From the new issue of Investor, on Georgian film productions:
"It is not easy to cover the expenses of the film with the small number of screens that are in Georgia. The market is limited and the number of screens is also limited," he said.
"If you want to make a Georgian film commercially successful, you have to expand this market, you have to go outside...either to Russia or international."
There was certainly no shortage of talented Georgians who made it in the Soviet Union, or later in Russia. While we can safely assume that today there are still Georgians in Georgia with the talent of Mikheil Kalatozov, Tengiz Abuladze and Otar Iosseliani, it is doubtful that the world will hear from them. Being confined to a small market, and in an industry with high fixed cost they seem to face an almost impossible task. The only hope – new technology that will lower the fixed cost of producing a film, and a world market open to films from other countries.
While the cost of producing a film has indeed gone down and the world film market is indeed more open than ever, there is still an insurmountable obstacle in the way. The film industry is characterized by positive externalities, that is, the more films a country is producing, the easier it is to produce a film. Vice versa, with little film production the cost of producing a film will be very high, implying a vicious cycle in which a film industry will not start without subsidies or other support programs.
Why are there positive externalities? There are many reasons. A large film industry is able to support a very specialized labor pool of screenwriters, directors or actors. A large film industry allows investors to hedge their risk, by financing not one but many films. Most importantly, it seems that there are large creative spillovers in film or more generally art production – think of the French new wave of the 1950s, the new German cinema of the 1970s or more recently the Romanian new wave.
Comments
Georgia has a better chance to succeed in exporting its movies (and arts and crafts, more generally) than in manufacturing. The challenge is to find a market niche and develop the relevant skills/infrastructure. This may require a period of incubation during which the government or a philanthropist would subsidize or otherwise support the nascent movie industry. Providing land for a world class film studio (a big chunk of the fixed cost) might be one way to go.
There is hope given Georgia's glorious past and exuberant talent. Israel is not much larger than Georgia and its language is almost as exotic. As could be expected, the Israeli movie industry was utterly useless until 10-15 years ago. However, in recent years, the quality of Israeli cinema has improved a lot. Quite a few movies have been quite successful outside Israel. Waltz with Bashir (http://www.imdb.com/title/tt1185616/) is rated "8" on the IMDB website. The Band's Visit (http://www.imdb.com/title/tt1032856/) is rated 7.6. These are two movies I personally loved, but there are many other examples.
The Israeli cinema is still subsidized but so are many other forms of artistic expression...
We can talk about additional positive side effects of well-developed movie industry for the Georgian Economy. Movie is the best way to show Georgian culture, landscapes, traditions, lifestyle to broad audience, thus millions that Georgian Government spends on the promotional campaigns to attract tourist, might be better to be invested in the movie industry. It will not only enhance the development of the industry but also contribute to the growth of number of visitors and to the popularization of the country in general.
Tax cuts for the movie industry is a good practice and I think Georgia can also make some amendments in the tax code to promote national film production.
Creating favorable ground for making movies in Georgia will possibly attract foreign movie-makers as well. If I am not mistaken Bollywood will shoot two movies in Georgia. Recently I watched American movie "The Loneliest Planet" taken in Georgia, in magnificent mountains of Kazbegi. I am sure Georgian movie makers can learn much about modern technologies in movie industry even from Bollywood representatives (By the way, Bollywood production has broadest audience and Indians take two movies per day on average!!!)
To sum up, fiscally supporting Georgian movie industry government will be able to catch several rabbits at a time. Firstly, national movie, that is half dead, will have more chances to survive and talented Georgian actors to realize their abilities. Secondly,charming tax legislature will attract foreign movie-makers that will automatically translate into more foreign investment, new technologies and new knowledge for the local industry. Thirdly, movies taken in Georgia will serve as ambassadors and help to spread word about the country enhancing development of tourism industry.