"Elite Squad / A bone too hard to chew / Catches one / Catches all / Is gonna catch you too"

(From the original Portuguese version "Tropa de Elite / Osso duro de roer / Pega um / Pega geral / Também vai pegar você")

The most frightening nightmare (or the most efficient marketing dream) of every Brazilian film producer has become a reality – and, what’s more, with a Brazilian movie that had not been released to movie theatres yet. ’Piracy’ has been the most spoken word on the streets and in all media since late July, when Tropa de Elite (’Elite Squad’), a national production scheduled to be released in November, started being copied and sold by street vendors, and became a social phenomenon in Brazil: 1,5 million people watched the film before it hit the screens, only in the city of Sao Paulo.

As soon as the film leaked to the pirates, director José Padilha (who directed the film Bus 174) wrote an aggressive article in the newspaper O Globo, claiming vigorously that the incident was not a marketing strategy and that he was shocked and angry with the leak. He also anticipated that piracy was going to cause huge financial damage to the film, and claimed that Brazilian authorities should start fiercely repressing it immediately.

The leakage not only changed the movie’s financial perspectives, but also forced the studio (Paramount/Universal) to release it in theatres two months before the planned date. Producer Marcos Prado said in a press conference that, before July, the director’s perspective was that one million people would go to the theatres to watch the film. But now everything had changed. For the better: "To try predicting what number we will reach would be too subjective. I personally think that we will make a five million people audience", said Prado after the movie had an impressive opening (attracting 180,000 people in the first weekend, a very good number for a Brazilian film, without any TV advertising).

There was another side affect of the leakage: the film was originally planned to be released in 150 theatres in November, however, the early opening of Tropa de Elite grew to 300 theatres all over the country – thanks to the huge publicity generated by the piracy. The bet paid off. The opening was 90% better than the Brazilian film City of God, directed by Fernando Meirelles (The Constant Gardener), the highest-grossing foreign film of 2003 in the United States, and also a big hit on Brazilian screens. And it was 46% better than Two Sons of Francisco, the Brazilian biggest hit movie in the last few years.

"I’d like to express my gratitude to the people that are actually going to the theatres for watching the final version of the film. The good results of this first weekend show that there is public interest for Brazilian movies", said the director José Padilha in a press release written in a very different tone to his earlier comment.

A quick look over Brazilian culture financing policy

These days, filmmaking in Brazil is a big activity for only a few people. In the absence of a commercial market, the government provides companies with an income tax exemption whenever they invest in approved films (sometimes the tax exemption reaches more than the 100% of the amount invested). This often generates criticism. Another criticism is that films are paid for even before they’re released. This reduces the pressure to make money at the box office, and allows Brazilian directors to go "artistic", privileging art house formats (the vast majority of Brazilian films are watched by less than 100,000 people).

Government also provides withhold income tax exemptions to international studios, when they remit royalties abroad, if they invest in local productions. It means that a significant number of "Brazilian" films are actually owned by the major Hollywood studios, who produced them using tax-exemption money (money that one would have to pay anyway to the Brazilian IRS). That is the case of Tropa de Elite, which is co-produced and distributed by Paramount/Universal. If the film hits big in Brazil and abroad, it will be a good example of money generated with practically zero financial risk.

The cost of a feature film remains high. The cost of creating Tropa de Elite totaled approximately US$ 6 million, one of the largest film budgets in the country. These big numbers are controversial. Moviemakers, such as veteran Domingos de Oliveira, are a good example of directors refusing to use the Brazilian tax exemption system for raising big amounts. He prefers to use digital technology in order to shoot with lower budgets. He has even published a manifesto called BOAA (Portuguese acronym for "Low Budget and Good Vibes"). His 11th movie, Carreiras, was shot on an approximately US$17,000 budget and was released in digital theatres. Domingos says: "Many filmmakers have become used to inflating the budgets so that, in one film, they can earn the amount they need to live for four years, the average time between that and the next production. This situation reminds me of Rio de Janeiro police officers who also take freelance jobs as private security agents."

Elite Squad 2, 3 and 4

So, 1,5 million people watched Tropa de Elite on pirate DVDs for the price of one third of a movie theatre ticket. How many among those people (or ’pirates’) could effectively be accounted as contributing to ’revenue losses’? Or, in other words: how many could afford to pay 5% of a minimum wage salary for a ticket?

The demand for the film was so big, that the street vendors quickly created "sequels" to Elite Squad, creating versions two, three, and four of the movie. Version two was a documentary shot in the late 90s by João Salles (brother of Walter Salles, director of Dark Water) called News from a Personal War, about the drug wars in the Rio de Janeiro favelas. Version three is more difficult to map: it consists basically of news footage recorded and edited from television about the drug wars. "Elite Squad 4" consists of the 2004 Brazilian film Almost Two Brothers, directed by Lucia Murat, and subsequently renamed by the street vendors, which is also about gang violence in the favelas.

Both films, News from a Personal War, and Almost Two Brothers, are excellent. One doubts whether they could have been found by that "new" audience through a conventional distribution system. The film Almost Two Brothers, for instance, was watched by only 59,000 people in total when it was distributed in the film theatres in 2004.

If there is one thing that can be learned from the Elite Squad case, it is that there is a huge demand on the part of the Brazilian population at-large for cheap, interesting movies that deal with their often-difficult reality. This is very similar to the Nigerian film industry, which started with films sold through the street vendors (check the paper by Ronaldo Lemos "From Legal Commons to Social Commons" for further information). The first movie producer that shoots a good and attractive film, with a low budget, and sells it directly to its audience through cheap DVDs, will probably make a lot of money. Just like Kenneth Nnbue who became rich when he shot the film Living in Bondage in Nigeria and sold it in the streets in the early 90s, thus becoming the precursor to the entire industry. As Charles Igwe, one of the most influential Nigerian film producers of these days says: “Piracy emerged because we producers weren’t able to produce the number of copies demanded by the market."

However, anyone planning to experiment with the Nigerian model in Brazil should do so quickly. The Brazilian senators are already discussing an amendment to the Brazilian Criminal code to increase penalties for piracy-related crimes, and for creating new crimes to repress the entire activity. In other words, it’s possible to imagine a near future in which, if you infringe copyright in Brazil, the Elite Squad will come for you.

For a very comprehensive and interesting report on the Nigerian film industry, see the transcription of the conference given by the Nigerian well-known producer Charles Igwe at the Center for Technology & Society at the FGV Law School within the Cultura Livre project.

Article by Paula Martini originally published in iCommons website.