Current Affairs

Nationalize the Movies

The simplest and most effective way to save cinema is through government subsidies to small, independent filmmakers.

For lovers of cinema, casual or besotted, the pressures of the ongoing COVID-19 pandemic have brought long-simmering anxieties to a boil. While the major studios, with their massive catalogs, mega-franchises, and ever-proliferating streaming platforms will likely come through the crisis intact, the smaller players—independent artists, producers, programmers, exhibitors —are facing much longer odds. With the discussion of government bailouts once again attracting heated discussion, it might be worthwhile to look at an obvious (if often overlooked) resource for the art and business of making movies: the deep pockets of the U.S. government. 

Although there are countless examples across the globe, and even some local precedent, the idea that we might directly and publicly subsidize movie production in this country gets little attention. Take an example from a couple years ago: in late 2019 the New York Times published an op-ed by Martin Scorsese, who was on a publicity tour for his latest opus, the three-and-a-half-hour crime epic The Irishman. He was seeking to clarify statements he’d made a few days earlier during an interview with Empire magazine, where he’d opined that Marvel movies “aren’t cinema,” and that he thinks of them more like “theme parks.” These remarks were brief and measured, so it was probably somewhat to Scorsese’s surprise when they incited a furor on the internet. Offended fans rushed in to defend the honor of their beloved Marvel Entertainment, itself merely one tentacle of the multi-billion dollar kraken that is The Walt Disney Company. 

The controversy escalated quickly, as often occurs online, swiftly reaching the height of disingenuous (or merely ignorant) woke-ness: Marvel movies, some claimed, were superior in their diversity, with special mention given to Black Panther, against which Scorsese’s back catalog of white male antihero films literally paled in comparison. Never mind that the charges were bogus—besides having directed Kundun (a biopic of the 14th Dalai Lama written by Melissa Mathison) and The Age of Innocence (an Oscar-winning adaptation of Edith Wharton’s 1920 novel), Scorsese has also founded two organizations—The Film Foundation and the World Cinema Project—that preserve and promote independent and international cinema. He has also been a producer on films like Clockers and Shirley that were directed by people who aren’t white or male. Nevertheless, Scorsese had poked a sleeping dragon, and was now enduring the sulfurous rage of the fans.

In his op-ed, Scorsese stood his ground and elaborated his views. His general point was that cinema, at its best, is an art form, and while art has always had a vexed relationship with commerce—perhaps nowhere more so than in Hollywood—cinema has shown remarkable resilience as a mode of creative expression. Scorsese’s own brief list of recent examples included the work of Spike Lee (whose Chi-Raq, a ribald and hilarious musical adaptation of Aristophane’s Lysistrata, was a recent triumph), Claire Denis (a longtime critical darling, she had recently made her biggest international feature with High Life, starring Robert Pattison), and Wes Anderson (probably the most original stylist in American cinema of the last 30 years). But the future was looking bleak: more and more of the business, and with it the creativity, was being dominated by a few mega-conglomerates whose imperatives were about as far from aesthetic excellence as strip-mining is from backyard gardening. 

The gold standard of franchise world-building is the Marvel universe (known by fans and flacks alike as the MCU), in which a vast tapestry of copyrighted commodities are spread across multiple platforms over several years, the “phases” of which have seem to have the scope and grandiosity previously reserved for the 5-year plans of Stalin’s USSR. It’s unsurprising that Scorcese was unimpressed by the spectacle. In his view, movies should delight but also challenge; at best, they could be revelatory. Nobody familiar with the director’s body of work could fail to notice the spiritual overtones of his argument, which were of a piece with the harrowing trials of the human soul depicted in his films. However technically accomplished the Marvel (and other mega-franchises) movies were, they were mostly devoid of spiritual content. They didn’t reveal but obscured, concealing the human in a maelstrom of digitally-rendered chaos.

All of this isn’t to say that the franchise extravaganzas are entirely without merit, as Scorsese himself was quick to note, praising those who make them as having “considerable talent and artistry.” But the cinephile with eclectic taste finds herself in a bind: the inexorable consolidation of media entities renders one’s options increasingly zero-sum. Market logic runs roughshod over other considerations, even what it claims to be preserving—i.e. choice—by following the ruthless dictates of winner-take-all competition. A war of all against all rages, and it is unmistakable which side is winning. The percentage of domestic ticket sales earned by Disney movies alone was 40 percent in 2019 (that’s $3.09 billion in sales), as well as 80 percent of the top-grossing films’ receipts, an astonishing figure in an industry once rocked by an historic antitrust case that decisively severed production from exhibition. In 1948, the U.S. Supreme Court ruled that the studios, who also owned many of the theaters in which their movies were shown, were guilty of anticompetitive behavior. That decision may soon be at least partially reversed, as studios increasingly court subscribers for their exclusive streaming platforms.  

To those who care about the overall health of our cinematic ecosystem, as measured by diversity, volume, and the fostering of artistic risk-taking, Scorsese’s words were gratifying, even galvanizing. But towards the end of the piece, he included an odd caveat: “I’m certainly not implying that movies should be a subsidized art form, or that they ever were.” 

Factually and ideologically, given what had preceded it, this was a disappointing turn. For one thing, movies are indeed subsidized, most obviously and commonly in the form of tax credits. Domestically, the past couple of decades have seen frenzied expansion among states and cities offering sizable tax breaks to film and TV productions. Where domestic production was once largely divided between California and New York (which set aside $330 million and $420 million per year, respectively), it is now common for productions to shoot in any number of cities. Atlanta, Portland, Austin, New Orleans—to name only a few— have all seen surges in production activity, thanks to the willingness of local governments to essentially subsidize significant chunks of the projects’ budgets. The same is true internationally. Overseas production has been a rising trend for years, with American studios increasingly taking advantage of tax breaks and other perks offered by eager (some might say desperate) countries in Eastern Europe, South America, Asia, and Africa. Foreign or domestic, the argument for this outsourcing is pure neoliberal ideology: increased “investment” in new markets will supposedly grow local economies, with added value to the American consumer. And, of course, there’s the modest fringe benefit of bigger profits for the parent corporation.

The problem is that this is all a fairly obvious scam. Deep-pocketed studios are relying on the pliancy of states, who, under the long shadow of austerity, are forced to engage in a frantic Hobbesian struggle over what amounts to a pittance of public benefit, if any. Most of these subsidies are in fact little more than bribes to the studios and producers. State officials can claim some positive PR about jobs and growth, and the saccharine prestige of show business helps the medicine go down the gullets of the public. Maryland is a recent case in point. In 2014, a study conducted by the state found that out of every dollar spent on tax credits for film production (97 percent of which went to two big-budget shows, HBO’s Veep and Netflix’s House of Cards), only 10 cents was recovered. So much for growth—when the state’s legislators pushed back against the obvious lopsidedness of the arrangement, Veep decamped for sunny California. As a 2019 story in the New York Post observed, because of the blight of balanced budget amendments in most states, money spent on tax incentives for movies is money that can’t be spent on other (likely more sustainable) public goods. In an interstate and international race to the bottom, the owners of capital make money hand over fist, while wages remain stagnant or falling, and insecurity worsens. But at least the next entry in the Star Wars canon is right around the corner, provided one has the disposable income to buy a ticket.

Beyond the tax credit schemes exist additional layers of state subsidy. From copyright protections (effectively, government-granted and -enforced private monopolies), to trade agreements that favor U.S.-produced movies in foreign markets, the entertainment industry benefits enormously from the firm, sheltering hand of the state. Internationally, American movies and TV shows are more than lucrative export commodities. The formulation of U.S. “soft power,” as conceived by Harvard political scientist Joseph Nye, noted that U.S. culture “from Hollywood to Harvard has a greater global reach than any other.” And then there’s the activity of the Department of Defense and the CIA, who have been shown to exercise considerable influence over the content of Hollywood movies having to do with the military or intelligence services. This includes script “consulting” (often, official vetting of the script, as occurred in 2003’s Hulk), use of equipment and expertise, and access to shooting locations. While rarely an area of direct state funding (which would likely entail negative PR for the film and the government) this nonetheless constitutes a significant degree of indirect subsidy to films, many of which operate quite effectively as vehicles of pro-state force propaganda. Top Gun and Independence Day are notorious for their cartoonish jingoism, but the more recent, self-serious example of Zero Dark Thirty, with its apologia for U.S. torture and imperialism, may be more insidious. After the film had its Oscar-nominated moment in the sun, a VICE article exposed the extent of the filmmakers’ collaboration with the CIA in the crafting of the film.

The problem, then, is not an absence of subsidy, but one of scale and discretion. Which projects are getting protected and promoted, and which films (and film artists) are getting left in the cold? It’s true that small, so-called independent films (the designation, always imprecise, has become increasingly meaningless in the era of private high finance, where a billionaire can fund a vanity project and call it “independent”) do benefit from tax credits and copyright law.  Indie stalwart Todd Haynes’ recent films, including Carol and Dark Waters, both benefited from Ohio state tax credits, as did the Oscar-winning American Factory.  

But these are crumbs compared to the massive sums reaped by the major studios, who also increasingly crowd the distribution slate, ensuring that the chances of a genuinely independent crossover hit are slim. By way of example: American Factory received $119,500 in tax credits, while the upcoming Netflix feature Gray Man, starring Ryan Gosling, will receive $20 million. This comparison isn’t meant to obscure the commensurate differences in these (very different) films’ budgets, but to highlight the amount of public money that’s flowing through this system.  Netflix, which until very recently has relied upon massive private debt financing to grow its library, is gaining an immediate windfall from Gray Man’s state subsidy. Meanwhile, the producers and makers of American Factory (which was picked up at Sundance by Netflix after early awards buzz) had to scramble mid-production for financial assistance when their project’s scope grew beyond its original conception.  

A just response to this state of affairs would be, at minimum, a reordering of priorities towards smaller, more artistically and socially diverse films. This could be done through a modification of current tax codes that favor lower-budget films for a greater piece of the subsidy pie (in California, it stands now at 5 percent) or it could be accomplished by the creation of funds to directly grant money to filmmakers and filmmaking collectives. Local tax break initiatives could favor local artists making local films, instead of luring a predominantly LA and NYC-based workforce to sojourn in the hinterlands, only to pull up stakes when filming wrapped. Other, more creative solutions exist, such as the Artistic Freedom Voucher, an idea from economist Dean Baker of the Center for Economic and Policy Research. In brief, Baker imagines a democratic approach to arts funding in the form of refundable tax credits—say, $100 yearly— that people could use to support artists or arts organizations of their preference. The recipients of this money would be ineligible for copyright protection for a period of time after accepting it, creating a class of makers, crafters, and artists whose careers would benefit from free digital proliferation while making a sustainable living.

A more straightforward model of state subsidy, or what remains of it, can be seen in the National Endowment for the Arts (NEA). Initiated as part of Lyndon Johnson’s Great Society, it embodies the principle, however modestly, that a society’s investment in its members’ creativity is a worthwhile endeavor. Although its budget has increased slightly in the past several years, funding for the NEA still lags behind the 1980-90s levels of $160 to $180 million. For a quick comparison, in 2015, the NEA received just over $146 million, or .04 percent of the federal budget. Over in the U.K., the Arts Council of England (ACE), spent just over £449 million, and the French Ministry of Culture spent €3 billion. In case you were wondering, our economy is nearly four times larger than the U.K.’s and France’s combined.  

The current meagerness of our public arts funding has a complex history, but the basic principle of government sponsorship is hardly unknown. The NEA’s founding clearly recalled earlier eras of federal support, the most notable being the Works Progress Administration (WPA) under FDR, which included the Federal Art Project. As a central plank of FDR’s New Deal, the lives and work of thousands of artists were essentially underwritten by the state. It’s no exaggeration to say that this subsidy contributed greatly to the flourishing of modern art in America, effectively jump-starting the careers of Willem De Kooning, Jackson Pollock, and many others. There’s no reason why this same model couldn’t be applied to filmmaking, providing at the very least a robust alternative to the major studios and private financiers.

And then there’s the international scene, where—not to pick on Marty, but he is surely aware —the explicit state subsidy of cinema is ubiquitous. Whether in France, where the famous “French exception” protects and support French film artists and the industry as a whole, or in virtually every other European country (not to mention Japan, Taiwan, Thailand, South Korea, etc.) there exists some combination of direct and indirect subsidy, often focused on supporting young and emerging filmmakers, and frequently specializing in projects that for one reason or another might lack immediate box office appeal. This focus on the uncommercial is crucial, if infrequently articulated. It takes for granted that the market alone is an insufficient arbiter of value. Popularity and quality intersect only occasionally, and artistic value is an elusive, contentious, and complex designation. Appeals to the Tomatometer and the box office returns only give us a snapshot of a particular work, a sliver of information that must be considered against a much wider spectrum of opinion and assessment, both personal and collective.

This is an essential truth about art and commerce, and one that can offer a proactive response to Scorsese’s lament. Movies have long been, and ought to be, subsidized. That hasn’t changed in decades, and shouldn’t now. What is in contention is what to subsidize, and how to go about it. How do we, as a society, value creative work (in this case, cinema, although the question generalizes to any creative endeavor), and how can that value be put into practice? There are few who would defend the current trends—even the most ravenous Marvel fans are, at least in principle, not in favor of the extermination of all other kinds of filmmaking. However trenchant Scorsese’s complaint, it remained precisely that: it was decidedly not a call to action. But we aren’t powerless over the media giants and their multinational masters. At the most basic level, we can choose what to watch, and how to watch it. That’s the role of the consumer, though it doesn’t go very far. 

On a societal level we need to be more energetic and creative, as well as more militant, in finding other models of financing and distribution. Acting alone as individuals, we are essentially relegated to a strategy of petitioning rich people to invest in our creative dreams. Acting collectively, with a clear awareness of our social and artistic priorities we can realize new possibilities. We can make more movies, and better ones, that reflect our own complicated humanity. Such a fusion of the practical and the esoteric sides of creativity ought to be embraced, by everyone from eminences like Scorsese to aspiring artists who lack rich parents or industry connections.

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