Brazil’s Production Sector Booms, Following Crisis

In a breath-taking plot twist, the health of Brazil’s indie production sector of films and TV shows has turned from the worst crisis in 30 years to an unprecedented boom.

The growth is fuelled by commissions from streaming platforms such as Netflix, local Globoplay, Amazon Prime Video and HBO Max, and most recently the “resurrection” of federal incentive body Fundo Setorial do Audiovisual (FSA).

“We never produced so much in the history of Brazil,” helmer Paulo Sergio Almeida, head of film marketing and research firm Filme B, told Variety.

The scenario today is radically different from the one in 2019, when the National Cinema Agency (Ancine) virtually paralyzed funding for the FSA, by far the main local incentive. The Federal Accounts Tribunal (TCU) dictated the halt, due to alleged inadequacies in Ancine’s system of audit expenses of productions subsidized with FSA coin.

In the same year, the far right Jair Bolsonaro was voted in as president of Brazil. Following the path of Donald Trump, whom he publically acclaimed, Bolsonaro waged a war against “leftist” filmmakers and artists in general. He first threatened to shut down Ancine, then he delayed nominations for key positions in the agency and on FSA boards and committees, which maintained the fund’s paralysis.

Then came the pandemic, which closed theaters and sets, creating a perfect storm for the sector. The perception then was this was the deepest crisis since 1990, when the federal government closed production and distribution agency Embrafilme. Since then, new incentive mechanisms and the creation of Ancine rebuilt the industry, whose output rose from no movies opened to 169 Brazilian features theatrically released in 2019, still reflecting the pre-crisis production.

But the pandemic had also the positive effect of driving the expansion of streaming platforms and the appetite of international platforms for Brazil’s over 220 million people market.

Here, the big world players have to face the competition of Globoplay, the streaming platform of local giant media group Globo, which has telenovelas and other shows made in-house and is also commissioning from indie producers.

International streaming companies know they need local content in the Portuguese-language to strengthen their positions in the Brazilian market. Led by Netflix, they are increasingly commissioning series, feature films and other TV programming. In 2021, Netflix launched 18 Brazilian original productions: Nine films, three series, three docs, and threereality shows.

Streaming kept some indie production companies from going during the pandemic, particularly those with a tradition in the making of commercial series and features. But producers of art-house films bled.

Then in mid-2021, the Brazilian Senate finally approved the nominations of three directors for Ancine’s four-person board. As Ancine is legally independent from the federal executive, the new board moved to revive FSA.

The good news is that FSA, during the lockdown imposed by the Bolsonaro administration, continued to collect a fraction of each telephone bill paid in the country and other contributions, as stipulated in its creation by the Congress. As payments out proved rare over the past four years, FSA accumulated a large amount of money, and Ancine has vowed to release a total of 5 billion reais (US$920 million) over the next five years.

Ancine has already opened the application period for two FSA lines for feature film production. There will be eventually be other lines for film, TV and VOD production, distribution, development, international co-production, P&A, games and other types of content.

The agency has also announced it will streamline other incentive mechanisms, such as a tax shelter system for Hollywood majors that invest in local feature film productions.

The Brazilian production sector’s expansion is thus based on two strong pillars: Private investments from streaming platforms and incentive coin. This seems to be the scenario for the upcoming years.

On the streaming side, Netflix will apparently continue to lead investments.

“After five years producing in Brazil, we have consolidated our partnership with the local entertainment industry and strengthened ties with the Brazilian creative community to produce more and more stories that reflect the country’s cultural diversity,” Elisabetta Zenatti, Netflix’s VP of content for Brazil, told Variety.

She added that Netflix is currently making 26 new Brazilian films, series, docs and realities, which are in different stages of production. The list includes feature “Vizinhos,” a comedy by Roberto Santucci, the helmer with the highest accumulated B.O. in Brazil, “De volta aos 15”, a teen series with Maisa Silva e Camila Queiroz, horror series “Olhar indiscreto” and reality “Queer Eye Brasil.”

Top local production companies are busy. “Conspiracao produced in 2021 a total of 16 TV series, feature films, docs and non-fiction TV shows, and we expect to double the volume of production this year. We are undergoing a boom in the production of entertainment in Brazil. This unprecedented volume of content shows the maturity and capacity of our industry,” Renata Brandao, CEO of leading production company Conspiracao told Variety.

Two Conspiracao’s highlights are “Dom,” a Breno Silveira-helmed series in its second season on Amazon Prime Video, and “Under Pressure,” a feature and series in its fifth season on Globoplay, which also airs on broadcaster TV Globo.

O2 Filmes is currently lensing seven series for streaming platforms, including “Pico da Neblina” and “Nevoa” for HBO Max, Andrea Barata Ribeiro, a company partner and exec producer, said: “As Brazil is a strategic market, the trend is that streaming platforms will increasingly produce here. We have a number of new projects lined up for the second semester.”

The production of art house/festival features is also gradually resuming. Ilda Santiago, director of Rio’s International Film Fest, mentions Flavia Neves’ “Fogareu,” which opens in Berlinale’s Panorama, Julia Murat’s “Regra 34,” Gabriel Martins’ “Mars One,” which premiered at Sundance, Fabio Meira’s “Tia Virginia” and Marcelo Gomes’ “Paloma.”

Traditional production company LC Barreto is finishing “Vovo Ninja”, the new feature of helmer Bruno Barreto, due to be released in theaters mid this year. Paula Barreto, a company partner and director, told Variety they are working on several other projects of film and TV shows, including “Deus ainda e brasileiro,” the upcoming feature of vet helmer Caca Diegues.

Paula Barreto, voicing a widespread complain among Brazilian producers, is critical of the lack of local regulations for streaming platforms.

As opposed to what happens to productions financed through local incentives, Brazilian producers, as in many parts of the world, do not retain rights for the content they make for streaming. The unfair balance in negotiations allow the world giant streaming companies to keep full rights over everything produced here.

“When it comes to producing for streaming, we lost our independence. We no longer hold the rights for what we make. We became mere providers of product services,” Barreto told Variety.

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