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The Professorship of Exemplarity organises a discussion on the economics of the film industry
January 29, 2025
Last Wednesday, 29 January, the Chair of Exemplarity, Javier Gomá Lanzón, discussed the economics of the film industry with Jaime Rosales, a film director and producer who was won multiple awards, including the Critics’ Award at the Cannes Film Festival and two Goya awards. The session, entitled “How are movies produced? The economics of the film industry”, was held in the Auditorium of CUNEF Universidad and attended by over 120 undergraduate students. The speakers highlighted the following aspects:
- Ideation, the artistic phase of any film, always has an economic impact. This is materialised in the script and the budget, both very important tools. This phase involves the director, the producer and the cast.
- The role of the production company is to find the funds to cover the cost of making the film, and to manage the profit it delivers.
- There are three main film financing models:
- The American model, with private equity, which focuses on profit. Recovering the investment depends on how the film does in movie theatres, television and other circuits. This model encourages commercial cinema, based on what the public likes.
- The European model, inspired by France, which eliminates the risk for producers, making box office profit an additional reward. Producers can subsidise up to 50% of the cost with automatic aid, as well as with national and regional government subsidies. The other 50% can be financed with aid provided by television channels (broadcasting rights). This model encourages creativity and aesthetic innovations, but it can lead to parasitic productions and ideological censorship.
- The platform model, where platforms such as Netflix, Disney or Amazon Prime cover the costs and offer a percentage to the producer, who loses control of the film and runs the risk of becoming just another employee.
- In the distribution phase, the distributor covers the marketing and distribution costs and is also tasked with booking theatres and producing copies of the film to show.
