8%
25
11
17
19
6
10
8
36
43
5
6.4%
2.2%
5.6%
8.8%
3.8%
0.8%
3.6%
12.8%
30.0%
10.8%
2,401
218
9.0%
180
7.5%
Elaborated from data covered in repertory “Chi e’” (Who’s Who) of the “Annuario del cinema italiano & audiovisivi – 2008/2009 (Rome
2009) and from the internet site “cinemaitaliano.info” on 31st March 2009.
As an activity which is decidedly artistic and creative cinematography is concerned with
more than concrete monetary remuneration, but with another form of compensation,
immaterial but, nevertheless, important: so-called artistic remuneration consisting of the
“reputation” which every subject can boast of and which is accredited within the sector in
which such subjects operate. This consists of elements which can be placed at diverse levels
of valuation – which end up partially being reflected on the entity of economic treatment –
and, moreover, maintaining its intrinsic and autonomous value. This is given to each
professional by acquired experience and by the number of performances; by the release of
previous works and the number in which that professional has participated, based, primarily,
on their appreciation by both the general public and in terms of economic results obtained;
we can also add by the personal characteristics which eventually respond to the host of
opportunities offered by projects in preparation, be they either in the role of utility actors or
extras or of roles rather than under the profile of empathy, of the collaboration or the
capacity to integrate with the other individuals involved in a specific production.
Artistic remuneration is placed in a direct relation with the individual top names and increases
with the development of the individual’s career, this is because of the creative contributions
given according to the various titles (director, actor, screen writer, set designer, director of
photography, or director of editing and so forth) on the diverse occasions of employment and
their contribution to the eventual success of the produced film.
Such overbooking of artistic figures, furthermore, risks blocking the development of a
curriculum vitae for a large number of employees as well as for many its progressive
construction through the accumulation of performances which also favours the level of
remuneration on the market.
An insight may be obtained comparing certain figures regarding the consistency – in
term of quantity as opposed to quality – of the principle work credits extrapolated from
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TAB. 15
ARTISTS AND TECHNICIANS BY PROFESSIONAL TITLE WITH MINOR CREDENTIALS
Number of works (documentaries
and films) per professional activity
Directors
Screen Writers
Editing Directors
Cinematographers
Set Designers
Costume Designers
Sound Track Writers
Sound Engineers
Special Effects
Casting Directors
General Values of Sample
Cinema sector
employees with
less than 10 films
Up to 2 works
number
%
With at least 1 film
number
%
358
486
272
212
149
119
212
234
100
41
156
256
136
99
50
42
131
102
32
26
43.5%
52.6%
50.0%
46.7%
33.5%
35.3%
61.8%
43.6%
32.0%
63.4%
95
124
52
45
50
42
94
63
32
26
26.5%
25.5%
19.1%
21.2%
33.5%
35.3%
44.3%
26.9%
32.0%
63.4%
2,183
1,030
47.2%
623
28.5%
Elaborated from data covered in repertory “Chi e’” (Who’s Who) of the “Annuario del cinema italiano & audiovisivi – 2008/2009 (Rome
2009) and from the internet site “cinemaitaliano.info” on 31st March 2009. internet “cinemaitaliano.info” al 31 marzo 2009.
two of the principle versions of “Who’s Who?” for Italian cinema presented on the internet
site “cinemaitalia.info” and also on “Annuario del cinema italiano & audiovisivi” (Yearbook
of Italian Cinema and Audiovisual Industry) where each individual from the empirical
sample is a physical person with name and surname and, quite lengthy, professional
history and work experience, without the anonymity which at times seems to render
statistical accounting rather abstract.5
Against the sample of those involved in the cinema industry and their diverse professional
roles it is possible to count on their curriculums at least 10 films and other works (218
according to the table above, where, by ‘works’ are intended also documentaries and
short films) there is a second table which delineates the operators which have, amongst
all of the other employees, participated in the production of at least two works and,
amongst these, there are also those who have participated in at least one full-length
feature film (cf. table 15 below).
4
5
128 |
Edited by Fabrizio Maria Arosio, responsible for the operational unit “Istituzione e servizi culturali” of ISTAT.
As far as professional qualifications are concerned the ‘Chi e’’ (Who’s Who) of the web site “cinema
italiano.info” contains 11 databases which reveal 2,498 operators: directors (358), directors’ assistants
(128), set designers (499), directors of editing and assembly (300), directors of photography and filming
(235), musicians and sound track composers (223), screenwriters, architects and designers (156), costume
designers (129) sound technicians (281) engineers and technicians of special effects (143), casting directors
(46). The repertory presented on “Annuario del cinema italiano and audiovisivi” , reports, on the other
hand, from 15 different profiles: directors (389), director’s assistants (32), actors (959), set designers (288),
screenwriters (50), musicians and composers (73), directors of photography (87), costume designers (52),
dialogue writers (45), designers and sound (40), casting directors (24), dubbing directors (83), cameramen
(26), directors, inspectors and assistants of production (47), functionaries and general staff (123).
Considering the fact that within the intermediate sample range there are 1,153
individuals (equal to 48.0% of the total) with already between three and nine works, one
has a summary table of the potential capacity for utilization of this enormous group of
highly specialized technical professionals and employees already possessing a good
amount of experience in terms of Italian cinema production, and which introduces to the
market around 100 motion pictures a year, whilst the production of short films and
documentaries is near to 200.
ARTISTS AND TECHNICIANS
Reputational values essentially keep to the type of creative, artistic, of the stage and, to
some extent, also technical titles and not to those titles regarding administration or
employment, for which recognition is valid in terms of the performances almost
exclusively in terms of economic compensation. This is the key, for instance, to the most
traditional star system, however, in the sense that it is not easily measureable (even less
so for those individuals with no previous experience) it is at the base of the method of
making films which is slowly being imposed and where the managerial organizations
and production cycles are pre-eminently characterized by team work.
Within the Italian cinema the central axis around which such teams revolve is primarily that
of the director whose name, on the final market, constitutes the trademark as far as the
general public and critics are concerned and also influences the expectations concerning the
quality of the film. On the other hand, the importance of the director also influences the
access to not only financial, technical and artistic resources, but also human resources. In
terms of the work customs and habits among cinema circles one can refer to the analysis
carried out by two researchers of the Bocconi University in Milan, Fabrizio Montanari and
Alessandro Usai, who have applied certain methodologies of social network analysis to the
study of team productions based on the film casts of the period 1990 to 1998.6
What clearly surfaced were the presence of groups and sub-groups of stable employment
and, in particular, three very cohesive and proven formations around the figures of the
brothers Carlo and Enrico Vanzina, the director Enrico Oldoini and the scriptwriter
Alessandro Bencivenni, Leonardo Benvenuti (recently deceased) and Piero De Bernardi.7
The increase in the number of artistic figures and the tendency of habitual collaborations
and casts – with consequent beneficial effects on both remuneration and reputation –
on the contrary, places a second obstacle for professional titles: the dispersal of talent.
6
7
The frequency of collaborations is considered in light of the probability calculations which depend on game
theory. Suppose there exists only three objects, if, for every one of these there is the eventual formulation
of three preferences regarding how to work: with only one of the others in a pair; with both of the others;
with none of the other two. The total combination of these alternatives generates 64 diverse possibilities.
Fabrizio Montanari and Alessandro Usai: “La squadra artistica e ideativa” second chapter (pp.57-84) of
the volume edited by Severino Salvemini “Il cinema impresa possible. La sfida del cambiamento per il
cinema italiano”, Edizione Egea, Milan 2002.
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A further investigation by Usai and Montanari, carried out with a third researcher of the
Bocconi University, Giuseppe Delmestri, relative to the same time period and again
referring to the role of the director demonstrates how Italian productions is distinguished
by a strong polarization between an elevated quantity of writers who have written few
films and a limited number of cinema sector staff who have, nevertheless, worked on a
large number of film productions. Those who have made only one film amount to 330,
whereas only as few as 23 have directed more than six.8
If this is a reassurance for a large number of new directors producing their debut film, it is
undoubtedly a source of perplexity that the first film production has not been followed by a
second for many others and that a sentence has been passed without the possibility of
appeal. Such a phenomenon is, moreover, also in existence today. According to the
information provided by ANICA 50% of films produced in the last three years coincide with
the debut of their authors: 57 out of 90 in 2006, 43 out of 80 in 2007 and 61 out of 123 in 2008.
A number of these were also box office hits. From “Parlami d’amore” by Silvio Muccino
which earned 7.5 million euro at the box office to “Pranzo di ferragosto” by Gianni Di Gregorio
(neither film has been translated into English) with 2.5 million euro, whereas Pino Insegno
with “Ti Stramo” up until last March found himself with a quota of 400 thousand euro.
However, it remains to be seen how many of these 161 new successes (in only three years
half of those registered as nine, triple the time, of the 1990s) will know how to, or will be
able to, repeat themselves. That is if, to the vitality which is at the base of the sector,
favoured by new technology, also corresponds an effective evolution with the opening of
new protagonists and the progressive alignment between younger and older generations.
WORKERS AND EMPLOYEES
The second category of staff, that of workers and employees, presents a profoundly
diverse panorama for whom contractual relations in terms of open-ended, permanent
contracts with a stable and structured work load concentrating on managerial,
administrative and commercial activity which generally is more typical of the
manufacturing industry.
The consistency of the dividing line between the category of workers and employees and
the category of artists and technicians also reveals itself by the division of the indexes
which measure the distribution of characteristics. Just as the skewness, which has a
very limited form for workers and employees (-0.91 per annual working days and 1.32 per
8
130 |
Alessandro Usai, Filippo Montanari, Giuseppe Delmestri: “Il cinema tra arte e box office: reputazione e
relazioni” in “Artwork and Network” by Severino Salvemini and Giuseppe Soda, Edizione Egea, Milan
2001. The 23 directors who have directed more than seven films during the period are: Carlo Vanzina
(16), Neri Parenti (14), Pupi Avati (10), Carlo Verdone and Nina Grassia (9), Enrico Oldoini, Maurizio
Zaccaro, Gabriele Salvatores, Mario Monicelli, Maurizio Ponzi, Carlo Mazzacurati, Alessandro Benvenuti
and Aurelio Grimaldi with 7; Lucio Fulci, Ettore Scola, Daniele Lucchetti, Marco Risi, Francesco Nuti,
Tinto Brass, Cristina Comencini, Lina Wertmuller and Christian De Sica with 6.
annual remuneration) as demonstrated by the gathering of positions for the majority of
units near to the most gratifying values in comparison to those of artists and technicians
which are greatly more considerable (respectively 2.34 and, incredibly, 36.81) and which
reveal the unfavourable asymmetries, in as much as the majority of groups, due to
affinities of conditions, are concentrated at the base, where less favourable treatment is
situated. Otherwise, as the coefficients of variability which stand to indicate the large
size, or less, of the variations in determinate parameters in relation to the average
considered by all of those revealed within a determinate group: in this case the
percentage of the corresponding divisions for the same entry (days worked in a year an
annual remuneration) are 46.0 and 80.26 against 194.40 and 522.63.
Certain aspects of membership can, at this point, be revealed – to the specific cinema
sector – as to the range of first occupations and, that is, from the moment of entering the
job market for those who have just finished their studies. Other than representing a mere
47.6% in comparison to 62.8% of graduates from other courses and who find a permanent
occupation, the youngsters who graduate with an academic qualification in performing
arts subjects are assumed under the profile of a staff member with high or average
qualifications in a proportion which is decisively inferior: 29.3% as opposed to 43.4%.
A final consideration, therefore, can be expressed in light of the two circumstances
signalled at the beginning and at the end of the chapter on the relations of FUS dedicated
to the professional influx of youngsters with a finalized academic course and entering in
the culture and entertainment sector such as the cinema: the number of “young people
who on undertaking university studies every year choose to attend the course of so-called
“performing arts schools” certainly is not marginal: 4,500”9; and yet the qualifications
given in such courses “constitute an exclusive title and entrance channel which is
indispensable to the continuous employment developed for the 6% of employed
graduates”, whereas the number of youngsters who have found a position “for which any
kind of degree would have been sufficient is even less: 5.1%”.
4. Free or organized
In an area in which individualism and self-promotion fall within the “natural” prerogatives
of workers within the cinema sector, the heterogeneous specificity of the duties and
responsibilities (which are still more prolific given the evolution of computer and digital
technology and the innovations in productive standards) certainly do not favour the
aggregation of univocal interests, expectations, guarantees, objectives and parameters.
Furthermore, the flexibility of the job market proportionally marks the rarefaction of
9
Data referring to the academic year 2006-2007 in “La formazione universitaria in Italia per i beni culturali
e lo spettacolo” ECCOM – European Centre for the Cultural Organization and Management (October 2006).
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organizations of stable, social representation and still more the general scale of the sector.
The cinema sector and those who work therein consists of an uneven, heterogeneous
community – in as much as it is formed by individuals classed as substantially free – and
primarily based more on interpersonal relations, on familiarity, friendships and
acquaintances, and on relations resulting from the presence on set and in studios than
on category associations and federal organizations.
ASSOCIATES
The particular structure of the sector, distinguished by numerous specializations and by
strongly creative contributions, has furnished the development of free professional unions,
the so-called trade associations, employed more in the valuation and qualification of the
profession and in the formative development of those who turn to it rather than in the
development of a legal representation of the category and of the associated staff within a
determinate sector of activity. They are rather more like cultural and technical
organizations, as is confirmed by the sphere of creative works, as opposed to bodies with
social or trade union interests. Some of these organizations, such as ANAC – ‘Associazione
nazionale autori cinematografici’ (National Association of Cinematography), have acquired
through their initiatives a primary role in the history and evolution of Italian film making.
ANAC, led by Ugo Gregoretti and Citto Maselli, has always been involved in the defence of
the freedom of expression and in the protection of property rights, according to the aims
expressed since the foundation in 1950 due to the work of a group of “cinema writers”
which includes Age-Agenore Incrocci, Alessandro Blasetti, Mario Camerini, Ettore
G.Margadonna, Furio Scarpelli and Cesare Zavattini.
Such associations are, furthermore, also economic subjects when they endow themselves
of informational bodies, fund reviews, promote and manage schools and courses of
specialization, become partners in the organization of cinema festivals, institute professional
awards, initiate screening cycles or other manifestations which are open to the public.
Their categories are rather varied and are not susceptible to schematic classifications.
What seems to characterize them, independently of the eventual forces of adhesion that
they collect and of the number of enrolments, is the attention paid to the professional
themes, to contents and to the values of the performances, and definitely to the adequate
recognition of the contributions with which the diverse categories offer to the success of
the single film and, more generally, to the affirmation of the Italian cinema. If certain
affinities are revealed, it is certainly in virtue of such a mission, a mission which
understandably brings with it the associations of the four principle areas (creative,
artistic, on stage and technical) to an implicit synthesis regarding the defence and
valuation of professional roles as opposed to a development of the market which tends,
with its processes of multimedia integration, to standardize determine phases of
production compressing space for expression of acquired discretion.
Almost all founded expressly within the field of cinema production, these trade
associations have, over time, updated their business titles, significantly adding to their
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initials the term ‘audiovisual’ in a more extensive sense and with a major adherence to
the operative context.
Within this area classed as ‘creative’ one can also include (as well as ANAC) FAI –
‘Federazione italiana autori’ (Federation of Italian Writers), SNS – ‘Sindacato nazionale
scrittori’ (National Writers’ Union) – to which belong part of the authors and screenwriters,
UNUPADEC – ‘Unione Nazionale Unitaria Professionale Autori Drammatici e
Cinematografici’ (National Unitary Union of Professional Authors, Dramatists and
Cinematographers) and AIDAC – ‘Associazione italiana dialoghisti adattatori cinetelevisivi’
(Italian Association of Dialogue Writers and Film Adaptation Writers). The area classed as
‘artistic’ includes AIC – ‘Associazione italiana autori della fotografia cinematograficia’
(Italian Association of Cinematographers) with 93 members, AMC – ‘Associazione del
montaggio cinematografico e audiovisivo’ (Association of Cinema and Audiovisual Editing)
with 323 members, ASC – ‘Associazione italiana scenografi costumisti e arredatori’ (Italian
Association of Screenwriters, Costume Designers and Stage Designers) with 188 members.
Stage associations include ANAD – ‘Associazione nazionale attori doppiatori’ (National
Association of Actors and Dubbing Technicians) and ADAP – ‘Associazione doppiatori attori
pubblicitari’ (Association of Dubbing Technicians, Actors and Copywriters’. Technical
associations include AIARSE – ‘Associazione italiana aiuto registi segretarie edizione’
(Italian Association of Directors’ Assistants, Editing Secretaries), APAI – ‘Associazione del
personale di produzione audiovisivo italiano’ (Italian Association of Audiovisual and
Production Personnel), AITS – ‘Associazione italiana tecnici suono’ (Italian Association of
Sound Technicians) with 77 members, of which 37 are direct filming technicians, 29 are
sound technicians, 9 sound assemblers and 2 sound special effects technicians, AIAT-SFX
– ‘Associazione italiana autori e tecnici effetti speciali di scena (Italian Association of Writers
and On Scene Special Effects Technicians), AITR – ‘Associazione italiana tecnici ripresa’
(Italian Association of Filming Technicians) consisting of 116 members divided into 22 film
operators, 48 assistants, 32 assistant directors, 11 camera operators, 3 video assistants),
ANACINETV – ‘Associazione nazionale attrezzisti cinetv’ (National Association of Cinema
and Television Property Persons), ANTEPAC – ‘Associazione nazionale truccatori e
parrucchieri cinematografici’ (National Association of Make Up Artists and Cinema
Hairdressers), EMIC – ‘Elettricisti macchinisti italiani cineaudiovisivo’ (Italian Cinema
Audiovisual Electricians and Engineers), ANAGRUC –‘Associazione nazionale autistic
gruppisti cinematografici’ (National Association of Cinema Group Drivers). These last eight
associations, together with AIC, AMC and ASC are affiliated also resulting in a further, more
general representative organization: FEDIC – ‘Federazione italiana delle associazioni
cineaudiovisive’ (Italian Federation of Cinema Audiovisual Associations).
UNIONS
Fully titled economic subjects are, however, considered as trade unions, signatories of
the entrepreneurial organizations of the agreements which regulate, on the national level,
the activities of all of the employees of the cinema sector. Their number of members is
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substantially limited in spite of the objective professional complexity of the sector which
emerges, moreover, with concrete evidence of the contract contents which are among the
most meticulous and detailed within the whole panorama of national employment. Given
the particular productive structure and, primarily, the many and detailed technical
specializations involved, as well as fixing in detail the profiles and titles of all figures
involved in production (especially for the workers and set crews and often by extremely
subtle distinctions). Trade unions also define a protocol for a large number of operations
– and their individual phases – which form a part of the process of production.
Objective: Individuate and standardise work parameters for estimating the relative work
times and thereby quantify the reference compensation and the basic minimum of
remuneration owed. The fundamental problem, however, is that the predominance of
short term contracts, contracts at most for single projects and for brief or very brief
periods within the different types of performances or services almost always impose
parameters of a single day or single hours onto the artistic and technical contribution,
resulting, as a consequence, in the need to evaluate and monetize the ‘brisure’ of
employment using the smallest unit of measurement, such as the metres of film, rollers
and lines or even the length of sounds (emitted, for example, in dubbing studios) for the
recited texts.
In general, the rate of unionization for cinema production is not considered particularly high
and as regards Italian informational bodies more interest is provoked by contract disputes
publicized in Hollywood than those in Italy which are, moreover, rare. Nevertheless, the
Italian actors trade union SAI (Sindacato attori italiani) is one of the richest unions in history
being the result of assistance loans founded following the recognition, in 1865, of a legal
position for actors – which rendered employment relations and the protection of primary
rights possible – and of the first, true forms of representation such as LAD – ‘Lega degli
artisti drammatici’ (League of Drama Artists) who were signatories of the first unique work
contract, as well as the ‘Lega di miglioramento attori drammatici’ (League for the
Improvement of Theatre Actors) which promoted the first strike (in 1919 against the artistic
and legal directors of theatre companies). It is thirty years since its refoundation with the title
‘Sindacato nazionale attori di prosa’ (National Union of Prose Actors) which became, in 1960,
SAI – ‘Societa attori italiani’ (Italian Actors’ Society) and today is, and has been since 1976,
from the moment it became affiliated to the union CGIL – ‘Confederazione generale italiana
del lavoro’ (Italian General Workers’ Confederation) in the area of SLC – ‘Sindacato lavoratori
della comunicazione’ ( Communication Workers’ Union).
Amongst its most active exponents it has had such artists as Achille Majeroni, Cesare
Dondini and Ruggero Ruggirer, followed by Vittorio De Sica, Anna Magnani, Gino Cervi,
Giancarlo Sbragia, Enrico Maria Salerno, Saturnino Manfredi, Arnoldo Fo and Marcello
Mastroianni and among its most important ‘conquests’ one can include the protection of the
so-called connected rights and the consequent recognition of the compensations tied to
audiovisual reproductions with the birth, in 1977, of IMAIE – ‘Istituto Mutualistico artisti
interpreti esecutori’ (Assistance Institute of Artists and Performers) now in the middle of
134 |
a turbulent process of reform, and the collective national contract for dubbing technicians.
Led for a number of years by Pino Caruso and today presided over by Massimo Ghini,
with Maurizio Feriaud as general secretary, it is affiliated to FIA – ‘Federazione
internazionale degli artisti’ (International Federation of Artists) an international
organization which contains over 100 unions and associations from across the world,
and, in the area of CGIL is preparing the formation of a Federation of Artists together
with SIAM – ‘Sindacato italiano artisti della musica’ (Italian Union of Musicians) and SILF
– ‘Sindacato italiano lavoratori del fumetto, del disegno animato e della comunicazione
visiva’ (Italian Union of Workers in Comics, Animated Design and Visual Communication).
Also the other two large national unions CISL – ‘Confederazione italiana sindacata
lavoratori’ (Italian Confederation of Workers’ Trade Unions) and UIL – ‘Unione italiana del
lavoro’ (Italian Workers’ Union) include representation of cinema sector staff, who are also
amalgamated to organizations of the communications sector such as FISTEL – ‘
Federazione informazione spettacolo telecomunicazioni’ (Federation of Computer and
Performing Arts Telecommunications) and UILSIC – ‘Unione italiana lavoratori spettacolo
informazione cultura (Italian Union of Performing Arts Workers and Cultural Information)
(It has been revealed that membership numbers are only known for FISTEL: 55,523 out of
704,962 total that CISL counts in industry and out of a total of 4,507,486). Furthermore, it
can be pointed out that the two autonomous organizations LIBERSAND CONFSAL and
CONFILS – ‘Confederazione italiana lavoratori dello spettacolo e della comunicazione’
(Italian Confederation of Workers in Performing Arts and Communication) are also active.
BENEFICIARIES
In June 2007 the European Parliament of Strassburg approved a resolution in response
to the need to “define a new status for artists” of countries which are members of the
European Union and to “develop a legal and institutional outline in order to maintain
artistic creation by the adoption or the implementation of a series of coherent and
comprehensive measures regarding the contractual situation, social security, health
insurance, direct and indirect taxation, conformity to European laws”. Such a
commitment put to the proceedings and addressed to the executive of the European
Commission of Brussels arose from the pressure which the representative associations
of the artistic professions exerted for intervening in favour of cultural and artistic activity
principally in consideration of processes of integration and multimedia globalization and
the development of ICT (Information Communication Technology) which threaten the
cultural specificity of the same European community nations, putting the safeguards and
protection of royalties and copyrights and the same socio-economic conditions of the
artistic and creative category and of intellectual work in general to the test.
The fact that such appeals have been acknowledged and received at the institutional level
within Europe confirms the presence of the criticalities which involve the sector and
include those who work therein, even if in diverse forms and extents. Italy is among the
countries which firstly and with major intensity warned of the problem and in which the
| 135
concerns – in light of the involution which regards the job market and the relative
responses of the employment system, testified to by data and statistics such as certain
of those shown in preceding tables – are mostly felt. Also because on the judgement of
the operators and their professional organizations the diffuse condition of hardship
discounts, contrary to almost all of the other nations of Europe, “treatment which involves
social security, assistance and fiscal damages”.
What is primarily complained about is the lack of attention given by political institutions
which, by law, regulate both the tributary systems of the welfare state such as the services
managed by ENPALS. In terms of fiscal policy the emphasis is placed, for example, on the
applications of the regime which regulates the tax impositions of the professionals,
however, with serious limitations – preferentially deducted – on the possibility of detracting
a large part of the costs maintained for the carrying out of an activity. A series of norms are
then judged ‘oppressive’ for the category of artistic and performing arts professionals which
form a part of the item ‘welfare’, particularly from the general lack of social security
“cushions” (and, in particular, the absence of indemnities for unemployment) to the
normative which regulate maintenance interventions and assistance in the case of illness
or accidents. In this area there is only CALT – ‘Cassa assistenza lavoratori troupes di scena’
(Assistance Bonds for Workers in Television and Cinema Crews) promoted by CGIL, CISL
and UIL, however, autonomous and active only in the limited area of workers.
As to current welfare coverage the principle problem raised concerns the fact that it does
not enter into the so-called contributions system (pensions commensurate with the
payments made during the period of employment) but into that of remuneration, where
the daily income subjected to contributions is conventional – and can arrive at up to 620
euro – whereas that which is effectively considered for calculating the coverage settled by
bodies at the moment of retirement does not take into consideration the quantity actually
paid in and is guaranteed at a level which is clearly inferior: around 210 euro. The part in
excess, which amounts to 380 euro, has, moreover, a further 5% deducted destined for the
solidarity funds of the institute, whose accounts, in effect, appear (60 years after the
constitution) in excellent condition. With a further 265 thousand contributors of all sectors,
the number of pensions paid out in 2007 resulted in 55,109 (becoming 54,634 in 2008,
decreasing by 1,180, equal to 2.1% in the last five years) with a total cost of 832.7 million
euro – corresponding to a unitary average of 14.08 thousand euro – against an income of
1,035.3 million euro and a positive advance on management of 202.6 million (1,169.8
million for administration; 1,876.8 in property and 751.0 cash in hand).10
This involves aspects of a socio-economic character which complete the picture of the
job market in the cinema industry and which would deserve, in all likelihood further
analysis, above all in terms of insurance policies which are indubitably of definite
importance. The availability of ENPALS data is, nevertheless, limited to total cash
balances, without reference to statements relative to single sectors of activity. The
indications which can be obtained on the activity of 2008, therefore, correspond to the
averages – beginning at the age of 72.3 years – of all the beneficiaries and their value is
to furnish a functional map to outline the maximum performances which the welfare
regime of ENPALS foresees and pays out to contributors and members of the cinema
professionals category.(11)
Direct pensions represent 71% of all the welfare coverage of ENPALS and are 38.7
thousand (with a predominantly male presence of 62.0%) with an annual, average amount
of 16.85 thousand euro which varies according to its three diverse categories: seniority
23.28 thousand; old age 13.44 thousand; invalidity 9.38 thousand; whereas those with
indirect pensions (29%) consist of 15.8 thousand (predominantly female with a percentage
of 93.3%) for an average amount of 8.68 thousand euro per year, from which two
categories cannot be removed – those insured or those with a pension – from which such
categories are formed.
50% of the coverage is situated, moreover, at less than 10,517 euro a year (809 euro a
month, the average being between 1,813 for those in seniority, 673 in old age, 520 in
invalidity and 576 indirect). From the subdivisions by deciles it results, moreover, that in
the first class – with monthly assignments from 350 to 450 euro – are included the major,
comprehensive number of pensioners: 11,640 (21.3% of the total), 5,259 of which holders
of integration at the minimum permitted by law (443.12 euro a month) as opposed to
4,857 of the tenth range, the highest which starts from a monthly base of 2,151 euro and
which is also the second in terms of consistency. From the second to the ninth (1,9512,150 euro) the trend is indeed constantly decreasing. As far as the specific area of direct
coverage for seniority is concerned it is the tenth which includes the highest quota of
positions (22.0% equal to 3,241 pensioners), whereas for those of old age the principle
value (19.2% corresponding to 3,033 individual positions) refers to the first deciles.
All of the social and economic elements, in substance, demonstrate a general alignment
with the principle coordinates of the job market and would seem to support, as a profound
analysis can, an unsuspected outline of the professional universe of the cinema industry
in Italy. Observing the Italian cinema industry from a general overview, the image which
is obtained seems similar to that of a fisheye lens as opposed to a wide-angled lens,
given that it does not permit the perception of the most specific aspects. When examined
up close the same characteristics, however, assume their true colours and surroundings;
authentic even if gaudy and marked, for effect, by a convex lens.
10
11
136 |
Source: “Report Direzionale 2007” edited by the Ufficio organizzazione e controllo gestione dell’ENPALS
– National Welfare and Assistance Body for Performing Arts and Sports Workers; Rome 2008.
Source: “Le prestazione istituzionali dell’Enpals- Anno 2008.Sintesi e comment” edited by the
‘Coordinamento statistic-attuariale dell’ENPALS’; Rome 2009.
| 137
Part Four
Integrated
and Concentrated
The force of a class
Chapter 6
“IT’S ALL ABOUT BUCKS, KID. THE
REST IS CONVERSATION”
Michael Douglas in Wall Street by Oliver Stone
Groups and companies:
the principle organizations
ust as the investigation to give an outline of the Italian film industry on the
basis of the activity carried out by the so-called extended sector as well as on
that of the specific sector is adequate for defining the economic values of the
market according to the supply in contrast to current investigations which only
consider demand, similarly the definition of the universe of reference for
corporate and professional organizations is instrumental in reconstructing, in outline,
the creative sources of those aforementioned values, in other words of who and how
much it gives life to the cinema, furnishing content and business, and contributing to
determine the cinema industry’s assets, equilibrium and evolution.
It is seen as 1,607 businesses which know how to accumulate a revenue quota equal to
97.2% of all companies and as the major part of that turnover (actually 69.2% as opposed
to the indicated 97.2%) is ascribable to just over a tenth (10.6%) of these companies.
The first fact is that the sector confirms itself to – and in this it is not an exception – the
‘hands’ of a limited group which is capable of conditioning, with its own trends, the trend
in general, thereby exercising, as a consequence, certain controls over the allocation
and movement of resources, in this way influencing the total development of the industry
and, in particular, as far as the compatibility which opens the market to all operators is
concerned, whether they are old or new, or of large or small structure.
J
In terms of the structure of the productive apparatus the conventional reading of market
demand, through the data concerning public attendance of cinemas, therefore, seems to
be fully reaffirmed by the conformation with that of market supply, where a selected
nucleus of subjects who – as in the rest of Europe and , above all, the rest of the world –
view the clear strategic prevalence the ‘majors’ from across the ocean (not only the
Atlantic Ocean) and heighten the principle economic forces of the sector.
What remains to be observed is how one can set up, behind such a skyline in which
certain imposing skyscrapers are outlined, or configure the rest of the industry territory.
That is to identify whether such a panorama, in which box office results and ticket sales
prefigure, coincides with that suggested by a more detailed analysis of the general supply
activity of cinema production. Furthermore, to see whether those national cinema sector
employees who manage, due to their skills and talents, to carve out a space as
protagonists genuinely constitute a rare species and the others, of smaller size, a “race”
which is almost in extinction and are, as such, to be protected.
The objective of evaluating the collection of companies which together and as a whole define
the national film market supply is to qualify the effective vitality at both the aggregate level,
for all components of the industry, as well as the specific, individual level and to identify
whether this results in a further division of the field of investigation and, in as much as it is
possible, to widen our knowledge of the diverse sectors, from those classed as ‘major’
players to those, which are, primarily, independent: a reality which is, as stated, highly
divided and little noted, and which, nevertheless, characterizes in a determine fashion the
production and diffusion of cinema films in Italy (as well as beyond Italy’s borders).
Such an outline, traced with great difficulty, collecting information and data which is, to
say the least, not easily available or easily elaborated on, given the precarious
homogeneity, rather than being a point of arrival is rather a point of departure, a type of
base camp for further “explorations” and the descriptions presented begin with the
individuation of the first actors of the productive scene and from the characteristics which
determine the economic physiognomy and corporate policies of the industry.
1. Holdings and dominant groups
The first sketches offered are, by their very nature, as such as to connote the entire scene.
In confirmation of an historical impression (in other words ‘atavistic’) which standardizes
film making, resulting from the analyses of the corporate profiles carried out through the
databanks of the Italian Chamber of Commerce what clearly emerges, in effect, is the
force of a “class”, that is, the influence of the major operators, those at the top of the
industry, and their exercise of power over the sector. In particular, thanks to the
organizational and managerial models imposed on a network structure, with the
presence of their own companies within the various sectors, permits complete productive
autonomy as well as an extended control of the system which penetrates the market in
142 |
TAB. 1
Percentage of companies
NUMBER OF COMPANIES BELONGING TO GROUP
Situation in 2002
Latest reports*
Film and video production
Film and video distribution
Cinema screening
3.8%
6.9%
7.1%
3.8%
7.4%
8.2%
Total sector
Average macro sector
5.0%
2.6%
5.1%
3.3%
Italian Average
1.7%
2.0%
Elaborated from CERVED data.
* The latest studies available date until the end of 2006 – The group is defined by references to the financial links subsisting between holding head groups and controlled or colligated respective, resulting from the deposited balances of the ‘Company register’ – “Attivita’ ricreative culturali e sportive” which is, according to the codification ATECO, the macro sector for the cinema industry.
both the phases of distribution and direct and indirect sales (this can be considered as
the transfer of rights on the ownership and utility of the production).
The quota of companies belonging to the same group within the cinema sector is superior to
those of other entrepreneurial sectors of the nation whether they are in industry or services.
Aside from the statistical studies regarding the number of companies which are under,
or financially linked to the same group, it is, nevertheless, simple to reconstruct the true
economic dimensions of either the phenomenon in its entirety nor of the business volume
accumulated from every individual holding thanks to the activity carried out within the
diverse sectors.
Only 50% of these ‘conglomerates’ of the cinema draw up, aside from accounts of the
respective companies, also those which are consolidated, that is, the reports which
reassume the various obtained incomes in the course of a year also considering the
relations which are of economic groups, thereby rectifying eventual superimpositions or
duplications. For the other 50% of the so-called universe of reference it is necessary to,
as a consequence, rely upon a reworking (formally “empiric”) of the posts put on balance
by the respective controlled or related companies.
The information revealed in the preceding table is, nevertheless, extremely significant
and supports the research, for the first time, in offering with this an analytical outline of
the principle companies represented by Italian and foreign holdings present on the
national market. The following table, on the other hand, has been edited in such a way,
without objective claims to exhaustiveness, through the most complete screening of
company accounts possible and the successive selection of companies which are linked
or financially connected to a group, therefore with the processing of data collected from
the accounts available from the selected reference samples.
There is, nevertheless, a second caution: the classification order followed is principally
based on an objective of expository clarity and speaking of pure ranking would appear
improper. No index recapitulates the amount of turnover of every single company and it
results genuinely problematic to individually compare all of the financial statements of
| 143
TAB. 2
PRINCIPLE CINEMA SECTOR GROUPS IN TERMS OF REVENUE
Group
1 Rai Gruppo
2 The Walt Disney Co,
3 Fininvest-Mediaset *
4 Warner Bros ent.
5 Paramount Motion P.G.
6 Thomson H. Italy **
7 Kodak Italia **
8 The News Corp. ***
9 Quinta Comm, Italia **
10 Sony Italia ***
11 Odeon & Cinemas Uci
12 Deluxe Italia holding
13 Filmauro ***
14 Gruppo Cattleya
15 Cinecittà Holding
16 Film Master Group
17 Gruppo Mondo Tv H. E.
18 Gruppo Iih-Lucisano *
19 Gruppo Fandango srl
20 Gruppo Opus Proclama
21 Cinecity Art & Cinemas
22 Gruppo Occhipinti
23 Gruppo Furlan Cinecity ***
24 Gruppo Duradoni
25 Mercurio cinematografica
26 H&B-Mikado
27 Gruppo Quilleri **
28 Gruppo Circuito Cinema
29 Rainbow spa **
30 Gruppo Pathé-Vis Pathé **
31 Iven-Colorado
32 Film Participation
33 Panorama Films
34 Artech V.R.-Aegida
35 Gruppo Giometti ***
36 Gruppo Sacher
37 Gr. Poccioni-Valsania
38 Gruppo Levi
39 Minerva Pictures Group
40 Gruppo Ripley’s
Activity
P-D–S
D
P-D-E-S
P-D-E
D
I
I
P-D
P-D
P-D
D
S
P-D-E
P-D
P-D-E-I
P-D-S
P-D
P-D-E
P-D
S
E
P-D
E
D
D
P-D
E
E
P-D
E
P
P
P-S
D
E
P-D
P-D
P-D
P-D
D
2007 proceeds in euro
473,722,683
314,159,019
255,717,000
252,961,021
159,731,672
154,491,346
112,531,040
97,935,559
82,328,637
72,654,274
72,630,000
67,797,074
59,772,758
58,114,398
53,389,571
51,866,058
44,698,118
44,377,740
40,713,809
28,936,800
23,376,553
22,724,578
22,211,773
21,238,925
18,469,463
14,626,719
14,295,047
13,074,625
12,625,000
11,500,000
10,385,808
10,321,877
9,681,293
9,100,942
7,867,731
7,321,237
6,659,866
6,493,217
6,324,720
4,894,320
Result in euro
13,300,454
11,536,408
21,644,000
-317,412
-14,357,665
4,103,353
822,106
2,024,612
799,385
1,690,243
-2,756,622
677,473
2,551,409
3,821,086
-10,593,241
-182,096
-8,657,847
643,896
410,138
-71,856
-484,307
391,635
4,318,027
369,583
425,762
342,829
1,743,728
-443,740
67,000
-137,923
1,170,312
8,225
-163,005
83,819
-188,804
36,297
124,078
-22,402
219,110
Staff
91
488
528
673
290
51
58
73
610
156
14
35
371
111
58
100
14
174
16
35
13
15
26
55
2
36
24
2
2
4
Legend: P – PRODUCTION; D – DISTRIBUTION; E – ENTERPRISE; I – INDUSTRY; S – SERVICES
Elaborazione su dati e bilanci Cerved, Infocamere-Registro delle imprese e Borsa Italiana per le società quotate Rai, Mediaset e Mondo Tv.
* Il bilancio Mediaset è consolidato in quello della holding Fininvest ma non redige a sua volta un bilancio consolidato.
** I dati finanziari riportati corrispondono a quelli attinenti le sole attività cinematografiche (mentre il numero dei dipendenti – ove non
si è dimostrato possibile ricostruirne la specifica ripartizione – è riferito al complesso delle attività).
*** L’anno di esercizio di Sony, The News Corporation (20th Century Fox), Filmauro e Giometti non coincide con i dodici mesi di
quello solare dall’1 gennaio al 31 dicembre e i rispettivi bilanci vengono chiusi il 31 marzo, il 31 maggio, il 30 giugno e il 31 agosto di
ogni anno. I rendiconti del Gruppo Furlan Cinecity sono relativi al 2006.
144 |
the thousands of limited companies which are active and registered with the Italian
Chamber of Commerce and then draw up an exact order according to the amounts of
their respective earnings. The balance sheets and profit and loss accounts of the single
companies, moreover, are not necessarily uniform: despite the presence of accounting
principles fixed by law and by administrative and fiscal rules, their interpretation and
application – as indicated by financial practices – are never univocal. This is particularly
so as far as the proceeds indictments of the diverse activities are concerned.
Such customs of financial analysis testimony, furthermore, to how fundamental it is to
construct an initial classification which is specific to the field of research (and the
prospect which follows is an example application of this) in order to arrive at a further,
eventual completion of research.
Apart from the objective implications for employment recruiting, elaboration and the evaluation
of the figures to be considered, this ranking table with its general indications furnishes a
preliminary outline of the state of Italian cinema (verifying and sorting, moreover, the themes
and theses principally discussed at the dialectic level) and represents a synthesis of the
compositions – with relative assets – of market supply and its leaders. Principally, so far as the
grades of integration and concentration are concerned, this defines the ‘upper class’ of the
cinema sector, those clusters which remain at the top of the cinema industry pyramid.
It demonstrates, furthermore, a first, simple consideration: the value of production of the
first 10 corporations within the field of stringently cinema activity (over 2,035 million) is
greater than the volume of revenue that the usual consumer reports, in terms of
performances and entertainment, credit in total, as market demand, to the cinema
industry. This entails that the economic activity generated by the cinema in Italy is, indeed,
physically and physiognomically a great deal greater than how much is typically claimed.
It is also necessary to point out that the group structure derives from the choices and
exigencies which are, by nature, organizational, managerial and occasionally financial, but
they do not necessarily coincide with the highest classes in terms of dimensional scale. In
substance, they correspond to a conception of the strategy of market presence which can
disregard the relative large scale of conducted business, as is the case, moreover, for the last
groups indicated. In contrast, there are companies classed as no holding, without colligated
and controlled businesses or subsidiaries, which, at times, feature (as can be ascertained by
what follows) superior turnover; similar to a large number of the same companies which
depend on a group leader often register incomes which are singularly greater – even, at times,
by large amounts – than those earned by other groups in the totality of their activity.
DUOPOLIO E MAJOR STRANIERE
The significance of the term ‘conglomerate’, in any case, results in the need to state the
following points.
• Without doubt the presence of the two major, national communications companies,
understood in their numerous forms (performing arts, culture, information,
entertainment, artistic activity...): one in the public arena, Rai, the other private, being the
| 145
group leader Mediaset which incorporates controlled companies under the trade name
Medusa whose mission is to safeguard the cinema sector, is certainly a relevant point.
• The positioning of the companies reveals two basic conditions. 1. In line with the
organizational and managerial evolution which constantly innovates the production
system, the most developed communications operators have progressively broadened
their sphere of activity in the last ten years, searching to consolidate their presence in all
areas. Following in the footsteps of the technological revolution, large editorial and
cinematographical complexes (such as the legendary studios of the United States), as
opposed to the giants of information technology and entertainment – such as Walt Disney
and Sony – understood, very early on, the rapid integration between diverse forms of
communication as well as the opportunity to exploit their specific know how within the
contiguous areas of their primary social objectives. 2. As such, between acquisitions and
cross mergers, incorporations or activity scales which are, more or less, friendly, the
larger companies have gradually widened their interests from the initial core business to
the parallel markets of communication (so-called info-entertainment) thereby realizing,
in terms of financial, managerial scale, and, above all, in marketing terms the typical role
of corporations which are multi-national and globalized ahead of their time – theorized by
the historical gurus Joseph Schumpeter, Alfred P.Sloan, Igor Ansoff and Alfred Chandler.
• In particular, cinema and television, together with the gradual convergence of technical
standards, has resulted in their original, creative and productive concepts becoming ever
closer – even if gradually. In Italy such a situation has also been accentuated by a second
fundamental condition. In the case of Rai and Fininvest-Mediaset, there has existed, for about
a quarter of a century, the possibility of depending upon a notable economic force which the
peculiar asset of the national television system has conceded with the formation of a duopoly
which constitutes a rather uncommon situation on the international scene. Their capacity to
gain the resources generated by the publicity market has, in effect, created an advantageous
position for financing development and, as such, has enabled them to maintain expansion
which, otherwise, would have been greatly more difficult and open to risk.
• Only in Brazil, Portugal and Poland, among the 40 most developed nations in the world,
is the quota of investment in television advertising greater than that registered in Italy,
equal to 53.5% of almost 8.6 billion euro which, according to the most recent surveys of
Nielson corresponds to the total costs of advertising companies and announcements of
all media outlets in 2008 (furthermore, this is the lowest figure of the last 25 years, in the
course of which the average spending oscillated between 58% and 55%). The fifth state
for which the percentage is greater than the 50% mark is Japan, whereas in the
remaining 35 nations advertising costs maintained by advertisers on television networks
have always been less, not only less than 50% but also less than that effected on other
single means of communication, starting with the daily press and periodical press.(1)
1
146 |
Elaborated from data of Nielson and FCP.
In terms of absolute value the amount of Italian investments occupies seventh place in
the world, only threatened today by the massive growth of China. Furthermore, as noted,
in Italy over 80% (in certain years exceeding even 87%) of these advertising sector
resources have been constantly destined for the six networks of the two poles – public
and private – of the television sector.
• The duopoly Rai-Mediaset excels in serving as a rival attraction to the fact that the
other eight operators present in the first ten positions are under the control of
shareholders and capital which is primarily foreign: six properties are of United States
nationality, another is Anglo-Australian and one is Japanese. This confirms the
predominance which American media groups have, for the last ten years, exercised
on the European market, from the moment that the trade names and studios belong
to five of these holding groups which have made the story of Hollywood and of
international cinema.
• The existence of the entity that is the business volume of the Walt Disney Company
also deserves mention, this is the Italian group leader for the cinema (films, animated
cartoons and documentaries of Disney Nature) which is under the direction of the
international sub-holding Walt Disney Studios. With an amount of 314.15 million it was
not added – due to the lack of appropriate data – any other proceeds, even though the
well-known Disney Store Italia, which is occupied with merchandising for the whole
group of Burbank, has, in its catalogues, a large number of products which are
indubitably correlated to the production of films and cartoons. This commercial
company, in 2007, has invoiced through 11 direct sales outlets 43.26 million euro with
a profit of 6.2 million, furthermore, the most reliable estimates credit a value of around
17 million euro to the ‘spin off’ articles of cinema production sold in Italy. It should also
be pointed out, for the record, that in completion of the Italian Disney scene, the robust
turnover of the editorial and publishing division The Walt Disney Co. Italia (dependent
on the other sub holding Disney Enterprises) which publishes and sells magazines
and periodicals for a total amount of 239.9 million euro with a profit ratio of 8.5 million.
TAB. 3
CORPORATE AND ORGANIZATIONAL STRUCTURE OF THE TWO NATIONAL LEADERS
Property
Holding
Area
Division
Company
Other groups
Public-Treasury
Rai
Editoriale Tv
Generi
Rai cinema
01 Distribution
Sipra
Rai Trade
Property
Holding
Subholding
Capogruppo
Company
Head company
Controlled
Connected
Private – Berlusconi family
Fininvest
Mediaset
Rti
Medusa cinema
Medusa video
Medusa multicinema
Med Due
Medusa film
Cinecittà Factory Digital
Elaborated from accounts of Rai and Fininvest 2007.
| 147
ORGANIZATIONAL STRUCTURE OF RAI AND FININVEST-MEDIASET
As to the specific connotations and eventual characteristics which can be associated with
the various central groups of Italian cinema it would appear useful to evaluate certain
other summary data. The two national leaders have given themselves an organizational
structure which is in part similar and also, in part, dissimilar.
In Rai, where the organization chart is for functional planning and essentially based on types
of activity carried out, there are five principle areas: television editing; radio editing; new
media; advertising; transmission. The first is principally involved with concentrating business
of the public holding which is under the Ministry of the Economy (only a quote equal to 0.44%
is deducted by SIAE) and includes four divisions: Networks, Information, TV support,
Products. To the last of these belong two dedicated companies with which Rai operates in
the sector, Rai Cinema and the 100% controlled 01 Distribution, which, moreover, do not
exhaust the commitments, thanks to another two entities – Sipra and Rai Trade which
compose the commercial area – and to which the management of interests in terms of
publicity (product placement for produced or distributed films and commercials and
announcements projected onto cinema screens) as well as the sale of rights are delegated.
• As far as Mediaset is concerned, however, the outline is more pragmatic and, it can be
said, “private” for the conglomerate Fininvest (almost entirely owned by the Berlusconi
family through a series of financial holdings which are distinguished only by their
progressive numeration), where the expansion and diversification of activity has
occurred, over time, in the acquisition and incorporation as well as the protection of
every sector or area seen in corporate form.
Controlled 39.76% and quoted on the Milan stock exchange with floating funds equal to
60.24% of shares (37% in the hands of foreign investors and 23% Italian), Mediaset is a sub
holding for the television and cinema areas, in the same way as Mondadori (50% owned)
for the publishing industry and Mediolanum (35%) for financial services, both quoted on
the Milan stock exchange (Piazza Affari), then there is Milan football team (100%) for
sports and Teatro Manzoni (100%) for the theatre. Furthermore, within the Berlusconi
operative area are included five leading companies: RTI which incorporates the core
institutional business of television and cine-video productions; Publitalia ’80 for local
advertising shares; Telecinco (the only one which does not entirely participate, with a
quota blocked at 50.13%) which is basically the photocopy of RTI for the Spanish market;
then Mediaset Investments SpA (plc in English) and Mediaset Investment Sarl (Ltd. in
English, more or less) as the ‘safeguards’ of all properties and participations abroad.
To properly individuate the cinema companies it is necessary, therefore, to descend from
the second and third levels of Mediaset and RTI to the fourth level, where the truly
operative companies, such as Medusa Cinema, Multicinema, Medusa Video (all 100%
controlled) and Med Due s.r.l. are found. These are 75% connected, given the 25%
partnership with the producer Pietro Valsecchi who, in 2008, ceded his company Tao Due
– to which are collocated, at the fifth level, Cinecitta Digital Factory (15%), a recent initiative
started in collaboration with the public holding, and that of Medusa Film (100%) which
148 |
TAB. 4
THE INCIDENCE OF THE CINEMA SECTOR WITHIN ITALIAN GROUPS
Activity in millions of euro
in comparison to control group
Rai
Fininvest
B&D Holding *
Value of Productions Made
Cinema Company
Percentage of Group
Rai Cinema
Mediaset-Medusa
Mikado
12.55%
4.14%
0.36%
Elaborated from accounts 2007.
* B&D Holding does not draw up balance sheets and the revenue has been estimated on the basis of the sales revenues of the four principle
sub holdings which form part of it.
previously had had all cinema activities in its possession, then passing on to incorporation
into RTI with an inter-group operation which has been given a memo value of 152 million
euro, charged to RTI. Also in the case of Fininvest publicity and rights for the cinema
screen are, in every case, entrusted to companies outside of the strict limits of the cinema
industry, in other words to Pubitalia ’80 and to the same RTI. Also other companies which
are active within the cinema sector are under the leadership of Mediaset, including
Cinematext Media Italia (with a revenue of 535 thousand euro in 2007), the Spanish
Telecinco Cinema Sau (19 million) and Cinematex Media sa (1.7 million).
• Organizational structures aside, the business model of Rai and Fininvest-Mediaset in the
cinema industry are more or less the same, in response to an analogous history which has
seen them integrate film production into the institutional mission of the television, in
periods of time which are rather close together: Medusa was directly acquired at the end
of 1995 by the then ‘Silvio Berlusconi Communications’ directly from the founder (1988)
Franco Poccioni (father of Marco, co-founder with Marco Valsania of the actual Rodeo
Drive), however, it principally developed between 1999 and 2000 when numerous
collaboration agreements were reached in Italy (in particular with the ex Cecchi Gori
Group) as well as abroad; Rai Cinema in December 1999 and 01 Distribution in June 2001.
The objectives behind such agreements were, moreover, convergent: on the one hand, to
better face the European regulations concerning the amount of television programmes
destined for national products; and, on the other hand, to better exploit the achievable
synergy between the two audiovisual activities, from the creative point of view as well as
from the commercial point of view. Fininvest-Mediaset has, if anything, progressed a step
further, directly involving itself in business affairs, having ten multi-screen cinemas, also
in virtue of a certain real estate know how of the parent company plus a certain territorial
rootedness in certain determinate geographical areas of northern Italy.
ORDER AND ORGANIZATION OF THE MAJOR COMPANIES
The integration and concentration of the structures within the two national leaders is,
nevertheless, attested to by a level which is even less than major foreign companies, where
the cinema sector assets are not only part of a more extended production apparatus which
incorporates all, or almost all, the communication and entertainment activities (Disney, AOL
| 149
Time Warner, Viacom, The News Co. of Rupert Murdoch) but also a corporate agglomerate
that also includes other macro sectors (Sony, General Electric) of a totality which is, at times,
surprising. This is principally in light of the fact that during their progressive expansion the
major American companies, for almost half a century, have maintained their studios at the
head of their operations, in other words the respective companies which controlled and
physically incorporated (in the sense of ‘logistically’)the making and production of films.
Half way through the 1970s, however, there began a transformation – at the beginning
gradually and according to industrial projects, then incrementally and inspired by the
financial euphoria of the times – a transformation which constantly shifted the central
activities further away. From centripetal the movement became centrifugal.
This, however, does not concern a one way system. This is because the forced growth
induced by the logic of competition (and imitation), which often triggers the most relevant
and delicate economic processes, obeyed the laws of attraction also at the base of the
cinema system, bringing with it aggregation around the ex studios – with acquisitions,
mergers and alliances of mutual interest – for a growing number of businesses,
distribution companies and independent firms. Also a large number of these wanted to
preserve a certain autonomy, however, they then joined together through agreements,
understandings, and collaborations of various types, according to a role which in
Hollywood is generally defined as ‘sub-contractors’ and which is beginning to be
reproduced in Italy. It is through a series of financial joint ventures with a value of 1 billion
dollars with the companies of eight Hollywood stars (among which, Smoke House
Productions of George Clooney, Saturn of Nicholas Cage, JC23 of Jim Carey, and Plan B
of Brad Pitt) that the Indian producer Anil Ambani is trying, for example, to conquest the
international market through his Reliance company of Mumbai. (2)
• These are the rules of the market. A very similar situation occurred successively in
Italy; where Rai and Fininvest-Mediaset continue to employ a business concept which
has its reference range in multimedia publishing and communications, without, for
the time being, the prospective of involving further incorporations or diversifications
2
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Among the companies of production and co-production directly formed by Italian artists and film
makers the following can be listed: Alia Film and Achab Film of Enzo Porcelli; A Movie-Palomina
of Anna and Sauro Falchi; Bess Movies of Francesca Neri; Betty Wrong of Elisabetta Sgarbi; BiBi
Film of Angelo Barbagallo; Cesarea Entertainment of Luca Barbareschi; Dap of Guido and
Maurizio De Angelis; Dharma of Eleonora Giorgi and Massimo Ciavarro; Devon of Luciano and
Sergio Martino; Duca Film of Antonio and Pupi Avati; Film 7 of Luciano Emmer; Film Albertos of
Marco Bellocchio; First Sun of Silvia Venturini Fendi; Gege Produzioni of Mimmo Calopresti; Italy
Dreams Factory of Maria Grazia Cucinotta; L’Ottava of Franco Battiato; Hathor Film of Pappi
Corsicato; Immagine and Cinema of Edwige Fenech; La Dolce Vita Productions of Patrizia
Pellegrino; Levante Film of Leonardo Pieraccioni; Martinelli Film Company of Renzo Martinelli;
Motorino Amaranto of Paolo Virzi; No Limit International of Franco Nero; On My Own of Roberto
Cicutto; Opera Film of Claudio and Dario Argento; Sixteen Films of Ken Loach and Rebecca
O’Brien; Titania Produzioni of Ida De Benedetto; Trio International of Marco Rissi.
(apart from certain approaches of the News Corporation of Rupert Murdoch to the
Berlusconi empire).
• The organizational plan, despite being somewhat schematic, of the current six major
companies found in the following table attempts to outline the connective lines
between the ‘central headquarters’ and those companies which supervise the cinema
sector at the level of groups, of national and European markets, up until those which
are properly operative.
• As common as it is to identify the major companies with Hollywood, defined also as the
world capital of the cinema (as well as of United States television and radio), it should
be pointed out that there have remained very few true general zones of the
international cinema in the suburbs north of Los Angeles – with 200 thousand
inhabitants. Of the actual parent companies Sony is Japanese and The News Co. is
Anglo-Australian. Of the major production companies which still genuinely make films
in the area the only one is Paramount, which is also the longest standing.
Whilst Hollywood titles remain shining examples, it is, nevertheless, difficult to retrace
the tracks of the entrepreneurial heredity left behind by those who created Hollywood
from the artefacts of the industry’s golden epoch. This is between the 1930s and 1950s,
a period marked by The Big Five: Paramount, MGM – Metro Goldwyn Mayer, Warner
Bros., RKO and 20th Century Fox for which the ‘mini-majors’ of Columbia, Universal
and United Artists served as assistants. These were referred to as The Little Three,
and occupied a second place position given that they did not have cinema halls and,
therefore, did not control the whole industrial cycle constituted by production,
distribution and the running of cinemas, a position that was occupied, practically in a
monopolistic sense, exclusive to the five majors.
TAB. 5
SUMMARY SCHEME OF THE CORPORATE STRUCTURES AND GROUPS OF THE MAJOR CINEMA COMPANIES
SONY CORPORATION
Cinema Sub-holding
International leader
Italian leader
Controlled in Italy by
Sony Pictures
Columbia TriStar Pict. Gr.
Columbia Pictures
Mgm-Metro Goldwin Mayer
United Artists
Sony Italia
Sony Pictures Home
Sony Pictures Releasing
Sony Pict. Home Video
SUB-CONTRACTOR: Mirage Ent. (Pollack) - Fountainbridge (Connery, Tollefson) - Tribeca (De Niro, Rosenthal) - American Zoetrope (Ford Coppola) - Irish Dream Time (Brosnan, St. Clair) - Harpo Films (Ophra Winfrey) – Trillium Ent.
(Glenn Close) - A Band Apart (Bender, Tarantino) - Pearl Street (Damon, Affleck)
NEWS CORPORATION
Cinema Sub-holding
International leader
Italian leader
Controlled in Italy by
Fox Filmed Ent.
The News Co.Ltd
20th Century Fox
Fox Faith
Fox Int. Channels Italy
20th Century Fox Italy
20th Century Fox Home
Sky Italia
SUB-CONTRACTOR Lightstorm Ent. (Cameron) - Blue Tulip (de Bont, L. Foster) - Davis Ent. (Davis) - Seaside (Besson, Peyronnet) – Ocean Pictures (Ramis, Albert) – 3 Arts Ent. (Stoff, Rotenberg, Klein)
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segue TAB. 5
TAB. 6
SIZES OF MAJOR COMPANIES IN ITALY IN COMPARISON TO CONTROL HOLDINGS
WALT DISNEY COMPANY
Cinema Sub-holding
International leader
Italian leader
W. D. Enterprise
Walt Disney Studios
Buena Vista Motion P.G.
Walt Disney Pictures
Touchstone Pictures
Miramax Films
W. Disney Pixar
W. Disney Co. Italia – Miramax
Controlled in Italy by
The Disney Store
SUB-CONTRACTOR Blue Wolf (Robin Williams) - Jerry Bruckheimer Films (Ridley e Tony Scott) - Cappa (Martin Scorsese) - Flying Heart (Bruce Willis) – Great Oaks Ent. (John Hughes)
Cinema Sub-holding
International leader
Italian leader
Controlled in Italy by
Warner Bros Ent.
Warner Bros Ent. Inc.
Warner Bros Rko
Warner Bros Pictures
New Line Cinema
Hbo Films
Castle Rock Ent.
Warner Bros Ent. Italia
Warner Bros Italia
Warner Bros Village
SUB CONTRACTOR: Chal (Al Pacino) - Face (Crystal) - Simian Films (Grant, Hurley) - Fortis Films (Bullock) - Malpaso
(Eastwood) - Section 8 (Clooney, Soderbergh) - Icon (Gibson) - Trigger Street (Spacey)
VIACOM INC.
International leader
Paramount C. inc.
Paramount Motion P. G.
United Int. Pictures (50%)
Blockbuster Ent. Inc.
Go Fish Pictures
Paramount Pictures
Italian leader
Controlled in Italy by
Uip-Universal P. Italia (50%)
Blockbuster Video
Blockbuster Italia
SUB-CONTRACTOR: CW (Cruise, Wagner) - Egg Pictures (J. Foster) - Shoelace (J. Roberts) – Revolution Studios
(Roth, Moore, Garner) – Phoenix Studios (Medavoy, Messer) – Verhoeven-Marshall (Verhoeven, Marshall)
GENERAL ELECTRIC COMPANY
Cinema Sub-holding
International leader
Italian leader
Nbc Universal
Universal Studios
United Int. Pictures (50%)
Focus Features
Uip-Universal P. Italia (50%)
Controlled in Italy by
SUB-CONTRACTOR: Amblin Ent. (Spielberg) - Further Films (Douglas) - Jersey Films (De Vito, Shamberg, Sher) Eddie Murphy – The Playtone Co. (Hanks, Goetzman) - Raffaella (R. De Laurentiis) - Revolution Films (Eaton, Winterbottom) – Imagine Film Ent. (Grazer, Howard) – Beacon Communications (Bernstein, Abraham)
Elaborated on data taken from the annual reports of the companies and the data of ‘Variety’. The indicated sub-contractors, moreover in
continuous fluctuation, are only a select sample of those effectively linked to diverse companies.
It is enough to consider the numerous handings over which have occurred over the
years and the changes in corporate philosophy which have accompanied them. Before
belonging to Sony, for example, Columbia actually belonged to Coca-Cola from 1982
to 1987, when it brought about, along with HBO, the company Time Inc. as well as the
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Sony Corporation
The News Corporation
Walt Disney Company
Time Warner Inc,
Viacom Inc,
General Electric Co,
44,418
32,965
37,643
46,482
14,625
183,000
VALUE OF PRODUCTION IN 2008
International cinema revenue
Cinema percentage in Italy
Value
Percentage
Value
Percentage
7,600
6,690
7,328
11,682
6,033
16,900
17.1%
20.2%
19.4%
25.1%
41.2%
9.23%
0.22%
0.29%
1.12%
0.73%
1.47%
0.03%
1.29%
1.46%
5.78%
2.92
3.57%
0.33%
Elaborated on data taken from the 2008 annual reports of the indicated groups on the basis of the euro-dollar exchange (1,35) on 1st January 2007.
TIME WARNER INC.
Cinema Sub-holding
Activity in millions of dollars
of the majors respect to control International
groups
turnover
grand television network CBS brought about Nova Pictures which then became TriStar.
United Artists, founded in February 1919, by four great actors and directors Charles
Chaplin, Douglas Fairbanks, Mary Pickford and D.W.Griffith (it was the first time that
artists took the reins of a company a situation which was defined as “the insane who
took possession of the mental asylum”, following that it was taken over by MGM with
the massive debts accumulated from the expensive 1980 flop “Heaven’s Gate” by
Michael Cimino, and in the hands of Ted Turner for 74 days (in 1986) it passed, at the
beginning of the 1990s, together with “Casa del Leone”, through the failure of the
consortium formed by Giancarlo Parretti and Florio Fiorini, with the backing of the
French bank ‘Credit Lyonnais’, before finally arriving in the hands of Sony, which has,
as a minor associate, another multinational – Comcast Corporation.
Pixar, initially formed as a division of Lucas Film of George Lucas, was acquired in
1986 by Steve Jobs, co-founder of Apple Computers, then, nine years later was given
over to Walt Disney which gave everything in order to give an innovative slant to all of
its productions. Furthermore, to the Burbank corporation, always in California, the
company created only 14 years prior by the brothers Harvey and Robert “Bob”
Weinstein, that of Miramax – taken from the name of their parents, Max and Mira, was given over. Miramax was the protagonist of one of the last great exploits of the
film industry in Hollywood in 30 years, capable of renewing the magnificence of the
golden epoch (however, the Weinstein brothers, in September 2005, broke off all ties
with Disney).
A second tormented history is that of Dreamworks SKG, a studio constituted in 1994
by the director Steven Spielberg together with the ex head-animator of Disney, Jeffrey
Katzenberg, the record producer David Geffen (hence the acronym SKG) and the cofounder of Microsoft, Paul Allen as financial investor. Sold in October 2003 to the
Universal Group, it was then acquired in February 2006 by Paramount Pictures,
controlled by Viacom, and with the management of the communications holding such
divergences emerged which conducted, in only two years, Spielberg and associates to
obtain a handover, with yet another turnaround, to the Indian conglomerate Reliance
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Big Entertainment of Anil Ambani, the third private group of the country and number
one in Bollywood, in agreement, however, for distribution with Disney.
• This involves, however, brief suggestions to signify how, through the history of
Hollywood majors, the greater part of cinema publications have been written, as such,
given their more recent vicissitudes one could more appropriately and paradigmatically
write manuals on the finances of Wall Street. Furthermore, the dimensions of the
domestic, cinema industry, as in Europe, have become, if possible, still more distant
from those assumed by the large international holdings of the film industry. This is
principally because the financial propulsion which, in the last ten years, has pervaded
the economy has also consolidated the constitutional nature of integrated groups
which are fundamentally functional, moreover, to the process of globalization which
has pervaded the market with the contextual availability, in real time, and in almost
every corner of the world of products, works and technological solutions.
• What can be described as eloquent, in a table which is already explicit in itself, is the
almost negligible weight that Universal Pictures ends up with in terms of General
Electric, the number one company in the whole world with 319 thousand dependents
in five continents, 18.1 billion dollars (13.4 billion euro) in gains and absolutely the
largest capitalization on the stock exchange, episodically threatened by Microsoft. Also
activities which are decidedly industrial carried out in Italy represent modest
percentages in comparison to the group businesses. Thomson Italia represents, for
example, 3.29% of world revenue and 9.11% of European revenue, carried out by the
cinema parent company (Technicolor Italia in particular constitutes only 2.5% of the
total turnover). Furthermore, if Kodak Italia manages to count for 4.06% of the
proceeds of Kodak Entertainment Imaging, the sub-holding which includes the FSP –
Film System Products division, dedicated to motion pictures for the cinema, its amount
of business turnover of the principle holding, the Eastman Kodak Company of
Rochester, in the state of New York, reduces to 1.47%.
• Apart from Rai and Mediaset in the stock exchange values of Milan, also the other
group leaders of the ‘top ten’ are quoted on the lists of New York, London and Tokyo.
This corporate planning reflects organizational assets and managerial models of a
complex nature as well as, obviously, reflecting operative sizes: it is estimated that the
first ten companies total about 37% of the entire value of productions resulting from
all the activities generated on the supply market by the cinema industry in Italy.
On the other part of the rating appears a unique company to have chosen to put on the
market its own titles: Mondo TV spa, the third and last cinema company – of the over
9 thousand Italian companies which are active – to open its own capital to outside
associates as institutional investors as opposed to private shareholders, quoting itself
on the Italian ‘Expandi’ list of the Milan stock exchange. Also Mikado belongs to a
group which is present on the Milan stock exchange, the De Agostini spa (plc.).
However, not with its direct controlling company, De Agostini Communications (which
also includes the participation of 10% of the group Cattleya, with the exception of
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Magnolia Productions TV of Giorgio Gori which invoices 60 million euro and the
Spanish broadcasting company Antena 3) which was acquired from its founders
Roberto Cicutto and Luigi Musini in 2005 and which represents 6% of the revenue;
and neither with the principle holding B&D Holding (Boroli and Drago are the two
families which hold the capital).
• Mondo TV is, furthermore, the Italian group – together with Filmauro – which has a
direct presence in the international field, not only through collaboration agreements
or the acquisition of rights. Established by Orlando Corradi, who holds the majority
with 51.4% of the shares (the second principle shareholder, with 4.9%, is the
investment fund Simphonia Sicav, whilst the remaining 43.7% is distributed on the
market) and controls nine principle companies of which five are located in Italy (Mondo
Home Entertainment, group leader of Mondo Cinema-Moviemax and Mondo Licensing,
then Mondo Distribution and Doro TV Merchandising) and four located abroad: MIM –
Mondo Igel Media, Mondo Entertainment GMBH and Map Music & Picture GMBH
(operating in Hamburg, Germany) as well as Mondo TV France Sasu located in Paris,
France. The business activity is still principally orientated towards the Italian market
(82% of revenue), however, it also includes the rest of Europe (13%), Asia (4%) and
America (1%). Total revenue amounts to 21.03 million from the home video sector,
12.88 from licence concessions, 5.41 from cinema distribution and 1.12 for production
services. According to the specific types of product, such income is referable to film and
home video for 30.72 million and to animated cartoons for 4.23 million.
• As far as companies quoted on the stock exchange are concerned, it has been revealed
that during 2008, following the international crisis of the financial and real estate markets
which hit the economies of all countries as well as the stock exchange lists, their
capitalization suffered serious knockbacks in general measures and, at the end of the
year, on average descended to a third of the values signalled by fixing at the end of 2007.
• The summary outline of the principle holdings present in Italy also underlines the
importance and role which companies, not meant as traditional cinema companies –
that is, companies dedicated to the production, distribution and finance of films –
although tightly linked to the business of the cinema and as such as that which is
defined “large sector”, place on the supply market. Thomson Holding Italy, which has
sites in Anagni (Frosinone) and is under Thomson Multimedia Sales International sas,
is the first important protagonist of the manufacturing industry linked to the cinema,
as absolute leader in production, registration and reproduction of motion pictures and
videos through Technicolor of Rome and Technicolor Milan of San Giuliano Milanese.
The “factory” of Technicolor and Eastman Kodak are industries which furnish what
can be called the raw materials; Deluxe Holding (of the Deluxe UK Holdings Ltd. group,
of London) is the most important company concerning processes of post-production
with its laboratories of development and printing; Blockbuster is the trade name of
the Viacom Group world leader in distributive channels for home entertainment both
as far as direct sales (the ‘sell through’ sector) and rental are concerned.
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• Jointly with Rai and Mediaset there are – of the 37 companies considered in the
reference sample – another three national ‘conglomerates’ which work in all fields of
the sector, with structures for production and distribution as well as for screening:
Cinecitta Holding, of public capital, Filmauro srl and IIH – the Lucisiano group
controlled respectively by Aurelio De Laurentiis (100%) and Fulvio Lucisano (51%),
undoubtedly two of the most important figures in Italian cinema productions.
• In 2008 Cinecitta Holding began an intense phase of restructuration which resulted in
the incorporation of Filmitalia, a company dedicated to the promotion of national
cinema (in particular abroad), this restructuration also resulted in the handover of
100% of Mediaport and Globalmedia and 75% of Mediaport Cinema, all with sites in
Rome (whose business activity is included in the consolidated financial statements of
the period under consideration), and in the public sale of the participation quota of
25% and of 50.47% in Cinecitta Studios and Cinecitta Entertainment to the newly
formed IEG – Italian Entertainment Group of Rome on the part of four associates Luigi
Abete, Diego Della Valle, Aurelio De Laurentiis and the family Haggiag (who, due to the
lack of financial data for 2007 still do not appear in this classification). In the realm of
consolidation there is, therefore, only the Istituto Luce, 100% controlled, whereas
Circuito Cinema di Roma (Rome Cinema Circuit)(75%) and Lumiere di Catania (50%)
remain excluded. Of the latter, we can also include Cinecitta Multiplex and Cinecitta
Fund because (in as much as they are 100% owned) both are in liquidation; Anteo of
Milan, which manages a homonymous business, in the course of being transferred
has a participation quota of 25%. In conclusion of the various operations of company
reorganization public holdings have maintained, in IEG, a participation of 25%.
• Aurelio De Laurentiis is an active operator within the whole cycle of film production,
however, in the private realm. De Laurentiis’ Filmauro presents, in reality, a container
company – a ‘jack of all trades’ – in which results every form of activity carried out,
more than that of a group which is rigorously structured. It consolidates, in effect, 16
diverse company names: Fast Lane of Beverly Hills and Adel Productions of Rome for
production (with a turnover of 13.1 million euro) and distribution (with a turnover from
the theatre of 22.5 million, 6.3 from home video and 3.9 from television); Cinema
Europa, Cineservices, Sautec, ESI – ‘Esercizio Schermi Italiani’ for cinema projections
(13.1 million in revenue); Radiofilmusica of Rome (the use of music in cinema), CCGS
(use of image rights), Auro Servizi of Rome, Olimpia 80 Immobiliare (Real Estate) and
Ionio for the services sector; Auro International B.V.. Cineparco, Trastevere IG and
Dinamica, all in liquidation; and even Napoli Calcio (Naples Football) (with a 2007
turnover of 16.68 million, exclusive of the amount indicated in the table) as sports
entertainment activity, of which De Laurentiis is both president and first shareholder.
In total Filmauro has a production value in Italy which is equal to 46.48 million (77.8%)
and abroad 13.29 million (22.2%).
• The Lucisano Group includes, for its part, under IIH – Italian International Holding eight
subsidiaries (that is, with at least 50% of the quota owned by Lucisano and daughters
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Federica and Paola who now assist him in management) and four connected companies,
without the opportunity, moreover, of distinguishing with rational certainty the activities
carried out by the various trade names between production, distribution and finance, in
the sense that certain companies operate in a diversified fashion in numerous sectors.
For example, they operate both in production and in distribution (it has, in fact, been
present on the Italian market for almost fifty years in the course of which it has produced
and distributed over 500 films) and, as a guide, according to the financial balance sheets,
would appear to cover with two activities 68.97% of the turnover (61.17% with IIF – Italian
International Film and 7.80% with Italian International Entertainment and Keimos) and
earns a further 26.16% through the projection structures Stella Film of Naples, Italia
International Movieplex of Rome and Goodwind of Benevento.
• The table also fails to include another famous “historical” name in Italian cinema, that
of Cecchi Gori, however, the last living structure of the national ex number one, Cecchi
Gori Home Video, only preserves the name and, from the moment that it was in
extraordinary administration and entrusted to the entrepreneur Marco Duradoni of
Prato, 25% shareholder, who already led his own company General Video (2.7 million
revenue) which produces the DVDs of Roberto Benigni, plus another two lesser
companies (DDD and Myra Film which he controls at 80% and 50%).
• The market space which the Cecchi Gori Group had known how to conquer, also outside
of Italy, is becoming, however, a part of the Rainbow company of Iginio Straffi. From
1995 to the present, the creator of the Italian cartoon fairy ‘Winx’ has created a holding
which invoices, thanks to his cartoons, over 45 million euro, 12.6 of which, as producer
and film distributor through the new Roman hub of activity Buffalotta which has over
100 staff and which Buffalotta has added to the original site of Loreto (Ancona) where
editorial and merchandising activity is concentrated, corroborating, even more, to the
development of the cinema industry.
• In a general outline of Italian cinema it is also important to distinguish the presence
of Quinta Communications Italia, a sub-holding of the international group of the
producer and financer Tarak Ben Ammar, who is unique in representing the African
continent, although he also has strong roots in Europe and significant activity in the
United States. The group leader Prima TV spa depends on Quinta Communications
(which is, in turn, under the Holland Coordinator and Services Company, Italy),
furthermore, 85% control of Prima TV belongs to Imperium, group leader of the cinema
sector and to which the distribution company Eagle Pictures answers. Eagle Pictures
was taken over in 2007 by the brothers Ciro and Stefano Dammicco (and valued at 85
million dollars, equal to around 63 million euro) – together with the subsidiary DAT –
‘Distributore televisivi associati’ and Falcon the musical recording professionals. Prima
TV – which primarily operates in the area of television, managing digital channels and
pay per view of both their own channels (such as Europa 24, Sportitalia, Boing,
Teleradio Padre Pio) as well as for Sky and Mediaset Premium – it also became, in
2007, the principle shareholder of the television studios Lux Vide founded by Ettore
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Bernabei, as well as being a 2% partner of the aforementioned Rainbow of Straffi.
• In Tunisia Ben Ammar controls the Empire Studios, which includes three large studios
in Latrach, Ben Arons and Gammarth and the post-production studio LTC-Gammarth;
whilst in France, with the other local holding Quinta Communications (originally cofounded with Silvio Berlusconi and then entering into full availability) operates in
production with both the authors mark Emotion and with Quinta Industries – the latter,
in its time, also being the responsible for a series of acquisitions, from the Eclair
Studios to the laboratories Ex Machina and Duran Duboi, both leaders in digital
technology – as well as in distribution through Quinta Distribution and in digital
television with Dfree, in partnership with Warner, Universal and Mediaset.
• Ben Ammar is, moreover, the major shareholder of the first Canadian distribution
company Canadian Alliance, which enjoys a optimum position in both the USA and in
Europe, from where he intends to establish an independent distribution network with
the foundation of Alliance Films Europe with new acquisitions in Scandinavia and
Germany, thereby positioning himself in the five key countries of Europe (United
Kingdom, France, Italy, Spain and Germany). Furthermore, he is joint associate of the
brothers Bob and Harvey Weinstein in the new company Weinstein & Co. which the ex
title holders of the hen which laid the golden egg, Miramax, formed after leaving Walt
Disney, leaving in the hands of the corporate of Burbank their “creation”.
• The selected circle of independent Italian films (indies) reveals the presence of two
groupings – Cattleya and Fandango – which are in a period of gradual growth. The
Cattleya Group was formed, according to the Business Register, in September 1995
(however, press releases usually put the foundation at September 1997) by Riccardo
Tozzi, then head of production for Mediaset, and Marco Chimenz, ex vice-president of
Medusa responsible for the representation of Medusa and Mediaset in Los Angeles.
These three shareholders were joined, in 2000, by De Agostini Communications and the
private equity fund IMI ‘Investimenti’ together with 10% and at the end of 2008 by
Universal Pictures with 20%, for which, currently, they preserve 20% per person.
Cattleya spa also has total control over Radiocattleya srl (Ltd.) and Olympia
Entertainment Limited, however, it remains a company principally involved in cinema
production (responsible for 98.95% of its turnover), in line with the objectives and
decidedly industrial and managerial approach of its three promoters who divide the
charge of company president (Tozzi) and delegated administrators.
• Equally of relative infancy is the Fandango Group, founded in 1989 by Domenico Procacci,
which, to the parent company Fandango srl has gradually offered Fandango Home Video,
Fandango Australia Pty, The Works Group Plc of London, Last Kiss Pictures (all in the
area of cinema), Fandango TV producer of the popular Italian entertainment programme
‘Parla con Me’ of the channel RaiTre, the Italian publishing company Fandango Libri
(since 1999) in collaboration with the Italian writer Alessandro Barricco, Libri di Pietra,
Radiofandango and Restorambra (restoration services connected to the Ambra Jovinelli
theatre in Rome). Nevertheless, the core business remains with the cinema, with a series
158 |
of productions capable of doubling their total income in 2008, this is according to the
previsions already contained in their balance sheet notes of 2007 and relative to the
release of some of their more recent titles (“Caos Calmo” (no English version),
“Gomorra” (‘Gomorrah’ English title), “Un giorno perfetto” (no English version)).
• A particular case is that of the Film Master Group, founded in Rome in 1976 by Sergio
Castellani, Stefano Coffa and Giorgio Marino in order to operate in the field of publicity
and for which it became, in time, a leader for the production of commercials and short
films, however, always with a firm rootedness in the area of cinema drawing on actors,
directors and employees. Today, with the recent passage to IEG, it finds itself integrated
with such important groups as Cinecitta Studios and Cinecitta Entertainment, bringing
about a total of ten communications companies, principally active in audiovisual
productions – Clip Television, Gag, Film Master Film, K-Events, Film Master Fiction, Film
Master Limited, Film Master Services, Formati Originali – with three sites in Rome, Milan
and London. Valued, at the moment of acquisition at 40 million euro, the company is
already involved, along with the subsidiary Edilparco, in the reconversion of the historical
De Laurentiis studios, which are destined to become, under the name of Cinecitta World
and an investment of 100 million euro, one of the major theme parks of the nation.
• Also ‘Mercurio Cinematografica’ of Francesco Pistorio and Luca Fanfani has been
consolidated primarily thanks to publicity films. This company has sites in Milan ad includes
‘Mercurio Spqr’ associate company which operates in Rome for the markets of central and
south Italy, and ‘La Casa’ a company linked to Milan, formed in order to manage production
carried out with the work associate Fabrizio Ferri, director and photographer.
• The activity of Andrea Occhipinti is all dedicated to the cinema. Occhipinti is the founder
of Lucky Red and he became a producer after an initial, successful career as an actor.
He also has White Cat under his control, a company which is under a participation of
9% in the business group Circuito Cinema.
• Another film studio which has, in time, extended its activity to related sectors is
Colorado Film Production (owned 100% by Iven spa), set up in 1986 following a meeting
between Maurizio Totti – independent producer and theatrical agent – and the actor
Diego Abbatantuono and director Gabriele Salvatores (winner of an Oscar with one of
his first productions ‘Mediterraneo’ (same title in English)). In the corporate area are
also included the divisions Colorado Commercials (formed in 1997 for publicity films
and of which Marco Cohen and Fabrizio Convito have become directing associates) and
Colorado Services (since 2000, for the management of services) then the agency
Moviement, the recording studio San Isidro and the “laboratory” Colorado Cafe’ for
theatrical and television productions.
• If the prize of seniority amongst current Italian operators in the sector goes to Franco
Lucisano, founder, in 1958, of his company IIF, nevertheless, also the Minerva Picture
Group can boast of respectable credentials in this sense having been founded in 1972
by Ermanno Curti with the title Alpharet International, which then became, in 1985,
Minerva when ownership and use of the trade name were acquired, and which today
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also involves production, distribution and commercial activities for film and home video
as a foreign sales agency. Led, since 1987, by Gianluca Curti, the original company
also now includes the editorial groups Rarovideo, Edizione Serag, Finergi and Minerva
Production & Marketing, whilst in 2007 Minerva International was also incorporated
through a merger, this was the year in which a business volume of 8.7 million euro
was earned, however, with directly attributable earnings of 6.32 million euro (of which
4.32 were for rights and royalties and 1.57 for DVDs and home video).
• With an analogous impact in terms of business size, even if of little more or less, are
certain production groups such as Sacher Film, Panorama Films of Marco Valerio
Pugini and Ute Leonhardt, Poccioni-Valsania (of Marco Poccioni and Marco Valsania),
Levi (of Roberto and Matteo Levi), Film Participation of Ernesto Tabarelli (owner of
75% quota) and Ripley’s of Angelo Salvatore Draicchio.
• The first of the above includes the historical film studios of Nanni Moretti, formed with
Angelo Barbagallo – which has returned in recent times to dedicate itself to other work
commitments – and, among the company assets are included at 50% Sacher Distribuzione
(25% each for Moretti and Barbagallo, whilst the other 50% is equally sub-divided between
the two ex founders of Mikado, Roberto Ciccutto and Luigi Musini). Sacher Distribuzione
has sites in Milan and manages a homonymously titled Roman cinema. The second has
a small recoding label, Panorama Films Music; the third is led by the film studio Rodeo
Drive (with a proceeds value of 5.9 million) and is joined by Rodeo Drive Media for the
production and distribution of home videos; the fourth includes the productive structure
11 Marzo alongside the distributive structure Tangram. Film Participation includes the
company for the management of rights Mediafilm (8.0 million revenue) and the film studio
Mediafilm Cinema (2.2 million) which respectively cover 78% and 22% of the activity.
Ripley’s is operative in home video distribution and consolidates, on its part, Ripley’s Film
(1.71 million turnover), Ripley’s Home Video (3.13) and Erremme (0.1).
• The group Artech-Aegida, however, is a company of Cologno Monzese (Milan) founded
by Luciano Porilli and involved with the replication and distribution of DVDs and CDs
for the home video sector of which Artech Video Record and the smaller Aegida (259.7
thousand euro income) form a part.
• Primarily composed of active holdings in production and, still more, in distribution,
the outline of the groups is completed by those of enterprise, activity to which a
circuited organizational structure is natural, a structure which permits common
managerial models and allows for planning and diversification with a certain regularity
in scheduling on more cinema halls and screens.
• In the case of complexes exclusively dedicated to the screening (to which a paragraph
is dedicated below), the business volume appears generally limited in comparison to
the turnover which conglomerates active in other sectors register within their own
financial accounting, just as the initial table made clear. However, this does not entail
that they are of less absolute value, this is because the evaluation of the other
companies has to take into consideration one particular fact.
160 |
• Such a discrepancy, in effect, is somewhat less remarkable when one analyzes the
assets of the balance sheets. If the financial property of major value for production and
distribution companies is constituted by goods which are intangible, such as the socalled ‘film archives’, in other words from the archived films and the property rights of
each title, for projection companies it is represented by tangible sources of income such
as the real estate properties in which cinema and multi-screen centres are found. For
this, in the activity of ‘mergers and acquisitions’ the parameters of annual revenue for
the former groups are often valued as a unitary base, whereas for the latter companies
the turnover is often valued multiplied two, three and sometimes even four times.
2. Operational Companies and Leaders
The 40 groups individuated in the reference sample have control over more than 100
companies and, as stated, a number of these enjoy an income which is greater than that of
other holdings. The outline of the single, operational companies of major influence taken
from the reference sample – stopping at the threshold of 4.35 million euro in turnover – ends
TAB. 7
THE PRINCIPLE CINEMA SECTOR COMPANIES IN TERMS OF REVENUE IN EURO
Sample company
Sector
Revenue 2007
Result
1 Rai Cinema
2 The Walt Disney Co,
3 Warner Bros Italia
4 Medusa Film
5 Technicolor Spa
6 Blockbuster Video Italy
7 01 Distribution
8 Warner Village Cinemas
9 Eagle Pictures
10 20th Century Fox Home **
11 Cattleya spa
12 Uci Italia
13 Cinecittà Studios
14 Universal Pict, Int, Italy
15 Medusa Cinema
16 Fandango Srl
17 Italian Int, Film
18 20th Century-Fox Italy **
19 Sony Pictures Home **
20 Film Master
21 Sony Pictures Releasing **
22 Opus Proclama
23 Medusa Video
24 Cinecity Art & Cinemas
25 Lucky Red
P
P-D
P-D-E
P
I
S
D
E
D
P-D
P
E
S
D
D
P-D
P-D
D
D
P
D
S
D
E
D
373,815,574
314,159,019
177,969,418
167,589,000
141,076,119
138,768,672
99,907,109
77,425,938
76,328,637
65,509,288
57,510,538
45,457,647
42,795,351
41,926,983
40,376,000
40,226,827
34,640,893
32,426,271
32,406,829
31,059,552
29,493,113
28,636,831
26,603,000
23,376,553
22,698,576
13,281,052
11,536,408
1,670,639
20,798,000
5,648,626
-14,764,447
19,400
-1,988,051
799,385
-926,761
3,639,130
14,691,434
53,576
406,782
238,000
388,764
677,298
2,951,373
-407,556
84,818
-1,437,032
- 71,856
867,000
-484,307
381,023
Staff
63
488
46
328
316
1,037***
28
550
15
32
21
241
29
13
19
32
26
41
14
174
15
| 161
segue TAB. 7
Sample company
26 Furlan Cinecity ***
27 Mondo Home Ent,
28 Medusa Multicinema
29 Globalmedia
30 Cecchi Gori Home Video
31 Moviemax Italia
32 Bim Distribuzione
33 Rai Trade *
34 Istituto Luce
35 Mikado Film
36 Ugc Ciné Cité Italia
37 Circuito Cinema srl
38 Pathé-Vis Pathé **
39 Stella Film
40 Mondo Tv spa
41 Panorama Films
42 Artech Video Record
43 Technicolor Milan
44 Nexo
45 Ager 3
46 Mediafilm
47 Albatross Entertainment
48 Rainbow spa **
49 Sac
50 Cin Cin
51 R & C Produzioni
52 11 Marzo
53 Biancafilm
54 International Recording
55 Rainbow Cgi
56 Sacher Film
57 Cvd-Cine Video Doppiatori
58 Emme Cinematografica
59 Fono Roma Film Recording
Sector
Revenue 2007
Result
E
D
E
E
D
D
D
S
P-D
P
E
E
E
E
P-D
P-S
D
I
E
P-S
D
P
P-D
S
E
P
P-D
P-D
S
P
P-E
S
D
S
22,211,773
21,038,000
20,614,000
19,931,653
18,494,243
18,302,000
17,699,949
16,900,000
14,398,030
14,626,719
14,611,152
11,651,852
11,500,000
10,668,371
10,009,174
9,678,350
8,841,193
8,547,757
8,373,224
8,414,762
8,080,290
7,571,781
7,047,000
6,896,311
6,645,971
6,381,310
6,148,453
5,624,720
4,867,470
4,676,000
4,439,475
4,412,749
4,395,613
3,579,006
4,318,027
-5,205,060
-329,000
-6,786,831
149,485
-3,275,091
93,394
-3,647,257
342,829
-7,707,756
-301,712
275,428
-3,616,000
7,712
-101,098
304,064
537,090
-34,158
793,371
-150,887
53,000
883,163
1,119,686
-6,627
23,317
10,137
-1,849,437
52,000
-71,966
23,662
241,823
-138,844
Staff
35
221
11
8
96
87
26
169
16
36
28
8
55
52
2
1
6
25
Legend: P – PRODUCTION; D – DISTRIBUTION; E – ENTERPRISE; I – INDUSTRY; S – SERVICES
Source: Elaborated from CERVED data. Infocamere-Business register and financial statements of the Italian stock exchange for the companies of the quoted groups Rai, Mediaset (Medusa) and Mondo TV.
* The reported data refer to solely to cinema activity.
** The financial statements of Sony Pictures Home and Sony Pictures Releasing foresee the closure on 31st March of each year. All of those
of 20th Century Fox, however, close on 31st May.
*** The personnel of Blockbuster consist of 1,489 full time and part time dependents, equal to an equivalent of 1,037 full time individuals.
up including, primarily, activity which is included in the holding “enclosure” as well as that
of the so-called dominant groups: a good 36 out of 45 and, among these – with the exception
of Bim Distribuzione – all of the first 35, including the distribution company Universal Picture
International which, in the world of the major companies, has a singular connotation being
owned in joint venture at 50% by Viacom Inc. and the General Electric Company.
162 |
This yet again puts forward the statement made at the beginning concerning the effective
turnover generated by the cinema industry in Italy. Just as it was observed that the value
of production of only the first ten companies (over 2,035 million) is greater than the
amount of income that the typical consumer studies, in terms of performing arts and
entertainment, normally credit overall to the cinema in terms of market demand, as such
it is revealed that also at the disaggregate level, that is, in terms of companies which are
clearly operational, the amount of revenue of the first 18 trade names is sufficient to
surpass the upper limit of 2 thousand, million euro (to be precise 2,003.8) of total income.
Also at the level of single companies such a classification in terms of amount of proceeds
(intended as values of production and not as pure turnover) primarily functions to facilitate
the exposition and the understanding of the data and the composition of the sector and not
to fix an exhaustive grading or ranking of companies and their activities. The objective, in
substance, is to schematically represent a verification of the forces in operation which,
albeit in an elementary form, permit the delineation and better understanding of the
business volume and the “weight” of the diverse businesses within the single sectors.
Starting from the most immediate fact which regards the size of Rai Cinema, more than
double in comparison to that of the companies – with the exception of Disney – which
follow it, including Medusa Film, of which the table reveals the data relative to 2007,
prior, that is, to the incorporation of the ex company leader into the cinema activity of the
group Mediaset in RTI and the consequent company reorganization which has modified
the structure (the total values of production, however, remain unchanged).
• Among the objectives of Rai Cinema there are not, in actual fact, only the activities of
direct production and the acquisition of Italian and European cinema productions –
with the principle commitment being to respect the quota of resources predetermined
within both European regulations and the services contract stipulated between Rai
and the minister of Communications – but also the acquisition and commercialization
of television series, films and animated cartoons “depending on the general editorial
exigencies of the group and of its associated companies, without limits”, as states the
company mission, “of transmission and distributive formalities or economic support
(cinema halls, home video, pay per view, pay television, and so on)”. In truth, the
financial statements do not permit the stabilization of clear sub-divisions between
performances linked to television roles (therefore minority) rather than those strictly
linked to cinema.
• The second fact regards the relatively limited presence of film studios in comparison
to distribution companies and enterprise companies. On the shoulders of the two
native ‘mini-major- companies’, Rai Cinema and Medusa, there are, moreover, a 20th
Century Fox Home Italia which produces (like Disney) a small part of original films and
a Film Master principally active in the short films destined for the publicity market.
The first, most important ‘indies’ or independent film producers of the production
sector are, in substance, the operational companies Cattleya, Italian International Film,
Lucky Red and Mikado.
| 163
• What is somewhat remarkable, moreover, is the circumstance that the companies of
the two national group leaders are, among all those present on the table, the youngest.
If the formal constitution of the original Medusa by Franco Poccioni is not taken into
consideration, not having direct links to those resulting from Mediaset which are still
targeted as Medusa, it can be seen, in fact, that the 35 companies at the top of the
table were all founded over ten years ago and that, therefore, their principle market
impact also derives from a longer period of time during which they have been able to
grow and develop. Furthermore, the percentage relative to the classes of seniority also
confirm the preceding consideration on the prevalence – in terms of turnover – of
distribution companies and enterprises over those of the sector of major volatility
which is production.
TAB. 8
Index of seniority
AVERAGE AGE OF ACTIVE CINEMA SECTOR COMPANIES IN ITALY
Less Than 1 Year
From 1 To 5 Years
From 5 To 10 Years More Than 10 Years
Production
Distribution
Screening
8.9%
2.6%
2.8%
30.2%
10.3%
19.8%
24.4%
13.3%
17.3%
36.5%
73.8%
60.0%
Total sector
7.0%
26.4%
22.6%
44.1%
Elaborated on CERVED data 1st January 2007.
• In convergence with this annotation is the position, at number 32, of BIM Distribuzione,
a company formed in Rome in 1983 by Valerio De Paolis and which has, since its origin,
aimed to cover an area in the Italian market which hasn’t already been taken by major
United States companies, despite drawing on international cinema (including that of
the Far East) and co-producing and distributing films by foreign directors and produced
by independent companies. BIM Distribuzione is the result of a gradual but constant
development, and their substantial, consolidated position appears emblematic of the
persistence with which national independent producers – ignoring the eventual
successes of initial box-office takings which are preparatory to a favourable initial
phase – must maintain in order to reach the managerial, organizational and financial
standards which are the basis of work continuity that is essential for achieving and
conserving an appreciable market benchmarking (under which there is neither
visibility nor sufficiently profitable conditions).
• The two public entities which appear immediately after BIM Distribuzione: Rai Trade
(100% Rai, founded in 1996) and Istituto Luce (100% owned by Cinecitta Holding, and
actually formed as far back as 1924) can also make justified claims to seniority. Rai
Trade is essentially a services company which cooperates, to a significant degree, with
Rai Cinema and 01 Distribution and, as its name suggests, operates primarily in the
distribution and commercialization of productions abroad and in terms of licensing
and the transfer of rights. Istituto Luce is responsible for the photo-cinema archives
164 |
of Cinecitta, however, in its work of evaluating and restructuring historical audiovisual
property it also participated, in 2007, in the production and distribution of four motion
pictures (and only one motion picture in 2008).
• Fourth among the holdings, Warner Bros. shows itself to be second among the major
companies, in the strict sense of the word, of a foreign matrix, this is also a result of
the scale of its principle, operational company which is principally involved in cinema
distribution (however, it also has certain Italian productions) and generates 57.76% of
total revenue as WB, whilst the sister company generates the remaining 42.24%. For
a long period of time the two companies have registered a gradual but constant
growth of activity, so much so that from 2001 to 2007 they managed to double the
group’s national turnover and have sites in Rome under the ownership of Paolo
Ferrari.
• The position of Blockbuster Video Italy Inc. reconfirms the importance which the
company controlled by the group leader Blockbuster Entertainment Inc. (ViacomParamount) has assumed in Italy. With 178 direct sales outlets and 64 franchises, as
well as 1,935,169 member’s card holders, Blockbuster is the company of the sector
which employs the most people with 1,489 full and part time staff (all dependents of
Blockbuster Italia, the trade name with which Blockbuster Video Italy operates
commercially on the market).
• The operative continuity in real time, which is contextual to the consolidation of managerial
autonomy and of a market position which is, at least, competitive, is a characteristic that
is also adapted to other independent production companies which emerge from the
sample of companies. R&C Produzione was created in 1988 by Tilde Corsi, just as Ager 3
by Mario Lorenzo Predome, and Biancafilm in 1993 by Donatella Botti.
Albatross Entertainment of Alessandro Jacchia primarily addresses television channels
and is, among the few companies which maintain equivalent relations between the two
national broadcasters, Rai and RTI-Mediaset. 11 Marzo is more active, however, on the
cinema market, where the founders Matteo and Roberto Levi take into account a second
company, Tangram Film, for distribution; a division in which operates, primarily, Emme
Cinematografica.
3. The Principle Film Studios
According to the information elaborated by ANICA (Associazione nazionale industrie
cinematografiche audiovisive-multimediali, an adherent of Condinfustria) as to the
annual production of the national cinema, in Italy in 2007 a total of 120 were made and
141 films in 2008. In the first case, the companies which, on the basis of reported title
credits, have produced the 120 films distributed on the market amount to 217, however,
ignoring cases of multi-production results in an effective number of 141 companies.
Among these, 117 include a unique participation in the production of motion pictures
| 165
TAB. 9
THE PRINCIPLE FILM STUDIOS OF THE REFERENCE SAMPLE IN TERMS OF REVENUE IN EURO
Reference sample company
1 Rai Cinema
2 Medusa Film
3 Italian International Film
4 Cattleya
5 Film Master srl
6 Fandango *
7 Istituto Luce
8 Mikado Film
9 Filmauro **
10 Panorama Films
11 Ager 3
12 Albatross Entertainment
13 Rainbow spa **
14 R & C Produzioni
15 11 Marzo
16 Rodeo Drive
17 Biancafilm
18 Rainbow Cgi
19 Sacher Film
20 Ripley’s Film
21 A.B. Film Distributors
22 Eagle Pictures
23 Sharada
24 Cristaldi Picture
25 Rodeo Drive Media srl
2007 revenue
373,815,574
67,589,000*
34,640,893
33,717,364
31,059,552
16,798,724
14,398,030
14,626,719
13,900,000*
9,678,350
8,414,762
7,571,781
7,047,000
6,381,310
6,148,453
5,923,735
5,624,720
4,676,000
4,439,475
1,717,358
1,717,273
1,200,000
1,067,935
848,585
736,151
Result
13,281,052
677,298
3,804,976
84,818
-3,647,257
342,829
7,712
-34,158
-150,887
53,000
-6,627
23,317
33,507
10,137
52,000
-71,966
64,130
-5,190
2,299
2,394
2,790
Staff
63
13
19
26
87
26
8
55
2
23
1
5
1
1
Source: elaborated from CERVED data. Infocamere – Business Register and financial statements of the Italian stock exchange for the companies of the quoted groups Rai, Mediaset (Medusa) and Mondo TV.
* The reported data of Filmauro only refer to the activities of production according to the indications contained in the commentary notes on
the accounts and, for Medusa Film, it is an estimate based on the communications of the company.
** The annual statements of Filmauro close business on 30th June.
shown in cinemas, for which the other 100 “signatures” in the phases of production and
financing can be ascribed to only 24 film studios (17.0%), with an average presence for
each one equal to 4.16 and a total “coverage” of activity equal to 46.0%. In the following
year the brand names affixed to the 141 films which were released in cinemas amounted
to 261, corresponding, however, both materially and physically to 165 film studios, of
which 137 can count a single credit as opposed to 124 of the other 28 companies (16.9%)
with an attendance index of 4.42 films each and a level of coverage of 47.5%.
Apparently elaborated, the reports, in fact, simply demonstrate the limits on activity
which distinguish the vast majority of Italian film studios. If the figures of the two years
are considered in relation to each other, it can be verified that only 40 companies result
as active in both cases and that 26 of these are included, however, with a single annual
investment. In practice, of the 306 operators which have put their name to the 261
licensed films of the two year period, only 13.0% can claim a specific continuity in
166 |
planning and commitment: 8.4% at the minimum level (one title a year) and 4.6% in form
and measure, more intensively.
Being so elementary and clear the statistics demonstrate, in practice, the potentiality
for supply and the capacity of market presence of the cinema sector within the national
production area, furthermore, they indicate the relativity of the levels of incidence of total
activity under the Italian flag. The table of the principle film studios expressed, on the
basis of 2007 revenue, by the reference sample taken into consideration substantially
reproduces the outline.
The summary table of data results in the following brief comments.
In terms of direct production in Italy it has not been possible to reveal the amount, given
how limited it is, offered by the ‘majors’ (Warner Bros., Disney – also under the name
Buena Vista – and 20th Century Fox) with the exception of Sony Pictures Television (MGM
and United Artists). According to the database of ANICA, however, what does appear as
significant, if only in terms of presence, is the contribution supplied as co-producer by Fox
International Channels Italy through Sky Italia and Sky Cinema with 30 shared
undertakings (15 a year).
The predominance of Rai Cinema and Medusa does not appear to be subject to any
specific influence. In the two year period 2007-2008, for example, they were the
signatories of, according to the ANICA database, 54 (respectively 30 and 28, plus another
four with Rai Trade) and 28 (15 and 13) films. An aspect which is similar to both
companies is the decision to dedicate themselves, primarily, to production in conjunction
with other operators and only acting sporadically as direct producers with the complete
assumption of the project and work plan. After them the following can be distinguished:
Cattleya and Fandango with nine productions, Bianca Film with six and Istituto Luce,
Lucky Red, Rodeo Drive, BIM and Dania with five.
In comparison to the total revenue accredited as groups, the data of certain companies
such as Filmauro, Fandango and Eagle Pictures can appear very limited, however, on a
par with those revealed for IIF and Cattleya – the two other major Italian companies in
the sector – the figures only refer to the sole activity of production and acquisition as
indicated in the financial statements.
On the other hand, the vast majority of companies which operate in both production and
distribution present difficulties in defining a clear distinction of the turnover generated
by one area as opposed the other. Instead they prefer to offer only maximum indicators,
without particular details (in the case of Medusa Film, for example, estimates reported
in certain company communications are used as a reference).
Cristalli Pictures, formed by Massimo Cristalli, is active on two fronts, having
incorporated Lux, founded by Massimo’s father Franco, AB Film founded in 1978 by
Angelo Bassi and the more recent Sharada (founded in 2002) by Andrea de Liberato.
Strictly speaking, in statistical terms, there should also have appeared in the outline of
the productive sector certain companies involved in the activities of audio and video preproduction and post-production, development and printing, video-duplication and
| 167
electronic filming, this is because the ATECO classification assigns the same code 92.11
to such activities along with cinema film studios as generally understood. It is preferred,
however, to consider them, for the sake of homogeneity, as under the category “Industry
and Services” (in the last paragraph of this chapter) as a result of the fact that the ATECO
classifications do not seem to follow parameters and directions which are totally
rigorous. As can be continually seen, the companies inserted into the cinema category,
also include a large number of others which are catalogued, on the basis of the social
objectives declared in their statutes, into categories and lists which are very different.
TAB. 10
Reference sample company
1 The Walt Disney Co.
2 Warner Bros Ent, Italia
3 Medusa Film**
4 01 Distribution
5 20th Century Fox Home *
6 Universal Pictures
7 Eagle Pictures
8 Filmauro *
9 20th Century Fox-Italy *
10 Sony Pictures Home *
11 Sony Pictures Releasing *
12 Medusa Video
13 Lucky Red
14 Mondo Home Entertainment
15 Cecchi Gori Home Video
16 Moviemax Italia
17 Bim Distribuzione
18 Mondo Tv spa ***
19 Artech Video Record
20 Mediafilm
21 Emme Cinematografica
22 Italian Int. Entertainment
23 Ripley’s Home Video srl
24 Sacher Distribuzione
25 General Video
26 Mediafilm Cinema
27 Teodora Film
28 Dania Film
29 Rainbow Distribution
30 Fandango Home Ent.
4. THE MAJOR DISTRIBUTION COMPANIES
Under the profile of distribution channels the cinema industry in Italy has remained loyal
to its original configuration. The ANICA data on national activity registers, for example,
for 2007 the activity of 52 companies which are responsible for circulating 108 films: 39
for a single film and 13 for more than one. Last year the number of companies rose to
59 and films to 121, however, the proportions have remains more or less unvaried: only
17 companies have in fact distributed more than one title, against 42 which distributed
only one single title. In respect to the theoretical total of 111 companies which, in the
two year period, distributed 229 films (of the 261 materially produced) in question, it,
nevertheless, results that those which are effective amount to 94, given that 17 (equal to
18%) were active both years and the remaining 77 (82%) limited their intervention to a
single season.
Among the 17 companies which have distributed at least two films there are, however,
seven which have limited their involvement to a single title a year. The Italian companies
which can be considered actually present, with a significant continuity, on the market
can, therefore, be reduced to just 10 (10.6% of the total) and to these can be ascribed the
promotion and circulation of 129 titles on the market (equivalent to 53.7% of national
productions which arrived to the general public in the two year period). In summary, the
cinema sector shows, as protagonists, the “branches” of the major foreign companies,
primarily involved in adjusting to the Italian market the distributive policies and strategies
organized at the international level by the parent companies.
Firstly, it should be pointed out that as well as the distinction between revenue resulting
from production activity and from distribution activity not being, as stated, easily
ascertained, the results are also open to diverse and debatable interpretations. The same
holdings and companies which operate on both fronts qualify as such in diverse ways, the
one from the other, the actual origins of such revenue and both follow dissimilar
attributions. Neither, on the other hand, does the end result or the relations which
accompany the indications, reveal the resources generated by produced works or coproduced works, distributed by the companies themselves or through other companies
(at the same time they omit to mention, rather frequently – according to a practice which
168 |
THE PRINCIPLE DISTRIBUTION COMPANIES BY REVENUE IN EURO
2007 revenue
314,159,019
177,969,418
102,300,000
99,907,109
65,509,288
41,926,983
40,100,000
33,100,000**
32,426,271
32,406,829
29,493,113
26,603,000
22,698,576
21,038,000
18,494,243
18,302,000
17,699,949
10,009,174
8,841,193
8,080,290
4,395,613
3,342,961
3,138,752
2,881,762
2,744,682
2,268,231
2,142,846
1,827,926
862,000
486,982
Result
11,536,408
1,670,639
19,400
-926,761
406,782
799,385
4,700,000
2,951,373
-407,556
-1,437,032
867,000
381,023
-1,902,060
149,485
-3,275,091
93,394
-3,616,000
-191,098
793,371
241,823
-77,158
154,980
-117,838
220,098
-63,094
3,202
118,417
-39,000
10,720
Staff
488
46
28
32
29
15
19
32
41
15
11
8
16
36
2
2
2
1
-
Source: Elaborated from CERVED data, Infocamere – Business Register and financial statements of the Italian stock exchange for the companies of the quoted groups Rai (01 Distribution), Mediaset (Medusa) and Mondo TV.
* Sony P, Home and Sony P, Releasing close business on 31st March each year; 20th Century Fox Home and Fox-Italy, however, on 31st May;
Filmauro 30th June.
** The values indicated are the result of estimates on how much the company is active in both production and distribution.
*** The reported data only refer to cinema activities.
is, unfortunately, common in almost all other sectors – the information, which moreover
is necessary, regarding consistency or the composition of personnel involved).3
3
Over time only a few co-production agreements have been registered. Only Columbia, after taking
Tri-Star from its partnership, has created certain small scale companies for the production of films
outside the United States, such as: Nelson Entertainment in joint venture with British and Canadian
partners, Triumph Films co-owned by the French studio Gaumont and Castle Rock Entertainment.
| 169
As far as the reports of the object of analysis are concerned, those companies which are
outside of the norm include only 11 Marzo and Tangram of Roberto Levi, Eagle-PrimaQuinta Communications of Tarak Ben Ammar, Rodeo Drive and R.D.Home of
Poccioni-Valsania and Dania di Luciano and Sergio Martino, who note down even the
amount of all the minimum guaranteed concessions, receipts and owned royalties in
concession or licensed for around 840 diverse films. It can, therefore, be verified
(involving eight annual reports out of the whole reference sample) how, in practice, the
quota of companies which signal in their documents the effective results achieved from
single titles and their various channels of “exploitation” is less than 3%.4
There are, furthermore, companies which among their activities also include that of
territorial agents – for one or two reasons – of the major distribution companies, without
signalling in their accounts the relative posts (often considered under the general title of
“other proceeds”), also because in the vast majority of cases of such commercial
agreements no communication is given. Seven of the first 11most important positions in
the ranking of distribution companies demonstrate the importance of the foreign ‘majors’
on the market. The resources of Walt Disney and Warner Bros. appear, above all, clearly
superior to those of the other competitors, so much so that it would be necessary to total
the proceeds of another ten companies in order to obtain the revenue-amount equal to
that of the ‘majors’ totalled.
As can be seen in the production sector, only Mediaset and Rai among Italian companies,
maintain an elevated market presence. Medusa is the first to come near to the foreign
‘majors’ and jointly considered, the two companies Medusa Film and Video have 128.9
million euro in revenue, whilst 01 Distribution of Rai maintains its position also if it
accumulates the turnover of the two companies The News Corporation of Rupert
Murdoch (20th Century Fox and Fox-Italy), whereas the two subsidiaries Sony Pictures
Home and Releasing, in total bring to their group 61.9 million euro. The group Mediaset
is, moreover, also active in Spain with the subsidiary Telecinco which, in 2007, distributed
11 films with a turnover of 19 million euro (such films, furthermore, brought in a total
income of 34 million euro).
On the other hand, 01 Distribuzione and Medusa, in the last two year period, released onto
the market, according to the reports of ANICA, respectively 42 and 31 of the 229 Italian
titles thereby representing 31.8% of all national production. Mikado stopped at 10; BIM
Distribuzione, Lucky Red and Warner at 6, Eagle Pictures at 5 and Filmauro at 4.
Indeed, it is these last two companies which are those that managed to be inserted
among the foreign and domestic ‘majors’. Eagle, indubitably in virtue of an large amount
4
170 |
It is not uncommon, however, to find in accounts relations detailed information on distribution
agreements stipulated in the course of the year (and, therefore, with effects on successive accounts),
also foreseeing the specific nature of due income, to testify to the efficiency of undertaken initiatives
and in support of the results – more or less exalted – presented in the balance sheets of the last year.
of experience and credentials acquired in numerous years of activity. It was formed in
1986 when the Dammicco brothers (already protagonists in the 1970s of the musical
scene with their group ‘Daniel Sentacruz Ensemble’ and for the composition of
successful, international hits such as When a Child is Born and Solendo) left their second
career as producers and television entrepreneurs, undertaken in 1980 and culminating
with the creation of the network Videomusic. It was after they had consolidated the area
of home video that the Dammicco brothers began, in 1995, to develop their company in
all areas of production and distribution, with exclusive agreements with other national
producers they arrived at releasing onto the market around 20 titles a year; target put
TAB. 11
THE PRINCIPLE BUSINESS CIRCUITS BY REVENUE IN EURO
Reference sample circuits and companies
1 Warner Village
2 Gruppo Uci-Un, Cinemas Int. Italia
3 Gruppo Medusa-Mediaset
4 Uci Italia (G. Uci Italia)
5 Medusa Cinema (G. Medusa)
6 Cinecity Art & Cinemas
7 Furlan Cinecity
8 Medusa Multicinema (G. Medusa)
9 Globalmedia (Cinecittà H.)
10 Ugc Ciné Cité Italia
11 Gruppo Quilleri
12 Gruppo Filmauro **
13 Circuito Cinema
14 Gruppo Iif-Lucisano
15 Circuito Cinema srl * (C. Cinema)
16 Gruppo Pathé-Vis Pathé **
17 Stella Film * (G. Iif-Lucisano)
18 Nexo srl
19 Giometti Holding ***
20 Cin Cin * (G, Quilleri)
21 Uci Centro * (Uci Italia)
22 Coges Padova * (G, Quilleri)
23 Porta Nova srl * (G, Quilleri)
24 Giometti Jesi * (Giometti H.)
25 Arco Program (De Pedys)
26 Italian International Movieplex (Iif)
27 Mediaport Cinema (Cinecittà H.)
28 Arco Film (De Pedys)
2007 Revenue
Result
77,425,938
72,630,000
60,990,000
45,457,647
40,376,000
23,376,553
22,211,773
20,614,000
19,931,653
14,611,152
14,295,047
13,100,000
13,074,625
12,887,792
11,651,852
11,500,000
10,668,371
8,373,224
7,867,731
6,645,971
3,413,684
2,729,704
2,611,071
2,425,633
1,827,163
1,510,627
1,816,273
1,054,788
-1,988,051
-2,756,622
-91,00
14,691,434
238,000
-484,307
4,318,027
-329,000
-6,786,831
-7,707,756
1,743,728
-2,100,000
-443,740
339,906
-301,712
275,428
537,090
83,819
1,071,633
121,377
488,083
-19,794
15,175
17,981
-60,883
308,410
327,850
Staff
550
610
174
35
221
169
28
-
Elaborated from data and accounts of CERVED, Infocamere – Business Register and the Italian stock exchange for the quoted company Mediaset.
* These operational companies belong to the indicated groups: the economic values are relative to their management, and reported in the table,
already include in the total values of the groups referred to.
** The proceeds attributed to the group Filmauro are the result of estimates based on indications contained in the financial statements; those
relative to Pathe-Vis Pathe of Europalace are obtained from communications pertaining to their activity.
*** As far as Gruppo Giometti are concerned it is to be noted that the elaboration was effected only on the available balance sheets of the
company managing the structures Jesi, Fano, Senigallia and Pesaro and do not include, therefore, the financial statements of Porto S,Elpidio, Ancona and Perugia, The business year of the company Giometti Holding does not coincide with the calendar year and accounts are
closed on 31st August.
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forward again recently after passing the majority of their capital to Tarak Ben Ammar. On
its part, Filmauro represents a continuity of the De Laurentiis dynasty in international
cinema. In 2007 the revenue from distribution amounted to 22.5 million euro for the
theatrical division, 6.3 million for home video and 3.9 million for television circulation.
Other operators which make use of other structures for the distribution of their
productions – separating the television market from the home video market – include
Mondo TV with over 31 million euro in revenue (between Mondo spa, Moviemax and
Mondo Home Ent.), Film Participation with 10.3 million income, between Mediafilm and
Mediafilm Cinema, and IIF with Italian International Entertainment and the smaller
Keimos which also operates with the title IIF-Homevideo (the modest amount of 3.3
million euro reported in the table must be considered as purely indicative in absence of
a secure division of proceeds which enter into the group leader’s accounts). Franco
Lucisano was, among other things, the first Italian film maker to subscribe, beginning in
the 1960s, to collaboration agreements with international holdings, such as the then
American International Pictures, Cannon, MGM, Polygram Film International, Columbia
Tristar and the more recent Buena Vista (Disney).
The following can all be considered as distributors in their own right (as well as for third
parties): Lucky Red of Andrea Occhipinti, BIM of Valerio De Polis, Fandango of Domenico
Procacci, Ripley’s of Angelo Salvatore Draicchio, Rodeo Drive of Marco Poccioni and
Marco Valsania, Colorado of Maurizio Totti, which also has internal corporate and not
autonomous divisions, and Dania of the Martino brothers, associates also of VIP Media
(19.9%), Surf Film (7.3%) and Movie 90 (25%).
Almost exclusively active in distribution are, for their part, Artech Video Record, Emme
Cinematografica and Teodora. The first is a company of Cologno Monzese (Milan) founded
by Luciano Porilli and concentrated on the replication of DVDs and CDs for the home
video sector. Emme Cinematografica of Rome, formed by Mario Fiorito, operates
primarily with tender contracts with Universal (also including the management of the
cinema hall ‘Tibur’ in Rome) and representation for other Italian film studios; such as
Teodora Film of Ceare Petrillo, which is also located in Rome.
5. THE MAJOR BUSINESS CIRCUITS
The area of business and finance is, perhaps, the most paradigmatic in the whole cinema
sector. A terminal thermometer of the evolution of activity over the years – from the
pressing competition of television productions to the ever increasing film consumption
from individual “platforms” such as DVD players, personal computers and mobile
telephones – which is exemplary of the segmentation of market supply.
Being congenial to an organizational structure in the form of a matrix which permits
common managerial models as well as the capacity to plan and modulate, with discrete
uniformity, the scheduling of films on even more cinema screens, has always been
172 |
characterized by the formation of comprehensive circuits of more structures,
geographically dislocated, also by notable distances, the one from the other.
Furthermore, this almost “natural” tendency to aggregation has had a minimal influence
on the vast, indeed enormous plateau of small and very small autonomous cinema halls
(of small districts, parishes or clubs often open only for one or two days of the week and,
at times, not even open to all of the general public in that they are reserved only for
associates or members of determinate organizations) which are found across the
country.
Such fragmentation is, moreover, not only in terms of size or logistics. It is also found,
for example, in terms of type of offer, in other words, in terms of the nature of the film
production being proposed, in virtue of which those areas of film which are partially
ignored – from so-called art house cinema or specialist films to amateur films, from
documentaries to film shorts – which are also an integral part of the sector. It can also
be stated that such fragmentation is also found under the administrative and corporate
profile of the sector, from the moment that the activity of each projection unit considers
the management and – very often – the ownership of the halls or the edifices in which the
operational structure has sites and to which, usually, are given autonomous legal status
(generally under the form of srl ‘societá a responsabilitá limitata’ – in English societary
law this corresponds to Ltd. or ‘Limited liability company’ (translator’s note)) typically in
order to protect and increase the value of the real estate property.
For the very same reason the practice is extremely diffuse at all levels, including those
at the top where the major national circuits are placed and which are constituted by
multi-screen cinemas and multiplexes. As such, if on the one hand, there formally
emerges a growing concentration of establishments, on the other, there remains an
intense corporate fragmentation and company autonomy is increasingly becoming a
reason for the subsistence of minor structures. The latter has a real estate capital which
confers a greater capacity for negotiation and expenditure (in particular in terms of credit)
also in periods of possible difficulty.
This also explains the elevated number – 1,815 – of active companies enrolled on the
Business Register in the section on cinema projection. At the end of an analysis of the
market, such as the one proposed by this report, the situation presents, nevertheless, a
problematic comparison due to the fact that with the increase in the number of
companies under consideration and with the contextual reduction in their scale it
becomes inevitable that one is confronted with a perceptible lack of sources: for a
relevant number (clearly greater than that registered for production and distribution
sectors) of companies it results that financial statements have not been deposited and
the same holds for recent balance sheets (indeed, the same index of companies
unexpectedly reveals as empty those companies which are well noted by persons involved
in the work and of those it is even difficult, at times, to find any trace); for another large
amount of companies financial statements are, at times, so succinct as to appear almost
incomplete.
| 173
The table below therefore corresponds to a first reconstruction of a sector which is
confirmed by extra information and by boundaries which cannot be described as clear.
This classification based on economic values is only finalized to facilitate the exposition
of data and has a purely approximate value, also if the sum of revenue attributed to the
considered business circuits (obviously excluding those companies which are
subsidiaries) is greater than the threshold of 400 million euro, corresponding to around
65% of gained takings – according to the data of ANICA in 2007 – in cinema halls and
can, therefore, be considered as sufficiently representative of the general outline.
A first reading of the table confirms the operative force of foreign companies in
comparison to national ones and, in particular, the notable discrepancy in terms of size
between the two leaders of the sector and the other competitors. Warner Village (Warner
Bros.-Time Warner) and UCI Italia (United Cinemas International – News Cooperation)
claim almost half of all proceeds of the business and finance sector and have a business
scale which is four or five times larger than their nearest competitors.
• To a large measure the activities of all the principle groups of the business sector
involve the management of structures of the latest generation, in other words multiscreen cinemas and multiplexes, upon which, moreover, development plans and
investment in new acquisitions and openings are concentrated. Warner Village, for
instance, now has 15 cinema complexes – with a total of 158 cinema screens – with the
inauguration of the multiplexes of Nola in 2007 and in Lamezia Terme and Vimercate
(the latter being the unique cinema in Italy with a large format screen measuring 21
by 16 metres) in 2008. UCI, which operates through five companies (UCI Centro di
Roma, Multiplex Nord, UCI Bicocca, UCI Nord Est and UCI Sud) has also consolidated
its position acquiring the circuits Europlex and Cinestar and having 22 multiplexes
totalling 233 cinema screens. UGC has acquired in Europe nine cinema structures
leading to a total of 240 cinemas, 60 of which are in Italy, since 2000.
• If Warner Village and UCI are of Anglo-American origin, with head offices located in the
United States and United Kingdom respectively, as well as a network of structures in
diverse continents, the other two foreign circuits operating in Italy are of French origin
and are only present in Europe. UGC – Union General Cinemas was formed in 1971 in
Lilla on the initiative of certain business chains of a regional character and now has 48
cinemas and 576 screens in France (35-359), Spain (6-108), Italy (4-66) and Belgium (343). Over time UGC has extended its business range to also include production and
distribution, inheriting the area from two of the most established groups in
international cinema, Gaumont and Pathé, of which, for the last 30 years, the alliance
Pathe-Vis Pathe has represented continuity. This circuit, today, manages 86 cinemas
also including Europalace with 843 screens, 643 of which in multiplexes such as the 39
found in the three Italian centres Rome, Turin, and Florence.
• The model of a vertically integrated company which is active in all areas is also
common to certain of the major national circuits beginning with the number one
Medusa which operates through both Medusa Cinema and Medusa Multicinema. Its
174 |
TAB. 12
THE PRINCIPLE INDUSTRIAL AND SERVICES COMPANIES BY REVENUE IN EURO
Reference sample company
1 Tecnhicolor spa
2 Blockbuster Video Italy
3 Kodak Italia ***
4 Deluxe Italia holding
5 Cinecittà Studios
6 Opus Proclama
7 Rai Trade ***
8 Technicolor Milan
9 Sac
10 International Recording *
11 Cvd-Cine Video Doppiatori
12 Fono Roma Film Recording
13 Surf Film
14 Cam
15 Eurolab
16 Laser Film
Sector
I
S
I
I
I-S
S
S
I
S
S
S
S
S
I
S
S
2007 Revenue
Result
141,076,119
138,768,672
112,531,040
67,797,074
42,795,351
28,636,831
16,900,000
8,547,757
6,896,311
4,867,470
4,412,749
3,579,006
2,936,515
2,914,116
2,598,985
1,745,721
5,648,626
-14,764,447
822,106
677,473
53,576
-71,856
304,064
883,163
-1,849,437
23,662
-138,844
17,172
58,733
-72,014
26,555
Staff
316
1,4890**
290
156
241
14
96
52
6
25
7
-
Legend: I - INDUSTRY, S - SERVICES
Source: Elaborated from CERVED data and Infocamere – Business Register.
* International Recording appartiene al gruppo Thomson-Technicolor Italia.
** International Recording belongs to the Thomson-Technicolor Italia Group.
*** The reported data only refer to cinema sector activity.
development has been very rapid and it now has ten multi-screen cinemas and one
single-screen cinema. Producers, distributors and, at the same time, traders are also
the group Filmauro – through the subsidiaries Sautec, ESI – Esercizi cinema italiani,
Cinema Europa and Olimpia 80, all in Rome, and which represent 21.9% of the
holding’s cinema revenue – along with Italian Int.Film with Stella Film of Naples, Italian
International Movieplex of Rome and Goodwind of Benevento (80 cinemas in total and
contributions to the group turnover equal to 26.1%). What is curious, moreover, is how
the composition of the business set in which Filmauro is interested is to speculate on
the diverse interests of Pathe’, since the moment that both include in their core
business also football, owning respectively the clubs of Naples and Olympique Lione.
• Franco Lucisano and Aurelio De Laurentiis can be considered traders from the start of
their careers. Since the founding of IIF it has managed, for example, the then Cannon
circuit which was subsequently transformed into Cinema 5, then successively, in
partnership with Dino De Laurentiis, a network of miniplex cinemas was created. Once
the success of multiplex structures had begun the partnership was dissolved and IIF
and Filmauro began to autonomously develop their own structures, principally in the
regions of central and south Italy.
• The work of the Furlan dynasty in the management of theatres and cinemas in Veneto
has been continuing for over ninety years. The family also arrived at holding the fourth
quota of the market with its structures in north-east Italy and with policies of large
| 175
scale expansion in the multiplex sector under the title Cinecity which, in 2007, brought
about a change in strategy in terms of investment plans. The structure of the subsidiary
Cinecity Art & Cinema were actually demerged into the bridge company Solengo and
then conferred to the Dutch holding Msref V Amber, of which the United States
merchant bankers Morgan Stanley are major shareholders with 60%. The group
Gruppo Furlan, which has maintained 40% of shares as well as the management of
four centres in Treviso, Udine, Padua and Trieste (with a total of 45 screens), has earned
from the operation 18.7 million euro, plus the exercisable right to regain cinemas
before the second half of 2010 from Gianantonio Furlan. The latter has maintained
ownership of the multi-screen cinemas and traditional single-screen cinemas of
Venice, Mestre, Vittorio Veneto and Porto Viro (18 cinema screens in total).
• The success of multiplex cinemas was also taken by Cinecitta Holding in 2003. They had
acquired, through the subsidiary Mediaport the Cineplex circuit which was then
renamed Globalmedia (with seven multiplexes and one single screen cinema).
However, the public group did not manage to activate the managerial area and, in 2008,
began the handover of Mediaport – including the same Globalmedia and Mediaport
Cinema, owners of Cinemax in Padua – to Farvem Real Estate srl of Massimo Ferrero,
an operator previously primarily involved in distribution (Elleemme Group).
• The interests of Cinecitta in the area of film projection now remains tied to a 27%
participation in the mixed public-private joint venture Circuito Cinema, originally
formed to encourage the circulation of high quality films and art house films, and which
includes the owned (100%) Circuito Cinema Firenze and another seven homonymous
associates (with sites in Genoa, Turin, Milan, Bologna, Rome, Florence, Naples, Catania
and almost all in partnership with local traders) amounting to a total of ten cinemas.
The other company associates are BIM Distribuzione of Valerio De Polis (22.5%),
Mikado Film of De Agostani (18%), Medusa Cinema of RTI-Mediaset (10%), White Cat
of Andrea Occhipinti (9%), Greenwich of Fabio Fefe (8%) and Emme Cinematografica of
Mario Fiorito (4.5%).
• In contrast to the territorial references considered so far, those of the other principle
companies of the reference sample involve a geographical distribution which is far
more regional in character or, in certain cases, inter-regional. This involves, in effect,
business groups developed by managers who started their activity at a provincial level
and then knew how to expand their businesses, interpreting market trends and
promptly adjusting to the evolution of the activity, beginning with the conversion of
single screen cinemas into multiplexes. The Quilleri circuits of Davide Quilleri in
Brescia, Giometti of Giovanni Giometti (70%) and family Massimiliano, Gianluca and
Silvia (10% each) of Pesaro are, today, among the most consolidated, similarly Nexo of
Anna Nove Di Sarro and Arco di Luigi, Walter and Cristina De Pedys for other areas of
northern Italy.
The fragmentation of interests within the groups of numerous management companies
certainly reduces the visibility, thereby indirectly limiting the area of research, however,
176 |
this is not the case for the actual consistency, enhanced by the considerations shown by
‘majors’ and by the large scale groups which often entrust their agency mandates of zone
and of representation to the areas under consideration.
6. The First Industrial and Services Companies
It is common practice to subdivide the cinema sector into the three traditional sectors of
production, distribution and business and finance, including in the first all of the activities
which are linked to the making of a film, in the second everything which is instrumental
in its release onto the final consumer market, that is, offering it to the public, and, in the
third is included that which is necessary for the film’s practical commercialization and
larger circulation (the so-called box office). Concrete experience shows, moreover, how
attention ends with the concentration on who “supplies” the financial and creative
resources and the role played by the consequent economic and artistic dividends.
As such, there are areas of the industry which, despite their importance, are very rarely
taken into consideration. For instance, those of the companies which procure the raw
materials, systems, equipment, and logistic structures; the companies involved in pre
and post-production such as those involved in dubbing; the companies involved in imports
and exports or the intermediation of rights, licences and commission as opposed to
production services; the agencies which represent the interests of artists or casting and
so forth. In discussing the cinema it is commonly thought in terms of a generic “cinema
and related industries”, however, in actual fact, it involves activities which are closely
linked to the sector and their business scale legitimize the essential roles and functions.
Given that the cinema scene is already, in itself, fragmented and disorderly, it is not
simple to trace an analytical outline. This is also because it involves reference to
companies which are fundamentally industrial and of services and the same ATECO
classification of ISTAT and the Italian Chamber of Commerce includes a large number
outside of the category 92.1 which is reserved for the cinema sector (the management
of rights and licensing, for example, falls under section 74.8) or, at most, they are
inserted under 92.2 which is agencies and companies of the television sector.
Furthermore, what has been found is the presence of financial statements in databanks
which are updated percentagewise and are inferior in comparison to how much it is
possible to verify them for other cinema companies of similar size.
The research conducted on the selected reference sample of companies linked to cinema
production results, however, in the composition of an approximate summary.
Also in this classification there recurs two characteristics which distinguish the entire
cinema sector. 1. The relevance of generated turnover. If it is considered that a large
number of estimates concerning the area of linked industries value the total business
volume at 571 million euro, it appears significant that the first five companies singlehandedly add up to 502.9 million euro in revenue. The remaining ten are enough to
| 177
generate almost the remaining generally estimated total, considering, moreover, that
the other major production industry – the Japanese company Fuji – does not permit the
possibility of ascertaining the specific revenue of the division Fujifilm. 2. What reemerges, furthermore, is the predominance of foreign capital, resulting from the fact
that four of the first five companies are under the control of foreign groups, similarly for
the other two companies present in the classification: Technicolor Milan and International
Recording.5
It was intended to define as ‘services’ the area of pre and post-production given that the
nature of the services offered is – in almost all cases – typically of the tertiary sector.
The so-called cinema sector linked industries besides have always been in the area of
outsourcing; since the time, that is, that the American studios realized, over 50 years
ago, that is was remarkably cheaper, and, in the end, not excessively dangerous for the
protection of contents to entrust determinate technical processes of manufacturing to
external companies, capable of carrying them out in series, rather than doing it internally
with fixed structures.
An example of a services group is Cinecitta Studios, to the turnover of which production
structures have contributed 27.2 million euro – theatres and venues (10.0), fixed systems
(3.7), set design (10.5) and technical equipment (2.9) – and that of post-production 13.2
million, subdivided between developing and printing laboratories (9.4), Cinecitta audio
(1.3), and Cinecitta Digital (2.5). Cinecitta Studios, in turn, holds 48% of Cinecitta
Entertainment (615.6 thousand euro in revenue) and has passed to the control of IEG –
International Entertainment Group of the Abete-Della Valle-De Laurentiis-Haggiag
agreement, which has planned a reinforcement through investment in international coproductions and a further increase in value of the post-production area. A further
important asset of IEG, Film Master, has lent itself to, primarily, exploiting the new
synergies with Cinecitta Studios, given that it produces 120 titles every year, thereby
requiring an average use of theatres of four thousand hours a year. Among commercial
services there is the activity of Blockbuster, which acquires productions (or rather, the
rights for their reproduction, entrusted to foreign suppliers) from distribution companies
or even directly from film studios and then becomes a final channel retailing the
productions in its shops. Blockbuster is the world’s leading chain with 7,800 sales outlets,
5
178 |
The estimate of 571 million euro given for explanatory purposes is from the annual document of
syntheses on activity in the sector “Il cinema italiano in numeri – anno solare 2007” (Italian
Cinema in Number – Calender Year 2007) edited by the official studios of ANICA. The table
“Fatturato per aree di attivita” (Turnover for areas of activity) (pp.21) reports the indications of the
business volume generated in five sections: film studios-television studios-filming: 158 million;
lessees and technical equipment and transport managers: 20; development plants and video
recording press: 190 the value of such manufacturing was estimated at 566 million euro, however,
in the 2008 edition it is valued at 574 million. The entries considered do not seem to understand
that the areas of production and supply of raw materials (beginning with films).
despite the fact that after years of expansion it entered a phase of controversy and, also
in Italy, saw its business volume reduced with a deficit, in 2007, of 14.7 million,
nevertheless, its leadership in the area of direct sales of films remains indubitable.
Equally consolidated is the position of Deluxe among the structures of development and
printing, recording and post-production. The company which controls 100% of Digititles,
a small company specializing in titles, sells over 236 million metres of film a year
(corresponding to almost 8 thousand films lasting 100 minutes) and was once the
purchaser of foreign film development laboratories.
To the same market sector belong another three Italian companies of the reference
sample – Eurolab, Laser Film and Fono Roma Film Recording, the first formed in Italy in
1931- with a market presence which serves to supply an indicative profile of the total of
medium and small sized companies active in this area, similarly to CVD-Cine Video
Doppiatori which can be considered as representative of an activity which is extremely
important for Italian cinema such as that of dubbing. SAC (Servizi Ausiliari Cinema) of
Rome can be defined as a distribution company, however, it administers to a very
particular type of service: supplying the film copies and publicity materials for the cinema
circuits of the 12 principle ANICA cities upon which the business market is structured
(Rome, Ancona, Bari, Bologna, Cagliari, Catania, Florence, Genoa, Milan, Naples, Padua
and Turin).
The absolute leader in cinema publicity is Opus Proclama of Milan, an historical agency
which is under the control of the Maestro and Langs families. Opus is a group which
controls a series of small agencies dedicated to product placement, merchandising and to
interactive promotion and holds, on the cinema screen advertising market a quota of 46%.
Apart from Rai Trade, the company Surf Film of Rome belongs to the area of services for
intermediation and representation – the artistic, promotional, public relations and casting
agencies or the press offices (areas where the rarefaction of balance data is further
accentuated). Surf Film specializes in the management of property rights on the mandate
of film studios and distribution companies. Formed by Massimo Vigliar, the company has
started to also operate in distribution and has recently produced its first two films.
The substantially illustrative character of the classification is enhanced by the insertion
of CAM, an acronym of Creazione Artistiche Musicale, a recording studio which, by now,
can boast of half a century of existence and which has always been exclusively dedicated
to producing music and sound tracks for both national and international films (and has
also created, on the side, a line of jazz record titles called Cam Jazz). An independent
recording label, it is the publishing house of the late Nino Rota as well as of other more
noted composers of Italian cinema music including the Oscar winner Ennio Morricone.
As a recording studio it obviously has not been catalogued among cinema companies,
however, it is clearly difficult to exclude its activity from those which combine to generate
the production values of the whole sector.
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CHAPTER 7
“WHY IS AMERICAN CINEMA SO LOVED
AND FRENCH CINEMA NOT?”
“BECAUSE IT TELLS LITTLE STORIES USING ENORMOUS MEANS;
FRENCH CINEMA TELLS ENORMOUS STORIES WITH MINISCULE MEANS”
Bernard Tapie and Fabrice Luchini
in Hommes, Femmes, Mode D’emploi
by Claude Lelouch
The Market Quota
central theme to countless analyses and discussions of Italian cinema is
the predominance of the major international holdings on the sector and the
relative consistency of the market quota which is protected by foreign
productions which are considered so prevalent as to condition the
affirmative possibilities of national titles as well as the development space
of the film makers who produce and distribute them.
From an economic point of view, the presence of dominant groups in certain sectors
is not a desired condition but, nonetheless, a possible condition, inherent in the nature
of the free market, and certainly not an infrequent phenomenon. This is especially so
in sectors involving mass consumption goods, as is, in the end, the cinema sector. This
can also be confirmed observing, for example, other types of product, such as
automobiles, fuels, hi-tech equipment, sportswear, electrical appliances or –
remaining in the entertainment field – CDs and music recordings. Between the film
market and the recording market, in terms of quota divisions, what can be verified is
an almost perfect superimposition, with the same range of dominant foreign ‘majors’
and an almost identical balance of power towards domestic employees.
The point is that the cinema, like music, is not only entertainment and consumption,
but, principally, a means of expression, with its own messages and values, with the
A
experiences and meanings which it transmits. As an artistic and cultural activity, of
intellectual and creative content, the cinema poses, in substance, questions and
problems of market structure which are not only economic in nature and which require
more complex evaluations under a social profile.
1. The Nature of the Parameters
The importance of such a subject is attested to by the fact that the hegemony of American
multinationals is considered a critical factor in the development of the cinema in numerous
other countries, with a favourable position which, in defining spaces – for example in Europe
– on the international market, such hegemony can open up others to a cultural homogeneity
of thought and of its forms of expression, and not only in terms of consumption.
The same MPAA – Motion Picture Association of America which represents United States
studios illustrates, in its statistics on world cinema, how against almost 3.5 thousand
films produced every year and income generated in cinemas amounting to over 26 billion
dollars (19.3 billion euro), the (circa) 600 productions from the United States manage to
total over 85% of global proceeds. The other 2,900 films, equal to 82% of the total, divide
the remaining 12% of global revenue. This involves tell-tale data, despite being generic (as
well as susceptible to a certain perplexity). This results from the fact that the values
regarding the numerous and disparate national markets are considerably unaligned and
because the box office economic results are consistently under 30% of that which is
effectively achieved on all the channels of distribution, home video and television.
Furthermore, the predominance of the American cinema sector, is indubitable. In Italy,
the most employed parameter is constituted by the documentation made available by
CINETEL, a research centre jointly formed by the organizations of ANICA (Associazione
nazionale industrie cinematografiche audiovisive multimediali) and ANEC (Associazione
nazionale esercenti cinema), which reveal through a computerized system the
attendances and gross takings of cinema halls during the night, then, the following
morning such information relative to each film shown is made available to the associates.
It is, in effect, a work instrument which permits the monitoring of real market trends of
the sector, allowing timely comparisons of the results taken at the box office of the titles
put in the cinema circuit and, moreover, permits the various operators to evaluate the
effectiveness of their choices and film scheduling strategies.1
The information offered by CINETEL does not regard, for reasons of operational
necessity, the totality of cinemas, but a sample of active cinema halls defined as
1
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CINETEL has recently signed an agreement with an international research group A.C.Nielsen in
order to reinforce the management of software of its own computerized system. At the same time
the reports of CINETEL will enter into a global database belonging to Nielsen regarding the
takings from world cinemas.
representative of the volume of takings between 80% and 90% of the total sector. In effect,
on an annual basis, the paying cinema goers assessed by SIAE (Societa’ italiana autori
ed editori) – which proceeds to the legal money refund offers on every single coupon sold
in every form of charged show, event or demonstration – are greater than the upper limit
of 100 million euro and the gross earnings are greater than the quota of 600 million euro,
whilst CINETEL reports that average annual attendance is inferior to around 23 million
with less revenue for 110 million.
The statistics of SIAE concern, on the other hand, the totality of subjects and include over
5 thousand cinema screens, that is, also those cinemas which are only used for a single
day a year, with a total film scheduling of over 6 thousand titles, calculating also the socalled “continuations” of films released in preceding seasons (long tenures, re-releases,
reviews and so on). As an instrument of marketing the reports of CINETEL are effected,
TAB. 1
MARKET QUOTA OF DISTRIBUTED FILMS OF THE MAJOR ITALIAN CINEMAS
Market quota by
origin of distributed title
First Releases Only
Follow-Ups
Number Quota
Films Including
Viewers
Number Quota
Total Number Of
Takings (Euro)
Millions Quota
Box Office
Millions
Quota
20.5%
4.5%
25.1%
11.6%
61.3%
2.0%
111.9
23.3
135.3
61.3
338.4
11.3
20.5%
4.3%
24.8%
11.2%
61.9%
2.1%
92.11 100.0%
546.3
100.0%
27.90
5.14
33.04
12.27
56.81
1.37
27.0%
4.9%
31.9%
11.9%
54.9%
1.3%
166.1
29.3
195.5
71.6
342.1
7.8
26.9%
4.8%
31.7%
11.6%
55.4%
1.3%
103.49 100.0%
617.0
100.0%
28.0%
1.4%
29.4%
10.0%
59.6%
1.0%
164.2
7.6
171.8
58.1
357.6
6.0
27.7%
1.3%
29.0%
9.8%
60.2%
1.0%
99.29 100.0%
593.7
100.0%
2006
Italy
Co-productions
Italian Total
Europe
United States
Other nations
100
161
124
26.0%
41.8%
32.2%
Total
385
100.0%
Italy
Co-productions
Italian Total
Europe
United States
Other nations
110
154
106
29.7%
41.7%
28.6%
Total
370
100.0%
209
89
298
242
330
90
20.5%
4.3%
31.0%
25.3%
34.4%
9.3%
960 100.0%
18.89
4.16
23.05
10.66
56.49
1.90
2007
195
73
268
234
317
68
21.9%
8.3%
30.2%
26.4%
35.8%
7.6%
887 100.0%
2008
Italy
Co-productions
Italian Total
Europe
United States
Other nations
130
163
83
34.6%
43.4%
22.0%
Total
376
100.0%
214
74
288
196
300
61
25.3%
8.7%
34.0%
23.2%
35.6%
7.2%
845 100.0%
27.71
1.37
29.09
9.91
59.22
1.07
Source of elaboration: the report “Il cinema italiano in numeri” – calender years 2006, 2007, and 2008 – edited by the Ufficio Studi/CED
of ANICA (Associazione nazionale industrie cinematografiche audiovisive e multimediali) on data of CINETEL.
| 183
instead, concerning screens which are defined as technically and genuinely active, that
is, operational for at least 120 days of the year – which, thereby, result in few more than
3.2 thousand, equal to 56.1% of the total – verifying, above all, the release of new
distributed titles, the so-called first releases; whereas the SIAE survey, despite being
cumulative, is also anonymous, without any regard to takings or attendances at individual
film screenings, furthermore, it is of a definitive character only being conducted on a
six-monthly basis.2
The situation of Italian cinema according to the screening carried out by CINETEL in
relation to the quota of market demand in the latest seasons, is summarised in the
following table.
Observing the distribution of films put into circulation in terms of national origin and
their public results, the predominance of American production clearly emerges: with
almost 35% of films distributed and, on average, 60% of cinema tickets sold and total
proceeds, whilst that of Italy, with a series of titles not greatly inferior, totals half of the
attendances and revenue generated by American films. Other foreign productions cover
the remaining 30% (23% Europe, 7% the rest of the world), but with video releases which
are even less: 10-11% of viewers and proceeds for continental products and 1-2% for
those non European.
It should not be forgotten, nevertheless, that the inferior state of Italian cinema was,
until a few seasons ago, still more accentuated and that after a twenty year period
characterized by a hard and general market contraction, only in 1997 did Italian cinema
return to produce around ninety films a year thereby bringing the quota for the period
over 30% in terms of the public (rising totally to 100 million) and of revenue, whilst, with
the development of multi-screen cinemas and multiplexes the general cinema structure
has began to recuperate the values of ten years prior.
The growth trend has since been consolidated and after a recent, but temporary,
regressive decline has given signs of new vitality to the sector, as is indicated by the titles
which ANICA has given to its reports on the trends of the period 2007 and 2008 – “Il
Rinascimento” (The Rebirth) and “La conferma” (The Confirmation) – obviously referring
to the total market rather than being specific to the positive trends in national production.
Production which, furthermore, in spite of a perceptible tendency inversion in comparison
to previous years, preserves its entrenched structural fragility.
2
184 |
A second system of reports into film consumption is carried out by the research institute CRA
(Customized Research Analysis) in collaboration with Rai Cinema. It is called ‘Audicinema’ and
consists of two complementary reports: Telepanel and Oversample. The former involves a
reference sample of 3,500 families with a total of 9 thousand individuals – representative, by
demographic characteristics, of the Italian population – who, on a monthly basis, communicate
their range of cinema consumption. The latter is developed, however, through opinion surveys
conducted at the entrances of cinemas (with a total of 20 thousand annual interviews) in order to
know the opinions and levels of satisfaction regarding the films seen.
TAB. 2
MARKET QUOTA IN TERMS OF TAKINGS OF THE PRINCIPLE DISTRIBUTION COMPANIES
Principle distribution
companies
Medusa Film
Warner Bros
Universal-Uip
20th Century Fox
01 Distribution
W. Disney-Buena Vista
Filmauro
Sony Pictures Italia
Eagle Pictures
Moviemax
Mikado
Lucky Red
Bim Distribuzione
Teodora Film
Dnc Distribuzioni
Mediafilm
Lady Film-Archibald
Fandango
Films distributed
2007
2008
75
61
49
45
67
48
13
45
42
17
70
44
43
17
11
16
18
26
82
60
49
44
70
31
8
24
40
21
71
44
48
15
9
17
4
21
Takings in Millions of euro
2007
2008
106.9
84.1
80.9
67.8
61.1
57.0
50.6
39.2
22.7
11.4
9.6
8.3
5.3
1.9
1.5
1.3
0.9
0.6
99.5
56.9
116.8
37.8
65.9
45.5
47.3
30.1
23.3
13.9
9.3
17.2
14.5
1.9
1.2
4.3
1.3
2.2
% Quota on Total Takings
2007
2008
17.33
13.64
13.11
11.00
9.90
9.25
8.21
6.35
3.68
1.86
1.56
1.36
1.36
0.31
0.26
0.22
0.16
0.10
16.60
9.59
19.68
6.37
11.10
7.67
7.97
5.08
3.94
2.35
1.57
2.90
2.45
0.33
0.21
0.73
0.22
0.38
Source elaborated from: “Il cinema italiano in numeri” report – calendar year 2007 and 2008 – edited by Ufficio studi/CED of ANICA
(Associazione nazionale industrie cinematografiche audiovisive e multimediali) on CERVED data.
2. Kingmakers and Players
Apart from the incidence of the productive apparatuses of the diverse nations on the total
of cinema activity, the reports of CINETEL also permit, with the attributions of takings for
every individual motion picture, the determination of the divisions of the quota of market
demand of the numerous distributors thereby permitting an evaluation of the effective
competitiveness (and not only the specific impact) of one system rather than another. This
is because the importance relative to a ‘kingmaker’ in comparison to other ‘players’ can
render the competition rather simple and the possible development of a market challenge
either concrete or merely theoretical, precisely in line with the analyses of the influenceinvasion of the United States cinema and the resulting weaknesses of national production.
In terms of this the data of CINETEL relative to the last two seasons offers an outline
which is proposed in the following table.
The indicated amounts in millions of euro are removed from the real, acquired turnover
reported on financial statements by the various companies entered in the table of the
previous chapter. The CINETEL reports draw from, as stated, a significant sample of the
market (not in its entirety) and register the takings accredited to distribution
companies, even if, a concrete and consistent part of such takings (varying between
| 185
60% and 65%) finish in different destinations: for instance, towards film studios and
business and finance companies. Furthermore, CINETEL reports also draw from the
sole earnings from the box office, to the exclusion of all those obtained from other
diffusion circuits – with home video and television in the lead – which represent, in
turn, over two thirds of the resources which the sales of a film can, overall, generate.
Their value is diverse.
3. Major, Mini-Major and Indie
Considering the nationality of the principle groups present in the table, the incidence of
their activity (which covers 99.43% for 2007 and 99.16% for 2008 of the general revenue
from distribution) and the corporate structure of a large number of them – with vertical
integration which results in them taking the revenue from production and business –
through the data of CINETEL, for example, it is possible to trace a profound segmentation
of the demand market.
TAB. 3
DIVISION AND MARKET QUOTA IN DISTRIBUTION BY CATEGORY OF COMPANY
Cumulative data
per company group
Films distributed
2007
2008
Takings in Millions of euro
2007
2008
% Quota on Total Takings
2007
2008
International Majors
National Mini-Majors
Italian Indies
365
155
262
330
160
250
351.9
218.6
31.1
310.7
211.8
64.2
57.03
35.64
6.50
52.32
35.67
9.17
Italian total
417
410
249.7
276.0
42.14
44.84
Source for elaboration: “Il cinema in numbers” report – calendar year 2007 and 2008 – edited by the Ufficio studi/CED of ANICA (Associazione nazionale industrie cinematografiche audiovisive e multimediale) on CINETEL data – The sum of percentage quotas out of
total takings are not equal to 100% as they only refer to the first 18 distribution companies on the national market, whose incidence is equal
to 99.17% for 2007 and to 99.16% for 2008.
This involves an individuation of the three principle categories of operator which can be
classified as follows:
• Major: international holdings such as Warner Bros., Universal-UIP, 20th Century Fox,
Walt Disney and Sony, plus Eagle Pictures which, by now, is included for homogeneity.
• Mini Major: the national groups Rai-01 Distribution and Medusa-Mediaset with, for
coherence, Filmauro, which is also vertically integrated.
• Indie: independent Italian companies of medium to small scale, however, with
greater work intensity and continuity, in other words, the other nine companies
which are included in the preceding classification and to which the data in the table
below refers.
In a hypothetical assignment of parts it would be possible to state that the first entry
belongs to the lead role actors, the second to important second actors and the third entry
belongs to extras.
186 |
The availability of reports on the takings obtained by distribution companies on the basis
of CINETEL data starts at 2006 and, therefore, it is not possible to reconstruct a time series
from a sufficiently large arc of time. Also if it is noted, for example, that between 2000 and
2005 American production, on average, offered 44% of new films in cinemas as opposed
to 26% from Italian studios, and 30% from all other nations, causing, in any case, 60% of
the takings, in comparison to 24% from Italian titles and 16% from all other nations.
Even the limited comparison of the three year period 2006-2008 seems to signal – as is
confirmed by the same comparison of the final balances of the last two periods – a
potential reduction in the hegemony of the foreign majors, whilst the incidence of the
national mini-majors demonstrate a stable trend. This shows that the slight
displacements in action primarily influence the ‘indie’, the independent Italian film
companies of medium to small scale.
As a cross-check of such indications it is possible to take, as a parameter, the total
incidence of the first ten companies uniting the activity of the six international majors and
the three mini-majors to that of the largest – in this case Lucky Red – of the indies, all
vertically (01 Distribution aside) integrated. Furthermore, it is precisely on the cumulative
quota of the classes of company constituted by the ‘top ten’ that, fundamentally, one
makes commensurate the equilibrium of a market and the impact of the sector leaders
(also to determine the formation of possible regimes of oligopolies as opposed to
monopolies or oligopsonies).
It emerges that this informal and hypothetical G10 of cinema distribution has launched
537 films in 2007 and 534 in 2008 and has passed from 581.9 million euro in cinema
takings to 539.7 million and, in the two year period, has seen its extremely elevated
market quota reduced from 94.32% to 90.91%. In order to evaluate, in concrete terms, the
possible consistency of such evolution at the diverse levels of the sector necessarily
requires, however, more information.
4. Where Business is Concentrated
The verification of the movement tendencies shown by the particular CINETEL sample
can also be found in the database of the Italian Chamber of Commerce which includes
all of the companies of three diverse areas, verifying the quota on the supply market –
rather than the demand market – determined on the basis of the registered turnover.
As can be ascertained the situation of the three areas of the sector is in a course of
evolution, even if in a manner which is not univocal: the incidence of the principle
companies demonstrates a somewhat perceptible fall in production, whilst in business
(screening) an inverse process is occurring.
What primarily attracts attention is the divide between the various classes:
• in production the twenty companies between the 11th and the 30th position carry out activity
which covers 16.1% of the market and the other twenty (from 31st to 50th position) 7.5%;
| 187
• in distribution the twenty companies which are near to the ‘top ten’ accumulate a quota
which is equal to 15.5% and the other twenty following (from number 31 to 50)
correspond to 4.9%;
• in business and finance the twenty companies included between the 11th and 30th place
amount to a presence equal to 15.6% and then the other twenty which follow together
occupy a market space corresponding to 8.9% of the turnover of the entire sector.
In as much as it is possible to see the rejects of the three classes they expose analogies
which are truly marked. This entails, therefore, that in the three areas the two minor
classes of company (grouped 11/30 and 31/50) maintain a market importance almost
similar and respond in the same fashion to the prevalence of sector leaders, also
independently of the scale and the form of such leaderships, exercised by the respective
groups of the first ten operators of production, distribution and business (whose relative
quotas appear, indeed, rather diversified).
This asset is the result of a gradual settlement, the dynamics of which are revealed by
the quantification of the displacements, in time, of the market quotas (table 5).
It can be observed that the movement of the quota has produced – with differentiated
effects – changes also in the last section, in which are included the hundreds of
companies which by business volume are located past the 50th position. This is the area
which could be defined, in terms of scale, ‘minor indies’. Within the distribution remains
their meagre market portion equal to 3.9%, whilst in the business and finance sector
there still is 30% of market space and in production activity which is valued at 39.3% of
total turnover.
In the three sectors they seem, in substance, to co-exist common elements of evolution
as well as factors of different capability which propose certain orders of consideration.
TAB. 4
THE CONCENTRATION OF TURNOVER IN THE CINEMA SECTOR
Market quota by
class of company
First 10 Companies
2002
2007
First 30 Companies
2002
2007
First 50 Companies
2002
2007
Production
Distribution
Screening
48.3%
75.5%
39.3%
37.1%
75.1%
43.4%
62.7%
93.2%
54.8%
53.2%
91.6%
61.4%
68.9%
96.3%
63.5%
60.7%
96.5%
70.0%
Total sector
38.6%
33.7%
55.2%
49.3%
63.3%
58.2%
The actual nature of cinema production understood in the strict sense considers, for
its part, the limited presence of the so-called national ‘mini majors’, of the selected
circle of ‘indies’ and also of a selection of ‘minor indies’ consisting of at least 300
small scale companies, from the fluctuating activity and property structures which
cannot be described as stable and on which the liquidations or cancellations
registered depend , also at the expense of companies rendered beneficiaries of past
seasonal successes.
The relatively reduced consistency of turnover quota accumulated by the first ten
operators reflects, as a consequence, the limited representation of film makers who from
the sales of their films gain revenue of the order of at least 40-50 million euro. If then one
of the major groups – such as is the case with the Cecchi Gori Group, the most important
national and European cinema company of the 1980s and 1990s – stops activity as a result
of grave management difficulties, that same quota undergoes a rapid reduction as can
be seen in table 5.
TAB. 5
Market quota per
class of company
HOW THE CONCENTRATION OF TURNOVER CHANGES IN FIVE YEARS
First ten
2007/2002
First thirty
2007/2002
First fifty
2007/2002
Remaining
2007/2002
Production
Distribution
Screening
-11,2%
-0,4%
+4,1%
-9,5%
-1,6%
+6,6%
-8,2%
+0,2%
+6,5%
Dal 31,1% al 39,3%
Dal 3,7% al 3,5%
Dal 36,5% al 30,0%
Sector total
-4,9%
-5,9%
-5,1%
Dal 37,7% al 41,8%
Elaborated from CERVID data 1st January 2007.
Trends in turnover of the other classes of production also show that such contraction
– equal to 11.2% – trails from the first to the other groups, being partly absorbed by the
medium and small sized companies and a further portion by successive compartments;
primarily those subjects which compose the divergence 31-50 revealing a progress of
1.3%. Fundamentally, therefore, the average category of film studios, which constitute
the heart of the sector, show, in spite of appearances, a positive trend in support,
moreover, of the particular process of evolution of which such film studios are the
protagonists.
Elaborated from CERVED data 1st January 2007.
PRODUCTION
What must be considered, above all, is the highly elevated number of companies included
in the sector of production – in which are included around 65% of those involved in
activities of pre and post-production – implying a weight relative to the classes of the
first ten (which also includes Technicolor, Kodak and Deluxe) somewhat less than that
registered for companies of distribution and business.
188 |
DISTRIBUTION
The consequent enlargement of the amount of turnover accumulated by all of the
production companies which are located after the 50th position is not, in itself, an
indicator of the expansion of the market, to be interpreted unequivocally. This is because
the values evidenced by the distribution sector reveal that the group leaders that operate
in this area – the foreign ‘majors’ and other principle national distributors – all maintain
their own market space, as a consequence limiting the access channels to the market
| 189
for all the small film studios, thereby, if they want to enter the circuit, then their
productions must confront the negotiating power and commercial influence of entities
which are decidedly superior. A situation “supported” by the contextual and increasing
concentration which is registered in business and finance and which, consequently, puts
the larger distribution companies into a condition of being able to “impose” their own
titles with far greater force.
• The underlying consideration is that in the process of settlements and development of
Italian cinema of recent years the ‘major’ companies have certainly not lost their
presence on the national market (aside from a slight erosion according to the specific
cinema studies of CINETEL). Despite continuing to concentrate their activity on the
distribution of films and DVDs – a strategy only recently mitigated by certain
circumscribed incursions in internal production carried out by Warner Bros. Italia, Walt
Disney, Fox and now Prima-Quinta – they have consolidated their influence. In
accordance with their respective advantageous positions the major companies have,
moreover, maintained such commercial agreements with traders that have caused a
great deal of controversy, for the last ten years, among staff members who, in the
meantime, have themselves become protagonists within distribution channels such as
multi-screen cinemas and multiplexes.
• The possibility of organizing strategies for the release of every new title at the
transnational level (or even better – the intercontinental level) offers, moreover, the
opportunity to put into play important economies of scale which go from the number
of copies to be printed to the centralized conception of communication and publicity
plans, up until the preparation of materials destined for initiatives (repeatable) and
advertising campaigns (reproducible in more contexts). With the passage of time
such economies of scale have also conspicuously heightened the threshold of
investments in promotion, to the point where the marketing budget per title by now
covers 30% of the production costs, against 10% a few years ago. It is difficult that
today a title can aspire to become a true blockbuster putting itself onto the market
with a publicity campaign whose costs are measured in more than tens of millions
of euro.
• Within this context the activism of Italian ‘indies’ assumes, nevertheless, particular
significance. With the extension of channels of market exploitation for films the majority
of national companies of medium size have, in fact, endowed themselves – as
illustrated in the previous chapter – with their own distribution businesses, controlled
directly or colligated with consistent participation. The results are beginning to emerge:
both for the cinema circuits, as documented by the data of CINETEL concerning the
gross takings with an income of 33.1 million euro in comparison to the year prior (above
all with the release of 12 less titles) and an improvement in market quota of 2.62%; as
well as for the other “platforms”, according to how much can be revealed from the
turnover data of CERVED which accredits, to the companies of the block 31-50, a robust
increase in quota equal to 4.9%.
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BUSINESS
From the moment in which the transmission of films on television channels started
reaching its highest point of intensity, before the use of satellite and the consumption of
films on video, it revealed exponential rates of progress. In 1988 Kinepolis opened, in
Brussels, the first multi-screen cinema in the world, with six cinema screens. At that
point the conversion of structures of projection from the traditional single screen systems
began in centres provided with more screens. Indeed, in as little as 20 years these new
multi-screen structures covered 50% of the whole business network in Europe, north
America and Australia. A result of this is the progressive concentration of business and
the contextual decrease in single-screen cinemas, principally in city centres
In Italy, in 2001, such multifunctional complexes amounted to 36 and multi-screen
cinemas to a little more than 20 with a total of almost 600 screens; today the complexes
have increased tenfold and cinema screens fivefold, whereas their incidence in terms of
total attendances has passed – in cinemas which are defined as ‘active’, that is, open at
least 120 days of the year – from 17.9% to 88.5% and the percentage of takings from
22.6% to 89.3%, as is illustrated in table 6.
Primarily opened by the major international cinema industry chains and by major
national circuits which are capable of maintaining the enormous investments necessary
TAB. 6
MARKET QUOTA OF CINEMA SCREENS ACTIVE IN ITALY BY TYPE OF STRUCTURE
Market quota by type
of cinema
Active Total
Number Quota
Screen Total
Number* Quota
Attendance Total
Millions* Quota
Takings in Euro
Millions Quota
2006
Single Screen
Multi screen (2-4)
Multicinema (5-7)
Multiplex (8-19)
Total
713
325
69
103
58.9%
26.9%
5.7%
8.5%
1,210 100.0%
713
864
405
1,080
23.3%
28.2%
13.2%
35.3%
3,062 100.0%
14.0
20.6
13.8
43.7
15.2%
22.4%
15.0%
47.4%
77.9
117.0
82.2
269.9
14.3%
21.4%
15.0%
49.3%
92.2 100.0%
547.1 100.0%
14.0
22.4
16.9
51.1
78.1
126.7
95.9
317.0
2007
Single Screen
Multi screen (2-4)
Multicinema (5-7)
Multiplex (8-19)
Total
658
329
71
108
56.4%
28.2%
6.1%
9.3%
1,166 100.0%
658
884
418
1,132
21.3%
28.6%
13.5%
36.6%
3,092 100.0%
13.6%
21.7%
15.4%
49.3%
103.6 100.0%
12.6%
20.6%
15.5%
51.3%
617.8 100.0%
2008
Single Screen
Multi screen (2-4)
Multicinema (5-7)
Multiplex (8-19)
Total
612
324
80
113
54.2%
28.7%
7.1%
10.0%
1,129 100.0%
612
875
470
1,184
19.5%
27.8%
15.0%
37.7%
3,141 100.0%
11.4
20.7
15.4
51.7
11.5%
20.8%
15.5%
52.2%
99.4 100.0%
63.3
117.3
93.0
320.4
10.7%
19.8%
15.8%
53.9%
594.2 100.0%
Source of elaboration: ANEM (Associazione nazionale esercenti multimediali) from data of CINETEL – The studies involve the report “Il
cinema italiana in numeri” – calendar year 2006, 2007, and 2008 – edited by the Ufficio studi/CED of ANICA.
| 191
for their construction, the multi-screen centres have, at the same time, reinforced the
market quota, something which, today, sees foreign operators prevailing on those which
are Italian in the area of the first ten groups with a percentage of revenue at 64% against
36%, whilst when all activity is taken into consideration – including single-screen
cinemas – Italian subjects obtain 54% of the general proceeds against 46%.
With the exception of those of the first class in terms of scale, with turnovers at over 13
million euro and which have, in the last five years, increased their incidence of total
business volume by 4.1%, the twenty circuits of the second range with revenue of
between 5 and 13 million euro (all Italian owned, apart from Vis-Pathe’) have also grown,
increasing their takings by 2.5% in the last five years.
With its 1,815 active companies the sector clearly remains uneven. However, this involves
only a partial fragmentation. Due to the growing concentration – with 50 cinema chains
covering 70% of the total value of the cinema sector, estimated at 545 million euro – and
the constant erosion of traditional single-screen cinemas, a formal, structural separation
is being registered, between the nucleus of complexes described as truly entrepreneurial,
capitalized and of industrial management, and the staff of companies which can almost
be described as family run businesses (1,765 companies registered with the Italian
Chamber of Commerce plus a various one hundred non limited firms which represent art
house cinemas and parochial cinemas dividing a market slice of 30%).
The dynamics of expansions have also accentuated the competitive climate of the major
networks, eight of which own over 50% of the structures with more than one screen.
Each one of these, on the basis of interpretations of the terms ‘multi-screen’,
‘multicinema’, and ‘multiplex’ which are subtly dissimilar and with which the structures,
in terms of available screens (it is only in Italy that there are no ‘megaplex’ and ‘gigaplex’
structures, with over 20 and 30 screens respectively) claim their leadership. The financial
statement reports are authoritative: absolute, territorial, specific – for the number of
available posts, spectator attendance, annual takings, square metres of occupied
surface... – these are not really important, so long as there is the leadership.
However, the effects, which are substantially more relevant of the ongoing process have
repercussions for the whole cinema industry. This is because the vertical integration of
numerous companies which are also active in production and distribution, introduces
into the business activity and into the relations between those involved in film rental and
those who manage cinema halls a new sense of compatibility (for example a new respect
for the inter-group interests). Initially started in order to confront the strong competition
of the television sector and to recuperate further profit margins from the commissions
(including between 30% and 40%) corresponding to the distributors of the region, such
a policy was essentially pursued by the American ‘majors’ which had already
experimented with it, from the end of the 1930s, on the example of the French Gaumont
in both Europe and in the United States. Also certain Italian producers had already, in the
1960s and 1970s, adhered to this strategy, however, in a circumscribed form and
essentially in terms of marketing, in order to test the pulse of the market and the tastes
192 |
of the public. With the arrival of multi-screen cinemas, the enthusiasm of the ‘majors’
towards integration became, in all of Europe, more cogent – putting in difficulty the
independent distributors of various countries – and today customer choice finds (apart
from Rai) the principle national producers as allies.
The range of centres and multi-screen chains as consumer markets, on the other hand,
demonstrates itself to be congenial to a film scheduling policy which is oriented towards
film titles and, in particular, towards the blockbusters of the United States, thereby
reinforcing the already notable powers of attraction on the cinema going public. From the
moment that those involved in cinema management had the necessity of guaranteeing
a constant influx of viewers and takings – above all in those structures with capacities and
management costs decidedly elevated as is the case with multiplexes – the principle
distributors, such as the international ‘majors’, have consolidated their negotiating
powers. Primarily, thanks to the variable factors which can condition the release of a
film at the box office: release periods, number of cinemas in which it is screened and
running time, meaning the number of days in which the film remains scheduled.
Aside from the official bargaining, such planning foresees margins of manoeuvrability
which are agreed upon, usually, through understood informalities between distributors
and cinema managers; agreements which enter the area of a subject which is fluid and
often controversial such as that of the uses and customs of the private pacts between
operators and commercial practices – with their own unwritten rules and so-called ‘silent
clauses’ – which distinguish determinate markets, in particular in the direct relations
described as ‘business to business’.
In their, by now, age-old history the major American corporations have often been at the
centre of attention due to their potential capacity for pressurizing and are called in
lawsuits by antitrust authorities of the United States as well as by those defending free
competition from other countries or even by the same European Union, which, at present,
remains the most involved in “observing” the audiovisual market. In Italy the referred to
law is number 287 of 1990 ‘Norme di tutela della concorrenza e del mercato – Sulle
intese, sull’abuso di posizione dominante e sulle operazioni di concertazione’ (Norms
regarding competition tutelage and market tutelage – on the agreements, the abuse of
dominant positions and on consultation operations) which was initiated by AGCM –
Autorita’ garante della concorrenza e del mercato . Belonging to this set of controversies
are the “cartels” for agreeing rental tariffs and ticket prices as well as the informal
practice of ‘blockbooking’, which consists in furnishing films to cinema managers with
only the requirement of scheduling, in the same cinema complexes, films of lesser
attraction which would otherwise have scant circulation or even not any form of
circulation at all. The system also involves other alternative forms: ‘blind buying’ or
rather the rental of selections of films without titles; ‘first runs’ which is the release of
films exclusively to the cinemas of a specific zone; ‘designated play dates’ which is the
choice of specific time periods for the screening of films; ‘reciprocity of dealing’ which
is, in other words, the concession of a film only to privileged partners and to the exclusion
| 193
of their competitors, for the bargaining of pricing policies and for the vertical agreements
which have, as an object, the exclusive use of films of major success.
A rather diffuse conviction in the five major European markets – the so-called ‘Big five’,
according to the nomenclature in use by research centres – is that among the corollaries
of the phenomenon certain repercussions can be individuated which affect the sector of
production. Given that national Italian titles, which cannot, in general, boast of the same
apodictic attractiveness of productions designated ‘made in the USA’, they meet major
difficulties in having success in a market which is informally compartmentalized and find
it difficult to obtain adequate space in a window display where visibility and major running
time are pre-emptively dedicated to “home products”. Only before an immediate response
of consensus on the part of the general public do they manage to obtain the creation of
more copies and long film scheduling, thereby escaping from the statistical laws which
assign to “domestic” productions inferior averages of reproductions, days of running time
and areas of circulation. Often not even covering the national territory is insured and
sometimes not even the principle city centres (which in Italy amount to 12: Rome, Milan,
Turin, Genoa, Padua, Bologna, Florence, Naples, Bari, Catania, Cagliari, Ancona).
The proliferation of multi-screen cinemas seemed, at one time, to herald a major access
opening and increase in circulation for all production, however, the auditing of the latest
period would seem to consolidate the advantageous positions and from the data it
emerges that the division of attendances and takings of national titles by type of
projection structure are far removed from the titles of the American ‘majors’ and
integrated groups. There are almost eight percentage points more credited to the first at
the level of single-screen cinemas, multi-screen cinemas and multicinema per number
of spectators, whilst the takings for multiplexes result almost ten percentage points less.
In Italy the amount of attendances for national films in structures with between 1 and 7 screens
result, for 2008, equal to 55.4% and, as a consequence, the percentage of pertinence for the
multiplexes is 44.6% in comparison to a situation which has practically been inverted for
important films with a respective 44.8% and 55.2%, whilst the amount of takings for Italian films
in the first three types of cinema system is equal to 53.5% alongside the complementary 46.5%
for multiplexes, against 43.1% and 56.9% respectively assigned to the number of foreign films.
Such figures, nevertheless, do not state that the time curve relative to recent years registers a
positive trend for Italian films, which are in evident increase as far as the progressive polarization
of spectators and, above all, of revenue in terms of multicinemas and still more in terms of
multiplexes is concerned. On the other hand, a more profound extrapolation of the data, through
the relation of attendances and takings, results in the consideration that the diffuse conviction
that the number of attendances at first releases and Italian titles generally result in less takings
for their producers and distributors in comparison to American and other foreign films, is an
opinion which has been superseded and is, indeed, no longer true. The average prices given to
entrance tickets to cinemas which show Italian films – depending on the release season and the
days (working or holiday) of film scheduling – is practically a reflection of the average costs of
the tickets to cinemas dedicated to productions outside of Italy’s borders.
194 |
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