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» Report 2008
Part Four - INTEGRATED AND CONCENTRATED
THE FORCE OF A CLASS
Chapter 6 - Groups and companies: the principle organisations
The Primary Industrial and Service Companies
It is common practice to subdivide the cinema sector into the three traditional sectors of production, distribution and business and finance, including in the first all of the activities which are linked to the making of a film, in the second everything which is instrumental in its release onto the final consumer market, that is, offering it to the public, and, in the third is included that which is necessary for the film’s practical  commercialization and larger circulation (the so-called box office). Concrete experience shows, moreover, how attention ends with the concentration on who “supplies” the financial and creative resources and the role played by the consequent economic and artistic dividends.
As such, there are areas of the industry which, despite their importance, are very rarely taken into consideration. For instance, those of the companies which procure the raw materials, systems, equipment, and logistic structures; the companies involved in pre and post-production such as those involved in dubbing; the companies involved in imports and exports or the intermediation of rights, licences and commission as opposed to production services; the agencies which represent the interests of artists or casting and so forth. In discussing the cinema it is commonly thought in terms of a generic “cinema and related industries”, however, in actual fact, it involves activities which are closely linked to the sector and their business scale legitimize the essential roles and functions.
 Given that the cinema scene is already, in itself, fragmented and disorderly, it is not simple to trace an analytical outline. This is also because it involves reference to companies which are fundamentally industrial and of services and the same ATECO classification of ISTAT and the Italian Chamber of Commerce includes a large number outside of the category 92.1 which is reserved for the cinema sector (the management of rights and licensing, for example, falls under section 74.8) or, at most, they are inserted under 92.2 which is agencies and companies of the television sector. Furthermore, what has been found is the presence of financial statements in databanks which are updated percentagewise and are inferior in comparison to how much it is possible to verify them for other cinema companies of similar size.
The research conducted on the selected reference sample of companies linked to cinema production results, however, in the composition of  an approximate summary..




Source: Elaborated from CERVED data and Infocamere – Business Register -
* International Recording belongs to the Thomson-Technicolor Italia Group -
** This indicates both fixed contract and open ended contract staff, equivalent to 1,037 full time staff *** The reported data only refer to cinema sector activity.

Also in this classification there recurs two characteristics which distinguish the entire cinema sector. 1. The relevance of generated turnover. If it is considered that a large number of estimates concerning the area of linked industries value the total business volume at 571 million euro, it appears significant that the first five companies single-handedly add up to 502.9 million euro in revenue. The remaining ten are enough to generate almost the remaining generally estimated total, considering, moreover, that the other major production industry – the Japanese company Fuji – does not permit the possibility of  ascertaining  the specific revenue of the division Fujifilm. 2. What re-emerges, furthermore, is the predominance of foreign capital, resulting from the fact that four of the first five companies are under the control of foreign groups, similarly for the other two companies present in the classification: Technicolor Milan and International Recording.5
It was intended to define as ‘services’ the area of pre and post-production given that the nature of the services offered is – in almost all cases – typically of the tertiary sector. The so-called cinema sector linked industries besides have always been in the area of outsourcing; since the time, that is, that the American studios realized, over 50 years ago, that is was remarkably cheaper, and, in the end, not excessively dangerous for the protection of contents to entrust determinate technical processes of manufacturing to external companies, capable of carrying them out in series, rather than doing it internally with fixed structures.
An example of a services group is Cinecitta Studios, to the turnover of which production structures have contributed 27.2 million euro – theatres and venues (10.0), fixed systems (3.7), set design (10.5) and technical equipment (2.9) – and that of post-production 13.2 million, subdivided between developing and printing laboratories (9.4), Cinecitta audio (1.3), and Cinecitta Digital (2.5). Cinecitta Studios, in turn, holds 48% of Cinecitta Entertainment (615.6 thousand euro in revenue) and has passed to the control of IEG – International Entertainment Group of the Abete-Della Valle-De Laurentiis-Haggiag agreement, which has planned a reinforcement through investment in international co-productions and a further increase in value of the post-production area. A further important asset of IEG, Film Master, has lent itself to, primarily, exploiting the new synergies with Cinecitta Studios, given that it produces 120 titles every year, thereby requiring an average use of theatres of four thousand hours a year.  Among commercial services there is the activity of Blockbuster, which acquires productions (or rather, the rights for their reproduction, entrusted to foreign suppliers) from distribution companies or even directly from film studios and then becomes a final channel retailing the productions in its shops. Blockbuster is the world’s leading chain with 7,800 sales outlets, despite the fact that after years of expansion it entered a phase of controversy and, also in Italy, saw its business volume reduced with a deficit, in 2007, of 14.7 million, nevertheless, its leadership in the area of direct sales of films remains indubitable.
Equally consolidated is the position of Deluxe among the structures of development and printing, recording and post-production. The company which controls 100% of Digititles, a small company specializing in titles, sells over 236 million metres of film a year (corresponding to almost 8 thousand films lasting 100 minutes) and was once the purchaser of foreign film development laboratories.
To the same market sector belong another three Italian companies of the reference sample – Eurolab, Laser Film and Fono Roma Film Recording, the first formed in Italy in 1931- with a market presence which serves to supply an indicative profile of the total of medium and small sized companies active in this area, similarly to CVD-Cine Video Doppiatori which can be considered as representative of an activity which is extremely important for Italian cinema such as that of dubbing. SAC (Servizi Ausiliari Cinema) of Rome can be defined as a distribution company, however, it administers to a very particular type of service: supplying the film copies and publicity materials for the cinema circuits of the 12 principle ANICA cities upon which the business market is structured (Rome, Ancona, Bari, Bologna, Cagliari, Catania, Florence, Genoa, Milan, Naples, Padua and Turin).
The absolute leader in cinema publicity is Opus Proclama of Milan, an historical agency which is under the control of the Maestro and Langs families. Opus is a group which controls a series of small agencies dedicated to product placement, merchandising and to interactive promotion and holds, on the cinema screen advertising market a quota of 46%.
Apart from Rai Trade, the company Surf Film of Rome belongs to the area of services for intermediation and representation –  the artistic, promotional, public relations and casting agencies or the press offices (areas where the rarefaction of balance data is further accentuated). Surf Film specializes in the management of property rights on the mandate of film studios and distribution companies. Formed by Massimo Vigliar, the company has started to also operate in distribution and has recently produced its first two films.
The substantially illustrative character of the classification is enhanced by the insertion of CAM, an acronym of Creazione Artistiche Musicale, a recording studio which, by now, can boast of half a century of existence and which has always been exclusively dedicated to producing music and sound tracks for both national and international films (and has also created, on the side, a line of jazz record titles called Cam Jazz). An independent recording label, it is the publishing house of the late Nino Rota as well as of other more noted composers of Italian cinema music including the Oscar winner Ennio Morricone. As a recording studio it obviously has not been catalogued among cinema companies, however, it is clearly difficult to exclude its activity from those which combine to generate the production values of the whole sector.


5 The estimate of 571 million euro given for explanatory purposes is from the annual document of syntheses on activity in the sector “Il cinema italiano in numeri – anno solare 2007” (Italian Cinema in Number – Calender Year 2007) edited by the official studios of ANICA. The table “Fatturato per aree di attivita” (Turnover for areas of activity) (pp.21) reports the indications of the business volume generated in five sections: film studios-television studios-filming: 158 million; lessees and technical equipment and transport managers: 20; development plants and video recording press: 190 the value of such manufacturing was estimated at 566 million euro, however, in the 2008 edition it is valued at 574 million. The entries considered do not seem to understand that the areas of production and supply of raw materials (beginning with films).

 

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