Brazil MARKET REPORT MARKET GUIDANCE FOR CANADA'S CREATIVE EXPORTERS - AQPM
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CREATIVE INDUSTRIES Brazil FILM AND TELEVISION MARKET REPORT MARKET GUIDANCE FOR CANADA’S CREATIVE EXPORTERS
This report was commissioned by the Consulate General of Canada in Rio de Janeiro on behalf of the Canadian Trade Commissioner Service (TCS). The opinions expressed herein are those of the authors and do not necessarily reflect those of the Government of Canada.
Table of Contents
1. Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2. Industry Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.1. Commercial Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.2. Challenges/Opportunities for Foreign Companies in Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.3. Industry Characteristics - What Makes Businesses Fail? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.4. How Do Canadian Companies Access These Opportunities? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3. Sectoral Breakdown: Film, Television and VoD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.1. Film Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.1.1. Market Entry Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.1.2. Key Decision Makers, Market Agents and Stakeholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.2. Television Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.2.1. Market Entry Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.2.2. Key Decision Makers, Market Agents and Stakeholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.2.3. Coproduction with Television channels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.2.4. Production service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.2.5. Branded content . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.3. Online Exhibitors/ VoD Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4. Film and Television Project Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.1. Audiovisual Sectoral Fund (FSA) (Law 11,437/06) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.2. Financing Funds in the National Film Industry (“FUNCINEs”) – MP 2,228-1/2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.3. The Audiovisual Act (Law 8,685/93) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.3.1. Article 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.3.2. Article 1-A (Sponsorship) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.3.3. Article 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.3.4. Article 3-A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.4. Article 39, X, of MP 2,228/2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.5. Law 8,313/91 (“Rouanet Act”) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.5.1. Article 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.5.2. Article 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3Brazil Film and Television Market Report 2018
5. Key Legal and Regulatory Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.1. Copyrights and Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.2. Coproductions under the Brazil-Canada Treaty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
6. Education and Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
7. Key Theatrical and Television Industry Sectoral Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
7.1. Market Events in Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
7.2. Film Markets with Brazilian Booth or Delegation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
7.3. TV/VoD Content Markets with Brazilian Stand or Delegation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
8. Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
List of Appendix Contents: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
8.1. List of Acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
8.1.1. Technical terms, definitions, sectorial programs and mechanisms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
8.1.2. Audiovisual sector organizations, related institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
8.1.3. Universities and technical training institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.2. Government organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
8.3. Semi-state organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
8.4. Private sector companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
8.5. Key publishing and distribution companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
8.6. Studio facilities, special effects, post-production houses and laboratories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
8.7. Film commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
8.8. List of educational programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
8.9. List of channels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
8.10. Brazil-Canada Productions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
8.11. List of Relevant Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.12. Industry Data and Graphs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
41
Executive Summary
The present Film and Television Market Report is designed to provide information and highlight
business opportunities for Canadian companies interested in engaging in business and otherwise
entering the Brazilian film and television market.
At this time, while the Brazilian economy is recovering from a deep recession, the creative industries
sector and the film, and television sectors in particular, have remained strong, with an average
growth above 8% per year since 2008, offering multiple opportunities for international business.
The report contains useful information on decision-makers, market agents and stakeholders for both
film and television sectors, including the robust television series sub-sector and emerging video-on-
demand business, as well as orientation on where and how to approach local companies.
Given the preponderant role of the Brazilian federal government in audiovisual content funding, and
the dependence of local producers on local incentives, it is essential that international producers
and service providers become familiar with regulatory framework, and direct and indirect funding
mechanisms, in order to navigate the marketplace and successfully license, co-produce and/or
partner with Brazilian firms.
Current legislation stipulates that international companies must partner with or contract a Brazilian
production company to enter into co-production or production service contracts in Brazil. As such,
the choice of the local production company is crucial. The Brazil-Canada Co-production Treaty (1995)
allows producers to benefit from incentives in both countries and thus expand funding sources and
distribution potential.
The Brazilian television and cinema sector is continuing to expand. Pay-TV channels offer important
co-production opportunities resulting from specific government policies and the driving force of
Law 12,485, which created local content quotas for Brazilian independently-produced content
in prime-time on Pay-TV channels. Production for digital streaming also offers good growth
opportunities in Brazil. Brazil is one of the top five consumer markets for companies such as
Netflix and YouTube, and has become an attractive environment for production of original content
and acquisition of local content.
52
Industry Overview
2.1. Commercial Environment
While the Brazilian economy is slowly recovering from a deep recession, the Creative Industries
sector in Brazil and the film and television sectors in particular, have remained strong, with continued
growth in recent years.
A number of positive factors have contributed to this reality. First and foremost, Brazil offers a huge
domestic market for audiovisual content, given its population of 206 million. Moreover, the current
aggressive government pro-business policies of key federal government leadership in the National
Film Agency, Ancine, and the Ministry of Culture are actively promoting the audiovisual industry
internally and internationally. These policies are also reinforced by the highly organized private-
sector production unions, associations and NGOs. Further, as the media and entertainment landscape
undergoes great transformation all over the world, Brazil stands out as one of the countries where
these transformations have been more significant and accelerated.
When considering economic indicators in the medium to long-term, industry forecasts are generally
favorable. According to Price Waterhouse Cooper (PwC), in spite of recent political and economic
turmoil, the Brazilian cinema sector is continuing to expand. Over the forecast period, box office
revenue is expected to rise at a CAGR of 6.9% to reach US$1,0 billion in 2021, up from US$773
million in 2016, as shown in Table 1.
Table 1 - Entertainment and Media market in Brazil* * (US dollar millions)
2016-21
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
CAGR
Business-to-business 1,7 1,9 2,0 2,0 2,1 2,8 2,2 2,3 2,4 2,4 2,735
Books 1,4 1,4 1,5 1,4 1,3 1,3 1,3 1,3 1,3 1,3 -0,624
Magazines 1,4 1,3 1,3 1,2 1,2 1,1 1,1 1,1 1,1 1,0 -1,884
E-sports - - - - - - - - - - -
Cinema 580 572 581 694 773 816 877 940 1,006 1,076 6,824
Internet video 35 84 123 155 181 208 225 237 255 276 8,783
Internet access 6,4 7,2 8,6 10,4 11,8 13,0 13,9 14,6 15,1 15,4 5,467
Continued
6Brazil Film and Television Market Report 2018
Continued
Table 1 - Entertainment and Media market in Brazil* * (US dollar millions)
2016-21
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
CAGR
Internet advertising 817 1,2 1,7 1,9 2,0 2,3 2,6 2,9 3,2 3,6 11,882
Newspaper 2,3 2,4 2,5 2,5 2,5 2,5 2,5 2,5 2,4 2,4 -1,279
Out-of-home advertising 259 284 313 316 333 334 353 372 391 409 4,192
Radio 340 350 356 350 350 345 343 249 356 367 0,924
Music 346 402 407 414 438 479 524 568 610 644 8,036
Television advertising 4,1 4,3 4,9 5,0 5,2 5,4 5,7 6,0 6,5 6,9 6,009
Traditional Television
5,3 6,2 6,7 6,9 6,9 6,8 7,1 7,2 7,4 7,7 2,176
and home video
Video games 244 333 442 536 670 802 946 1,1 1,3 1,4 16,571
Virtual Reality - - - - - - - - - - -
Total 25,2 28,0 31,3 33,8 35,8 37,7 39,6 41,2 43,2 44,9 4,658
Total without double
24,6 27,3 30,6 33,0 34,9 36,8 38,7 40,4 42,1 43,7 4,608
counting
* At average 2016 exchange rates.
** Note: Digital advertising components such as online television, online radio, digital newspaper,
digital consumer magazine, digital trade magazine and digital directory advertising are included in
the respective segments and in the Internet advertising segment but only once in the overall total
to avoid double counting. In addition, consumer spending on radio license fees is included in both
the television and video and the radio segment but only once in the overall total.
Note: Numbers shown are rounded. Totals may not equal the sum of their parts due to rounding.
Source: PwC Global Entertainment and Media Outlook 2017-2021
According to the 2016 Media and Entertainment Report by the US International Trade Administration,
the Brazilian filmed entertainment sector is slated to reach $2,7 billion by 2019, up from $2,2 billion
in 2015, at a robust 6.1 % growth rate. Box office revenues will reach $1,16 billion, growing 8.5 %
during the same five‐year period. The fastest growth will be in electronic home video, which will rise
at an impressive 15.4 % to $676 million in 2019 (from $330 million in 2014), which will represent 24
% of total filmed entertainment revenues.
Over-the-top (OTT) streaming revenues are also expected to strongly increase to $191 million in
2019, although a marked revision downward from predictions made in 2017 that revenues for
2018 would reach U$363 million. Pay-TV subscription revenues are expected to almost double to
7Brazil Film and Television Market Report 2018
reach $485 million by 2019 (up from $250 million in 2014), and offer excellent growth opportunities
for companies that are willing to navigate the quota and taxation requirements levied on foreign
providers. Most Pay-TV operators also provide TV Everywhere services, allowing subscribers to
access authenticated content across multiple platforms. These indicators make Brazil the region’s
most competitive, attractive and largest online video market, reaping an estimated total of US$527
million in gross revenue in 2016.
According to Ancine, the Brazilian audiovisual sector accounts for 98,000 formal and 150,000 indirect
jobs. SEBRAE, the Brazilian Small and Medium Business Administration Service, has also published
an Economic Impact Study (2016) highlighting the audiovisual sector as a significant engine of
economic growth, with a total of 4,883 commercial establishments and 1,404 companies in the
production and post-production segment in 2017 (an increase of 129% from 2007 to 2014). See
Chart 8.12.12 in Appendix for details.
2.2. Challenges/Opportunities for Foreign Companies in Brazil
Generally speaking, there is a wide array of opportunities for Canadian firms to partner, invest,
license content and do audiovisual business in the Brazilian film and television sectors, within the
current relatively complex industry framework.
With its rapidly expanding broadband penetration (over 59% of Brazilian households are online, with
nearly 89 mobile broadband subscriptions per 100 inhabitants), digital streaming and subscription
services offer good growth opportunities in Brazil, especially for local independently-produced
content or in new genres. Brazil is one of the top five consumer markets for companies such as
Netflix and YouTube, and has become an attractive environment for production of original content
and acquisition of local content.
Brazil lacks high-level screenwriters and scripted content, with very few local series demonstrating
international appeal. Exceptions are Netflix original content produced in Brazil: “3%” and “The
Mechanism.” Professional training of entrepreneurs and executives is still a great challenge for the
sustainability of film and television companies, and their level of internationalization remains low.
In this context, Canadian companies could consider partnering with a Brazilian producer to access
Brazilian financing mechanisms and local talent, while bringing in their expertise for potential projects.
Another area where important opportunities exist is for new investments in infrastructure, such
as for the construction of studios and the provision of post-production services. Rio de Janeiro and
São Paulo concentrate the majority of production companies and commercial activity. Government
policy has sought to foster geographic decentralization of the audiovisual sector, and financing
mechanisms promoted by Ancine have sought to favor production and programming companies
located in northern and southern states, which imply good potential for international partnerships
(co-production or production service in those regions). Furthermore, capital market financial
mechanisms such as Funcines (see Section 4.2 below) and private investment funds are increasing the
8Brazil Film and Television Market Report 2018
volume of resources invested in the production chain, representing an opportunity for participation
of foreign investors.
Regarding on-location filming, Brazil’s enormous diversity provides an immense variety of filming
scenarios: beaches, arid deserts, mountain ranges, forests, marshlands, etc., as well as a wide
variety of climates displaying all seasons of the year. Film Commissions throughout the country offer
support for filming in all formats (cinema, series, documentary, commercials). See Appendix for full
list of film commissions.
It is also important to note that, while Brazil maintains a vast array of production incentives for
national content in every format, there is no specific foreign production incentive (tax credit or cash
rebate). Nevertheless, foreign producers may still partner with a Brazilian company to access local
production funds.
2.3. Industry Characteristics - What Makes Businesses Fail?
According to Brazilian law, international companies must partner with or contract a Brazilian production
company to enter into co-production or production service contracts in Brazil. The Brazilian audiovisual
sector, and particularly the production segment, is highly dependent on public funding and incentives.
This model impacts not only public policies, but also the market’s organization and practices, since all
content funded by public resources must comply with corresponding eligibility requirements for both
funding and commercialization.
The most important factor determining success or failure in for international producers aiming to
coproduce in Brazil is the choice of the local partner production company, which is responsible for
compliance with all rules and requirements from Ancine. Its fiscal integrity and expertise in production
management should be strictly verified, as well as creativity, access to network executives and local
talent, familiarity with deliverables and with broadcasters’ compliance rules.
Canadian television producers interested in licensing their content in Brazil should become familiar
with each channel’s characteristics and which genres and formats of international programming have
been successful for each one, and then reach out to acquisition executives and take an aggressive
approach with appropriate content given current market characteristics and trends.
2.4. How Do Canadian Companies Access These Opportunities?
To approach local companies and find a suitable partner company in Brazil, Canadian companies
should:
N Attend Brazilian market events;
N Join the events and business meetings organized by Brazilian Film and Television trade
associations at their booths in both local and international the audiovisual markets;
9Brazil Film and Television Market Report 2018
N Contact the sectoral associations (BRAVI, APRO, SICAV, SIAESP). See Appendix for details;
N Contact Brazilian television networks and Pay-TV channel executives. See Appendix for
details;
N In the case of co-productions, research ways to combine Brazilian and Canadian incentives,
such as those offered by the OMDC in Ontario and those offered by the Audiovisual Sectoral
Fund (FSA) in Brazil.
To license their content in Brazil, Canadian producers and distributors should:
N Attend Brazilian market events;
N Meet Brazilian distributors at film festivals and markets;
N Contact Brazilian television networks and Pay-TV acquisition executives in the international
audiovisual markets.
Canadian service providers interested in taking part on Brazilian market should:
N Attend Brazilian market events and promote their services to local producers;
N Contact the sectoral associations (BRAVI, APRO, SICAV, SIAESP) to reach their producers
associates. See Appendix for details;
N Reach out to Brazilian service providers in the audiovisual supply chain.
Due to the dynamism and complexity of the Brazilian audiovisual sector, before undertaking
contractual commitments, Canadian producers and service providers are urged to seek both
professional legal and business consultancy to align their individual needs with the current regulatory
framework, government funding mechanisms and market agents.
N N N
10Sectoral Breakdown:
3
Film, Television and VoD
The audiovisual sector in Brazil is regulated by Ancine, which operates the main financial resources
for production and distribution in the country. Ancine supervises the use of tax incentive mechanisms
and is also responsible for the FSA (see Section 4.1), pursuant to which the agency is expected to
invest R$ 1 billion in film and television production, infrastructure and training in 2018.
The Ministry of Culture is the federal government organization that determines policies and actions
to promote Brazilian culture, including guidelines and programs for the Audiovisual sector. The
Minister of Culture serves as president of the Superior Council of Cinema (CSC), an organization that
reports to the President of Brazil, and which aims to formulate and implement public policies for
the development of the national film and television industry. The Minister of Culture also leads and
is responsible for appointing the members of the FSA management committee that proposes the
entity’s investment guidelines and actions.
In Brazilian states and municipalities, each Secretary of Culture is responsible for developing
and executing actions to promote local the audiovisual activity. Policies and actions regarding
funding and promotion are also implemented by local public companies exclusively dedicated to
the development of the audiovisual sector, such as Spcine in the city of São Paulo and RioFilme
in the city of Rio de Janeiro, or companies devoted to the development of local economy, such as
Codemig in the state of Minas Gerais. Rio de Janeiro and São Paulo are the most relevant Brazilian
regional hubs.
Rio de Janeiro is historically the city that has developed the most in the Brazilian audiovisual
landscape, with more than a hundred years of film and television activity, and the home of the
main free-to-air television networks of the country. In the cinema segment Rio has led the country
with the highest number of films produced for the last several years, as well as with box office
results. Independent production companies in Rio de Janeiro also have generated a large volume
of made-for-TV productions with great potential for commercial results. Rio de Janeiro’s municipal
audiovisual sector company, RioFilme, played a major role in the economic development of the
Brazilian audiovisual sector between 2009 and 2016.
São Paulo is considered the primary Brazilian city of business development in general, and it is
where audiovisual activity finds its greatest synergy with brand communication and digital media.
The majority of the principal theatrical film distributors and the vast majority of Pay-TV networks
are based in São Paulo. In 2015, the São Paulo municipal audiovisual company Spcine was created to
focus on audiovisual sector development and has assumed a growing role in attracting new business
and investing in companies and audiovisual projects in the city.
11Brazil Film and Television Market Report 2018
Minas Gerais is the state that has progressed most in the development of the audiovisual sector
since 2015, with structuring policies for professional training, attraction of companies, infrastructure
and investment in production. P7 Criativo is the hub of audiovisual activities in the city of Belo
Horizonte, capital of the state. The Audiovisual Pole of Zona da Mata, in the city of Cataguases, offers
production structure with studios and technical training.
Other regional associations, such as those in the State of Rio Grande do Sul, the State of Santa
Catarina, the State of Paraná and the North, Midwest and Northeast united regions, have begun
to develop more audiovisual structures, with the support of local government entities and greater
involvement of local entrepreneurs.
For other audiovisual industry players, see Appendix.
3.1. Film Sector
The Brazilian theatrical sector is essentially a private one, with hundreds of local independent
production companies and a strong presence of foreign agents in distribution and exhibition
segments. As with other audiovisual activities in Brazil, local theatrical production is funded by
public incentives, which represent the vast majority of resources destined for Brazilian independent
film production.
While local Brazilian comedies have generated the highest box office in recent years, several Brazilian
independent productions in other genres have garnered awards in international film festivals, such
as “Central do Brasil/Central Station” and “Tropa de Elite/Elite Squad” in Berlin, and Oscar nominees
“Cidade de Deus/City of God”, “Última Parada: 174/Last Stop 174” and “O Menino e o Mundo/
The Boy and The World”, resulting in stronger interest for Brazilian screenwriters and filmmakers’
forthcoming projects.
In Brazil, there are both local distributor offices of the US majors and local independent distributors.
Both are active in the production of local films, with the use of public resources and incentives.
Although distribution of local films is not solely dependent on public resources, a disproportionate
share of national film funding does rely on tax incentives. Local theatrical distribution is highly
concentrated in U.S. majors’ content, with an estimated 80-85% market share. Major studios
dominate the market through the exploitation of mostly commercial films, and smaller local
independent distributors must often submit to commercial conditions imposed by the majors.
According to Ancine, national distributors sold 95.8% of the Brazilian films in 2017, with 90.7% of the
income. Although there has been an increase in the number of independent theatrical distributors
in recent years, most important independent distribution remains concentrated with very few
companies, led by Paris Filmes and Downtown Filmes.
12Brazil Film and Television Market Report 2018
Chart1 – Box Office Breakdown of Distributor 2017
Others 11%
Disney
Downtown/Paris
7% 19%
Paris
8%
Universal
Sony 18%
9%
Fox
11% Warner
17%
Source: OCA – Ancine 2017
Table 2 - Distributor Market Figures 2017
Number of Share of titles Admission
Distributor Admission Income (R$) Income share
titles exhibited exhibited share
National distributors 224 96% 15,827,588 90.90% 218,851,035.56 90.70%
International distributors 8 3.60% 1,180,594 6.80% 15,960,738.17 7%
International-National
1 0.40% 401,960 2.30% 5,594,424.97 2.30%
Co-distributor
Total 223 1 17,410,142 100% 241,406,199.00 100%
In 2017, the Brazilian theatrical sector sold 181,2 million tickets (184,3 million in 2016) for 693 feature
films (766 in 2016), generating R$ 2,7 billion at the box office. In 2017, 460 new titles were released
(458 in 2016), 158 of which are Brazilian productions (142 in 2016) that sold together 17,4 million
tickets (9.6% market share) with R$ 241 million box office (8.9% market share). See Table 3 below.
13Brazil Film and Television Market Report 2018
Table 3 - Brazil Theatrical Market Figures 2012-2017
Indicator 2012 2013 2014 2015 2016 2017
Admissions 146,598,376 149,518,269 155,612,992 173,022,509 184,324,379 181,168,439
Admission in Brazilian films 15,654,862 27,789,804 19,060,705 22,500,245 30,413,839 17,410,142
Admissions in foreign films 130,943,514 121,728,465 136,552,287 150,522,264 153,910,960 163,758,297
Admissions in Brazilian films 10.68% 18.59% 12.25% 13.00% 16.50% 9.60%
Gross box office (R$) 1,614,022,223 1,753,200,572 1,955,943,573 2,351,585,859 2,599,251,044 2,716,642,243
Brazilian box office (R$) 158,105,661 297,072,056 221,887,006 277,808,326 362,776,086 241,406,199
Foreign box office (R$) 1,455,916,562 1,456,128,516 1,734,056,567 2,073,777,533 2,236,474,958 2,475,236,044
Releases 326 397 393 454 458 460
Brazilian releases 83 129 114 132 142 158
Foreign releases 243 268 279 322 316 302
Brazilian releases over total 25.46% 32.49% 29.01% 29.07% 31.07% 34.34%
Ticket per capita 0,76 0,74 0,77 0,85 0,89 N/A
Average ticket price per capita 11.01 11.73 12.57 13.59 14.1 15.0
Source: from 2002-2008: Filme B. except Brazilian release numbers: Filme B and Apuração Ancine;
2009-2016: Ancine/ Sistema de Acompanhamento da Distribuição em Salas de Exibição (SADIS).
However, Brazil remains “underscreened” given its enormous population. At the close of 2016,
despite Brazil’s population of 206 million, it had only 3,160 screens compared to 6,225 in Mexico,
with a population of 122 million. See Table 4 below.
Table 4 - Latin America: Theatrical Market Indicators 2016
Argentina Brazil Chile Colombia Costa Rica Mexico Peru Venezuela
Population 2016 (million) 43,6 206,1 18,2 48,8 4,9 122,3 31,5 31,1
GDP per capita 2016 (M USD) 12,425 8,587 12,910 5,623 11,749 8,699 5,727 10,755
Gross box office 2016 (M USD) 267,4 744,7 131,7 172,6 41,4 792,0 161,4 ~¹
Admissions 2016 (million) 50,9 184,3 27,4 61,4 7,4 321,0 51,1 19,1
Average ticket price 2016 (USD) 5.3 4.0 4.8 2.8 5.6 2.5 3.2 ~¹
Average admissions per capita 2016 1.2 0.9 1.5 1.3 1.5 2.6 1.6 0.6
Screens 2016 933 3,160 366 1,006 151 6,225 613 449
Digital screens 2016 868 3,148 366 1,006 149 5,976 613 408
National market shares 2016 14.4% 16.5% 6.4% 7.8% 0.8% 10.0% 11.2% 2.3%
Source: European Audiovisual Observatory 2017
14Brazil Film and Television Market Report 2018
Independent Brazilian companies may apply for funding according to the incentives listed in Section
4 below. The FSA is currently the most relevant source of the investments for film production, whose
financing is complemented by major distributors’ investments through The Audiovisual Act (Law
8,685/93 – articles 3 and 3-A), as well as with private companies sponsorship through tax incentives.
Brazilian independent distributors have access to FSA resources to invest in film productions and
prints and advertising expenses (P&A), while major distributors generally take advantage of the
tax incentives provided by articles 3º and 3º-A of Law 8,685/93, through which they may select
the Brazilian independently-produced audiovisual project where the amount equivalent to the
tax incentive will be invested. Depending on the tax incentive, the local distributor office of the
majors may also act as investors or co-producers of this content, in addition to distributing them.
Coproduction, investment and distribution agreements based on the use of these incentives must
abide by Ancine’s regulations.
3.1.1. Market Entry Strategies
Preferred business strategies to enter/expand in the market should consider identifying an
appropriate distribution partner and/or setting up an office in country with local production partners
to comply with local import regulations. Companies pursuing long-term market entrance/expansion
should consider setting up their own regional or local office in country. It is a cost of doing business
in the local market and may alleviate the high tax burden and complex licensing procedures in Brazil.
Production companies located in regional hubs other than Rio de Janeiro and São Paulo have been
beneficiaries of more favorable incentives from Ancine’s public policies for regional development.
Canadian producers should also consider partnering with these local producers and become familiar
with new, additional investments made by different Brazilian States and Municipalities.
Brazilian market events and festivals offer strategic opportunities to meet with distributors and
local producers. The RioMarket in October is considered the most relevant market event for
theatrical business and meeting place for Rio de Janeiro and São Paulo companies, and the
newcomer MAX – Minas Audiovisual Expo is now considered a good opportunity to meet and
reach local companies from other hubs.
3.1.2. Key Decision Makers, Market Agents and Stakeholders
In the Brazilian theatrical sector, the relevant decision-makers for international content producers or
distributors are their local counterparts, and may be divided into the following general categories:
N Brazilian independent film producers who may enter into co-production agreements, with or
without an international treaty. See Appendix for producer associations lists;
N Brazilian independent film distributors who may acquire an international film for distribution
in Brazil such as H2O, Esfera, Arthouse, Vitrine;
N Local branch offices or subsidiaries of major studios and independents which distribute
US major and independent films, and Brazilian films in the Brazilian market: Fox, Warner,
Universal, Sony, Paramount, Diamond, Disney;
15Brazil Film and Television Market Report 2018
N Municipal government entities such as RioFilme and SPcine which can invest in, or distribute
selected Brazilian titles.
3.2. Television Sector
Television is the dominant medium in the Brazilian audiovisual landscape, and the main source of
entertainment in the country. Over 67 million Brazilian homes have television sets, equivalent to 97.2%
penetration of Brazilian households. Pay-TV services accounted for 18.9 million subscribers at the end
of 2016, and in first quarter of 2017, this number fell to 17.8 million subscribers. See Table 5 below.
Table 5 - Brazil Television Market Figures 2012-2016
Indicator 2012 2013 2014 2015 2016
Pay-TV channels (with HD similar channels)¹ 177 188 200 236 246
Pay-TV channels (without HD similar channels)² N/A N/A N/A 165 171
Qualified space Brazilian channels (with HD
13 19 23 27 27
similar channels)²
Qualified space Brazilian channels (without HD
N/A N/A N/A 19 19
similar channels)²
Share of the Brazilian³ independent production in
8.48% 10.70% 10.41% 10.70% 10.92%
Pay-TV programing
Number of Pay-TV subscriptions (millions)⁴ 16,2 million 18,0 million 19,6 million 19,1 million 18,9 million
Household with television(millions)⁵ 61,1 million 63,3 million 65,1 million 66,1 million N/A
Source: 1. Ancine and Anuário Converge de Mídias 2009 (2011 e 2012); 2. Ancine; 3.Films, TV series
and TV-specific productions; 4.ANATEL; 5. Instituto Brasileiro de Geografia e Estatística - IBGE.
One peculiar aspect regarding Brazilian content broadcast on local free-to-air TV channels is that it
is, in its great majority, produced by the networks themselves and affiliates. The presence of free-
to-air TV in almost all Brazilian households does not result in a massive acquisition of independent
Brazilian production content by the leading national networks. By far the leading Brazilian content
on networks continues to be scripted content in the form of telenovelas. On the other hand, local
independent producers have recently undertaken co-production of several dramatic series with
networks, and also to produce (work-made-for hire) international formats. There are no local
content quotas for broadcast channels in Brazil.
Brazilian free television sector continues to be dominated by the Globo TV Network and its
subsidiaries, while in the Pay-TV sector Globosat (Globo Group’s TV programmer) competes with
the major TV programmers but exercises a very significant control over content licensing, prime-
time telecast grids and the theatrical-to-television release windows as well. Globofilmes (Globo›s
theatrical division) is still a relevant player in the co-production of feature films and docs, of whom
it retains domestic and sometimes international licensing rights for TV and video on demand (VoD).
16Brazil Film and Television Market Report 2018
Cable and satellite operators are also subject to a fixed levy on foreign content and foreign advertising
released on their channels and foreign ownership in media outlets is limited to 30 %, including the
print and “open broadcast” (non-cable) television sectors.
Law 12,485/2011, known as the “Pay-TV Law,” established quotas for Brazilian independent
production in prime time on Pay-TV channels, substantially increasing the number of hours with
local content. This quota only applies to productions that obtain the CPB issued by Ancine (See
Section 5.1 below).
In December 2017, 101 Pay-TV channels were registered with Ancine as being obliged to comply
with quotas that vary from 3h30min to 12h a week. This highly favorable scenario for production and
acquisition of Brazilian productions in the Pay-TV sector is expected to continue until 2021/2022,
when the renewal of the obligatory quotas will be evaluated.
The Brazilian independent television production landscape changed dramatically since passage
of Law 12,485/2011, resulting in the marked increase of independently-produced local content
and the upgrading of professional producers, yielding commercially successful fiction series and
reality shows. See Appendix for a list of selected Brazilian distributors focused on content originally
produced for television.
International sales of audiovisual content for free-to-air or Pay-TV in other territories, as well as for
in-flight entertainment, now ensure additional revenue to their producers. Animated content and
productions for kids have offered significant investment opportunities by clothing, toys and school
materials companies among others, in the licensing of brands and characters use in retail products.
There are no restrictions for a distribution company to invest in production financing and participate
as a co-producer in this segment. The Brazilian financing system also allows distribution companies
to co-finance pre-sales as an investment to access FSA resources. Foreign distributors may, for
example, finance pre-sales and licenses for the Pay-TV segment in Brazil, consequently leveraging
FSA resources to finance the production of content.
3.2.1. Market Entry Strategies
Brazilian producers and television channels are increasingly interested in coproducing with other
countries, in order to create original content that can reach global audiences. Audiovisual content
markets are the best place to meet these Brazilian content creators and producers. At these markets,
Brazilian producers regularly offer to international producers and channels, their original content, and
explain their close relationships with the production and programming network directors in Brazil.
Pay-TV channels operating in Brazil cover a wide range of genres, and there are opportunities to sell
documentaries, dramas, comedies, reality shows, formats, animations and live action content for
kids and preschool. To sell audiovisual products for a Brazilian programmer, it is worth attending local
or international market events and meeting their acquisition executives. To sell audiovisual content
to a multinational programmer, it is worth contacting the Latin American regional programming and
acquisitions executives.
17Brazil Film and Television Market Report 2018
Non-Brazilian productions may be acquired by Brazilian networks in markets such as NATPE, MIPCOM
and RIO2C. International television networks broadcasting in Brazil acquire non-Brazilian content
through their headquarters in the US, very often for exhibition in several countries of Latin America.
3.2.2. Key Decision Makers, Market Agents and Stakeholders
Brazil has five national private free-to-air channel networks: Globo, Record TV, SBT, Band e Rede TV.
They are present in all 26 Brazilian states and in the Federal District. There are also regional networks
and several local television private free-to-air channels. TV Brasil is the federal government public
channel. Some Brazilian states own television channels as well, such as TV Cultura from São Paulo
and Rede Minas from Minas Gerais.
National Pay-TV main programmers include Globosat (a division of Grupo Globo), Band,
Fundação Padre Anchieta (from the State of São Paulo and which owns TV Cultura). The
principal international Pay-TV programmers operating in Brazil are Fox, Sony, Turner, Discovery,
NBCUniversal, Viacom, Disney, A&E and HBO. Note that the list of Pay-TV channels broadcasting
in Brazil is regularly updated by Ancine at https://ancine.gov.br/lei-da-television-paga/
classificacao-canais. For a complete list of channels, please see Appendix.
Ancine has authorized 82 “Qualified-Space Channels”, for which it has established a minimum quota
of 3h30min of Brazilian content per week. There are 15 such “Brazilian Qualified-Space Channels”
that, during prime-time, must broadcast qualified Brazilian audiovisual content. Four channels are
known as “Super Brazilian Channels”, which must broadcast at least 12 hours of Brazilian independent
productions daily (at least three of them during prime time).
3.2.3. Coproduction with Television channels
Television networks or their owners invest in all or part of the production budget, with or without the
use of tax incentives. In addition to participation in marketing revenues, the network or programmer
holds rights for commercial exploitation in certain territories and, in some cases, for platforms other
than Pay-TV.
The definition of which projects will be financed by the network or its owner starts with the proposal
from the independent producer. Projects may be submitted at the request of the network or
spontaneously. The presentation is made in internal pitching sessions in the programming company
or in business meetings at market events. American television networks usually submit production
investment decisions to their US head offices.
The project development process is usually followed closely by television network executives, which
may propose an investment contract at this stage of development, tied to its option to co-produce or
acquire the content. In other cases, it is up to the independent producer to invest in the development
of the project prior to signing a co-production agreement. Public resources are available for project
development, both from Ancine and by state or municipal agencies.
18Brazil Film and Television Market Report 2018
3.2.4. Production service
Generally television networks or their owners contract a local company to create, develop, produce
and deliver productions, without commercial exploitation rights for the production company.
3.2.5. Branded content
Production of non-advertising branded audiovisual content is financed by companies holding brands
aimed at reaching their audiences through fiction and non-fiction programming. The production
company is often contracted by an advertising agency serving the company that owns the brand.
3.3. Online Exhibitors/ VoD Operations
VoD services are currently in accelerated expansion in Brazil, and will show the most significant
revenues growth for audiovisual content producers and distributors. At present, the Ministry of
Culture and Ancine are leading a discussion within the national Superior Council of Cinema (CSC) on
options for a regulatory approach to these services, which has stimulated heated debate regarding
possible immediate taxation on streaming services, while postponing the regulatory debate regarding
protection of minors, advertising and promotion of national works. The goal is to include online
video providers among agents that fund the FSA through the payment of the CONDECINE levy (see
Section 5.1 below).
It is generally agreed that the VoD segment presents new relevant commercial opportunities both in
services operating on the SVoD and TVoD models. At least a dozen free or low-cost online platforms
offer legal viewing options to Brazilian audiences. They will likely be charged with the collection of
the CONDECINE and may participate as coproducers of Brazilian independent original content.
The two most relevant Brazilian TVoD platforms at present are NET Now and Looke. Although VoD
players do not disclose information about revenue or number of subscribers, it is generally believed
that YouTube is the market leader in terms of number of users, and that NET Now, Globo Play and
Netflix are the leaders in terms of paying users. Forthcoming regulations may require disclosure of
this information. Other local players are planning to enter Brazilian VoD market according to the
following existing business models:
Stand-alone VoD global platforms already investing in Brazilian original productions
N Amazon Prime Video
N Netflix
Other stand-alone VoD global platforms already distributing Brazilian content
N iTunes Store
N Google Play
19Brazil Film and Television Market Report 2018
International television programmers’ VoD platforms:
N HBO Go
N Fox Play
N Turner’s TNT Go and Space Go
N Sony’s Crackle
N Esporte Interativo Plus
N Watch ESPN
Relevant Brazilian television networks and programmers VoD platforms:
N Globo Play
N Globosat Play
N Telecine On
User-generated content platforms:
N YouTube
N Vimeo
Table 6 - Official List of VoD Services Available in Brazil (Ancine, May 2017)
Service Website Business model
Afroflix http://www.afroflix.com.br/ Free
Amazon Prime Video https://www.primevideo.com/ Subscription
AXN http://br.axn.com/ For Pay-TV subscribers
+Bis http://maisbis.com.br/ Subscription
Babidiboo.tv http://babidiboo.tv/ Subscription
Canal A&E play https://play.canalaetv.com.br/ For Pay-TV subscribers
Canal Sony http://br.canalsony.com/ For Pay-TV subscribers
Cinemax GO https://www.cinemaxgobr.com/ For Pay-TV subscribers
Cartoon Network Go http://www.cngo.tv.br/ For Pay-TV subscribers
Crackle http://www.crackle.com.br/ Free if advertising-funded
CrunchyRoll http://www.crunchyroll.com/ Subscription
EnterPlay http://www.enterplay.com.br/ Subscription
Esporte Interativo Plus http://www.eiplus.com.br/ Subscription
FishTV http://www.fishtv.com/site/home/index.php Subscription
Fox Play http://www.foxplaybrasil.com.br/ For Pay-TV subscribers
Continued
20Brazil Film and Television Market Report 2018
Continued
Table 6 - Official List of VoD Services Available in Brazil (Ancine, May 2017)
Globo Play www.globoplay.globo.com Subscription
Globosat Play http://globosatplay.globo.com/ For Pay-TV subscribers
Google Play https://play.google.com/store Transactional
HBO GO http://www.hbogo.com.br/ For Pay-TV subscribers
iTunes Store https://www.apple.com/br/itunes/video/ Transactional
Looke http://www.looke.com.br Subscription / Transactional
Meulifetime Play https://play.meulifetime.com/ For Pay-TV subscribers
Microsoft Movies & TV https://www.microsoft.com/pt-br/store/movies-and-tv Transactional
Mubi https://mubi.com/ Subscription
NBA TV www.nba.com/leaguepass Subscription
Netflix https://www.netflix.com/br/ Subscription
NET Now http://webportal.nowonline.com.br/ For Pay-TV subscribers / Transactional
Oi Play http://www.oiplay.tv/ For Pay-TV subscribers / Transactional
https://itunes.apple.com/br/app/planet-kids-videos-jogos-
Planet Kids Subscription
e-livros/id687355465?mt=8
Philos tv http://philos.tv/ Subscription
R7 Play http://www.r7.com/r7-play/ Subscription
Seuhistory Play https://play.seuhistory.com/ For Pay-TV subscribers
Sky Online http://www.skyonline.com.br/ For Pay-TV subscribers / Transactional
SmartVoD http://smartVoD.com.br/ Transactional
Sony - Video Unlimited www.sony.com.br/video-unlimited Transactional
Space GO http://www.spacego.tv.br/home For Pay-TV subscribers
Telecine On http://telecineon.com.br/ Transactional
TNT GO http://www.tntgo.tv.br/ For Pay-TV subscribers
Univer https://univerparacrer.com/ Subscription
Vevo www.vevo.com/ Free if advertising-funded
Subscription / free if advertising-funded /
Vimeo https://vimeo.com/ondemand
Transactional
Vivo Play http://www.vivoplay-vivo.com.br/ For Pay-TV subscribers / Transactional
WatchESPN http://watchespn.com.br/ For Pay-TV subscribers
YouTube http://www.youtube.com/movies Transactional
214
Film and Television Project Funding
The vast majority of Brazilian audiovisual production falls within one of these categories:
(a) Branded works produced by Broadcasters or Pay-TV channels developed and produced for
telecast in their own grids (not necessarily independent and, often privately-funded), and
(b) National independently-produced content, funded by federal and/or municipal or state
resources, and aiming at a variety of platforms (theatrical, television, VoD).
The public funding system for the Brazilian audiovisual market is considered the backbone of the
audiovisual industry’s policies. The vast majority of the national independent works is produced
through public funding mechanisms, and therefore, conditioned to the production and exploitation
requirements established by legislation. Brazilian independently-produced audiovisual content also
benefits from some statutory advantages, such as lower tax rates and compliance with screen quota
obligations. A working knowledge of Brazil’s audiovisual funding policies is essential for those interested
in producing Brazilian independent film and television content, in association with local producers.
Public funding of audiovisual activities occurs through two different mechanisms: direct or indirect
funding. Direct funding consists of support for audiovisual projects (production, distribution or
development) with resources from Ancine’s own budget, through selective calls for proposals. These are
based on commercial performance and box office results of the films, as well as previous performances
of the Brazilian companies applying for the funding. Indirect funding occurs through the use of tax
incentives by private market agents, who undertake investment and sponsorships decisions regarding
where and how to invest the amount equivalent to the incentive. Direct funding is concentrated in the
FSA, and tax incentives are provided by different laws and regulations, as described below.
4.1. Audiovisual Sectoral Fund (FSA) (Law 11,437/06)
The FSA is a branch of the National Culture Fund for the development of the audiovisual industry in
Brazil, which is supported by the CONDECINE tax and the Telecommunications Inspection Fund. This
mechanism seeks to foster entities of the audiovisual sector engaged in the production, distribution/
commercialization and exhibition of works, and services infrastructure. It relies on a number of
financial instruments like investment, financing, support operations and equalization of financial
charges to develop such activities. FSA resources support the following programs:
1) Program for the development of Brazilian movie theaters (PRODECINE)
2) Program for the development of the Brazilian audiovisual production sector (PRODAV)
3) Program for the development of theater infrastructure (PRÓ-INFRA)
22Brazil Film and Television Market Report 2018
PRODAV is the only production focused program that is not limited to movie theaters. In order to
be eligible for investment, projects must be carried out by a Brazilian Independent Producers and
belong to one of the following categories:
- Fiction or animation feature film (i.e., Audiovisual work not in series, over 70 minutes
long, with initial release in movie theaters);
- Fiction movie made for television (i.e., Audiovisual work not in series, from 50 to 120
minutes long, with initial release on Free-TV or Pay-TV);
- Documentary film;
- Documentary series;
- Animated series; and
- Fiction series.
All Audiovisual Production Projects that are granted funding from FSA must abide by the “PRODAV’s
Statute” (see Appendix), which provides a series of legal and commercial requirements regarding
the commercialization of these works. These rules establish, for instance, mandatory priority returns
to the Fund and limitations of exploitation by private agents.
4.2. Financing Funds in the National Film Industry (“FUNCINEs”)
– MP 2,228-1/2001
FUNCINEs are investment funds typically structured as “closed-end funds” which are administered
by financial institutions, agencies and development banks registered with the Central Bank of Brazil
and the Securities and Exchange Commission (Comissão de Valores Mobiliários - “CVM”). This
mechanism allows taxpayers to deduct from the income tax due to the government (the ‘income tax
owed’) 100% of the amount invested in a FUNCINE fund, provided that it does not exceed the cap
of 3% of the overall income tax owed for companies, and 6% for individuals. According to Ancine’s
regulation, FUNCINE can only invest in the following projects:
(i) Production of Brazilian independently-produced audiovisual works;
(ii) Construction, renovation and restoration of movie theaters owned by Brazilian companies;
(iii) Acquisition of Brazilian companies shares for production, commercialization, distribution
and exhibition of Brazilian Independent Audiovisual works, and for the provision of
cinematographic and audiovisual infrastructure;
(iv) Commercialization/distribution of Brazilian Independent content by Brazilian companies;
and
(v) Infrastructure works carried by Brazilian companies.
23Brazil Film and Television Market Report 2018
4.3. The Audiovisual Act (Law 8,685/93)
This Act is in force since 1993, and is considered a fundamental driver of the audiovisual sector’s
revival (the so-called Retomada). Still today, the well-known Articles 1, 1-A, 3 and 3-A are seen as part
of the most important tax incentive mechanisms available for Brazilian independent productions.
4.3.1. Article 1
N Taxpayers may deduct from the income tax owed investments made in the production of
Brazilian independently-produced cinematographic films in short, medium or feature-length
format. Such investments are made via the acquisition of equity rights in the picture that are
offered on the capital market, subject to the appropriate regulation and authorization of the
CVM.
N This mechanism is often used by companies to earn some of the proceeds from the picture.
It allows investors to deduct 100% of the investment from the income tax owed, as long as
such amount does not exceed the 3% cap of the overall income tax owned for companies,
and 6% for individuals.
N Investments made under this section can be written off in the guise of operating expenses,
reducing the taxable income (i.e. before the tax rate is applied).
N Investments made under Article 1 and Article 1-A incentive mechanisms, jointly considered,
cannot exceed R$ 4 million per project.
4.3.2. Article 1-A (Sponsorship)
N Taxpayers may deduct from the income tax owned amounts paid in the sponsorship of
Brazilian independent films, in cinematographic and video format, as follows:
- Short (up to 15 min), medium (from 16 to 70 min) and feature length (more than 70 min)
formats
- television movies
- mini-series
- audiovisual work in series
- educational or cultural television program
N Amounts to be deducted should not exceed 4% of income tax owned for companies, and 6%
for individuals.
24Brazil Film and Television Market Report 2018
4.3.3. Article 3
N Amounts paid, credited, used, sent or delivered to producers, distributors or intermediaries
abroad, such as income derived from the exploitation of foreign audiovisual works in Brazil,
or the purchase or importation of audiovisual works at a fixed price, are subject to 25%
withholding income tax.
N This mechanism allows foreign producers, distributors or intermediaries to use up to 70% of
the withholding income tax owed (i.e., the amount that the Brazilian entity responsible for
the payment is holding on behalf of the Brazilian government) to invest in the co-production
of Brazilian independent films, in cinematographic and video format, as follows:
- Short, medium and feature length formats
- Television movies
- Miniseries
N Companies using this incentive mechanism are exempted from the payment of the
CONDECINE - remittance, due on international transfers.
4.3.4. Article 3-A
N Amounts paid, credited, delivered, used or remitted to a foreign company for acquisition
or remuneration of any audiovisual works exploitation, including transmission by radio,
television or any other media, of any picture or event, even sports competitions which
include Brazilian representation, are subject to a 15% withholding tax.
N The foreign company (or taxpayer) may use up to 70% of the withholding tax levied on
international transfers to invest in Brazilian independently-produced films, in cinematographic
and video format, as follows:
- Short, medium or feature length films
- Documentaries
- Television movies
- Mini-series
- This tax incentive may also be used to fund the development of cinematographic
production projects.
N The following persons and/ or companies are eligible to claim this incentive: income
taxpayers, beneficiaries of royalties related to the transmission through broadcasting sounds
and images and service companies of electronic mass communication of any audiovisual
work or event.
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