by Angy Essam
Egyptian cinema, the greatest in the Middle East with an over 100-year history, is not just an entertainment tool, it is a huge industry that represents an essential ingredient of the Egyptian economy. This industry witnessed a lot of changes, eras of progress and others of recession.
This vital industry faced and still faces many obstacles that negatively affect it. The Egyptian Cinema Industry Chamber confirms that a successful film that generates revenue of up to LE25 million ($3.5 million), for example, leaves the producer with only LE12 million ($1.67 million), because cinemas get 50 per cent of that revenue and a further five per cent goes to entertainment tax. The fall in revenues after the January 25 revolution was caused by the diminishing size of the local market, its lack of stability, and the decrease in external demand for Egyptian films. Egyptian films were negatively affected by the political and economic climate surrounding the traditional Arab market. This is in addition to the competition Egyptian films have faced in the international market with foreign films generally, and American and Indian films more specifically. The cinema producer places himself on an uneven battlefield with film pirates, especially in an environment where the state and its machinery take no part in monitoring or introducing laws to protect intellectual property. Adding to this is a turbulent political climate that has an adverse effect on film revenues, placing obstacles in the way of investments and delaying the point when the film industry can be resuscitated to generate satisfactory profits again. All the production companies suffered setbacks after the January 25 revolution and were forced to lay off employees or cut salaries by half due to falling movie-goer numbers and the remarkable repercussions of the international economic crisis on the cinema industry. Egyptian films still suffer from an imbalance between production costs and revenues generated, leading to only small profit margins. This situation has pushed producers toward low-budget films that appeal to a “third-class audience” in an attempt for financial rejuvenation.
Waleed Khairy, script writer, executive producer and filmmaker, explained that profit is generated from a variety of sources: cinema screenings, advertisements and selling screening rights to TV channels. But profit made through cinema ticket sales remains the primary measure of any film’s success. “The cinema industry generates profit when the country is stable,” said Khairy. He points out that producers have recently resorted to low budget films for different reasons: to cover production costs and because of their popularity among satellite channels. Khairy said that even if low-budget films are mediocre, we should be thankful for the companies that continue to keep the industry moving until economic conditions improve and allow for the existence of high-budget films that can guarantee that their producers meet the cost of production. He believes revenues are also affected by the recent closure of Arab markets due to ongoing wars in some countries. Pointing out that producers’ profits are also hit by TV channels broadcasting pirated copies of their films, he explained that although Egypt’s Cabinet has made several announcements about halting the activity of such channels, action is yet to be taken
“On the other hand the fact that film production continues in Egypt means companies must be making revenues. No one would produce a film without taking profit into account,” said Khairy.
This kind of commercial, mediocre film as recounted by Khairy is known all over the world, arguing that it plays a role in providing employment in the cinema industry. “Filmmakers have many ways to profit from their films, a film is screened in cinemas more than once, and when screenings cease the film can be sold to satellite channels through a contractual agreement that may last for years and is periodically renewed,” said Khairy. It’s worth noting that the heirs of late actor Ismail Yassin continue to profit from his films to this day. Movies are also sold to airline companies and other entities. “Even when it comes to pirated films, production companies can still get a percentage of profit from the accompanying advertisements in return for not suing the channels or websites that broadcast the films illegally,” Khairy continues. Acknowledging that piracy negatively affects revenues, he also argues that the people who watch films online are not the real cinema audience that appreciates the movie-going experience. Piracy by satellite channels and film websites and the state’s lack of support for the industry top the list of cinema industry problems. In this climate, cinema has become dependent on the efforts of investors, who have succeeded in producing high-budget films. Khairy adds that many elements need to exist for a film to succeed, including the topic, the director and production quality. Another important element is the number of stars it has, which attracts viewers to the cinema. Of course, mediocre films that are perceived negatively by critics from an artistic point of view can achieve high revenues. These films have their own large audience, especially among young people, artisans and less wealthy classes. These audiences are reportedly more willing to pay the price of a ticket for a film that represents them regardless of its artistic quality, making the production of a certain kind of film a safe bet at all times.
“For example some criticize El-Sobky Film Productions for the kind of films it produces other admit that it stood alone in the field of cinematic production when all other companies retreated , the whole industry might have stopped at some time if it weren’t for El Sobky this is a fact,” said Khairy. The profit Sobky generated showed that the films it produces respond to the demands of a big slice of audience. However, film piracy remains one of the starkest forms of encroachment on profit. Around 90 channels routinely broadcast pirated Egyptian films, effectively closing the Arab market for Egyptian films. Another difficulty that negatively affect the cinema industry is having to receive bank checks in financial transactions, since channel owners are not able to pay cash for films, this delays payments. The obstacles do not stop there, in Khairy’s opinion, the state plays a primary role in impeding the cinema industry and increasing costs for producers. He makes two main demands of the state: First, decrease the red tape involved in obtaining permits to shoot in locations such as airports, museums or at the pyramids, as just one hour of shooting in a place like the Egyptian Museum is currently a massive expense. Second, hold websites and satellite TV channels accountable for film theft. He reasons that as the state is able to shut down porn websites, it can no doubt also restrict the broadcasting of pirated movies.
