Milei's Free Market Reforms Can Reshape Argentine Cinema

Decades of protectionism have led to the film industry’s decline, but a free market can make it bloom.

As Argentine President Javier Milei continues to slash government spending, he aims to limit state support for local film production too, sparking protests from the industry. But rather than hinder the nation's film industry, Milei's reforms could encourage innovation among Argentine filmmakers and lead to a domestic cinematic boom. 

Government intervention reaches every facet of Argentine culture, from radio and television to music and literature, but nowhere is it more visible than in cinema. Argentina follows the French model of cultural protectionism, where a government agency farms taxes from the film industry to fund domestic production.

Except for a few countries with large film industries, several nations—especially in Europe and Latin America—have adopted different variations of the French model, arguing that their domestic markets are not large enough to sustain private movie studios. The allure of the French model lies in its potential for governments to promote specific values through film. It's equally appealing to filmmakers who believe studio interference and mass market appeal compromise their artistic visions. Video essayist Evan Puschak claims the French model "support[s] an independent cinema that is bold in terms of market standards and that cannot find its financial balance without public assistance." 

But the French model is flawed, and nowhere are these flaws more visible than in Argentina, where the National Institute of Cinema and Audiovisual Arts (INCAA) carries it out.

The main issue with the INCAA is its fiscal voracity: Beyond its 10 percent cut of every movie ticket, the institute collects taxes from the entire telecommunications sector. More recently, it has begun seizing revenue from streaming platforms. As a result, prices have skyrocketed, rendering movie theater outings and home movie watching unaffordable luxuries for many Argentines.

What does the INCAA provide in return to taxpayers? Very little. 

Since its establishment, the organization has been plagued with inefficiencies. Argentina's cinema law allocates half of the INCAA's revenue solely to administrative expenses, leaving the other half for its purported function of film production. But in practice, as much as 70 percent of the INCAA's funds end up in the administrative sinkhole while the institute operates at a deficit, relying on subsidies from the national government.

When it comes to film promotion, rather than tying its grants to commercial success, the INCAA distributes subsidies without taking into account any audience feedback. The results speak for themselves: Out of the 241 Argentine movies released in 2023, less than 20 had over 10,000 viewers in theaters, and only three of those made a profit at the box office. Most Argentines choose to watch foreign productions instead, with only around 10 percent of ticket sales going to domestic films. 

Argentine movie critic Gustavo Noriega wrote that "an Argentine filmmaker who doesn't find success is equivalent to an unproductive public employee."

The French model has failed to bring innovation and profit to the Argentine film industry. Film journalist Leonardo D'Espósito tells Reason that Argentine cinema has become "stagnant within a few themes" and "inoffensive, innocuous." Instead, D'Espósito says filmmakers focus on "surface-level, minimal, folkloric accidents."

But things are changing. In prioritizing Argentina's socioeconomic emergencies, Milei plans to reduce the state's footprint in cinema and the arts. While the INCAA falls under the Ministry of Human Capital, Milei plans to limit INCAA spending, establish criteria of accountability and efficiency, and offer incentives to supplement the grants with private investment. Ultimately, these measures have the potential to transform Argentine cinema from a fledgling industry to a market ripe with potential. 

"They shouldn't be afraid of the market," Argentine filmmaker Ariel Luque tells Reason, referring to his colleagues. In Argentina, "film schools don't teach any other way of funding besides the INCAA. People tell me they were never taught how to do a market study or seek investors." Luque's support of Milei has led to hostility from within the film community, which he says has been co-opted "for Gramscian purposes" by Kirchnerism, the left-wing movement that ruled Argentina before Milei.

"Cinema stopped being about the public and became about propaganda," Luque says. "There's no cinema without an audience….The state as a producer doesn't work. State intervention in art is always self-serving."

Although skeptical of a withdrawal of state support for film, D'Espósito is optimistic about some of Milei's reforms. "Great works," he says, are those that show "'the local' touch on universal themes" and can "captivate other spectators" from different cultures. And those can be translated to other cultures, captivate other spectators," he said. He is hopeful that Milei's changes could lead to a realistic, market-friendly, and export-oriented film policy, citing South Korea as an example.

Milei's plans do not mean the demise of Argentine cinema. Instead, they offer filmmakers an opportunity to showcase their ingenuity and tap into the financial resources available in the global market.