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Hollywood's Presence in Latin America

Chapter · December 2012

DOI: 10.1002/9781444361506.wbiems044

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11
Hollywood’s Presence
in Latin America
Production Participation to Distribution
Dominance
Tamara L. Falicov

ABSTRACT

This chapter will examine contemporary film industries in Latin America more
generally, to demonstrate what these industries share in common: dependence
on state support to survive, and a relationship of subordination to Hollywood
film, which dominates in exhibition, distribution, and, with more commercial
fare, in production as well. Data concerning both production and various alli-
ances between Hollywood studios and Latin American film industries – as
reflected for instance in the history of runaway production in the region – will
be juxtaposed to screen quota legislation passed in Argentina a decade later.
These issues raise perennially thorny questions regarding Hollywood’s history
of hegemony in Latin America.

Contemporary Latin American film production has a constraining, yet sometimes

enabling relationship with the Hollywood film industry. Although industries of the
so-called “Trinity” (Argentina, Brazil, Mexico) flourished autonomously at various
times – for example between the 1930s and the 1950s, when a robust studio system
thrived in those countries – there has always been some degree of Hollywood influ-
ence or some tangible competition at economic, political, and cultural levels. The
present chapter will focus on this relationship between two Latin American countries

The International Encyclopedia of Media Studies, First Edition.

General Editor Angharad N. Valdivia.
Volume II: Media Production. Edited by Vicki Mayer.
© 2013 Blackwell Publishing Ltd. Published 2013 by Blackwell Publishing Ltd.
2 Tamara L. Falicov

that Hollywood has penetrated both as a viable export market and as a place where
it can produce films offshore. Mexico and Argentina, which have developed film indus-
tries, will be profiled in terms of their differing finance models and of their sometimes
strained, sometimes accommodating relationship with the Hollywood industry.

Historical Overview

In the film business, the relationship between Latin America and the United States
begins as far back as the 1920s, when Hollywood looked to sell its motion pictures
there and generated between 80 and 90% of box-office receipts in parts of Latin
America (Armes, 1987: 47). Today that relationship continues. Data from 2001 show
that overall grosses outside the US account for 55% of the total Hollywood studio
box-office earnings and that Latin America has accounted for between 12 and 15%
of foreign theatrical revenue (Toumarkine, 2001).
When European markets – historically, the largest buyers of Hollywood films –
collapsed during World Wars I and II, Hollywood turned to Latin America to sell its
product (see Schnitman, 1984). In 1927–1928 Latin America created more revenue
for early sound features from Hollywood than Canada, Asia, and Europe combined
– about 31.5% of the $7.5 million that comprised the annual total foreign return
(Usabel, 1982, p. 80).
During World War II, Mexico’s film industry was aided and invested into by the
Hollywood studios – the most involved one was Radio–Keith–Orpheum (RKO);
and Hollywood helped train technical crew and actors in Mexico. Mexican actors
such as Dolores del Río, Ramón Navarro, and Lupe Vélez crossed the Rio Grande to
the US before World War II, but then they returned to Mexico in the 1930s and 1940s.
They became transnational stars – stars both in the US and in Mexico – and helped
popularize what has been dubbed the “golden age” of Mexican cinema, the period
from 1938 to 1953. That was also an age of transnational collaboration between the
two industries in the fight against communism: the Mexican B-film Dicen que soy
comunista (They Say I’m a Communist) (Alejandro Galindo, 1951, Mexico), among
others, perpetuated Cold War propaganda (Fein, 2000, p. 93).
Argentina, by contrast, paid heavily for its neutrality during World War II. Amidst
allegations that the Argentine film industry was producing pro-Axis propaganda, the
US government banned the shipping of raw film stock to Argentina. Although one
studio, Argentina Sono Film, did produce pro-Fascist newsreels, most of the film
industry, which at that time was the most industrialized and successful of its kind in
Latin America, was democratic and supported the Allies (see Falicov, 2007). The US
government, heavily influenced by Hollywood, found a strategic way to distribute
US films in the region by severely weakening the Argentine film industry, which had
the most developed studio system among Spanish-speaking countries at the time
(Getino, 2005, p. 28).
 Hollywood’s Presence in Latin America 3

Since the 1950s both Argentina and Mexico struggled with the loss of an industrial
film studio system and had to rely increasingly on the assistance of the state to
support cultural production in the face of Hollywood’s dominance. During the 1960s
and 1970s Argentina and Mexico produced some commercial cinema, but the land-
mark was a cinematic movement on the continent, dubbed the “New Latin American
Cinema Movement”: this was a highly politicized, anti-imperialist, low-budget cinema
that arose as a reaction to the dominant Hollywood cinematic style, form, and
purpose. Filmmakers during this period were experimenting with a different film
language; their hope was to create a cinema of “underdevelopment” and to use it in
order to raise the consciousness of the nation, rather than merely to entertain.
Beginning in the 1980s and until the present day, cinema in Argentina and Mexico
(as well as in most parts of the region) aimed to make fewer films, but films with
higher production values, and the intention was to circulate them at home as well
as abroad, in international film festivals. The films were less overtly political, and B.
Ruby Rich describes Argentine cinema from that era as a shift from the “revolution-
ary to the revelatory” (1991, p. 14).
In 1994 the Argentine government approved legislation intended to protect the
national cinema as an entity that forms part of the cultural patrimony, and also as
an infant industry in need of protectionist polices. Among other measures, a 10%
tax on movie tickets was instituted, to further investment in national cinema. A
decade after production funds were secured, a new law was passed that was
designed to strengthen national exhibition in Argentina, in response to Hollywood’s
long-standing film-exhibition hegemony. Historically, national films faced discrimi-
nation in theater exhibitions, where Hollywood movies would supplant national
ones due to exhibitor preference. Moreover, to this day, the Latin American film
market continues to be dominated by Hollywood films, which show, on average,
on between 80% (current figures in Argentina) and 98% (current figures in Central
American countries) of theater screens. For these reasons, in 2004 the Argentine
congress enacted a screen quota measure to insure legally that national films would
gain equitable screening space. Mexico passed a screen quota, designating 10% as
the proportion of theater space to be dedicated to national cinema (Article 9
of the 1999 law modified from 1992); but the quota is rarely, if ever, enforced
(see Ugalde, 2004).
Although Argentina has attempted corrective measures to wrestle some screen
time away from Hollywood, another trend – perhaps as a response to the screen
quota – has emerged from Argentina, Mexico, and Brazil, where the Hollywood
majors have invested in co-production and distribution deals with Latin American
film producers. Rather than relying solely on state funding or on co-production
funding from Europe (usually Spain), there is currently more collaboration taking
place between the Hollywood studios, represented by the Motion Picture Association
(MPA) – which is the overseas arm of the Motion Picture Association of America
(MPAA) – and Latin American producers. While Johnson (2005) has looked at the
MPA’s relationship to Brazil, this chapter will explore the Mexican and Argentine
4 Tamara L. Falicov

cases. Moreover, a general overview of runaway productions will further explain

Hollywood’s drive for ever cheaper locations to film and post-produce in.

The History and Impact of Runaway Productions

in Latin America

In addition to marketing their films throughout Latin America, “the majors” have
found ways of cheaply filming runaway productions there. According to a 1999 study
commissioned by the Directors Guild of America (DGA) and by the Screen Actors
Guild (SGA), “runaways” (or offshore productions) increased from 14% of total US
film and television productions in 1990 to 27% in 1998 (Klein, 2004). The trend con-
tinued when the number of domestic theatrical releases shot outside the country
increased from 35% in 1998 to 51% in 2005, the greatest shift occurring in produc-
tions with budgets greater than $50 million (CEIDR 2006, quoted in Davis & Kaye,
2010, p. 61).
In their edited volume dedicated to the study of runaway productions, Greg Elmer
and Mike Gasher (2005, p. 2) caution researchers that studying outsourced produc-
tions needs to be tackled in a polyvalent way: “Understanding it requires considera-
tion, at the macro scale, of economic globalization, screen aesthetics, narrative
forms, and reception practices, as well as, at the micro scale, specific production
communities, individual films and television programs and particular audiences.”
Although it exceeds the scope of this study to encompass all the facets of studying
runaway productions, it is important, in this discussion of mobility in production, to
understand how new technologies have enabled companies to produce and post-
produce films and television abroad in an efficient manner. New technologies, such
as the rise of digital cameras and affordable editing systems, have allowed companies
to shoot rushes abroad and then to send them via email as file transfer protocols
(FTPs), thus enabling people to shoot and edit in varying parts of the world. As long
as costs are low and labor is skilled enough for the work at hand, production crews
are increasingly mobile.
Runaway productions are not a new phenomenon in Hollywood’s history.
Historians pin the period of consistent production when US film studios opened
satellite branches abroad (such as Paramount’s Joinville Studios in France in 1930),
where low-budget, multiple-language versions of the same film were produced in
order to cater for foreign audiences at 33% below the cost of the original film pro-
duced in Hollywood (see Shurlock, 1931, p. 22, as summarized in Nornes, 2007,
p. 262 n58). A decade later, Hollywood studios teamed up with the US government
to promote what was known as “the good neighbor policy,” through an orchestrated
effort of creating Hollywood films with positive images of Latin America; these were
designed to persuade Latin American nations to join forces with the Allies in World
War II, and they were orchestrated through the Office of the Coordinator of Inter-
 Hollywood’s Presence in Latin America 5

American Affairs. Examples include cartoons blended with live action films, such as
Walt Disney’s Saludos Amigos (1943) and The Three Caballeros (1945). These produc-
tions were filmed partly in Latin American countries, and during the period 1939–
1947 roughly 84 films with Latin themes were produced (although the majority were
filmed at home; see López, 1993). The actual phrase runaway production appears in
the 1950s (Davis & Kaye, 2010), after the famous Paramount Case (or Hollywood
Antitrust Case) of 1948, when the US Supreme Court ruling mandated movie studios
to divest themselves from their exhibition houses (lest they continue to be monopo-
lies). This in turn remolded the studios, which started to produce films through
subcontractors abroad. During the period of the 1950s independent studios in Europe
were hired in order to regain the repatriation of profits lost from European quotas
and other constraints on US film exhibition there (Davis & Kaye, 2010, p. 59).
The current debates on US runaway productions focus predominantly on the
Canadian case, as Canada offers the most enticing tax incentives to Hollywood pro-
ducers. Moreover, compared to Latin American countries and to other non-English-
speaking nations, Canada has closer cultural and linguistic ties with the US (indeed,
it is not for nothing that New Zealand and Australia are key places for Hollywood
crews to film in, despite the enormous geographic distance). Nevertheless, in the
quest for ever cheaper labor and exotic locales, Latin America has continued to be
on US film producers’ radars, and it has done so by marketing its low-cost and tour-
istic locations. Their visibility is increased though tax incentives and legislation, as
has recently occurred in Mexico; through the creation of national and regional film
commissions, which is being championed by both Mexican and Argentine regional
governments; through presence in location conferences (such as the annual Locations
Trade Show in Santa Monica, CA); and through ad placement in trade publications.
For example, in the most recent Locations Trade Show, the following film com­
missions were present: Buenos Aires Film Commission, Durango, Mexico Film
Commision, and the Mexican Locations Commission.1

The Mexican Film Industry from the Late 1990s

to the Present

Mexican cinema has struggled to survive from the 1990s to the present. Unlike other
Latin American film industries, especially those of Brazil and Argentina, the industry
in Mexico has not been able to push its government to create a strong funding
mechanism to work as an incentive for production. Since 1997, production figures
have been low (see Table 11.1).
Although state support exists under the auspices of the Instituto Mexicano de
Cinematografía (IMCINE; the Mexican Film Institute), increased attention has been
paid to private film companies, which, without government funding, have produced
both critically acclaimed films and box-office hits. From 1997 to 2004, between one
6 Tamara L. Falicov

Table 11.1 Number of Mexican films produced, 1997–2009

Production year Films

1997 15
1998 11
1999 19
2000 32
2001 18
2002 14
2003 29
2004 36
2005 53
2006 64
2007 70
2008 70
2009 66
Source: Vargas (2003); Cazares (2006a); IMCINE (2012).

half and one third of all the films produced in any given year were financed through
100% private monies. It is these film companies, most of them funded by wealthy
entrepreneurs, that are now waking up the nearly moribund film industry. For
example, the Mexican conglomerate Interamerican Entertainment Corporation
(CIE) has partnered the venture-capital arm of the Grupo Financiero Inbursa (owned
by billionaire Carlos Slim Helú) to create Alta Vista Films (Morales, 2001). Another
company, Anhelo, is funded by chief executive officer (CEO) Carlos Vergara, who
made his fortune through Omnilife, a herbal supplement company (Smith, 2003,
p. 395). These production companies worked with film directors such as Alfonso
Cuarón and Guillermo del Toro, who made films in Mexico, then became successful
in Hollywood, but later returned to their home country to make quality films that
are more personal. Currently del Toro and Cuarón are based in the US. Alejandro
González Iñárritu has followed the opposite trajectory by making a hit film in
Mexico, then directing in Hollywood. Y tu mamá también (Alfonso Cuarón, 2001,
Mexico), produced by Anhelo, El espinazo del Diablo (The Devil’s Backbone; Guillermo
del Toro, 2001, Mexico), also produced by Anhelo, and Amores perros (Love’s a Bitch;
Alejandro González Iñárritu, 2000, Mexico), produced by Altavista, are small, artistic
films that gained critical acclaim in arthouse circles abroad and were equally success-
ful at the domestic box office. For the most part, lower-budget films such as these
get limited US distribution, if any. In Cuarón’s case, however, the independent US
film distribution company Independent Films Channel (IFC) distributed Y tu mamá
también, which became the most widely distributed foreign-language film in recent
US history (Plasencia, 2004).
The three directors of these films are friends and have remarked in interviews that
they feel ostracized from the traditional film community for going to Hollywood
(Puig, 2002, p. 14D). They do not lament the loss of state funding for films: according
 Hollywood’s Presence in Latin America 7

to del Toro, private funding signals that “that whole fossilized approach has now
been overturned, thank God,” and Cuarón states his preference for private-investor
finance over what he deems “corrupt Latin American governments” – by which he
refers to the old-guard ruling-party politics of the once dominant PRI (Institutional
Revolutionary Party) of the 1990s (quoted in Brooks, 2002). This reformist stance is
partly a reflection of the so-called “new” (conservative) government party or National
Action Party (PAN), which swept to power in 2000; but it is also these directors’
defense against criticisms that people in the film establishment have leveled against
them. In the Mexican press, Y tu mamá también was jokingly renamed “Hombre,
Where’s My Car?” or “Latin American Pie,” which implicitly likened it to recent
Hollywood teen movies. Clearly some members of the established film community
do not approve of national filmmakers having close ties to Hollywood. Cuarón
stated: “Of course, I’m not going to defend America’s attitude toward Mexico.
Historically it is a very tense relationship. But you have to be pragmatic. Why should
I turn down American distribution?” (quoted in Brooks, 2002). These newer directors
share similarities with the transnational figures that helped fortify the golden age of
Mexican cinema, such as directors Roberto Gavaldón and – notably – Emilio “El
Indio” Fernández, who spent time in Hollywood in the 1920s and 1930s and learned
their trade there (García Riera, as presented in Tierney, 2003, p. 227). There is there-
fore no lack of irony when those in the film establishment criticize the newer direc-
tors for working in Hollywood, while they themselves wax nostalgic over the bygone
days of a more “authentic” Mexican cinema. These current directors represent a new,
more youth-oriented film culture that, while not without its controversies, has helped
revive Mexico’s ailing industry.

The MPA in Mexico

Mexico is the number one market for the US audiovisual industry in Latin America,
and it is ranked tenth by MPA member companies among all foreign markets (MPAA,
2005). The MPA has played an important role in producing and distributing com-
mercial films made in large part by “industrial auteurs.” These directors work with
multinational, corporate-owned production companies and produce television com-
mercials in addition to film. Among the reasons for this involvement, apart from the
desire to diversify the Hollywood portfolio, is the need to respond to nations that
demanded cultural exceptionalism during the Free Trade of the Americas (FTAA)
agreements. As a way of appeasing this sector and as an attempt to make a profit at
the same time, the MPA began to collaborate in cultural production with the three
most developed film industries in Latin America – Mexico, Argentina, and Brazil – to
demonstrate how “the production and distribution decisions of MPA member coun-
tries also reflect this commitment to cultural diversity” (MPA, 2003).
In the case of Mexico, the MPA, via studios such as Disney, Warner Bros., Fox
Universal, and Columbia TriStar, has produced, co-produced, and distributed film
8 Tamara L. Falicov

and TV programs throughout the Americas. The films co-produced with Hollywood
studio money generally have very low budgets by Hollywood standards (typically
between $1 million and $2 million dollars). Most Mexican films that receive co-
production funding from Hollywood studios are relatively expensive by Latin
American standards and they tend to be, not “quality” productions, but rather popular
movies that appeal to younger, upwardly mobile, upper-middle-class audiences – the
sort of audiences that enjoy comedies and trendy urban youth culture (described
below). It is these very films that make money at the box office, but that are not
being exported to film festivals for world recognition.
Mexican co-producers stand to gain from Hollywood involvement; in addition to
the money invested, they also receive greater exposure from the wider distribution
that the Hollywood studios command. For example, Miravista, the company co-
created by Walt Disney Latin America and the Spanish telephone company Admira,
signed the Argentine director Gabriela Tagliavini to direct its first Mexican co-
production, Ladies’ Night (2003, Mexico) along with Mexican producers Televisa
Mexico and Argos Communication. This film, produced to the tune of $1.6 million,
is a comedy about a woman who runs away with a male stripper on the eve of her
wedding. According to Variety magazine, Ladies’ Night reached number one at the
box office in 2004 and was the second largest box-office hit in Mexican film history
despite receiving little critical acclaim (O’Boyle, 2005). According to Mexican film
statistics, the film was the eighth largest box-office hit from 1999 to 2004, with 2.2
million viewers (Cazares, 2006b).
Hollywood studios have been willing to distribute films after the latter have dem-
onstrated success in their home territory. For example, Mexico’s largest box-office hit
of all time, El crimen del Padre Amaro (The Crime of Father Amaro; Carlos Carrera, 2002,
Mexico), claimed 5.2 million viewers before being picked up by Sony Pictures
Entertainment. This film outdid the previous record, held by Sexo, pudor y lagrimas
(Sex, Shame and Tears; Antonio Serrano, 1999, Mexico), a film distributed by Fox
studios (MPA, 2003). In 2009, the top six Mexican box-office hits were distributed by
the US companies Universal, Fox, Warner Brothers, Disney, and Sony, selling a total
of more than 11.4 million tickets domestically (Young, 2009). The smash hit that year,
Rudo y Cursi (Alfonso Cuarón, 2008, Mexico) was distributed by Universal and became
the third biggest box-office hit of all time, with 3 million viewers (CANACINE, 2012).

Mexico as Hollywood’s Backlot

Despite the fact that government subsidies and incentives for film industry invest-
ment have not materialized in Mexico (to the same extent as they have for the private
sector in Brazil, for example), there has been an attempt to encourage multinational
investment by legislators. In 2004, Mexico created a 15% Value Added Tax (VAT)
rebate on local film production services, on condition that they contract with a
Mexican production service or a local producer (De la Fuente, 2004, p. 18), but by
 Hollywood’s Presence in Latin America 9

September 2005, despite approval from Congress, the government still had not issued
the operating regulations for this tax incentive to draw Mexico’s industrial wealth
into filmmaking (O’Boyle, 2005). Anna Marie De la Fuente has argued that interna-
tional producers have long been trying to convince Mexico to offer filmmaking
incentives. They believe that Mexico, despite its proximity to the United States, has
lagged behind Canada, and even behind New Zealand, because it offered nothing,
fiscally, to producers. However, in recent years, there have been a handful of
Hollywood films shot in Mexico, due to its lower cost options for higher budget
blockbuster movies. Some of these US film studios have financed runaway produc-
tions such as the famous mega-blockbuster Titanic ( James Cameron, 1997, US). More
recently, in an attempt to lure Hollywood producers back to the country after a rash
of drug gang violence in 2008–2009, an initiative was announced in March 2010,
when President Felipe Calderón’s administration rolled out a new policy of cash
rebates. The initial funding pool of $20 million offers 17.5% rebates on Mexican
shoots, in a combination of cash rebates and sales tax refunds (Hopewell, 2010). This
policy also came out as a way of competing with other Latin American countries
such as Colombia, Costa Rica, and Puerto Rico, which are currently offering deep
cash rebates and highly competitive pay scales to foreign producers (Young, 2010).
The contemporary history of Hollywood filming in Mexico purportedly began
when Night of the Iguana ( John Huston, 1964, US) was filmed in the once sleepy town
of Puerto Vallarta. The transformation of the town into a tacky commercial and
tourist destination has been attributed to the film’s fame. Restaurants and bars with
the film’s name cash in on the tourist market, and in 1999 the set of the film was
resurrected into two theme restaurants based on the film (Koehne, 1999). During an
earlier period, Hollywood westerns such as John Ford’s Treasure of the Sierra Madre
(1948) were partially filmed in Mexico, on account of the landscape (which was faith-
ful to the western genre) and of geographic proximity to Hollywood. Beginning in
1954, over 100 Hollywood films were shot in the northern Mexican city of Durango.
In that year a film commission was founded at Durango, and films such as White
Feather (1954), The Magnificent Seven (1960), The Wild Bunch (1969), and True Grit
(1969) were filmed there.
Big-budget productions of summer blockbusters didn’t return to Mexico until the
mid-1990s, when Titanic, the most expensive film in history ($200 million), was filmed
at a huge custom-built studio in Rosarito, Baja California Norte (Hawley, 2004). Director
James Cameron built a 775-foot replica of the ship, 10% smaller than the real one, and
a 17-million gallon tank to sink it in, within a 40-acre complex that Fox set up in Rosarito
(Masters, 1997). According to the Mexican government, the film injected $85 million
into the local economy. The facility, now dubbed the Fox Studios Baja, has since pro-
duced Master and Commander (Peter Weir, 2003, US), Pearl Harbor (Michael Bay, 2001,
US), and other special effects spectacles. More recent films include the comedy hit in
both the US and Mexico, Beverly Hills Chihuahua (Raja Gosnell, 2008, US).
What are the advantages for Hollywood studios? Wages for Mexican film crews
are about one quarter of those of their US counterparts, according to Hugo Alonso
10 Tamara L. Falicov

Reyes Mejilla, secretary for technicians in the Union of Cinema Production Workers
(Hawley, 2004). Labor costs for the Hollywood studios are cut by one third (Tegel,
2002). The Mexican government benefits from a potential influx of money, including
tourism dollars generated by having images of the Mexican landscape projected
globally. In addition, the presence of Fox Studios Baja has helped develop a theme
park element to the studio (following the production of Titanic), which has promoted
tourism. As Ben Goldsmith and Tom O’Regan note:

Fox Studio Baja, for example, has clear synergies with efforts to build on the tourism
potential of the Baja California region, which is acknowledged in the development of
the “Foxploration” studio tour. The Rosarito site was chosen primarily for its geo-
graphic location – close to the Southern California epicenter of English-language
audiovisual production – but also perhaps to take best advantage of incentives and
advantages to locate in Mexico under North American trade rules. (Goldsmith &
O’Regan, 2005, p. 26)

Still, not all was successful in the field of labor relations within Fox Studio Baja during
the filming of Titanic. For example, the shooting schedule ballooned from 138 days
to 160, and crew members complained about long hours and difficult working condi-
tions. This was punctuated by a food-poisoning incident with phencyclidine (PCP)
-laced chowder that sent cast and crew members (including Cameron) to hospital
(Graham, 1997, p. N1). Union leaders in Los Angeles labeled the Fox studio produc-
tion nothing more than a maquiladora and lamented that, “in exchange for NAFTA
(North American Free Trade Agreement)-sanctioned subsidies from Canada and
elsewhere, the studios have turned their backs on their own community and have
engaged in the wholesale destruction of the Hollywood jobs base” (Bacon, 1999). In
2007 Fox sold the studio in Baja to Baja Acquisitions, a group of private investors;
then it was dubbed Baja Studios, a film studio and tourist destination, not unlike its
earlier incarnation.
In an age of mobility and when many countries are competing for lucrative
Hollywood productions to come and film, having a low paid but skilled workforce
might prove to be a competitive advantage, paving the way for more specialized local
technicians to work on future projects. Goldsmith and O’Regan discuss this fierce
competition among various countries that build state-of-the-art facilities with the aim
of giving competitive bids to foreign countries:

Studios and places are now competing against each other on the basis of their ability
to provide a range of generic skills, services, and expertise to individual films, aug-
mented by what are claimed to be unique or compelling local advantages – the availabil-
ity of state-of-the-art studio infrastructure, particular creative individuals or firms, and
the proximity to specific locations. (Goldsmith & O’Regan, 2005, p. xii)

One reason why these nations have created policy initiatives and have coordinated
with subnational (e.g., regional and municipal) governments to provide such com-
 Hollywood’s Presence in Latin America 11

petitive bids for what Canada calls “foreign service production” (Elmer & Gasher,
2005, p. 5) is to obtain financial investment, which is the bottom line. It is projected
that nearly 20% of all out-of-state production budgets are spent within the local
economy. More specifically, the following businesses are hired when a foreign shoot
comes into town: labor, transportation, lodging, car and truck rental, motor fuel and
service stations, food and beverage companies – to name only a few (Gnuschke,
2005).
On the downside, Davis and Kaye (2010, p. 58) state succinctly that there are three
risks that host countries need to be concerned about if runaway productions are the
main avenue by which indigenous production can be developed: opportunity costs;
integration with Hollywood; and the race to the bottom. Moreover, there may be
power dynamics between the foreign and the local crew that reflect hierarchies in
the global world system. This happened for example when Roger Corman’s produc-
tion company worked in Argentina during the 1980s to make nine low-budget films
of varying genres. Argentina was chosen at a time when the economy was faltering
and costs were extremely low. According to production designer María Julia Bertotto,
during the filming of a sword and sorcery film, Corman’s above-the-line crew acted
offensively toward the Argentine crew. She recalled that some members of the US
crew felt uncomfortable working with the locals, despite the fact that many of the
latter spoke English. She remembered that Corman’s people “essentially gave orders
and refused to hear our suggestions. It was as though they had preconceived notions
of Argentina and thought we were ‘Indians with feathers on our heads’ ” (Bertotto,
interviewed in Falicov, 2004, p. 33). Another problem stemmed from the plan to
market the film for the anglophone market. In Wizards of the Lost Kingdom (La Guerra
de los magos, directed by Héctor Olivera, 1985), the credits for the film had the
Argentine names changed to anglicized pseudonyms; this was suppose to give the film
a better chance of selling in the English-language market (for example, Américo
Ortiz de Zarate’s name was changed to Andrew Sargent; ibid., p. 34).
This power dynamic raises the following questions: Do countries such as Mexico
and Argentina thrive, or do they get exploited under these conditions? In the example
of the unskilled crew working on Titanic, most crew members were overworked and
underpaid. In other situations, however, having an international crew composed of
specialized technicians may provide an opportunity for locals to learn new skill sets;
hence it may promote technology transfer. As a counterexample to the one above,
using Corman as a test case, there were some positive outcomes: Film critic Diego
Curubeto recounts from interviews how Argentine visual effects technician Alex
Mathius and makeup artist Jorge Bruno never had the opportunity to work in the
fantasy genre of film until Roger Corman came to Argentina in the 1980s to make
films such as Deathstalker (1983). They gained valuable expertise by learning the craft
from veteran special effects makeup artist John Carl Buecheler (whose credits include
numerous B movies and horror films such as Halloween: The Curse of Michael Myers,
1995; Curubeto, 1993, p. 155). Therefore it is not a simple equation of costs and
benefits when a foreign film crew goes to another country to make a film. Each case
12 Tamara L. Falicov

may vary; some local industries will benefit, and some workers will be exploited.
Others may gain valuable technology transfer skills. Taking a cue from the Canadian
case, where there has been a longer track record, Charles Davis and Janice Kaye
conclude that one must distinguish between two different kinds of home-grown
production: one is production capabilities, such as below-the-line crew positions, and
the other is the higher order film and television “business and creative capabilities.”
The authors argue that both are needed for a local film industry to thrive, but in the
case of runaway productions there is a strengthening of the crew training and eco-
nomic stability of the former, although there isn’t so much advantage for local pro-
duction houses or firms (Davis & Kaye, 2010, p. 58). In the two aforementioned
Corman cases, there were winners and losers in the same runaway production sce-
nario. In a nutshell, the benefits of runaway production help a host country if there
are enough resources (cash that stays in the country, being spent on salaries and
services) and skill sets honed in to allow for improved technical training of the local
crew; and, over time, this might help the local film infrastructure to be invigorated
in terms of new studios, post-production facilities, and so on, as a form of investment
with potential for local films to be produced in situ.

The Argentine Film Industry from the Late 1990s

to the Present

Argentina’s film industry, which had very low production figures in the early 1990s,
saw a revival in production after the passage of the 1994 Ley de Cine 24.377 (Film
Law 24.377), which entitled the Instituto Nacional de Cine y Artes Audiovisuales
(INCAA; National Institute of Film and Audiovisual Arts) to additional sources of
film-production funding (see Table 11.2). Despite the 2001 economic crisis, the biggest
to beset Argentina in decades (it was the largest default on an International Monetary
Fund loan in world history), the film industry did not falter. This was in part due to
the creativity of newer directors (many of them recent graduates of film schools),
who made films on a shoestring that have gained worldwide festival accolades (see
Falicov, 2003a). Fifty-one films were produced in 2004, the highest number in decades.
Over the second weekend of October 2005, three national films – a police comedy,
Tiempo de valientes (On Probation; Damian Szifron, 2005, Argentina), a Falkland Islands
award-winning drama, Iluminados por el fuego (Blessed by Fire; Tristan Bauer, 2005,
Argentina), and the old-age romantic comedy Elsa and Fred (Marcos Carnevale, 2005,
Argentina) – took nearly 45% of the 370,000 total admissions, compared to an average
10–15% share of the market for the same time period the previous year (Newbery,
2005b). By 2009, the top grossing film that year, El secreto de sus ojos (The Secret in Their
Eyes; Juan José Campanella), brought in 2.4 million viewers, drawing in an astonishing
45% of all the audience members who went to see Argentine cinema that year (Russo,
2010). This film was highly popular before it won the Oscar for Best Foreign Film (it
was the second Latin American film to ever win in the history of the Oscars), but
 Hollywood’s Presence in Latin America 13

Table 11.2 Number of Argentinean films released,

1997–2009
Production year Films

1997 28
1998 36
1999 38
2000 45
2001 45
2002 37
2003 46
2004 51
2005 65
2006 58
2007 68
2008 71
2009 85
Source: Getino (2005); DEISICA informe (2011); Cinenacional.
com (2012).

winning this prestigious accolade probably helped garner such a high number of
viewers. The film beat out the Hollywood hits for that year, Ice Age 3 (1.9 million
viewers) and Harry Potter and the Half Blood Prince (1 million).
Argentina’s film output ranges from low-budget independent films to glossier,
more commercial films with budgets of $1.5 million to $2 million. These more
mainstream films are produced by industrial auteurs who work with multinationally
owned production companies such as Pol-Ka and Patagonik. Both these companies
are partially owned by Buena Vista International, the distribution arm of Disney
(Patagonik also receives investment funds from Telefónica Media, a massive Spanish
telecom company). Pol-Ka produced a popular action film, Comodines (Cops; Jorge
Nisco, 1997, Argentina), which was billed as “the first Hollywood blockbuster spoken
in Spanish” (Clarín, 1997). It utilized television stars, special effects, product place-
ment, and the buddy movie genre; and it drew record numbers of filmgoers. It irked
some to know that this film received state subsidies despite being produced by a
production company owned by a multimedia conglomerate (see Falicov, 2003b).
Buena Vista International/Disney has actively co-produced and distributed films that
have commercial potential, such as famed director Marcelo Piñeyro’s Kamchatka
(2002, Argentina/Spain), or the comedy Cohen vs. Rosi (Daniel Barone, 1998,
Argentina). Two animated films for children were highly successful, and both were
distributed by a Hollywood “major”: Patoruzito ( José Luis Massa, 2004, Argentina)
was distributed by Buena Vista International; and Columbia pictures distributed
Manuelita (Manuel García Ferré, 1999, Argentina).
Argentina has witnessed worldwide acclaim with films such as Nueve reinas (Nine
Queens; Fabián Bielinsky, 2000, Argentina) and El hijo de la novia (Son of the Bride; Juan
14 Tamara L. Falicov

José Campanella, 2001, Argentina), both of which were picked up for US distribution
by Sony Pictures Classics. Dylan Leiner, senior vice-president of acquisitions and
productions, stated that Nueve reinas appealed to Sony because it broke the stereotype
of traditional Latin American cinema. “It was very smart and fast-paced. The broader
comedies in Latin America don’t usually work as well because they feature local
television stars or address regional issues. We look for stories that have universal
appeal and are easy to understand” (O’Brien & Ibars, 2004, p. 42). Nueve reinas was
remade by Hollywood as the mediocre Criminal (2004, USA), directed by Gregory
Jacobs for Warner Independent Pictures.
Although the economy faltered in 2001, causing the Argentine peso’s value to
plummet, this outcome, paradoxically, brought new opportunities for filmmakers
and for television and commercial production companies. The shift from the
Menem era, when the peso was pegged to the dollar (1 : 1 ratio), to a depression-
era situation where the ratio was 4 : 1 (and it is currently 3 : 1) has meant that US
and European producers found the prices to be extremely competitive. For example,
in 2003 a television commercial company in Miami that caters to the US Hispanic
market saved more on costs by hiring a local crew in Buenos Aires to shoot and
post-produce a Pollo Loco commercial. Because the day-rates were very reasonable
and the level of skill was very high (especially that of the Argentine directors), the
company simply flew in its executive producers and the client (that is, a total of
seven people), and the rest was done in Buenos Aires. This was more advantageous
than to film in Mexico, although the latter was a much closer neighbor to the south
(personal interview with Jaes, 2007). Although the commercial advertising sector
differs from film and television companies, it is an industry that has had close ties
to Argentine filmmaking in Argentina since the 1960s. It has had an international
reputation for highly skilled labor, and it has often served as a training ground for
successful feature-film directors. Another advantage to filming in Argentina is the
reversal of seasons from those of countries in the North – a “vital scheduling plus”
(Variety, 2008).
Instead of national tax incentives for foreign companies to come and film in
Argentina, there were outcroppings of regional initiatives in the mid-2000s; they
were made in the hopes of attracting companies to various provinces, in the wake
of the horrendous financial crisis. However, while the economic situation stabilized
in Buenos Aires by 2005, it was clear that citizens in large metropolises had access
to greater resources than their counterparts in the provinces. In 2001 the province
of San Luis fashioned itself as an outpost for production, which Variety character-
izes as having “pretensions to become the Hollywood of Argentina” (Newbery,
2005b). By 2004 the state had passed its own regional film law, to help provide
additional incentives for filming. However, not all citizens of the province sup-
ported the use of public funds to draw film production from the outside to the
region. A flashpoint that brought this disparity to the fore occurred in May 2005,
when arsonists in the province of San Luis, an area already established for national
video editing and production, burned down a set of the telenovela Salvame Maria.
 Hollywood’s Presence in Latin America 15

This was one in a number of violent protests that occurred against the province’s
film program that week. San Luis was under fire because the provincial legislature
approved a 10-million-dollar allocation toward film-sector development to the gov-
ernor Alberto Rodriguez Saa and his brother Adolfo, better known as one of the
short-lived presidents during the 2001 crisis (Newbery, 2005a). The province,
dubbed “Hollyluis,” has granted credits, co-production money, tax, and technical
assistance to 14 films (ibid). While business is booming for the film industry in San
Luis and the main impetus is to create jobs, many opponents accused the Rodriguez
Saa brothers of masking a poor administration under the guise of a new project
of economic development. Many dissenters demanded the money to go instead to
education, public health, infrastructure, and to increasing salaries for teachers and
state workers (ibid.). Other provincial cities such as Mendoza and Rio Negro claim
to be revamping their film commissions so as to attract film pesos from the capital
as well as currency from abroad, but the results have yet to be seen (Minghetti,
2005, para. 9).

SOS (Save Our Screens): Enacting the Screen Quota

in Argentina

In June 2004, due in part to the left-leaning atmosphere created by President Néstor
Kirchner’s administration, INCAA spearheaded the passage of new screen quota
legislation to counter Hollywood’s hegemony. It stated that movie theaters were
obligated to show one national film per screen per quarter: so, for example, a 16-
screen multiplex must screen 64 Argentine films per year. Another law, called the
“continuity average,” obligated film exhibitors to continue screening national films
if these domestic productions garnered an audience attendance of between 6 and
25% per theater in a given week. This act ensured that exhibitors could not arbitrarily
drop national films in mid-week, or change screening times in mid-week (Newbery,
2004). By and large, Argentine film producers do not have the funds to market their
films. A Hollywood blockbuster relies on high-priced “blitz” campaigns for an opening
weekend for a film, but an Argentine film usually gains momentum through word
of mouth. In 2009 the law was modified to give Argentine films a minimum of two
weeks in a movie theater as time to build an audience. The earlier version of the law
only guaranteed one week, unless the film was a national one, with less than five
copies available for screening. The justification for this – according to Mario Miranda,
an INCAA account manager – was the following:

We noticed that there was a type of discrimination going on. In 2008 there were 68
films released, of which more than half – 37 – were relegated to the “alternative circuit.”
On top of that, of the 31 local films that did reach commercial theatres, 30 percent
were taken off the marquee after the first week. (Garcia, 2009)
16 Tamara L. Falicov

Other measures enacted by the INCAA include subsidizing theaters whose national
films who do not garner enough attendance to reach the continuity average men-
tioned above (thus allowing films to continue to be screened), and offering a cash
prize every trimester to the movie theater that sells the most tickets to an Argentine
film; the prize is to be reinvested in the theater itself (Clarín, 2009).
The screen quota issue, which was not passed into law without debate in the film
community, has also been utilized in recent years by the South Korean film industry
– as well as by France, Italy, and other countries, mainly European. The case of South
Korea is the most famous one because of South Korean film industry’s huge strides
in producing popular films at the box office after the screen quota system was
enforced in 1993. Korean film production rose to nearly 70% of the box office in
2004, up from 35% in 2000. This policy requires cinemas to screen domestically
produced films 146 days a year and 40% of exhibition time (Lee, 2004). In 2006 the
Korean government decided to heed the United States’ call to delimit, or, better still,
to abolish the screen quota as part of the Korea–US Bilateral Investment Treaty talks
(BIT). Rather than doing away completely with the quota system, the number of
days in which Korean films were required to be screened fell from 146 days to 73.
This meant that only 20% of the local theaters’ schedule would be set aside for
homemade films ( Jin, 2008). Clearly the United States, as represented by the MPAA,
heavily pressured South Korea, arguing that the motion picture industry is a business
and that the quota system was against the principles of free trade (Lee, 2004). The
South Korean government very much wanted to resolve this issue, as Washington
had urged it since 2003 to reduce the quota before the two sides met at the negotia-
tion table for the BIT signing in 2007 (ibid.). Christopher Hill, the US Ambassador
to Korea, warned that Korea could not have the screen quota and a free trade agree-
ment at the same time (quoted in Jin, 2008). At stake here is whether the state has
the license to regulate culture by adopting protectionist measures, a phrase that has
become pejorative and stigmatized. Hence a new term has been embraced by those
who support a screen quota: “exceptionism.” The exceptionists are appropriating it
from the rhetoric of “cultural exceptionalism,” which was successfully championed
by France and Canada during the 1993 General Agreement on Tariffs and Trade
(GATT) against the United States. While the expression “cultural exceptionalism”
has given way to the concept of “cultural diversity” (Frau-Meigs, 2003; Moisés, 2002),
currently even organizations greatly influenced by the United States, such as the
Organization of American States (OAS), have supported the declaration of the United
Nations’ Educational, Scientific and Cultural Organization (UNESCO) to protect the
diversity of cultures against globalizing forces.
Jorge Coscia concludes his essay “The Screen Quota, a Fundamental Step Forward”
with the following statement:

The screen quota is not a flag by itself; the real flag is the defense of our interests, our
culture, our jobs, and our cinema, constantly cornered in our own market [. . .] Hence
policies are tools, they are not the ends but the means. The screen quota is a funda-
 Hollywood’s Presence in Latin America 17

mental issue, because culture is essential to a country’s project. But it is also relevant
because debates and discussions continue to establish new means of development,
sovereignty, and growth. (Coscia, 2004)

While the screen quota may function to the best of its ability at this juncture, it may
soon become ineffective – according to Harvey Feigenbaum, who argues that cultural
policy tools may be undercut by changes in technology to the point where direct satel-
lite broadcasting, data-casting, near video on demand, digital compression, video on
demand and distribution via Internet streaming may create more porous borders, may
allow the floodgates of Hollywood’s film and television in, and – in his words – may
permit to “undermine the state’s effort to protect national culture” (Feigenbaum, 2004,
p. 256). This author recommends different kinds of subsidies (in addition to individual
subventions in production, an emphasis on distribution and marketing, and in infra-
structure such as production facilities and training as the antidote for preserving the
health of a small national film industry: pp. 260–261).
Another strategy for filmmakers to continue producing films with less cash on
hand has been the perennial quest for co-production funding, mainly from European
sources, but sometimes from other Latin American countries – and occasionally from
the United States, too. Co-production funding has occurred in the region, if not in
all the film-producing countries, since the very inception of cinema in the 1920s.

Co-Production Between Argentina and Spanish

Autonomous Communities, Catalonia and Galicia

A novel co-production treaty between Argentina and two autonomous communities

in Spain – namely between the INCAA and various cultural entities of Galicia and
Catalonia – was announced in January 2005. Named Fondo Raíces de Cine (the Roots
of Cinema Fund), it was the brainchild of Argentina’s INCAA president, Jorge Coscia.
In an interview he stated that the project arose “out of necessity, that our country
and these regions create alliances to confront a film industry such as the United
States, which floods the movie screens of the world.” But, as if to answer any critics
who might accuse him of setting up possibly problematic barriers to Hollywood
(such as the ill-fated import quota set by Perón, which effectively shut down the
exhibition sector due to a lack of screen product to show), he noted: “But let us
clarify that no one wants to expulse Hollywood, but rather, Hollywood has expulsed
us” (Coscia, 2005a). The fund totals $600,000 dollars, toward which each partner
contributes equally. There are maximum four grants to be given out annually, and
each grantee is awarded funding according to the needs of his or her film project.
One of the criteria is that the projects should have the potential to be commercially
viable and successful in their respective markets.
Thus far two films have come out of the Raíces de Cine fund: No sos vos, soy yo (It’s
Not You, It’s Me; 2005), an Argentine–Catalan co-production directed by Juan Taratuto,
18 Tamara L. Falicov

and Cama Adentro (Live-In Maid; 2004), by Jorge Gaggaro. Both films have performed
well at the box office, but No sos vos has defied expectations by playing in Madrid to
packed houses for two months and thus earning the status of one of the top ten films
most seen in Spain this year; it had almost 350,000 spectators and box-office receipts
totaling 2 million euros. It has won the distinction of being the first Argentine film in
the top ten most seen films for seven straight weeks (“No sos vos,” 2005).
Coscia has stated that the impetus to initiate the Argentine–Spanish regional agree-
ment was two-fold: (1) the economic situation has made production in the country
more favorable to those companies from abroad; and (2) the box office is like a cut
of Argentine beef that is “less juicy” (menos jugosa) than in previous years, and thus
“we have to find outside business that will compensate for this” (Coscia, 2005b).

Conclusion

Since their inception, both Mexico’s and Argentina’s film industries have struggled
to create a space for themselves in the shadow of Hollywood. In its current configu-
ration, Mexico has continued to support filmmaking through IMCINE funds, but it
has also seen a proportion of films being made purely through the private sector –
the approach that most closely resembles Hollywood. Moreover, with the emergence
of transnational film directors such as González Iñárritu, del Toro, and Cuarón, the
transition to a private model has been a format that directors themselves find more
efficient and less politically fraught.
Argentina’s film-industry model has differed from Mexico’s in that the state has been
relatively successful at distributing grants both to small producers/directors and to
production houses owned by multimedia conglomerates (including Disney and other
transnational companies). Argentina has created film legislation that has strengthened
the nation’s film development fund, and more recently it has passed a screen quota that
seems to be functioning well at the time of writing. Argentina’s film industry is
modeled more closely on European film production than on the US model. However,
both Argentina and Mexico are gaining access to markets and funds through new col-
laborations with MPA member companies. Hollywood studios have proven thus far to
be friendly to both countries’ film industries; but it remains to be seen what kind of
effect this may have in the long run (for example, one can imagine the effects on the
screen quota if eventually most of the funding comes from the majors). Regardless of
these changes, Hollywood continues to maintain a strong foothold in Latin America.

ACKNOWLEDGMENTS

This chapter is an expanded and modified version of “Hollywood in Latin America:

How Mexico and Argentina Cope and Cooperate with the Behemoth of the North,”
 Hollywood’s Presence in Latin America 19

in Janet Wasko and Paul McDonald (Eds.), The Contemporary Hollywood Film Industry
(Oxford, UK: Blackwell, 2008). Many thanks to Manuel Pérez Tejada for his invalu-
able research assistance and feedback on the Mexico portion of this chapter.

NOTE

1 See, for example, the Comisión Mexicana de Filmaciones, 2012.

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FURTHER READING

Dawson, A. (2006). “Bring Hollywood home!” Studio labour, nationalism and international-
ism, and opposition to “runaway production,” 1948–2003. Revue Belge de Philologie et
d’Histoire, 84(4), 1101–1122. (Reprinted in Davis and Kaye, 2010.)
Wasko, J. (2003). How Hollywood works. London, UK: Sage.

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