For movie lovers, the Hollywood industry seems like a dream, a fantasy,
but to women that are active members of its community, it can be more of a nightmare. Since the establishment of the studio system in the 1920s, there has always existed a male tradition of sexual assault and abuse of power. The horrifying allegations that continue to appear regarding film producer and studio executive Harvey Weinstein are a reminder of how prevalent is the abusive culture that was inherited from old Hollywood and its iconic leaders.
Studio heads such as Louis B Mayer (MGM) and Darryl F Zanuck (Twentieth Century-Fox), managed stars like cattle more than as talented performers. Hollywood is no stranger to exploitation. Zanuck, in the 1940s, is rumoured to have invented “the casting couch”, a term and practice that sadly has not lost popularity in 2017 and has been used constantly to describe Weinstein’s aggressive actions towards women. “The casting couch” in Hollywood’s big studio system has been reupholstered so many times throughout the decades as a mentality it is deeply woven into its cultural fabric.
A feeling of impunity linked to absolute power, may have led this man to respect only his own rules, his own beliefs: I believe in myself, and you, too, must believe in me. But, like the old fashioned and forgotten silent-movie actress in Sunset Boulevard, Weinstein must now listen to those who were mute but now have a voice to denounce methods that, some believe, are not exclusive to the mogul in the patriarchal film industry.
Although based in New York, far from the Hollywood studios, Weinstein had built his own empire. His method of financing his projects was formidable. He knew how to monopolise markets and reduce competition to zero. He was the spider in the middle of the web of international distribution … and it always paid … and paid well. His speciality was box office success.
Why is there no Harvey Weinstein equivalent in Europe?
There’s a simple answer. The system for raising funds on the two continents are like chalk and cheese.
Take France, for example. Cannes Film Festival is the biggest International Film Market. A big party with wine and cheese on canapes. But the French film industry is heavily bankrolled through subsidies, institutional investment and tax incentives. At the heart of this is the Cinema National Center (CNC). It’s essentially a government agency. Its main role is to promote French films. A bucket load of cash is channeled through this body. Yearly budget of $1.2 billion.
In addition, French TV companies are obliged to ringfence part of their budget to invest in European (but mainly French) films. Canal Plus, for example, had its arm twisted and was forced into a deal with the government to devote 12 per cent, roughly 200 million euros annually, into this pot. A contract which ends in 2019. What will come after?
Then there is funding by the European Union (and its regions) as well as a generous tax deduction incentives through which many films can slash their tax bill by up to 30 percent on production costs. Similar systems are in place in Spain and the United Kingdom. Germany relies on public sector aid, funds from foreign co-producers and rights sales to TV networks.
The upside is that it gives money to a film that, without it, would never have been produced. The downside is that it gives money to a film that should never have been produced.
Juries also have a big role to play Europe side. They decide who gets funding. The criteria is not only the quality of the project but who is involved in it. If you are not part of the family there is no chance to get cash. Newcomers and emerging talents please stay out.
Across the Atlantic, the funding is more simplified: you need a idea for a film and a business plan. As most films are funded by private investment, the crucial question asked by the those supplying the cash is: how much money is the film projected to make?
A great example of this is Birth of a Nation by DW Griffith. Nobody would fund the 1915 landmark film. Griffiths went cap in hand to private investors, who eventually made a fortune from the movie. Thus Birth of a Nation gave birth to an industry based on private investment.
To sum up the Weinstein case
These sordid and repeated incidents ousted Weinstein from his throne and made him lose his crown. But this is surely not the reason why the Weinstein Company will lose big.
For 100 years the Tycoons were able to abuse their position of power, as well as keep the business model of the film industry unchanged over the same era. The entire value chain of a film is now outdated due to the supremacy of digital platforms and their distribution networks. The current process is, therefore, obsolete. At the film markets in Cannes, Berlin and Los Angeles, distributors, sales agents and other rights holders walk around with the anxious look of those who are questioning their future.
With digitalisation there is no need for expensive film copies. Once a film is made it can be uploaded directly to movie theatres. So more and more indie filmmakers are asking themselves: why do we need all these intermediaries to market our film, take the money and pay us peanuts at the end? Even small producers now become entrepreneurs and learn to communicate: it’s a simple matter of tapping into social networks to ensure publicity for their films. It’s cheap and much more efficient.
The only remaining questions are:
if everyone knew, why is Weinstein falling now after all these years of his alleged activities? And is it coincidence that all this takes place two weeks before MIPCOM in Cannes, one of the largest audiovisual content markets in the world, and one month before the American Film Market in Los Angeles?
And who is interested in grounding the value of one the most important movie catalogue owners, while all the rules of the game are changing?