The Culture Ministry last week continued its campaign to convert Ancine, the national film agency, into a single regulator for TV as well as film called Ancinav, with the last two letters standing for audiovisual. The ministry is concerned that Presidential Chief of Staff José Dirceu?s working group on the regulatory agencies might conclude for outright abolition of Ancine as ?unnecessary?.
A position paper has been submitted to Mr Dirceu?s group, highlighting the rationale for Ancinav and arguing that both TV and movie distribution are currently monopolies. Government intervention is justified in both sectors to avert further concentration and regulate the existing monopolies, the Culture Ministry argues.
It says concentration in movie distribution is due to the predominance of U.S.-based distributors belonging to the Motion Picture Association (MPA), which according to the ministry is virtually a cartel. The position paper presents data purportedly showing the practice of ?dumping? by the ?monopolists who control? the market for movies, given that list prices for Brazil are lower than prices in the United States.
In the case of TV, monopoly takes the form not only of audience concentration but lack of clear separation between the production and exhibition activities carried on by licensees: According to the Culture Ministry, more than 90% of the content aired by the networks is produced in house, leaving little scope for independent productions.
Ancine is a necessary agency and should be given special treatment because of the economic as well as social issues involved, the Culture Ministry insists. It also points out the existence of the Superior Cinema Council, which sets policy for the agency to regulate, so that Ancine ?doesn?t usurp government functions?. This refers to one of Mr Dirceu?s concerns, as highlighted in his working group?s remit.
Indeed, the position paper presents the Culture Ministry?s counter-arguments to the five points that define the ?necessity? of a regulatory agency according to the Office of the Presidential Chief of Staff: 1) monopoly; 2) information asymmetry; 3) negative externalities; 4) entry barriers; and 5) the need for universal access. A film agency satisfies all five according to the ministry.
The most important aspect of the Culture Ministry?s campaign is its unconditional defense of extending the regulator from film alone to all audiovisual production, changing its acronym to Ancinav, and setting up a fund for revenue deriving from its activities.