?Pay television is the best avenue we?ve found so far for the Brazilian film and TV industries to converge,? says Gustavo Dahl, president of the National Film Agency (Ancine), which is organizing mechanisms expected to finance local audiovisual production to the tune of some 90 million reals per year (now about 35m US dollars). To some extent, his commendations reflect the recent decision by programmers and cable companies to negotiate with Ancine rather than fight it in the courts. The pay-TV industry won significant concessions thanks to this strategy but will still have to contribute to Ancine?s incentives fund. Luiz Carlos Barreto, a movie producer and part-owner of Canal Brasil, urges programmers to pay contributions conscientiously. ?Ancine has given up quite a lot of its original demands,? he says. Pay TV is the third-largest source of funds for Ancine, contributing an estimated 25m reals per year. Ahead of pay TV are advertising, with 30m reals, and entities exempted under article 3 of the Audiovisual Act, also with 30m reals. Gustavo Dahl also pointed to other commoanlities, such as the low penetration of both movie theaters and pay-TV operators in Brazil (about 10%), as well as the fact that they?re both economically fragile and operate in niche markets.