A new independent analysis by international creative industries consultancy Olsberg SPI (SPI) examined the current position and potential of Brazil’s audiovisual production sector. The “Economic Impact Study for a New Federal Audiovisual Production Incentive in Brazil” report demonstrated how a federal audiovisual incentive in Brazil could support significant activity in the country’s audiovisual production sector and generate notable economic and strategic benefits.
The analysis covered the 2024 to 2030 period and considers the potential economic impact of an automatic federal audiovisual incentive under four different scenarios: Scenario 1: no federal incentive is introduced; Scenario 2: low cap federal incentive is introduced, with an annual budget of US$25 million; Scenario 3: higher cap federal incentive is introduced, with an annual budget of US$100 million; and Scenario 4: uncapped federal incentive is introduced, with no annual budget.
If a federal incentive was introduced in 2024 with an annual budget cap of US$25 million or US$100 million, SPI estimates that in 2030, the audiovisual production sector could generate up to US$0.73 billion (R$3.65 billion) and US$1.03 billion (R$5.15 billion) in direct production spend, respectively. This activity could directly create approximately 11,000 and 15,500 in employment in 2030, respectively. In comparison, the direct impact that could be generated by the sector without a federal incentive is expected to be more modest, with US$0.63 billion (R$3.15 billion) in total spend in 2030, and 9,500 in employment. The associated Gross Value Added (GVA) impact is also calculated for each scenario.
The study also considered broader strategic impacts that a new federal incentive could deliver, such as driving international and domestic tourism, and infrastructure and production supply chain investments.
While Brazil is a significant and key market in the global audiovisual production sector, its lack of a federal production incentive – which are utilised in over 100 jurisdictions globally – puts it at risk of losing its global competitiveness.
That said, several positive sectoral developments in recent years have meant renewed optimism and investment within the Brazilian audiovisual sector. Such developments include public funding initiatives (e.g. Paulo Gustavo Law), high-profile private and public planned studio investments (e.g. Banijay’s private investment in A Fábrica in São Paulo, and Quanta’s investment in the Polo de Cinema e Video in Rio de Janeiro), and the municipal incentives in São Paulo and Rio de Janeiro.
Despite these developments, Brazil faces significant challenges, including limited municipal incentive budgets excluding some large-scale productions, higher production costs compared to other markets, and limited impact of governmental selective grants in addressing the sector’s workforce capacity issues. A federal incentive could help stimulate improvements across the audiovisual sector by supporting a steady stream of incentivised productions and related work opportunities and investments, as well as building on other recent sectoral developments. A cash rebate is likely to be the most straightforward model for a federal incentive, which should be promoted and administered by the recently proposed national film commission, providing the resources and national reach required.
Alejandra Luzardo Gutierrez, Sector Lead Specialist – Innovation at the Inter-American Development Bank (IADB) provided the study’s foreword, noting how the IADB has been closely monitoring the developments in Brazil’s audiovisual sector in recent years, and that to reach its full potential, the Brazilian audiovisual sector requires public and private investment, including a globally competitive incentive. Without such investments, Brazil risks losing its leadership position.