Cinema production in Egypt has become an adventure with unpredictable consequences. At least, that’s how those in the profession view their situation.
Embarking on the adventure of being a film producer, you place yourself and your money on an uneven battlefield with film pirates, especially in an environment where the state and its machinery take no part in monitoring or introducing laws to protect intellectual property. Adding to this is a turbulent political climate that has an adverse effect on film revenues, placing obstacles in the way of investments and delaying the point when the film industry can be resuscitated to generate satisfactory profits again.
Egyptian films still suffer from an imbalance between production costs and revenues generated, leading to only small profit margins. This situation has pushed producers toward low-budget films that appeal to a “third-class audience” in an attempt for financial rejuvenation.
The Egyptian Cinema Industry Chamber confirms that a successful film that generates revenue of up to LE25 million (US$3.5 million), for example, leaves the producer with only LE12 million (US$1.67 million), because cinemas get 50 percent of that revenue and a further five percent goes on entertainment tax.
A limited market
The fall in revenues after the January 25 revolution was caused by the diminishing size of the local market, its lack of stability, and the decrease in external demand for Egyptian films. Egyptian films were negatively affected by the political and economic climate surrounding the traditional Arab market. This is in addition to the competition Egyptian films have faced in the international market with foreign films generally, and American and Indian films more specifically.
How do Egyptian films make a profit?
Profit is generated from a variety of sources: cinema screenings, advertisements and selling screening rights to TV channels. But profit made through cinema ticket sales remains the primary measure of any film’s success.
The vice president of the Egyptian Cinema Industry Chamber, Farouk Sabry, tells me that the industry generates profit when the country is stable. He points out that producers have recently resorted to low budget films for different reasons: to cover production costs and because of their popularity among satellite channels.
Sabry says that even if low-budget films are mediocre, we should be thankful for the companies that continue to keep the industry moving until economic conditions improve and allow “for the existence of high-budget films that can guarantee that their producers meet the cost of production.”
He believes revenues are also affected by the recent closure of Arab markets due to ongoing wars in some countries. Pointing out that producers’ profits are also hit by TV channels broadcasting pirated copies of their films, he explains that although Egypt’s Cabinet has made several announcements about halting the activity of such channels, action is yet to be taken.
Fierce American and Indian competition
Writer, journalist and film critic Tarek al-Shennawy, on the other hand, says the fact that film production continues in Egypt means companies must be making significant revenues. No one would produce a film without taking profit into account, he insists.
“Producers’ profit doesn’t just come from ticket sales,” he adds. “Satellite channels have opened new doors for movie sales” — which has “led producers to produce the low-budget films that have flooded TVs.”
“This kind of commercial, mediocre film is known all over the world,” he says, arguing that it plays a role in providing employment in the cinema industry.
But scriptwriter and cinema critic Magda Khairallah points out that “revenues generated by films do not solely go to production companies — a percentage goes to cinemas and taxation.”
“Filmmakers have many ways to profit from their films,” she explains. “A film is screened in cinemas more than once, and when screenings cease the film can be sold to satellite channels through a contractual agreement that may last for years and is periodically renewed. It’s worth noting that the heirs of late actor Ismail Yassin continue to profit from his films to this day. Films are also sold to airline companies and other entities.”
“Even when it comes to pirated films, production companies can still get a percentage of profit from the accompanying advertisements in return for not suing the channels or websites that broadcast the films illegally,” Khairallah continues.
Acknowledging that piracy negatively affects revenues, she also argues that the people who watch films online are not the real cinema audience that appreciates the movie-going experience.
Piracy and the role of the state
Production company media consultant Abdel Galeel Hassan says Egypt’s cinema industry suffers from several problems that curtail profit. Piracy by satellite channels and film websites and the state’s lack of support for the industry top the list of these problems. In this climate, cinema has become dependent on the efforts of investors, who have succeeded in producing high-budget films such as Hani Khalifa’s Sahar al-Layali (Sleepless Nights, 2003).
Hassan adds that many elements need to exist for a film to succeed, including the topic, the director and production quality. Another important element is the number of stars it has, which attracts viewers to the cinema.
Of course, mediocre films that are perceived negatively by critics from an artistic point of view can achieve high revenues. These films have their own large audience, especially among young people, artisans and less wealthy classes. These audiences are reportedly more willing to pay the price of a ticket for a film that represents them regardless of its artistic quality, making the production of a certain kind of film a safe bet at all times.
Hassan makes it clear that he’s against attacking El-Sobky Film Productions for the kind of films it produces.
“It stood alone in the field of cinematic production when all other companies retreated,” he says. “The whole industry might have stopped if it weren’t for Sobky. The profit Sobky generated showed that the films it produces respond to the demands of a big slice of audience. Also, Sobky has produced several films that have become important features of Egyptian cinema, such as Farah (Wedding, 2009), Cabaret (2008), Sa’a w Nos (An Hour and a Half, 2012), and more.”
“All production companies suffered setbacks during the January 25 revolution and were forced to lay off employees or cut salaries by half due to falling movie-goer numbers and the remarkable repercussions of the international economic crisis on the industry,” Hassan continues. “However, film piracy remains one of the starkest forms of encroachment on profit. Around 90 channels routinely broadcast pirated Egyptian films, effectively closing the Arab market for Egyptian films.”
“If a film is made with a budget of around LE10 million, you can stand to make a small profit, after paying for cinemas and publicity, by selling it to satellite channels,” says producer Hussein Maher. “But in the past three years such sales have not been possible, and so producers began seeking out low-budget films. As these channels obtained illegal copies of films, others were deterred from buying them.”
Maher considers this an audacious form of theft, and denounces the absence of any monitoring or accountability.
Another difficulty producers face is having to receive bank checks in financial transactions, he says, since channel owners are not able to pay cash for films. This delays payments.
The obstacles do not stop there. In Hassan’s opinion, the state plays a primary role in impeding the cinema industry and increasing costs for producers. He makes two main demands of the state: First, decrease the red tape involved in obtaining permits to shoot in locations such as airports, museums or at the pyramids, as just one hour of shooting in a place like the Egyptian Museum is currently a massive expense. Second, hold websites and satellite TV channels accountable for film theft.
He reasons that as the state is able to shut down porn websites, it can no doubt also restrict the broadcasting of pirated movies.
This article was originally published in Arabic on Raseef22.