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Tuesday, December 21, 2004

LARGE INCREASE IN GUMMINT GIMMES

Ontario is increasing its film subsidy. The subsidy for foreign films goes from 11 to 18 percent; Canadian films from 20 to 30 percent.

Hopefully Quebec will follow suit.

If so, this is exceptionally good news for Yours Truly. Looked at one way, the increase only offsets the rise of the Canadian dollarette from 75 cents to 85 cents. But looked at another way, together with the Federal subsidy (which is I think around 12 percent), you can now get 40% of your Canadian movie from the Feds and the province. That means you have to get only 60% of your movie from foreign sales and the US market. 60% is more than 10% easier to hit than 70%.

Having worked in independent feature filmmaking for almost a decade, it's the "gap" in your budget that is the killer. The last 10-30% is what separates real producers from talkers. Anybody can get some foreign sales (if you have the right star in the right vehicle). But you need to make the movie before you can get all of them. If you don't have those sales in your pocket, they're not in your budget -- unless you get a bank to "discount" those markets. They'll give you cash up front, but only about 80% or 90% of the value of those markets -- that's where they make their profit and insulate themselves against a crappy unsellable movie. So discounting costs you money. If you can get the money from the Federal and provincial governments, you can sell those markets later when you have actually made the movie, and receive full value for them.

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