Film, video and photography
Law 163/1965 was the first comprehensive law adopted in the cultural field in post war Italy. Although this law provided for all phases of the value chain – including distribution, diffusion and promotion – to be more or less subsidised by the state, the lion’s share of government funding has always been absorbed by production. State contributions were allocated – ex ante, in the form of loans and grants, and / or ex post, either in the form of prizes, or automatically, through percentage contributions on box office receipts.
While this law effectively supported the Italian film industry during the first decade of its implementation, the invasion of films on private TV networks, following the end of the state monopoly on television in 1976, has been the determinant for a major drop in film consumption, and thus, subsequently, in film production, which reached its qualitative and quantitative low around the mid-1990s (see chapter 3.5.1). In order to foster quality production, Law 153/1994 introduced a special category for films classified “of national interest”, which could attract public funding of up to 80% of the total costs, whereas further legislation adopted at the end of the 1990s, and in particular Law 122/1996 (see chapter 3.5.1), gave a significant boost to the production of Italian films. However, as many of these films were poor in terms of both critical reviews and audiences, a substantial agreement was reached between subsequent governments and professional circles to amend a legislation which had turned out to be too much in favour of a low risk assumption by the film producers.
This was one of the problems to be dealt with by Legislative Decree 28/2004, a comprehensive law aiming at streamlining and rationalising Law 163/1965 and all the following legislation on cinema activities, as well as at introducing substantial innovations, in particular the following:
- the adoption of a more selective reference system, based on qualitative as well as on economic criteria, for film producers eligible for state support;
- a higher ratio of financial participation of producers to the production costs of films classified of “national interest”, by lowering the ratio of state support from 80% to 50%; and
- the enhancement of the role of the state owned company Cinecittà Holding, from production, distribution and promotion of national films in Italy and abroad, to additional strategic functions in the monitoring and evaluation of the whole system.
Although acknowledged as a step forward towards sectoral rationalisation, the law (followed by nine implementing regulations) has also been criticised, as it was felt that such a rigid reference system could act as a barrier to access for interesting but less well-known and established film producers.
The law’s immediate unwanted side effect was actually the paralysis of financial allocations to cinema activities until the end of 2005, as a result of the endemic state / regional conflict. In fact, the Tuscany and Emilia Romagna regions appealed to the Constitutional Court against the Decree, for not taking into account the new concurrent competencies in the promotion and financing of cultural activities, entrusted by Constitutional Law 3-2001 both to the state and the Regions. In its Decision of 19/7/2005 the Constitutional Court endorsed the Regions’ claim, thus invalidating all the allocations of funds to the film industry, decided upon autonomously by the Ministry. A new Leg. Decree 164/2005 subsequently provided for joint approval – both by the Ministry and by the State-Regions Conference- of every decision concerning the regulating and funding of film production and distribution.
Three draft laws amending Leg. Decree 28/2004 had been presented to the Parliament in the past legislation, all of them more or less based on the following key points: 1) an increase in financial support to the cinema industry, to be obtained also by extending existing measures adopted for national TV networks by Law 122/1996 to Pay TV (Sky Italia) and the new media as well (see chapter 3.5.1); 2) the introduction of new fiscal incentives in the form of a tax credit and tax shelter, the latter also in favour of companies outside the cinema and audiovisual sector, but investing in the production and distribution of Italian films.
In order to speed up their much awaited adoption, the fiscal incentives giving relief to the cinema industry were subsequently anticipated in Law 244/2007, and finally endorsed by Law 133/2008. The related implementing regulations – whose applicability was however limited to the years 2008, 2009 and 2010 – came into force through two Decrees (for tax shelters and for tax credits, respectively), adopted in May 2009.
The positive effects induced in recent years in the Italian film industry by the implementation of the above mentioned tax relief measures (see also chapter 3.5.1) – along with the pressure exercised by the film industry, with the support of the Minister for Heritage – finally persuaded the reluctant Minister for the Economy to extend these fiscal incentives to the end of 2013. As established by Leg. Decree 34/2011, the related costs – along with the increase in MIBACT’s budget – have benefited from an increase in oil taxes. Again threatened with abolition, the tax credit measure – strenuously supported by the film milieu – was finally confirmed and made permanent by Leg. Decree n. 91/2013.Furthermore, Law 106/2014 increased from 5 to 10 million EUR the maximum amount of tax credit for foreign investments in Italian film production, and introduced a temporary tax credit for the restructuring and technical refurbishment of cinema hallsfor the years 2015 and 2016. Finally, the Financial Stability Law for 2016 has established the related budgetary allocation at 115 million EUR for 2015 and 140 million for 2016.
Furthermore a new draft law for cinema has been adopted by the Council of Ministries on 28 January 2015. When finally endorsed, the law will increase by 60% the ad hoc state financial allocations, by creating a Fund for the development of the cinema and audiovisual industries yearly endowed with 400 million EUR. The Fund will be financed by the state through tax income drawn from the television and audio-visual companies, and no more – as was the case for Law 122/1996, and was envisaged by previous draft laws – by the audio-visual companies themselves through given percentages drawn on their income. Funding criteria will be changed and made more automatic, by abolishing the existing prizes for films of national interest. Special incentives for young authors and for the preservation and development of new cinema halls have also been envisaged.
Such prospects of a long expected increase in the financial resources allocated to the cinema industry have been obviously very well received by film professionals: some, though, are arguing that “automatic criteria” may mean more “market oriented criteria”….
Finally, as far as our traditional state-owned film companies’ system is concerned (see chapter 1.1), whereas in 2009 Cinecittà Holding (entrusted with film promotion in Italy and abroad) was merged with Istituto Luce (film diffusion and production) into the new company Cinecittà Luce, Law n. 111/2011 changed once again its name into Istituto Luce Cinecittà:a new, much slimmer company, with a shrinking budget and personnel (half of the staff having been actually transferred to MIBACT’s DG for Cinema).
This section will deal simultaneously with radio / television and the press: legislation on these two media is, in fact, strictly interconnected in our country, as they are regulated, since the 1990s, under a unified system made up of “umbrella laws”.
When a Constitutional Court Decision, taken in 1976, abolished the Italian state monopoly on local radio and TV broadcasting, a protracted legislative gap – allowing the proliferation of private local stations which subsequently became national networks – resulted in the creation of a duopoly by RAI (the public company) and Mediaset (the private company owned by the media tycoon and present Prime Minister, Silvio Berlusconi.. Television thrived in this uniquely unregulated system, thus exercising fierce competition towards the other media: the cinema and the press industry, the latter already endemically affected by low reading rates (see chapter 1.3.2).
At the end of the 1970s, the press in Italy – confronted with falling income from the sale of newspapers and periodicals, as well as with a decline in advertising (see chapter 3.5.1) – represented a classic case of “market failure”, not being able to survive without direct and indirect public financing. Ad hoc legislation started with Law 416/1981 on the discipline and financial subsidies for the publishing industry of dailies and periodicals, by introducing – besides the first antitrust measures in the press system –a whole range of financial support measures for this troubled industry: tax incentives for capital investments, loans, grants, and postal tariff facilities. The criteria for support were subsequently modified by Law 250/1990 on subsidies to the publishing industry of dailies and periodicals, by further increasing the amount of the state financial grants. Subsequently various budget laws have modified the grants, by significantly raising them up to around 500 million EUR in 2007: so much so that, for several years, the Italian press industry has probably been among those most heavily subsidised in Europe. However, since the end of that decade, such grants have been substantially reduced (see chapter 3.5.1).
It should be mentioned that, the 2007 report Daily, Periodical and Multimedia Publishing, issued by the Antitrust Authority, had actually been very critical of the support system to the press in Italy, deemed also by the Court of Accounts as characterised by “a stratification of heterogeneous direct and indirect measures… where it is not easy to single out an organic and well planned underlying strategy aimed at the protection of pluralism”.
A reform of the existing system has actually been envisaged by DL. n. 63/2011 – the so-called Decreto Salva Italia, adopted by the Monti Government with a view to rebalancing Italy’s financial situation. According to Article 29, the Decree provided for the current system of direct state subsidies to newspapers and periodicals to be replaced, in the near future, by subsidies to the publishing industry aimed at fostering technological innovation as well as the informatisation of the distribution system. Meanwhile, D.L. n. 103/2012 established more stringent prerequisites for having access to state contributions. Furthermore, to encourage the digitalisation of the press, it provided access to increased state contributions for newspapers and periodicals transferring their publication from paper to on-line format.
Consequently, while ordinary contributions to the press underwent a further, strong reduction (see chapter 3.5.1), a new law – Law 147/2013 –established an “extraordinary fund for the support of the publishing industries”. However this fund – endowed by the law with 50 million EUR for 2014, 40 million for 2015 and 30 million for 2016 – is not only aimed at encouraging technological and digital innovation, but also at providing a social security “cushion” to allow slumping publishing houses to anticipate retirement measures concerning journalists considered to be redundant.
Such rationalising measures highlight the extent of the financial crisis affecting the press and threatening not only employment, but pluralism in the information system as well, in a country with a scant readers’ index (see chapter 6.2), and where a large number of Italian families still have poor access to the Internet (see chapter 2.4).
To cope with such a chronic and protracted crisis in the publishing industry – more and more heavily affected by the decline in advertising revenues and in earned income from sales (see chapter 2.5.3) – the Renzi government has addressed this issue, as well. In February 2016 a draft law on the creation, at the Ministry of the Economy, of a Fund for the pluralism and innovation of information – endowed with 100 million EUR for each year between 2016 and 2018 – has been adopted by the Parliament, and is now pending at the Senate. It delegates the government to establish the criteria for allocating the fund’s financial resources both to the publishing industry and to local television stations, according to guidelines aimed at encouraging innovation and further digitalisation, restructuring the distribution system, safeguarding minorities (including the linguistic ones) and – last but not least – providing social security measures for the declining employment in the field.
As far as the television industry in Italy is concerned, unlike in other countries, it remained totally unregulated throughout the 1980s, until Law 223/1990 was finally adopted, to regulate the duopolistic public/private radio-television system. Besides dealing with the planning of radio frequencies, the distribution of licences between RAI, private networks and local broadcasters, advertising, etc., the law extended its scope to the communication system as a whole, including the press, notably by introducing comprehensive antitrust measures for the media industry, thus modifying regulations provided for the press by Law 416/1981. In particular, in order to prevent the abuse of dominant positions, publishers in control of more than 8% or 16% of circulating newspapers were not allowed to own, respectively, more than one or two TV licences.
A subsequent Law (249/1997) provided for the creation of AGCOM – a Supervisory Authority for Guarantees in Communications, a public autonomous agency – presently linked with the Undersecretary for Communications at the Ministry for Economic Development – with supervising powers for the press, TV, radio and telecommunications. The law also outlined additional antitrust measures stating, in particular, that no entity operating in the radio-television and in the publishing industries should control more than 20% of the total financial resources flowing to the field (advertising, licence fees, etc..).
This frequently disregarded antitrust legislation was significantly loosened by Law 112/2004, the so called “Gasparri Law” (named after the Centre-Right Minister for Communication) regulating the media sector. In fact, this controversial law further endorsed duopoly in the television system (see chapter 2.5.3), while modifying the rules of the game as far as antitrust measures are concerned, thus allowing uncontrolled expansion both for RAI and Mediaset, and reducing even more space for other media operators. Notwithstanding the will expressed by the centre-left government (2006-2008) to amend the Gasparri Law, and to contain the patent conflict of interests, the situation has even worsened throughout the years of the subsequent Berlusconi government (2008-2011).
Antitrust legislation and the conflict of interest do not seem to be a priority anymore for the centre-left government after the dismissal of Berlusconi, so much so that the issue has not been dealt with by Law 229/2015 on the reform of RAI – amending the Gasparri law – adopted in December 2016 by the Renzi government, and has been postponed to a further law. According to the RAI reform law – focused on the reorganisation of the company’s governance – its board of 7 members are elected by the Parliament, by the Minister of the Economy and by the employees of the company. The board’s powers, though, will be diminished, as most of them are entrusted to a very powerful CEO, appointed by the Minister of the Economy. On the other hand, as far as the most important issue of redefining RAI’s mission and the notion of public service are concerned, the law provides for a consultation to take place in 2016, also in view of the expiration, in the same year, of RAI’s “Contract of Public Service” with the state. It should be mentioned that this law has not been well received by the many critics of the excesses of the Italian public television company’s politicisation, who believe that RAI will be under more government control.