Foreign distributors also face local ownership requirements such as
Canada’s requirement that non-Canadian distributors must own worldwide
distribution rights to a film before it can be distributed in Canada without a
Canadian distributor. Although Hollywood producers have been exempt from this
law due to a threat of a boycott, other independent American distributors and
foreign distributors, such as Dutch owned Polygram, have been constrained by the
law. Recently, the European Union (EU) has taken Polygram’s dispute with
Canada to the World Trade Organization.
Screen and airtime restriction are also widely used to keep American movies
from local markets. Airtime restriction for television in China allows for only
15 percent foreign programming, and Canada and EU nations require a 50 percent
minimum of local programing. Screen restrictions in the United Kingdom mandate
that a minimum of 20 percent of the screens show British films, where only ten
percent of box office receipts come from British films. These protectionist
rules may keep local markets on air and on screens but they reduce the demand
for American movies abroad.
Finally, subsidies for domestic film industries are funded through taxation
of foreign movie revenues. In France, a twelve-percent tax is imposed on cinema
admissions as one way to fund its $250 million subsidy of local films. While
admission taxes are a common means of subsidizing domestic film production,
licensing fees, tax rebates, loans and grants are other ways that nations fund
their film subsidies.
Despite all these taxes and restrictions on American films, it is still
profitable for most filmakers to exploit their works abroad because by
increasing the audience worldwide, they are more likely to maximize their film
Author acknowledges the contributions of
D’Alessandro; Willie Brent, Variety; Don Grove, Variety; John Nadler, Variety.
2006 BLAKE & WANG, P.A. ENTERTAINMENT LAWYER SERVICES. ALL RIGHTS RESERVED.
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