Introduction
Several nations have developed ways of safeguarding their local film industries through conserving market share of domestic films against domination by American films. The market share of American’s films is about seventy percent in the entire world. Many countries have created protectionism techniques such as tax concession, import quotas, subsidies, and screen quotas to safeguard their local film industries1.
Retaining such strategies are beneficial justification since market share of the local film is protected when every nation conserve its cultural autonomy. Nevertheless, the success of these economic strategies is gloomy. In fact, when the strategies do not contribute to any important impact in the local film industry, the best advice is to abandon such strategies.
Though, such strategies are recommendable by Global Trade Accord, quotas are not an effective way of protectionist measures because their implementation discourages trade relations with other nations. On the other hand, when tax dispensations and subsidies do not have useful consequence in the local film industry, such strategies would be a waste of public resources2.
However, there are few consequences of economic strategies such as subsidy, screen quotas, and tax concessions in the local films’ market shares. If such restrictive factors were regulated, the market size would not be an important determinant in the audiovisual industry.
Nations, therefore, need to adopt many alternatives ways to enhance market share of their local films industries through promoting average budget in every film, and by enhancing quantity of local films produced. This portrays that production of film should be based on a balance between quantity and quality of goods produced.
Countries should adopt International liberalization that does not result in easy deregulation, but in varied regulatory market capitalism3. The aim of this paper is to show how a government cannot support domestic audiovisual industry without discriminating against foreign products.
Audiovisual industry is one of the fastest developing service industries in the entire world. Technological growth has enabled customers multiple access to information and entertainment services and therefore has enhanced audiovisual industry in the world4. Audiovisual industry has played significant role in promoting new technologies.
For example, electronically audiovisual goods have enhanced network utility and have promoted business venture of digital networks. Technological growth has promoted cheaper and efficient audiovisual services to customers and has broadened their needs5.
Due to technological development, audiovisual information has been conveyed through an internet connection. As a result, nations are encountering challenges to restrict importation of foreign audiovisual products into the local markets.
For instance, several nations are using quotas for local channels in such as way that broadcasters have to dedicate some time for domestic broadcasting. This kind of restriction is outdated due to technological advancement since local customers can currently download foreign channels at reduce prices due to internet accessibility6.
Various nations, therefore, have to reform their regulatory policies to take into consideration of global interaction and internet services. The use of internet has minimized cost and has enhanced global sales of audiovisual products.
The customers are in a position to bypass retailers with intention of saving cost when purchasing audiovisual products7. Technological advancement of internet services has affected films and televisions’ revenues because people frequently access internet more than viewing television and films8.
Audiovisual industry is an important aspect in conserving cultural democracy; therefore, the main aim of a nation is to provide broad alternative services to customers through enhanced privatization and liberalization.
Nations need to conform to expectations of cultural protection and liberalization by forming effective regulatory policies that are updated to correspond with global standards. Liberalization policies coupled with increasing per capital income and developing urbanization have contributed to massive media penetration9.
Foreign investment and privatization have contributed to technological development in audiovisual products; these have promoted international competition in provision of audiovisual services. Several nations have adopted trade barriers in order to promote and safeguard their domestic cultures and to discourage competition from international players10.
However, it is broadly debatable whether such trade barriers are really functional in attaining focused aims. Besides that, many nations have experienced difficulty when restricting foreign contents because of the rising need of internet accessibility11.
Due to technological advancement and rising use of information technology, many nations are changing their regulations in order to expose their markets to the global demands. Business affairs in audiovisual industry are carried out mainly through commercial aims; and due to rising information technology, audiovisual trade has increased across border markets12.
Indeed, people move from one place to another in search of commercial presence. For example, people move to other foreign nations to pursue studies and training facilities; others also move to shoot their films in affordable international places.
Many nations doubted the competence of GAT negotiations in consideration of cultural, democratic and social issues13. Some nations have never made any attempt to conserve their cultural identities or to promote their local audiovisual industries.
There are only few nations that are committed to introduce trade barriers as way of conserving their cultural identities. Moreover, restrictive policies would limit delivery modes and audiovisual industrial coverage14. It is evident that lack of liberalization would restrict trade development not only in the current time but also in the future.
In economic presumption, quotas have been perceived as main obstacle to trade affairs. Nevertheless, quotas are used as a way of safeguarding local contents in television, radio, and film sectors; these policies are accepted in the global trade regulation.
Screen quotas was established toward the end of World War I, a time when many European nations created quota systems to safeguard their film industries from hostile and abrupt influx of United States’ films15. Foreign products have been seen as a threat to domestic cultural ideology.
However, there is a need to forbid any kind of discrimination between foreign and local products. Nevertheless, many nations have abandoned the screen quotas since they have faced many challenges when adopting implementation of screen quotas16.
The disagreement on how to handle trade promotion of audiovisual products has contributed dissatisfaction impacts for every World Trade Organization (WTO) affiliates. Audiovisual involvement is an industrial business that has cultural features, and this differentiates audiovisual industry from other service industries.
Actually, people do not expect to repress free speech and creativity in order to promoted cultural development; in fact they need to support domestic audiovisual products as a way that would not discriminate against international products17.
In addition, people intend to extend the importance of audiovisual products from diversified domestic cultures through the use of impartial criteria to acquire significant and objective audiovisual products. Effective cultural strategy measures need to be less restrictive in order to attain objective results.
Cultural protectionism is a constituent of domestic and foreign strategies as an extension of State’s autonomy18; it is an objective and liberal focus which is beyond domestic market.
Impacts of Economic Strategies on Local Film Market
America films have led the global film markets for many decades; however, several nations have created many ways to safeguard their cultural dominion and local film industries. For example, many European nations like Germany, have forbidden the importation of overseas’ movies; claiming that they are affected by American films.
France has established import quotas in the local film markets. Portugal and United Kingdom have enacted screen quotas that expect local artists to screen local films. In addition, several nations have established tax concession and subsidies to enhance domestic film production19.
Other nations have also formed market entry restrictions and local content regulations. Nevertheless, America under the umbrella of the Motion Picture Association of America (MPAAA) has eliminated aggressive strategies in the film market through provision of effective programs that meet global standards20.
On the other hand, many nations have abandoned the use of quotas since the policy hinders trade relations among nations. Nevertheless, the neoliberalism era was a fair period of regulation; it was the trend of strengthening safety of local film markets in the world and a cycle move in relation of regulating capitalism.
The determination to emphasize cultural diversity and local film industry have abandoned quotas in order to adopt the use passive regulatory strategies like tax concession and government subsidies21.
Protectionism measures such as border measures, local content regulation, tax concession and market entry restriction have created conflict and strife between local cultural strategies standards and trade liberalization22.
Tax concession, screen quotas and subsides have captured interest as appropriate tools to safeguard the local film markets. Nevertheless, such strategizes have not proved adequate efficiency.
Generation of audiovisual information needs huge capital investments; moreover, it’s business success is indefinite. Therefore, to minimize the risk in this industry, business providers need to spread their goods and services in both foreign and local markets.
Access to foreign market is emerging to be necessary policy in order to recover production cost. Globalization has reduced production cost of audiovisual products. Furthermore, business joint venture is a means in which foreign operators are capturing markets dominated by domestic country23.
Domestic markets are encountering stiff competition because of globalization; competition has enhanced service quality given to customers. Digital technology enables audiovisual contents to be utilized in various formats, hence provide broad markets for similar items.
Globalization is significant tool in determining best conditions essential for growth of delivery and invention of network contents24. The rise in audiovisual trade and globalization has compelled developing nations to open up their existing markets to global interaction.
Audiovisual industry should be a trade opportunity just like any other service industries; though, the industry has firm social and cultural impacts in society25. Audiovisual industry is significant in diffusion and broadcasting cultural values, therefore restricting its trade is not a best resolution in consideration of developing commercialization in the industry.
The existing challenge can be resolved when local markets derive a balance between audiovisual trade liberalization and, conserving and promoting of local cultural identity. Liberalization of audiovisual industry would: broaden alternative services to customers; enhance effectiveness through competition; and would develop technical knowledge in the industry.
Cultural Autonomy
Most nations in the world perceive the supremacy of American films, in the global markets, as a threat in their local film industries and also toward their cultural autonomy. This is the reason why many nations have devised ways to safeguard their local film markets from American films.
As tension on cultural protectionism develops, UNESCO, an agency of United Nation (UN) recommended institutional and economic barriers like screen quotas to safeguard local film industry for conserving cultural diversity26.
Whereas, one hundred and forty affiliates of UNESCO approved the accord, Israel and America declined to accept the agreement. This is because there has been severe strife between local cultural strategy and trade liberalization standards.
The economic strategies in the film business are categorized into two aspects: tax concession and subsidies that are financial factors for suppliers; and on the other hand, there is safety measures of film market through import quotas and screen quotas27.
Subsidy is the direct public investment in the local film industry, while tax concession comprises of credits, exemption and tax deductions for film productions. Screen quotas refer to a government rule which expected theater owners to screen local motives.
Besides that, imported quotas refer to the regulation of the number of imported movies. Nevertheless, such quotas have been discarded by several nations since global technology has overcome such restrictive policies in the entire world28.
For instance, Argentina attempted to use Reciprocity System on United States’ imports, while Brazil tried to adopt quotas system; however, both nations abandoned such restrictive factors because the need of globalization has overwhelmed such limiting factors29.
While most nations abandoned various quotas, they have increasingly adopted tax concessions and subsidies for their local film industries as a way for offering fund aid to enhance film production.
Nevertheless, many nations that have poor performance records of local film production depend on misguided perception that such economic strategies would contribute prosperity for their local film industry and conservation of their cultural identities.
The main aim of financial aid and quotas in the film business is to safeguard market share from being overwhelmed by prominent American films. Adopting such strategies is important since market share of local film is associated with safeguarding cultural autonomy of a nation. However, it is not automatic that such strategies would contribute development of local film industry30.
For example, quotas are not recommendable way of protectionism since implementing such conditions would discourage trade relations among international nations.
On the other hand, tax concessions and subsidies might not provide positive contributions as expected; in fact, such strategies can be waste of public resources of a country. It is thus a wise move to consider whether the economic strategies can contribute positive impacts on the market share of local film industry.
It is now proved that screen quotas do not contribute to any economic growth in audiovisual industry. Besides that, government grant is an approach that can be adopted to promote the defective cultural market.
However, some people viewed that subsidy is not a primary policy that would promote local film industry since it only act as a temporary relive that enhances little profit in film production31. Another device which several nations have adopted is tax concession to safe guide their local film industries.
In fact, tax credits from government are effective means to attract international film production to the national market and this would support local film industry to develop. However, the main intention of these strategies is to conserve market share of domestic film against foreign domination, the efficiency of these economic strategies are murky32.
Supply and Demand in the Market of Local Film Industry
Tax concession and subsidies enhance production of products when a government establishes such policies in the local film production. However, the strategies would not affect equilibrium prices since movies’ prices are determined by government departments or Local Film Association despite of the amount of films produced33.
Actually, these policies do not warrant an increase of market share in local film industry because trade-in global society has reduced production cost with improved quality. When local citizens like American films than domestic films, this would not change market shares of the local film, hence tax concession and subsidies would not develop local film production34.
Audiovisual industry is an influential and beneficial means for cultural communication; therefore, business in this industry should be regulated to conserve social customs and cultural identity.
Media Flow
The global world is built with many diverse flows, that is, organizational interaction flow; capital flow; symbol, images and sound flow; technological flow; and information flow35.
With an increasingly global community, such flows are portrayed as extraordinary development in velocity, volume and direction. For instance, media flow has become diverse global audience that is a unique way of expressing information.
The global media is a multifaceted topography of multi-media, multi-vocal and multi-directional flows36. The propagation of satellites created by digital technology and the rising online communication have caused media firms to function in an enhanced transnational arena other than national dome; hence seeking and generating new customers globally37.
However, some nations are focused to develop local media programs within the boundary of their state-country. The increasing viable business of media operations in the world has developed new networks which are focused in advertisement and market revenues38.
National focus rarely matters in relation of media markets because producers perceive audience as primarily global consumers rather than local citizens. This change of nation-centric perception into international markets has led to increase and development of media flow.
American media information is globally focused and many nations have gained a lot from the global perception of United States39. The union of broadband and television networks has unwrapped new prospect of media content. America has developed their media content beyond regionalization in focus of global market; many countries have grown from the evolving globalization policies.
Some nations have utilized their status in the media multinational resources to develop into global operators40. Media globalization has generated professional occupations in the cultural and information industries.
The outsourcing of information for International Corporation has contributed the momentum for establishment of significant global focus for creative industries41.
The operators of global media channels possess strong local presence through focus to get audience beyond their original local constituency.
This is a subaltern flow of domestic ideas that flow across the entire world. The evolving geo-cultural and international networks are the globalization of contra-flows42.
Globalization and Liberalization
The global transaction in the cultural products has tripled and has developed in a quick pace due to liberalization of media industries in the entire world. America is the dormant exporter of media and cultural goods in the world, and Europe is the leading market for United States’ films and audiovisual contents.
United States’ television channels are broadcasted in more than one hundred and twenty-five nations worldwide. Globalization has given diverse horizontal and manifold flows that have developed geo-cultural business. Nevertheless, the flow of American goods still persists to control the global market.
The international business interaction has created diverse disjuncture that is beyond homogenized culture; it has also contributed to cultural hybridity that is generated through the use of heterogonous media products to benefit domestic principles, languages and styles43.
Some people have claimed that international corporations have exercised indirect domination over developing nations; controlling labor, markets, production and resources of these nations44.
It is also viewed that International Corporations have destabilized cultural sovereignty in many nations; thus such nations are compelled to depend on global media and communication products that are reliable and affordable resources.
Globalization policies represent how international communities cover both geo-cultural and transnational markets through adopting domestic cultures to sustain market flows45.
The regionalization trend is perceptible in the development of domestic editions of magazines and newspapers, broadcast of television programs in domestic languages, and also in establishing local programming and domestic language websites46.
Interaction with global cultures would provide diverse impacts; people need to filter and evaluate content products from heterogonous cultures to incorporate them with ideas that originate from domestic cultures47.
The diversity of media information only exists in the wider fresh liberal ideological agenda. It can be seen that ideology of regionalization develops globalised perception, which focuses on liberal democracy and market primacy.
The media industry has emphasized on propagation of multilingual contents stemming from local creative hub. Adoption of deregulated, privatized and digital technology transmission network has contributed to enhanced flow of global media48.
In addition, audiovisual industries are associated with other service sectors like sporting and cultural, tourism, recreation and software services49.
For instance, Universal and Disneyland Studios in American film industry are beneficial for tourist services. The rising adoption of technological effects and computer developed production has enhanced the development of entertainment software business50.
Conclusion
Audiovisual products are the main drivers of globalization and also are significant careers of every culture. Audi-visual products play significant formative role in global community. These products provide services related to conservation of social values and cultural identity.
The audiovisual services play an important role in enriching public opinion, protecting democratic principles and enhancing creative potentials. It is, therefore, important for nations to offer incentives that would promote local audiovisual industries and to control their contents.
There is need of liberalization; however, nations need to protect their local industries from international competition in order enhance their development and safety of their cultural ideology from foreign influence. Nevertheless, the need to enhance social, cultural, and democratic values has to integrate global values for effective development.
Audiovisual industry is the quickest developing service industry; its technological transformation has enabled customers access of global multiple information and entertainment services.
Technological development particularly digitalization has discouraged governments from limiting imports of foreign media contents into local markets. Due to rising global interaction, the need of internationalization, and easy internet accessibility; many nations are changing their regulatory policies, and therefore promoting their markets for global interaction.
However, one problem which needs to be made certain is that various audiovisual facets and associated services should be properly addressed. The variety of cultural attributes embodied in films makes them a powerful medium through which to transmit cultural values and morals.
Arguably, the world is experiencing a strong trend toward cultural globalization, and no one nation is immune from the influences of the cultures of other nations because culture, in many respects, defies national boundaries. However, different cultures must be preserved and allowed to flourish, for it is a diversified global culture that benefits the world’s collective well being.
Cultural diversification allows people to observe different views and attitudes, test their own biases, and learn from different experiences. Unrestricted homogenization of cultures should be avoided, and diversification of culture should be championed. Films that promote National culture and local cultures should thus be protected by discriminating foreign products.
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Footnotes
1 Appadurai Arjun. “Disjuncture and Difference in the Global Cultural Economy”. Public Culture 2 (1990): 1-24.
2 Ward David, (ed). The European Union and the Culture Industries: Regulation and the Public Interest. (Aldershot: Ashgate, 2008), 264.
3 Pang Laikwan. Cultural Control and Globalization in Asia: Copyright, Piracy, and Cinema. (London: Routledge, 2006), 23-27.
4 Voon Tania. Cultural Products and the World Trade Organization.(Cambridge: Cambridge University Press, 2007), 4-6.
5 Pauwels Caroline et al. Can State Aid in the Film Sector Stand the Proof Of EU and WTO Liberalization Efforts? Sarikakis K (ed). Media and Cultural Policy in the European Union (Amsterdam: Rodopi, 2007), 23-43.
6 Paxman Andrew. “Who Killed the Mexican Film Industry?: The Decline of The Golden, Age, 1949-1960”. Presented at the Latin American Studies Assn. Conference, Rio de Janeiro. 5 (2009): 78.
7 Bly Van der. “Globalization and the Rise of One Heterogeneous World Culture: a Micro Perspective of a Global Village”. International Journal of Comparative Sociology, 48 (2007): 469.
8 “United Nations Educational Scientific and Cultural Organization (UNESCO)”.Convention on the Protection and Promotion of the Diversity of Cultural Expressions 13 (2005): 19-23.
9 Burri Mira. “Enquiry into the Notion of Cultural Protectionism in the Media and It’s Dimensions in Cyberspace”. NCCR Trade Regulation Working Paper 20(3) (2011): 35-37.
10 Collins Richard. “Trading in Culture”. The Role of Language, 11 (1990): 351- 371.
11 Lee Gyeoreh. “A Study of the Effect of Economic Policies on the Domestic Film Markets”. Journal of Media Economics 17 (2006): 163-176.
12 Mcchesney Robert. New Global Media. Held, D & Mcgrew, A (eds). The Global Transformations Reader: An Introduction to the Globalization Debate. (Cambridge: Polity, 2004), 12-17.
13 Stamatoudi Irini. Copyright and Multimedia Products: A Comparative Analysis. (Cambridge: Cambridge University Press, 2002), 7-12.
14 Thussu Daya, (ed). Media on the Move: Global Flow and Contra-Flow. (London: Routledge, 2007), 67-79.
15 Footer Mary & Graber Christopher. “Trade Liberalization and Cultural Policy”. Journal of International Economic Law 3 (2000): 115-144.
16 Bernier Ivan. “Local Content Requirements for Film, Radio, and Television as a Means of Protecting Cultural Diversity”. Theory and Reality 51 (2003): 465.
17 Jin, Dal Yong. “Cultural Politics in Korea’s Contemporary Films under Neoliberal Globalization”. Media, Culture & Society, 28 (2006): 36-39.
18 Ritzer George. “The Globalization of Nothing”. SAIS Review, XXIII 2 (2003): 189-200.
19 Voon Tania. “State Support for Audiovisual Products in the World Trade Organization: Protectionism or Cultural Policy?” International Journal of Cultural Property, 13 (2006):129-160.
20 Bernier Ivan. “Local Content Requirements for Film, Radio, and Television as a Means of Protecting Cultural Diversity”. Theory and Reality 51 (2003): 465.
21 Sweetman Paul & Knowles Caroline. Picturing the Social Landscape: Visual Methods in the Sociological Imagination. (New York: Routledge, 2004), 90-104.
22 Voon Tania. Cultural Products and the World Trade Organization. (Cambridge: Cambridge University Press, 2007), 4-6.
23 Footer Mary & Graber Christopher. “Trade Liberalization and Cultural Policy”. Journal of International Economic Law 3 (2000): 115-144.
24 Yecies Brian. “Parleying Cultures against Trade”. Hollywood’s Affairs with Korea’s Screen Quotas, 38 (2007): 56.
25 Collins Richard. “Trading in Culture”. The Role of Language, 11 (1990): 351- 371.
26 Bernier Ivan. “Local Content Requirements for Film, Radio, and Television as a Means of Protecting Cultural Diversity”. Theory and Reality 51 (2003): 465.
27 Bly Van der. “Globalization and the Rise of One Heterogeneous World Culture: a Micro Perspective of a Global Village”. International Journal of Comparative Sociology, 48 (2007): 469.
28 Jin, Dal Yong. “Cultural Politics in Korea’s Contemporary Films under Neoliberal Globalization”. Media, Culture & Society, 28 (2006): 36-39.
29 Ward David, (ed). The European Union and the Culture Industries: Regulation and the Public Interest. (Aldershot: Ashgate, 2008), 264.
30Mcchesney Robert. New Global Media. Held, D & Mcgrew, A (eds). The Global Transformations Reader: An Introduction to the Globalization Debate. (Cambridge: Polity, 2004), 12-17.
31 Appadurai Arjun. “Disjuncture and Difference in the Global Cultural Economy”. Public Culture 2 (1990): 1-24.
32 Paxman Andrew. “Who Killed the Mexican Film Industry?: The Decline of The Golden, Age, 1949-1960”. Presented at the Latin American Studies Assn. Conference, Rio de Janeiro. 5 (2009): 78.
33 Voon Tania. Cultural Products and the World Trade Organization. (Cambridge: Cambridge University Press, 2007), 4-6.
34 Footer Mary & Graber Christopher. “Trade Liberalization and Cultural Policy”. Journal of International Economic Law 3 (2000): 115-144.
35 Pauwels Caroline et al. Can State Aid in the Film Sector Stand the Proof Of EU and WTO Liberalization Efforts? Sarikakis K (ed). Media and Cultural Policy in the European Union (Amsterdam: Rodopi, 2007), 23-43.
36 Yecies Brian. “Parleying Cultures against Trade”. Hollywood’s Affairs with Korea’s Screen Quotas, 38 (2007): 56.
37 Burri Mira. “Enquiry into the Notion of Cultural Protectionism in the Media and It’s Dimensions in Cyberspace”. NCCR Trade Regulation Working Paper 20(3) (2011): 35-37.
38 Lee Gyeoreh. “A Study of the Effect of Economic Policies on the Domestic Film Markets”. Journal of Media Economics 17 (2006): 163-176.
39Stamatoudi Irini. Copyright and Multimedia Products: A Comparative Analysis. (Cambridge: Cambridge University Press, 2002), 7-12.
40 Bernier Ivan. “Local Content Requirements for Film, Radio, and Television as a Means of Protecting Cultural Diversity”. Theory and Reality 51 (2003): 465.
41 Yecies Brian. “Parleying Cultures against Trade”. Hollywood’s Affairs with Korea’s Screen Quotas, 38 (2007): 56.
42 Sweetman Paul & Knowles Caroline. Picturing the Social Landscape: Visual Methods in the Sociological Imagination. (New York: Routledge, 2004), 90-104.
43 “United Nations Educational Scientific and Cultural Organization (UNESCO)”.Convention on the Protection and Promotion of the Diversity of Cultural Expressions 13 (2005): 19-23.
44 Voon Tania. “State Support for Audiovisual Products in the World Trade Organization: Protectionism or Cultural Policy?” International Journal of Cultural Property, 13 (2006): 129-160.
45 Thussu Daya, (ed). Media on the Move: Global Flow and Contra-Flow. (London: Routledge, 2007), 67-79.
46 Voon Tania. Cultural Products and the World Trade Organization. (Cambridge: Cambridge University Press, 2007), 4-6.
47 Ritzer George. “The Globalization of Nothing”. SAIS Review, XXIII 2 (2003): 189-200.
48 Pang Laikwan. Cultural Control and Globalization in Asia: Copyright, Piracy, and Cinema. (London: Routledge, 2006), 23-27.
49 Ritzer George. “The Globalization of Nothing”. SAIS Review, XXIII 2 (2003): 189-200.
50 Bernier Ivan. “Local Content Requirements for Film, Radio, and Television as a Means of Protecting Cultural Diversity”. Theory and Reality 51 (2003): 465.