A rising star: New legislation supporting the film industry is beginning to bear fruit

An audio-visual revolution is the term that would best describe the events that have taken place in Panama ever since the Law of Cinema (Ley del Cine) came into force in 2012. At that time, Panama was only producing an average of one film per year, with a shortage of technical and artistic staff, few incentives from the state and a lack of support from the private sector. It was in this context that the Cinematographic Association of Panama (Asociación Cinematográfica de Panamá, ASOCINE) lobbied for around a decade to heighten the awareness of government institutions about the economic potential of a strong cinematographic industry.

Legal Blessing

ASOCINE’s efforts to obtain effective support from the government were becoming gradually less effective as two different governments refused to countenance the idea. Indeed, it was not until the administration of President Ricardo Martinelli took power in 2009 that the Ministry of Trade and Industry (MICI) took into consideration ASOCINE’s proposals as part of its efforts to support the tourism industry (films have been shown to be effective in attracting tourists into a region) and increase foreign spending in the country (foreign productions taking place on domestic soil represent an inflow of millions of dollars in all kinds of movie-making related purchases from the local market).

The bill supporting Panamanian cinema reached the National Assembly in February 2012 and was passed in April of the same year. However, four more months went by before it finally came into force in August 2012. This law created a platform to support and integrate the already existing Panama Film Commission (PFC) as well as the new General Direction of the Cinematographic and Audiovisual Industry of Panama (Dirección General de la Industria Cinematográfica y Audiovisual de Panamá, DICINE).

The Panama Film Commission

The PFC was created in 2007 under the purview of the MICI with the purpose of promoting Panama as a destination for movie-making. Under the Law of Cinema, the PFC now has more effective tools to achieve its goal by offering new advantages to filmmakers. The first of these is a tax incentive scheme under which foreign productions are exempt from paying Customs duties. A second incentive is the convenience of the PFC’s one-stop shop for film permits and production needs, including the processing of visas and work permits before arriving in the country.

The law also grants foreign producers the right to claim a cash rebate equivalent to 15% of the amount spent in the country during the recording of the film, including the salaries of Panamanian workers.

A recent success story has been attracting the production of the film “Hands of Stone”, based on the life of the famous Panamanian boxer and local hero, Roberto Durán. The American production, originally scheduled for production in Puerto Rico, received $3m from the PFC in exchange for 3% of the film’s ticket sales. The proceeds will later be transferred to the Fondo Cine programme, run by DICINE.

The General Direction Of Cinema

Created under the Law of Cinema in 2012, DICINE is in charge both of facilitating and incentivising the production of domestic films as well as promoting them in international markets. Additionally, DICINE has various ambitious plans to turn Panama into an international hub for Latin American films as well as into a central gathering point for the international film industry as a whole, through several fairs and industry meetings. Among DICINE’s most relevant initiatives is the allocation of $3m from MICI’s budget to finance a Film Fund (Fondo Cine) to support the national industry. Of this amount, $2.2m is financial aid destined for domestic productions through the Film Fund Contest (Concurso Fondo Cine).

According to DICINE, the most recent contest, which had a participation deadline of January 31, 2014, received applications for a total of 49 projects. The winners of the contest are expected to be announced in April 2014 during the International Film Festival of Panama (IFF). The award will include four categories with three winners in each. These categories will consist of a feature film, a feature documentary, post-production and project development. The remaining $800,000 of the fund is allocated to development and training programmes. These include various workshops, courses, scholarships, provision for distribution in rural areas, and accessibility for blind and deaf audiences. Other important initiatives by DICINE have included the development, promotion and funding of international film events as well as legally obliging all cinemas to reserve a 10% share of their annual billboard for domestic productions.

From Panama To The World

MICI has also funded a number of international festivals which take place during the Panama Film Week (Semana del Cine de Panama) from April 3-9, including the third edition of the IFF ($1.2m), the first edition of Meets (a Latin American co-production market forum within the IFF, which is funded with an independent budget of $200,000), the first edition of the Platinum Iberoamerican Film Awards (featuring entries from Latin America and Spain), the Premios Platino Film Awards ($1.5m) and the eighth edition of the Hayah International Short Film Festival ($50,000), which will take place in August 2014.

In an interview with OBG, Arianne Benedetti, general director of DICINE, highlighted the importance of the two new initiatives, Premios Platino and Meets. “Hosting Premios Platino is a very serious and ambitious idea with the goal of becoming the equivalent of the Oscars for Iberoamerican films,” she told OBG. These awards are all managed by Egeda, a non-profit multinational entity based in Spain that specialises in the management of intellectual property rights, in conjunction with the Iberomerican Federation of Film and Audiovisual Producers (Federación Iberoamericana de Productores Cinematográficos y Audiovisuales, FIPCA), and will see its first edition take place on April 5, 2014. Meets will take place shortly afterwards, from April 7-9, 2014.

“The whole idea is to create a film market where Latin American films and projects can get international exposure. It will serve as a forum in which the international film industry will gather to fund, sell or buy movies,” Benedetti told OBG. The first edition has already been a resounding success by all accounts, featuring 128 projects from all over Latin America. Out of these 128 applications, only 12 will qualify for the event and only one will become the winner of a $25,000 prize. However, the importance of Meets for the participating projects is not the prize itself but the international exposure these films will get. “Although there is only one winner, that is nothing compared to the countless options that will arise for all projects after the exposure they get to all the distribution and production firms participating in the event,” Benedetti told OBG.

Tangible Outcome

Very few pieces of legislation can point to as many tangible effects as Panama’s Law of Cinema can. This can be illustrated by comparing statistics for the film industry from before and after the passage of this law. For example, in terms of figures for foreign investment in the film-making industry, the country’s records show a pre-law average of $2m-3m worth of foreign investment per year. In 2013, which was the first complete year after the law came into force, Panama attracted $23m in foreign investment in film production. This represents an increase of more than 600%.

As for the production of domestic films, Panama was, according to DICINE, producing an average of just one film per year and sometimes one every two years. In contrast, a total eight films will be released in 2014, representing a 700% increase over the pre-law era. In fact, of the eight films that are currently being produced, six are the direct result of the first edition of the Film Fund Contest in 2013, showing the impact of the public initiative. The other two movies are privately financed, an indication of the interest the private sector is taking in the industry.

According to Benedetti, the establishment of quotas for domestic films, in addition to the promotion of Panama’s film industry by various public institutions, has sent a clear and direct message to private investors “who are now becoming more and more interested in participating, as they see that the promotion of the national film industry is not a momentary policy but a serious long-term strategy offering a wide range of business opportunities.”

The interest of the private sector is also visible in the arrival of major foreign companies in Panama that are offering rental services for film-making equipment. For example, Colombia’s Congo Films (the largest equipment rental firm in South America), in addition to Mexico’s leader, EFD Mexico, have now opened facilities in Panama, attracted by the growth potential in Panama’s film-making industry.

Challenges Ahead

Despite what is widely viewed as a law that is at once beneficial in its vision and effective in its impact, Panama’s film industry must still confront various challenges that will need to be seriously addressed if this success is to become sustainable in the longer term. For example, according to Mariel García Spooner, audiovisual producer and director of the Hayah International Short Film Festival, the lack of professional staff and cinema programmes in higher education should be considered as the next priority for the country. “Panama is now home to many different workshops, foundations and technical courses. However, no official university diplomas are being offered to those willing to study cinema as a full-time degree such as the ones offered in countries like the US, Spain, Argentina or Canada, forcing young talent to go abroad, and preventing those who are unable to afford to do so from fulfilling their goal, with the loss of potential which that represents.” For Benedetti, a more concerted effort to improve the level of education will be “the only way to elevate the quality of Panamanian human resources and better exploit the country’s potential to its maximum level. She added that “not only undergraduate degrees but also masters’ degrees would be more than welcomed”. According to DICINE, some universities have already approached the institution to collect information to develop cinema programmes. Nonetheless, according to García, developing higher education for cinema in Panama requires time and a greater scale of vision as some challenges need to be overcome first, such as “a lack of professors with experience due to the relatively new film industry and the lack of funding to invest in the equipment needed”. To date, two universities have shown signs of interest in developing such studies, the Universidad Tecnológica de Panamá and the Universidad Nacional, according to DICINE.

The most pressing challenge for the future of the film industry in Panama is the absence of indoor facilities. According to DICINE, some 70% of the total footage of a film is recorded indoors while only 30% is filmed outdoors. Panama’s lack of studio infrastructure could become a ceiling to the industry’s growth as all the potential generated by PFC’s incentives in order to attract foreign productions will be wasted as those productions would not find the required facilities to work in. This could mean a significant loss of investment in the country as it would be limited to outdoors recordings which are a smaller piece of the pie.

For Benedetti, addressing the lack of indoors facilities should become a priority in the short term. “With the current developments and incentive schemes we can still capitalise on the full investment potential that the country offers today. Nonetheless, as the market grows, if we are not able to offer studios that meet international standards in the next two years we might face a drop in potential investment inflows.” Encouragingly, talks are already in progress according to DICINE, with some large US studios to start building facilities in the near future.