Film and television present the face of the nation. Language is the voice of its soul.

THE UKRAINIAN FILM AND MEDIA SECTOR IN TRANSITION TO THE 21TH CENTURY

Presentation by Peter Borisow
Media and Entertainment Session
Ukraine-US Business Networking Series: Forum II New York, New York, March 31, 2005
In 2003, Oles Sanin's Mamay was warmly received as Ukraine's first candidate or consideration in the Academy Awards' Best Foreign Picture category. In 2004, Ukraine's submission, Alexander Rodnyansky's Driver for Vera was rejected by the Academy because it was not a Ukrainian film.

Ukraine is potentially the largest and most important film production center in Europe for the next 10 to 20 years. This is due to the deep cultural tradition of film making, the extremely talented creative and technical pool, the relatively low cost of talent and production, significant studio assets, a large variety of topography, and - very important-- the temperate climate, including sub-tropical along the Black Sea coast. It is also the last film making frontier in Europe, as even Romania today is considered expensive.

People in the industry and the public in the West as well as in Ukraine are asking, "What is happening to the film industry in Ukraine? Will it survive and, if so, in what form?"

The question is important on several levels. On a business level, people need to know where to turn to do business in Ukraine. They also need to know what to expect from government authorities. On a cultural level, whoever controls film and television will determine whether Ukraine's unique identity, culture and language will survive. On a political level, whoever controls film and television will shape Ukraine's international identity and image as well as the hearts and minds of generations of Ukrainians.

THE POTENTIAL AND REALISTIC GOALS:
Before addressing specific proposals, it is important to have a vision of what is a realistic future for film and television in Ukraine and what is essential for such a future. It is also important to address common misconceptions about these industries.

FIRST, and foremost, the film industry in Ukraine can and must be financially sound - that means self sustaining. Every film made must have a potential market with realistic, professionally verified revenue potential.

The government should not give money to make a film that has no revenue potential. Even films that the government feels should be made for overriding national, historical or cultural purposes can and should be made financially responsibly, within market sensitive parameters.

SECOND, we must recognize the role of film and television in nation building, both internally and internationally.

Film and television present the face of the nation. Language is the voice of its soul.
Most people in the world will not visit Ukraine. They will learn about Ukraine mostly from what they see of Ukraine and Ukrainians in movies and on television.
The image delivered and the language in which it is delivered are identifying features for the Ukrainian nation. If the language is Russian, there will be little distinction in world public opinion between Ukraine and Russia. In their mind, Ukraine will continue to be considered just another part of Russia.

This will inevitably impact on all aspects of Ukraine's international relations, both business and diplomatic.

The current situation, with most television broadcasting in Russian, conveys the wrong message to Ukraine and to the world. Worst of all are the films dubbed into Russian with rapid fire (and hard to read) Ukrainian subtitles.

Can you imagine going to France and seeing a movie dubbed into German with French subtitles? It's a question of national identity. It's the image the world sees. It helps determine how people deal with Ukrainians - as a "real" nation or as something somehow a little less. This is absolutely not anti-Russian. It is simply what every significant nation does. Failure to do so dilutes that nation's significance.

Government support for the Ukrainian language is fundamental to establishing a distinct and separate identity for both the Ukrainian film industry and the Ukrainian film market. Today both are viewed (and actively promoted by Russia) as simply adjuncts to the Russian sectors.
Direct distribution of USA/European studio films to Ukraine as a separate market and distribution of these films in the Ukrainian language will establish awareness of Ukraine in the world industry, encourage direct utilization of Ukrainian production facilities, influence how Ukraine and Ukrainians are portrayed in international films and help establish a positive anti-piracy image. This support can be provided with tax incentives for distributors and exhibitors of Ukrainian language films, DVDs and derivative television products.

THIRD, film and television are two separate sectors with different disciplines and very different financial dynamics. The argument that making television programs will lead to future film production is false.
Television is not a kindergarten for the film industry. They are very different businesses and successful cross-over between the sectors is rare. Focusing the Ukrainian industry as a service sector for Russian television productions means the Ukrainian film industry will not develop independently. At best, it will remain a low cost place for making Russian television and, occasionally, Russian movies.

Making Russian television programs in Ukraine may be financially profitable for some individuals but will not help the Ukrainian film industry. The Russian television industry should not be beneficiary of any Ukrainian government facilitation through financial, fiscal or policy considerations. These must be reserved for an independent Ukrainian film industry and not be used to save money for Russian producers.

FOURTH, this is not the time to privatize any parts of Ukrainian film studios. The past decade has seen a very serious deterioration and destruction of assets in this sector nationwide. In part this was due to lack of clear government policy. In part it was due to various interests preferring to destroy value to facilitate cheap privatization. This abuse must not be repeated in the new Ukraine.

Rather, these assets can be and need to be restored. However, restoration of these assets must also be market relevant. Dovzhenko Studios, for example, has been so neglected and cannibalized that it can no longer meet any mission as a modern film production studio. Instead, it should be converted to a National Film Museum together with a film library and archives.
A bilingual international film school (Ukrainian and English) with exchange programs with film schools in the USA would prepare Ukrainian students for the world wide industry. Theaters, restaurants, gardens (no casinos, please!) would complete a family venue.

Other Ukrainian studios such as Kyiv Cinematheque Studios, working with Odessa Studios, can and should be financially responsibly rehabilitated to today's industry standards and become the focal point for international productions.

FIFTH, the voices promoting the Russian model for film finance in Ukraine ignore the fact that the Russian model has failed and is wrong for Ukraine.

Despite the very high cost to the State, Russia's model has not created a financially viable film industry. Out of 90 plus films made last year, only one made a profit. The rest were movies made without concern about potential revenues, while the State paid for it all. The Russian model is an oligarch's dream - a windfall paid by the State - not an industry builder.
Despite huge expenditures to update equipment and facilities in Moscow and Leningrad, both remain very low on the list of places where Hollywood likes to work. Russia may be able to afford it - it has huge oil revenues - but it's still bad business. More likely, the Russian government understands the importance of film and television as national identity and image builders and is willing to pay the price to get the influence.

The simple fact is that Russia, due to its severe climate and limited topography cannot have a viable international film industry without bases in warm parts of Ukraine - therefore, the acquisition of Yalta Studios by Russian businessmen and pressure by Russian interests to take over Odessa Studios. There is a reason why Hollywood is in Southern California and not in Alaska.

If the Russian model is adapted in Ukraine, it will simply put the Ukrainian nation in the business of paying for financially doomed pictures for Russian producers. It will incur huge losses to Ukraine, without creating a viable Ukrainian film industry and without even the benefits of national identity building and positive image for Ukraine.

Sixth, the media sectors (film, television, radio and publishing) must be Ukrainian owned, truly independent and without concentration of control by narrow interests.

Today, the film and television sectors in Ukraine are tightly controlled by a handful of oligarchs who are lobbying fiercely to retain their control. Such concentration, at best, chills and, at worst, freezes free flow of information to the public. This is, by definition, detrimental to a free and democratic society. Nowhere is monopoly more pernicious than in media. Speech tempered to avoid offending an owner or hyped to promote an owner's interests is not free speech - it is advertising and must be labeled as such.

Freedom of Speech is the root of all our freedoms. Without it all other freedoms wither on the vine.

Anyone with sufficient ownership interest, direct or indirect, to create influence in one media sector should not be allowed to have an influential interest in any other media sector. That means if you have a television station, you do not own newspapers in the same places. If you own newspapers, you do not own radio stations, etc. Publishing must be Ukrainian owned and independent of television and radio. No group can be allowed to overlyinfluence media in any given city, region or market sector. If Ukraine is to have freedom of speech, it's that simple.
How to achieve Ukraine's potential in the world wide film industry:

One inescapable fact about the world film industry is that over 90% of film industry revenues world wide are generated by "Hollywood", i.e., USA companies. The rest of the world struggles for bits of the remaining 10%. When you look at weekly film revenues in any country, be it Japan, Italy or Venezuela -- among the top ten money earners, at least half, and often all ten, are "Hollywood" pictures.

For an independent film industry to thrive in Ukraine, it is essential for it to become financially self sustaining. To do that it must become part of the "Hollywood" cash flow. Ukraine must have a work environment that will encourage the Hollywood film industry to come to Ukraine to make movies.

Through this work, Ukrainian film makers will develop to world standards and quickly learn to make Ukrainian films that will be financially as well as critically successful in world markets, carrying with them a new identity and positive image for Ukraine and Ukrainians throughout the world.

Making this happen will require proactive support by the Ukrainian government. Properly structured and supported, an international "Hollywood" style, self sustaining film industry will take root in Ukraine. It will also provide the foundation for the non-commercial, social, cultural and historical requirements of the nation. The international film industry will come to Ukraine.Government policies will determine through whom and for whose benefit it will operate. The answer should be Ukraine and Ukrainians.

Peter Borisow is president of the Hollywood Trident Foundation.