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1、A REPORT FORFEBRUARY 2024THE ECONOMIC CONTRIBUTION OF MEXICOS AUDIOVISUAL INDUSTRY1The economic contribution of Mexicos audiovisual industry in 2022Executive summary 21.Introduction 82.Total economic impact of the audiovisual industry 102.1 The impact on Mexicos GDP 102.2The impact on Mexicos employ

2、ment 112.3The productivity of audiovisual workers 112.4The impact on Mexicos tax revenues 123.Economic contribution by segment 143.1 Film and TV production and distribution 153.2Television 163.3Film exhibition 183.4Video on Demand(VOD)193.5Retail and reproduction 224.Additional impacts 244.1 Attract

3、ing FDI and related benefits 244.2Supporting regional development 254.3Encouraging film-induced tourism 274.4Promoting Mexican content through film festivals 275.Appendix 30TABLE OF CONTENTS2The economic contribution of Mexicos audiovisual industry in 2022The audiovisual(AV)industry in Mexico suppor

4、ts considerable amounts of GDP,jobs,and government revenue through the production and distribution of movies,TV shows,and other video content.This report demonstrates the integral role that the AV industry plays in the broader economy by estimating the industrys domestic economic footprint.Oxford Ec

5、onomics analysis comprises all aspects of the audiovisual industry,including film production,distribution,and exhibition;the production,distribution,and broadcast of television content on free-to-air and pay TV channels;and online video platforms.Our estimates provide a recent snapshot of the audiov

6、isual industry,including impacts at the broader industry level and broken out by sub-sector.1 Instituto Nacional de Estadstica y Geografa(INEGI),“Sistema de Cuentas Nacionales de Mxico.Cuenta de bienes y servicios(CBS),”2022(preliminary).2 Chamber of Deputies,“Presupuesto de Egresos de la Federacin

7、para el Ejercicio Fiscal 2022,”2022.TOTAL AUDIOVISUAL ECONOMIC IMPACTBased on our detailed analysis of Mexicos economy,we estimate that in 2022,the audiovisuals direct economic impact amounted to a MXN$138.7 billion contribution to domestic GDP and over 77,000 jobs.The audiovisual sector directly cr

8、eates more GDP in Mexico than that generated by the manufacturing of computers.1 The sector also supported significant tax payments for the Mexican government.We estimate that the industry directly supported MXN$19.2 billion in tax payments to the government,an amount equivalent to more than the ent

9、ire Ministry of Cultures proposed budget in 2022.2EXECUTIVE SUMMARYFig.1:The audiovisual industrys contribution to Mexicos economyGDP contribution(MXN$,billions)138.719.268.79.8Total228.832.177,00096,00031,000200,000Employment(headcount)Tax contribution(MXN$,billions)DirectIndirectInducedSource:Oxfo

10、rd EconomicsTotals may not sum due to rounding.21.43.1MXN$228.8 bnTotal GDP supported by the audiovisual sector In Mexico in 2022.3The economic contribution of Mexicos audiovisual industry in 2022Through its spending with local suppliers and employees,the audiovisual industry supports an even greate

11、r economic footprint in Mexico.In total,we estimate the industrys direct,indirect,and induced impacts,as illustrated in Fig.1,totaled MXN$228.8 billion in GDP,MXN$32.1 billion in tax revenues,and over 200,000 jobs across Mexicos economy.A significant multiplier effect is associated with the activity

12、 of the audiovisual industry in Mexico.In 2022,for every MXN$10 million of value created directly by entities within the audiovisual industry,there was an additional economic contribution to Mexicos GDP worth MXN$6.5 million,implying a GDP multiplier of 1.6.Similarly,for every individual directly wo

13、rking within Mexicos audiovisual industry,the industrys activities and expenditure additionally supported 1.6 workers across the rest of the domestic economy,implying an employment multiplier of 2.6.Across the whole audiovisual industry,the average direct output contribution per employee stood at MX

14、N$3.5 million in 2022.This implied productivity compared favorably to the wider Mexican economy,in which output per employee stood at MXN$1.3 million per worker.These results indicate that employees in the audiovisual industry are nearly three times as productive as the average employee in Mexico.Fi

15、g.2:Total contribution of each of the audiovisual industrys sub-sectors to Mexicos economyGDP contribution(MXN$,billions)39,00029.038.583,000Employment(headcount)96.920,000Source:Oxford EconomicsTotals may not sum due to rounding.6.413.64.1Tax contribution(MXN$,billions)1.85.40.845.76.0Film&TV produ

16、ction&distributionFree-to-air TVVideo on DemandRetail&reproductionPay TVFilm exhibitionTotal228.8200,00032.140,00011,00012.613,000200,000 Jobs supported by the audiovisual sector In Mexico in 2022.4The economic contribution of Mexicos audiovisual industry in 2022ECONOMIC IMPACT BY SEGMENT3Statista,“

17、Pay TV in Mexicostatistics&facts”and Digital TV Research,“Mexico pay TV forecasts,”September 2023 edition.4IADB,“Behind the Camera:Creativity and Investment for Latin America and the Caribbean:Learnings from Conversations with Key Players in the Audiovisual Sector,”2021.Film&TV production&distributi

18、onAt the core of a countrys film and TV industry is the production of motion pictures and TV programs.In 2022,the film and TV production and distribution sector made a direct contribution to Mexicos GDP worth MXN$6.3 billion,while creating nearly 4,500 jobs,and supporting MXN$0.9 billion in tax cont

19、ributions.Including its indirect and induced impacts,the segment contributed MXN$12.6 billion in GDP,MXN$1.8 billion in taxes,and nearly 13,000 jobs.TelevisionOne of the most significant components of the traditional television industry is free-to-air(FTA)television.FTA television consists of progra

20、mming delivered without subscription or usage charges,usually generating revenue from advertising.We estimate that FTA TVs direct contribution to Mexicos GDP was MXN$57.6 billion in 2022.In addition,FTA TV directly generated MXN$8.0 billion in tax revenues and supported over 23,000 jobs.With additio

21、nal impacts from supply chain and consumer spending,the impact of this sub-sector totalled MXN$96.9 billion in GDP,83,000 jobs,and MXN$13.6 billion in tax receipts.The other major segment of the traditional television industry is pay TV.Mexico is,by far,the largest pay TV market in Latin America,acc

22、ording to Statista estimates,with more subscribers in 2022 than Brazil and Chile combined.3 The pay TV sector is comprised of subscription television services and in 2022,our estimates indicate that the direct contribution of the pay TV industry added MXN$27.2 billion in value to GDP.This direct con

23、tribution created MXN$3.8 billion in tax payments and around 11,000 jobs across Mexico.In 2022,we estimate that,including all channels of impact,the pay TV industry supported a MXN$45.7 billion value added contribution to GDP,stimulated some 39,000 jobs,and supported MXN$6.4 billion in tax payments.

24、Film exhibitionOne of the main drivers of revenues supporting the production of new film content is the screening of films in cinemas.Mexico is known to have the highest concentration of cinemas in the region.4 In 2022,this segments direct contribution totalled MXN$18.2 billion in GDP,27,000 jobs,an

25、d MXN$2.5 billion in tax revenues.Including supply chain and wage effects,the segment supported MXN$29.0 billion of Mexicos GDP,40,000 jobs,and a MXN$4.1 billion tax contribution to the Mexican government.VODThe Video on Demand(VOD)segment refers to professional and curated online video content,but

26、excludes user-generated platforms such as YouTube.VOD uses internet networks to deliver content outside of traditional methods such as movie theaters and television networks,with content usually viewed through internet browsers and mobile applications.We find that in 2022,the segment directly contri

27、buted an estimated MXN$25.8 billion to Mexicos GDP,employed 4,300 people,and generated MXN$3.6 billion in tax receipts.Including the indirect and induced impacts,the total economic activity within the sector supported MXN$38.5 billion in GDP,MXN$5.4 billion in taxes,and some 20,000 jobs.Retail&repro

28、ductionThe retail and reproduction segment encompasses companies whose main activity is to sell or rent DVDs,Blu-ray discs,and other physical media containing audiovisual 5The economic contribution of Mexicos audiovisual industry in 2022material to consumers.To capture the digital portion of the ret

29、ail segment,in this report the industry also includes Download to Own(DTO)activities,as well as digital rental of audiovisual products.5Gobierno de Mexico,“Flujo anual de IED en Industria Flmica y del Video,”2022.6Rhse,Viola,“Travel inspiring skeletons in Spectre and Coco,”2021.7Olsberg SPI,“An Audi

30、ovisual Production Incentive for Mexico,”May 2023.8IMCINE,“Statistical Yearbook of Mexican Cinema,”2022.9Peirano,M.P.,&Vallejo,A.,“Iniciativas de educacin cinematogrfica en los festivales de cine de Iberoamrica,”2021.In 2022,some 7,000 people were employed directly by the sector,creating a direct GD

31、P of MXN$3.5 billion.In total,the segment supported MXN$6.0 billion to Mexicos GDP,11,000 jobs,and MXN$0.8 billion in taxes.ADDITIONAL IMPACTSAside from the quantifiable impacts by sub-sector described above,the audiovisual sector contributes to Mexicos economy and culture in myriad other ways.First

32、ly,the AV industry stimulates and attracts foreign direct investment(FDI),which in turn provides capital,jobs,and advanced technologies,amongst other benefits.Recent statistics suggest that,in 2022,foreign direct investment in the film and video industry in Mexico reached MXN$463 million.5 Domestic

33、policies incentivizing foreign investment further facilitate growth of the industry with spillover effects to the broader Mexican economy.Policies such as the recent decree published in October 2023,which grants tax benefits to export-oriented industries,encourages workforce development and investme

34、nt in fixed assets.The momentum of the recent public policies in the audiovisual industry signals to the global economy that Mexico is truly invested in cementing its position in the global marketplace,though much remains to be done.Another key benefit that Mexicos audiovisual industry brings to its

35、 local residents and the broader film community is the sharing and appreciation of Mexicos rich history and culture.The audiovisual industry has been strategic in driving the countrys perception and reputation.Local content emphasizing Mexican culture and customs included in films such as Spectre an

36、d Coco has played a tangible role in increasing film induced tourism.The Dia De Muertos parade(featured in Spectre)had 425,000 spectators in 2016,which quickly grew to over two million in three years.According to recent figures,in 2019 the festivities attracted more than 7.5 million international to

37、urists,not just from the nearby US,but also from Canada,France,and China.6 Similarly,the success of film Coco was also associated with boosts in visitors to the country as a published guide of destinations inspired by the film was followed by a 425%increase in tourists in Michoacan(the state where t

38、he tour route runs through)from 2018 to 2019.7Film festivals play another key role in generating economic activity through expenditure with local suppliers,wages paid,and taxes raised.The number of film festivals has been steadily growing over the last decade in Mexico;in 2022,the Mexican Film Insti

39、tute(IMCINE)recorded 234 film festivals and events(4.5x the amount of 2010)spread throughout most Mexican states.8 IMCINE estimates that attendance to festivals and events reached 10.5 million people in 2022,with 5%of the festivals having over 250,000 attendees.While the section about the film exhib

40、ition sector(which includes film festivals)covers the economic impacts of the sector to the broader economy,there are wider impacts of the film festival industry that may not be captured through economic statistics.Mexican film festivals promote domestic content,broadcast it to a wider audience,and

41、attract industry professionals from around the world to Mexico.They also often help turn the spotlight on small,independent,and new filmmakers.In addition,film festivals offer educational value to their audiences,with studies showing that festivals and parallel training activities are ideal spaces t

42、o complement the educational curriculum at various levels.9The economic contribution of Mexicos audiovisual industry in 2022The audiovisual industry in Mexico has a GDP multiplier of 1.6.AUDIOVISUAL SECTOR EMPLOYMENT THE MEXICAN AUDIOVISUAL INDUSTRY IN 2022:CREATING JOBS,ECONOMIC ACTIVITY,AND ATTRAC

43、TING FDI*Totals may not sum due to rounding.For every individual directly employed in Mexicos audiovisual industry,1.6 additional jobs are supported across the country through the sectors supply-chain and wage-induced spending.Direct Jobs77,000Total Jobs supported in 2022200,000+DIRECTINDIRECTINDUCE

44、DTHE INDUSTRY CONTRIBUTES SIGNIFICANTLY TO MEXICOS OVERALL ECONOMYIn 2022 foreign direct investment in the film and video industry in Mexico reachedMXN$463 mn3xEmployees in the audiovisual industry were nearly three times as productive as the average employee in Mexico in 2022.Direct contributionWho

45、le economy contributionMXN$138.7 bnMXN$228.8 bnGDP CONTRIBUTION,*2022DIRECT GDP CONTRIBUTION*BY SEGMENT,2022Retail&reproductionMXN$3.5 bn;2%Film&TV production&distributionMXN$6.3 bn;4%Pay TVMXN$27.2 bn;20%Film exhibitionMXN$18.2 bn;13%Video on DemandMXN$25.8 bn;19%44+2020+4242+1313+22+1919+E+EMXN$13

46、8.7 billionFree-to-air TVMXN$57.6 bn;42%DIRECT EMPLOYMENT CONTRIBUTION*BY SEGMENT,2022Retail&reproduction7,300;9%Film exhibition27,000;35%Video on Demand4,300;6%Film&TV production&distribution4,500;6%Pay TV11,000;14%Free-to-air TV23,000;30%66+1414+3030+3535+99+66+E+E77,000 jobsDirect contributionWho

47、le economy contributionMXN$19.2 bnMXN$32.1 bnTAX REVENUE CONTRIBUTION,*2022MXN$19.2 bnMXN$9.8 bnMXN$3.1bnMXN$138.7 bnMXN$68.7 bnMXN$21.4bn7The economic contribution of Mexicos audiovisual industry in 20228The economic contribution of Mexicos audiovisual industry in 2022Mexico is of significant strat

48、egic interest as a destination for global audiovisual(AV)producers and investors,with its strong domestic production sector and notable talent.The country benefits from a rich film history and culture;since its cinema golden age in the mid-20th century,its been churning out talent,most visibly in th

49、eir Academy Award-winning directors,but also,behind the scenes,in the thousands of experienced camera operators,production designers,and light technicians employed in the sector.The creativity and innovation of all segments of the Mexican audiovisual industryfrom production to content exhibitionsupp

50、orts economic activity and jobs through a broad range of local companies and industries.Several countries in Latin America have identified the creative industries as an important strategic vehicle to assist economic development.Against this backdrop,the Motion Picture Association(MPA)commissioned th

51、is analysis to understand the true economic value that the audiovisual industry brings to Mexico.1010This study constitutes a more comprehensive assessment of the Mexican AV industry compared with IDB and Netflix,“The Economic Impact of the Screen Industries in Latin America,”2023.This study uses 20

52、22 as the base year for the impact analysis as this was the last year with available data.We also present direct economic impacts in 2023 and 2024 drawing from industry growth projections.To assess the total economic impact of the audiovisual industry,we measured the individual contributions of the

53、following segments:i)the production and distribution of film and TV content;ii)free-to-air TV;iii)pay TV;iv)the exhibition of films in theaters;v)Video on Demand(VOD);and vi)retail and reproduction.Notably,this is the first economic impact assessment to include digital media and Video on Demand as p

54、art of the audiovisual sector in Mexico.The structure of the report is as follows:chapter 2 reports on the economic impact of the audiovisual industry as a whole,while chapter 3 offers a sector-by-sector analysis.Chapter 4 provides a discussion on the wider impacts of Mexicos AV sector,and the techn

55、ical appendix is found in chapter 5.1.INTRODUCTIONKEY DATA SOURCESOxford Economics collected extensive data about the audiovisual sector from Mexicos official national statistics agencyINEGIand other sources.Our use of these data was essential to estimating the total size and key characteristics of

56、the sector,such as gross value added contribution to GDP,employee compensation,and intermediate consumption.In particular,we used the following data sources:2022 Preliminary INEGI System of National Accounts,Goods&Services.The database constitutes the most comprehensive source for many economic and

57、financial information including production,paid jobs,employee compensation,and intermediate consumption.2019 Economic Census data referencing 2018 economic activity by detailed industry level.Several proprietary reports and data sources,including IBISWorlds Wired Telecommunications Carriers in Mexic

58、o report and Digital TV Researchs Mexico OTT&Pay TV Forecasts report.9The economic contribution of Mexicos audiovisual industry in 2022HOW WE ARRIVED AT THESE FIGURESOxford Economics was commissioned by the MPA to assess the economic contribution of the audiovisual industry in Mexico.This section ou

59、tlines how these estimates were produced.For further details,please refer to the Appendix.Direct economic contributionThe GDP,employment,and tax contributions due to the activities of businesses in the audiovisual industry themselves are referred to as direct economic contributions.The direct activi

60、ties of the audiovisual industries were primarily assessed based on official data published by the INEGI.Details on all data sources can be found in the“Key Data Sources”box above,as well as in the technical appendix.These data were used to estimate the direct gross output(i.e.,revenue),employment,d

61、irect GDP,and taxation.Additional economic contributionsThe total economic contribution of the audiovisual industry to the Mexican economy also includes two further channels of economic contribution.The indirect contribution includes the GDP,employment,and tax contributions of companies in the suppl

62、y chains of the audiovisual industry.The induced contribution considers the value generated as employees of the AV industry and its supply chain spend their earnings domestically.These impacts are quantified using an economic impact model,based on official 2018 Mexico Input-Output tables,which provi

63、de data on the pattern of purchases for industry sectors and households in the economy.TOTALIMPACTEmployees(including of the suppliers)spend their wages in the wider economy,generating more GDP,jobs,and tax revenues.Added together,these three efectsdirect,indirect,inducedcomprise the total economic

64、impact of the company or sector.DIRECTIMPACTINDIRECTIMPACTIt also spends money with suppliers who employ staf,generate GDP,and pay taxes.They use other suppliers in turn.A company employs staf and generates GDP and tax for the authorities.INDUCED IMPACT10The economic contribution of Mexicos audiovis

65、ual industry in 202211Instituto Nacional de Estadstica y Geografa(INEGI),Sistema de Cuentas Nacionales de Mxico.Cuenta de bienes y servicios(CBS).2022(preliminary).and were worth nearly MXN$138.7 billion(Fig.3).The audiovisual sector directly creates more GDP in Mexico than that generated by the man

66、ufacturing of computers.11 In 2022,the direct operations of businesses within the audiovisual industry itself accounted for more than 60%of the industrys total contribution to Mexicos GDP 2.TOTAL ECONOMIC IMPACT OF THE AUDIOVISUAL INDUSTRYThe total economic contribution of the audiovisual industry i

67、s expressed in this report in terms of its impact on Gross Domestic Product(GDP)the standard measure of a countrys economic outputemployment,and tax revenues.These impacts occur in three tiers.The first tier is made up by the“direct”operations of businesses within the audiovisual industry in Mexico.

68、The second occurs through the“indirect”supply chain spending of those operations.And the third occurs through the wage expenditure that is“induced”Fig.3:Economic contribution of Mexicos AV industry,2022DirectIndirectInducedSource:Oxford EconomicsTotals may not sum due to rounding.MXN$,billionsGDP(MX

69、N$bn)Tax(MXN$bn)250015020010050228.832.121.468.7138.719.29.83.1Jobs,thousandsEmployment(jobs 000s)250015020010050200319677from the earnings of those employed in the industry,and in its supply chain.We estimate that,in total,the audiovisual industry supported over 200,000 jobs in 2022 and contributed

70、 over MXN$228.8 billion to Mexicos GDP.The industry was responsible for supporting a combined total tax contribution worth MXN$32.1 billion in 2022.The disaggregated contribution across the three channels of impact is displayed in Fig.3,and explained in more detail below.2.1 THE IMPACT ON MEXICOS GD

71、P11The economic contribution of Mexicos audiovisual industry in 2022The total economic contribution of the audiovisual industry in Mexico is much wider than its direct operations.This wider impact manifests itself through the industrys indirect supply chain spending,which supported a MXN$68.7 billio

72、n contribution to Mexicos GDP in 2022,and it extends even further through the induced expenditure of those employed in the audiovisual industry and its supply chain,which contributed MXN$21.4 billion to the economy in that year.A significant multiplier effect is associated with the activity of the a

73、udiovisual industry in Mexico.In 2022,for every MXN$10 million of value created directly by entities within the audiovisual industry,there was an additional economic contribution to Mexicos GDP worth MXN$6.5 million,implying a GDP multiplier of 1.6.2.2THE IMPACT ON MEXICOS EMPLOYMENTThe Mexican audi

74、ovisual industry directly employed over 77,000 people in 2022.However,the largest portion of the industrys overall employment footprint came from its supply chain.Over 96,000 jobs were supported through this indirect channel,with a further 31,000 employed through the induced effect of wage expenditu

75、re.This means that for every individual directly working within Mexicos audiovisual industry,the industrys activities and expenditure additionally supported 1.6 workers across the rest of the domestic economy,implying an employment multiplier of 2.6.2.3THE PRODUCTIVITY OF AUDIOVISUAL WORKERSAcross t

76、he whole of the audiovisual industry,the average direct output contribution per employee stood at MXN$3.5 million in 2022(Fig.4).This implied productivity compared favorably to the wider Mexican economy,in which output per employee stood at MXN$1.3 million per worker.These results indicate that empl

77、oyees in the audiovisual industry are nearly three times as productive as the average employee in Mexico.Productivity is highest in the Video on Demand industry,averaging MXN$10.6 million output per worker.In the retail and reproduction industry,average productivity was MXN$1.0 million in 2022,the l

78、owest in the sector.Interestingly,productivity varies widely even across impact channels.As discussed,direct productivity stood at MXN$3.5 million output per worker,while indirect and induced productivities were MXN$1.2 million and MXN$1.1 million per employee,respectively.This is in line with expec

79、tations,as indirect productivity reflects the supply chain of the sector and mirrors the state of the Mexican economy more broadly,while induced productivity reflects the consumer economy,which tends to display higher labor intensity and hence lower productivity.12The economic contribution of Mexico

80、s audiovisual industry in 20222.4THE IMPACT ON MEXICOS TAX REVENUES 12Chamber of Deputies,“Presupuesto de Egresos de la Federacin para el Ejercicio Fiscal 2022,”2022.13INEGI,Finanzas Pblicas Estatales y Municipales,2022.The activities of the audiovisual industry in 2022 were associated with a direct

81、 tax contribution of MXN$19.2 billion,an amount that could have funded more than the entire Ministry of Cultures 2022 proposed budget.12 Adding the indirect contribution,worth MXN$9.8 billion,and a further MXN$3.1 billion generated through the induced contribution,the industry supported a total of M

82、XN$32.1 billion in tax contributions to all levels of Mexican government.To put this figure into perspective,this is close to 90%of the total expenditure of the state of Morelos in 2022.13Fig.4:Output per worker across audiovisual segments12,000,00008,000,00010,000,0002,000,0006,000,0004,000,000Outp

83、ut per worker,MXN$Video on DemandTelevisionAudiovisual industryFilm&TV production&distributionMexico formal economyRetail&reproductionSource:Oxford EconomicsFilm exhibition10.6mn2.7mn3.5mn1.3mn4.9mn1.3mn1.0mn13The economic contribution of Mexicos audiovisual industry in 202214The economic contributi

84、on of Mexicos audiovisual industry in 20223.ECONOMIC CONTRIBUTION BY SEGMENTThis section of the report describes the economic contribution that was made by each segment of the audiovisual industry in Mexico in 2022.As mentioned,the industry is constituted by the following segments:i)the production a

85、nd distribution of film and TV content;ii)free-to-air TV;iii)pay TV;iv)the exhibition of films in theaters;v)Video on Demand(VOD);and vi)retail and reproduction.All segments within the audiovisual industry support the Mexican economy;the bulk of that contribution is made by the free-to-air-and pay-t

86、elevision segments,which jointly supported nearly two thirds of the industrys direct contribution to Mexicos GDP in 2022(Fig.5).The Mexican audiovisual industry directly employed over 77,000 people in 2022,with the largest portion supported by film exhibition(27,000 people).The free-to-air TV indust

87、ry was the second largest and directly employed 23,000 people,while the pay TV segment directly employed a total of 11,000 people in 2022(Fig.6).Lastly,the combined audiovisual industry was responsible for a direct tax contribution of MXN$19.2 billion in 2022.The majority of this,totaling MXN$8.0 bi

88、llion,came via the free-to-air TV industry,with an additional MXN$3.8 billion from the pay TV industry,and MXN$3.6 billion from the Video on Demand segment.Film and TV production and distributionFree-to-air TVVideo on DemandRetail and reproductionPay TVFilm exhibitionFig.6:Direct contribution of Mex

89、icos AV industry to employmentSource:Oxford EconomicsDirect employment(headcount)1414+3030+3535+99+66+66+AA4,50011,00023,0007,30027,0004,300Fig.5:Direct contribution of Mexicos AV industry to GDPSource:Oxford EconomicsMXN$,billions44+2020+4242+1313+22+1919+A+A6.327.257.618.225.83.515The economic con

90、tribution of Mexicos audiovisual industry in 20223.1 FILM AND TV PRODUCTION AND DISTRIBUTION14NPR,“More shows and films are made in Mexico,where costs are low and unions are few,”23 May 2023.15El Pais,“The other nearshoring:film and TV production stands out in Mexico,”15 March 2023.At the core of a

91、countrys film and TV industry is the production of motion pictures and TV programs,through which businesses create value for the domestic economy,as well as cultural assets.Our analysis in this section focuses on the value generated by both the production and distribution of this content.The segment

92、s direct economic contribution was MXN$6.3 billion in 2022.The indirect impact,generated along the supply chain that supports film and TV programs production and distribution,contributed an additional MXN$3.5 billion to GDP.Finally,the induced impact,generated by the wage expenditure of those employ

93、ed in the sector and its supply chain,was worth a further MXN$2.8 billion.This constitutes a total contribution to GDP worth MXN$12.6 billion(Fig.7).This activity helped to support an employment footprint totaling nearly 13,000 jobs in 2022.The direct activities of the industry supported nearly 4,50

94、0 jobs.Meanwhile,the indirect supply chain impacts supported another 4,400 jobs.The induced impacts supported another 4,100 jobs.The main tax contribution came from direct activities,which produced revenues of nearly MXN$900 millionor 49%of the segments total tax footprint.The total tax contribution

95、 made by this segment in 2022 totaled about MXN$1.8 billion.While these findings relate to 2022,more and more American and European companies are choosing Mexico for their film and TV shoots,taking advantage of lower costs and experienced local crews.In 2019,15%of the Mexican Filmmakers Association

96、members work came from production services for foreign companies;in 2022,it was 36%and is expected to keep growing.14When foreign companies commission projects,they usually travel to the location to supervise.For example,Mexican production company The Lift reported that the work commissioned to them

97、 in a year resulted in 8,500 nights at the Four Seasons hotel,making them a bigger spender than JPMorgan,Ford,and even the Formula 1 Grand Prix.15Making the country even more appealing for audiovisual production,on October 11,2023,Mexicos Ministry of Finance published a“Decree to Grant Tax Incentive

98、s to Key Sectors of the Export Fig.7:Economic contribution of film and TV production and distribution in Mexico,2022MXN$,billionsJobs,thousandsDirectIndirectInducedSource:Oxford EconomicsTotals may not sum due to rounding.GDP(MXN$bn)Tax(MXN$bn)1402648101212.62.83.56.31.80.90.50.4Employment(jobs 000s

99、)1401012486213.04.14.44.516The economic contribution of Mexicos audiovisual industry in 2022Industry through Accelerated Depreciation for New Fixed Assets and Additional Deductions on Training Expenses.”The Decrees primary objective is to provide tax benefits to companies operating within pivotal se

100、ctors of Mexicos export industry.These incentives specifically target taxpayers 16Olsberg SPI,“An Audiovisual Production Incentive for Mexico,”May 2023.17Statista,“Most watched free TV channels in Mexico as of March 2022,by signal type.”who participate in the production of cinematographic or audiovi

101、sual works protected by copyright for export.Foreseeing the introduction of some kind of incentive for the industry,Olsberg SPI modeled the potential economic impact of the industry under three incentive scenarios.16 The estimates in Fig.8 leverage the results from Olsberg SPIs central scenario(Low

102、Adoption)to forecast near term developments in the industry.Under such assumptions,we project the industry could create a direct GDP contribution of MXN$11.4 billion and 7,500 jobs by 2024.3.2TELEVISION3.2.1 Free-to-air TVOne of the most significant components of the traditional television industry

103、is free-to-air(FTA)TV.This consists of programming delivered without subscription or usage charges,usually generating revenue from advertising.The most watched free TV channel in 2022 was watched by over half of the Mexican population.17In 2022,the largest source of GDP impact came from its direct a

104、ctivities,worth MXN$57.6 billion.Meanwhile,the indirect supply chain impact and induced consumer spending impact contributed MXN$30.7 billion and MXN$8.5 billion,giving a total Fig.8:Direct size of the film&TV production sector,projections for 202224YearDirect GDP contribution (MXN$billions)Direct t

105、axes(MXN$billions)Direct jobs (headcount,thousands)20226.30.94.520238.61.25.9202411.41.67.5Fig.9:Economic contribution of free-to-air television in Mexico,2022MXN$,billionsJobs,thousandsDirectIndirectInducedSource:Oxford EconomicsTotals may not sum due to rounding.GDP(MXN$bn)Tax(MXN$bn)1200206040801

106、0096.98.530.757.613.68.04.41.2Employment(jobs 000s)90050602040301070808312472317The economic contribution of Mexicos audiovisual industry in 2022economic footprint worth MXN$96.9 billion(Fig.9).In total,FTA television was responsible for creating over 23,000 jobs through its direct activities.Nearly

107、 47,000 workers were employed in its domestic supply chain,and over 12,000 through the consumer spending it induced.This is a total of nearly 83,000 jobs supported in Mexico.18Statista,Pay TV in Mexicostatistics&facts and Digital TV Research,Mexico pay TV forecasts,September 2023.FTA television gene

108、rated a total tax footprint worth MXN$13.6 billion in 2022,with nearly MXN$8.0 billion of this attributable to its direct activities.This impact is projected to grow further in the near term,as illustrated in Fig.10.The estimates are based on Digital TV Researchs projections for free-to-air satellit

109、e TV households and suggest the FTA TV sector could generate 24,000 jobs and some MXN$63.1 billion GDP contribution by 2024.3.2.2Pay TVThe other major segment of the traditional television industry is pay television.Mexico is,by far,the largest pay TV market in Latin America,according to Statista es

110、timates.The country was home to approximately 17.9 million subscribers in 2022,more than Brazil and Chile combined.18In 2022,the pay TV industry made a direct contribution to GDP worth MXN$27.2 billion.The indirect impact,generated along the supply chain that supports pay TV activities,contributed a

111、n additional MXN$14.5 billion to GDP.Finally,the induced impact,generated by the wage expenditure of those employed in the sector and its supply chain,was worth a further MXN$4.0 billion.Pay TV supported MXN$45.7 billion in total GDP(Fig.11).This activity helped to support an employment footprint Fi

112、g.10:Direct size of the FTA TV sector,projections for 202224YearDirect GDP contribution (MXN$billions)Direct taxes(MXN$billions)Direct jobs (headcount,thousands)202257.68.023202360.88.424202463.18.824Fig.11:Economic contribution of pay TV in Mexico,2022Jobs,thousandsDirectIndirectInducedSource:Oxfor

113、d EconomicsTotals may not sum due to rounding.Employment(jobs 000s)45025301020155354039.05.922.011.0MXN$,billions50051510202530354045GDP(MXN$bn)Tax(MXN$bn)45.74.014.527.26.43.82.10.618The economic contribution of Mexicos audiovisual industry in 20223.3FILM EXHIBITION19IADB,“Behind the Camera:Creativ

114、ity and Investment for Latin America and the Caribbean:Learnings from Conversations with Key Players in the Audiovisual Sector,”2021.20IMCINE,“Statistical Yearbook of Mexican Cinema,”2022.21Ibid.22Ruiz Duran,C.,“Impacto de la Industria Cinematogrfica en la Economa Mexicana,”2019.Mexico is known to h

115、ave the highest concentration of cinemas in the region.19 In 2022,a total of 7,410 movie screens were reported in Mexico,with Jalisco,Nuevo Len,Mexico City,and the Metropolitan Area registering the highest numbers of theater complexes.20The number of exhibition venues in Mexico increased by 12%in 20

116、22 compared to 2021,totaling 782 venues,signaling the rebound of the sector following COVID-19 pandemic closures.Additionally,theater attendance increased by 63 million from 2021 to 2022,reaching 173 million in 2022.21 The increase in exhibition venues and attendance has direct economic implications

117、 on the sector,along with wider spillover effects on other industries.For instance,exhibition complexes are often situated near other entertainment venues such as restaurants and shopping establishments,driving consumer spending in these sectors.Additionally,as employment within a locale increases d

118、ue to the demand for theater staff,local businesses benefit further as a result of increased wage induced spending.22In 2022,the film exhibition segment contributed MXN$29.0 billion to Mexicos GDP(Fig.13).The majority of this contribution came from direct activities of movie theaters,which totaled M

119、XN$18.2 billion.A further MXN$8.0 billion came as an indirect impact from the supply chain supporting this segment,and the remaining impact,worth MXN$2.8 billion,was contributed by induced consumer spending.The segment sustained a total of over 40,000 jobs.Of these,the largest share came from the di

120、rect activities of film exhibitors,totaling nearly 27,000 jobs.Out of the 782 exhibition venues tallied by IMCINE,nearly half of the employees directly Fig.12:Direct size of the Pay TV sector,projections for 202224YearDirect GDP contribution (MXN$billions)Direct taxes(MXN$billions)Direct jobs (headc

121、ount,thousands)202227.23.811202325.23.59.9202423.73.39.0totaling nearly 39,000 jobs in 2022.The indirect supply chain impacts generated the largest share of jobs,at 22,000.Meanwhile,the direct effect and induced impact supported 11,000 and 5,900 jobs,respectively.The tax contribution made by this se

122、gment in 2022 totaled MXN$6.4 billion.The main contribution came from direct activities,which produced tax revenues of MXN$3.8 billionapproximately 59%of the segments total tax footprint.This impact is projected to decline in the next couple of years,in line with projections by Digital TV Research(F

123、ig.12).We expect the direct GDP contribution generated by the industry to fall to MXN$23.7 billion,and the employment effect of the sector to reach 9,000 workers by 2024.19The economic contribution of Mexicos audiovisual industry in 2022employed by these venues were women,representing 47%of employme

124、nt.23 A further 9,100 people were employed indirectly,while the induced contribution sustained 4,200 jobs.Overall,film exhibition contributed a total of MXN$4.1 billion in tax revenues,with MXN$2.5 billion of the total impact coming from direct activities.Statista estimates that Mexicos box office r

125、evenue could grow by 56%between 2022 and 2024,and we use these estimates to inform our growth projections for the industry,depicted in Fig.14.We estimate that by 2024,the film exhibition sector could directly generate 39,000 jobs and some MXN$28.3 billion in GDP.23IMCINE,“Statistical Yearbook of Mex

126、ican Cinema,”2022.24Video on demand in the context of this report refers strictly to non-linear programming,that is where consumers choose explicitly which show/movie/episode they wish to watch.3.4VIDEO ON DEMAND(VOD)In recent years,the internet has revolutionized the distribution of audiovisual con

127、tent globally,driven largely by the emergence of a range of online video services.Video on demand(VOD),sometimes also referred to as over the top(OTT)distribution,uses internet networks to deliver content outside of traditional methods such as movie theaters and television networks,with content usua

128、lly viewed through internet browsers and mobile applications.24To assess the economic impact of the VOD segment,we define VOD as professional Fig.14:Direct size of the film exhibition sector,projections for 202224YearDirect GDP contribution (MXN$billions)Direct taxes(MXN$billions)Direct jobs (headco

129、unt,thousands)202218.22.527202325.43.536202428.33.939Fig.13:Economic contribution of film exhibition in Mexico,2022Jobs,thousandsDirectIndirectInducedSource:Oxford EconomicsTotals may not sum due to rounding.Employment(jobs 000s)45025301020155354040.04.29.127.0MXN$,billions35051510202530GDP(MXN$bn)T

130、ax(MXN$bn)29.02.88.018.24.12.51.10.420The economic contribution of Mexicos audiovisual industry in 2022and curated online video content and do not include user-generated platforms such as YouTube.We find that VOD directly contributed MXN$25.8 billion in GDP,MXN$10.4 billion through its supply chain,

131、and MXN$2.3 billion through wage-induced spending channels.In total,this means VOD contributed an estimated MXN$38.5 billion to Mexicos GDP in 2022(Fig.15).VOD services supported a total of nearly 20,000 jobs in 2022,with 4,300 people working directly for VOD platforms in Mexico.25 The supply chain

132、segment sustained another 12,000 jobs and the remaining 3,400 were employed through wider induced activity.The sector has been growing considerably over the past few years.Mexicos most recent National Survey of Audiovisual Content Consumption indicates that 54%of interviewed households consume audio

133、visual content online,up 8 percentage points compared to 2018.26 Another survey from the INEGI also illustrates this trend(Fig.16),reinforcing the importance and demand growth of the VOD sector in the Mexican economy.27The increase in demand for online video services positively correlates with the r

134、evenue 25Employment data for the VOD industry are not available for Mexico.We chose to estimate employment by adjusting the GVA per worker ratio of the traditional AV sector in Mexico following the study:Olsberg SPI,Study on the Economic Contribution of the Motion Picture and Television Industry in

135、Australia,November 2019.26IFT,“Encuesta Nacional de Consumo de Contenidos Audiovisuales,”2023.27INEGI,“National Survey on Availability and Use of Information Technologies in Households,”20192022.growth of VOD companies in Mexico.Since 2016,VOD revenues have increased from MXN$8.7 billion to MXN$43.5

136、 billion in 2022,an almost 5x increase,as can be seen in Fig.17 below.Most platforms generate revenue through subscription fees(SVOD).Conversely,Fig.15:Economic contribution of VOD services in Mexico,2022Jobs,thousandsDirectIndirectInducedSource:Oxford EconomicsTotals may not sum due to rounding.Emp

137、loyment(jobs 000s)250102015520.03.412.04.3MXN$,billions45051510202530GDP(MXN$bn)Tax(MXN$bn)354038.52.310.425.85.43.61.50.3PercentageFig.16:Percentage of internet households viewing paid audiovisual content onlineSource:INEGI,Oxford Economics60%40%201920222021202043%46%49%50%21The economic contributi

138、on of Mexicos audiovisual industry in 2022advertising-supported video on demand(AVOD)is free to consumers and generates revenue through advertisement to offset production and hosting costs.In 2022,SVOD is estimated to have made up nearly three quarters of online video services revenues,with the port

139、ion of the video on demand sector attributable to AVOD providers at 28%of the total.28 Recent revenue data for both the SVOD and AVOD segments of the OTT sector show that both have been 28It should be noted that previous reports and industry studies often include online rental and Download to Own(DT

140、O)as part of the OTT/VOD segment,whereas this report captures these two under Retail and reproduction,covered in section 3.5.29Dataxis,“Netflix and telcos:unique strategy to maximise SVOD reach in Latin America,”2023.growing consistently since 2016(Fig.17).The size of the VOD sector in Mexico is pro

141、jected to grow further in the near term,as illustrated in Fig.18.The estimates are based on Digital TV Researchs projections for OTT revenues and suggest the sector could generate 5,100 jobs and some MXN$32.7 billion GDP contribution by 2024.The future growth of the sector lies in not only new onlin

142、e video service providers entering the market in Mexico,but in further market penetration.Additionally,providers have started to offer hybrid SVOD-AVOD platforms and combined products that bundle services across OTT and TV service providers.As consumers respond to the increased supply of these produ

143、cts and services,new opportunities arise for service providers to introduce content consolidation and subscription management services.29Fig.18:Direct size of the VOD sector,projections for 202224YearDirect GDP contribution (MXN$billions)Direct taxes(MXN$billions)Direct jobs (headcount,thousands)202

144、225.83.64.3202329.64.14.7202432.74.55.1Source:Adapted from Digital TV ResearchFig.17:VOD revenue,by type,20162022AVOD revenuesSVOD revenuesMXN$,billions50051510202530354045201620192018202020172021202222The economic contribution of Mexicos audiovisual industry in 20223.5RETAIL AND REPRODUCTION30Throu

145、gh DTO products,customers can purchase specific film or television content through the internet and have access to them indefinitely.This segment encompasses companies whose main activity is to sell or rent DVDs,Blu-ray discs,and other physical and digital media containing audiovisual material to co

146、nsumers.In recent years,this part of the industry has experienced a decline given the emergence of new business models(e.g.,VOD).The advance of piracy,now facilitated by the widespread access to broadband internet,has also contributed to the drop in sales and rentals of physical and digital media.To

147、 capture the digital portion of the retail segment,in this report the industry also includes Download to Own(DTO)activities,as well as digital rental of audiovisual products.30 In 2022,the retail and reproduction segment contributed MXN$6.0 billion to Mexicos GDP(Fig.19).The majority of this contrib

148、ution came from the direct activities of the sector,totaling MXN$3.5 billion.This segment sustained a total of nearly 11,000 jobs.Of these,the largest share also came from direct employment,totaling 7,300 jobs.A further 2,000 people were employed indirectly,while the induced contribution supported 1

149、,300 jobs.Overall,the retail and reproduction sectors direct activities contributed MXN$0.5 billion in tax revenues,and a total contribution of MXN$0.8 billion in 2022.As the sector has both a digital and a physical component,and the two are expected to trend in opposite directions,our projections c

150、onsider both trends,drawing from Digital TV Research estimates for online rental revenues and historical data on video tape and disk rent and lease from Statista.On net,we estimate the sector will grow slightly to generate some 7,400 jobs and a MXN$3.8 billion GDP contribution by 2024(Fig.20).Fig.20

151、:Direct size of the retail and reproduction sector,projections for 202224YearDirect GDP contribution (MXN$billions)Direct taxes(MXN$billions)Direct jobs (headcount,thousands)20223.50.57.320233.70.57.420243.80.57.4Fig.19:Economic contribution of retail&reproduction in Mexico,2022MXN$,billionsJobs,tho

152、usandsDirectIndirectInducedSource:Oxford EconomicsTotals may not sum due to rounding.GDP(MXN$bn)Tax(MXN$bn)701 324566.00.91.63.50.80.50.20.1Employment(jobs 000s)12010486211.01.32.07.323The economic contribution of Mexicos audiovisual industry in 202224The economic contribution of Mexicos audiovisual

153、 industry in 20224.ADDITIONAL IMPACTSThe impacts of the audiovisual sector in Mexico extend far beyond the quantifiable impacts outlined in earlier sections of this report.Government policies and incentives enhance opportunities for more resources to flow into the country.This,in turn,provides oppor

154、tunities for the sector to grow,develop local talent,and support other adjacent industries.Leveraging existing production hubs and creating regional clusters around those also enable a concentration of resources and streamlined policies.As the growing creative industry garners additional internation

155、al attention and draws visitors 31Fredrick,James,“More shows and films are made in Mexico,where costs are low and unions are few,”23 May 2023.32Gobierno de Mexico,“Flujo anual de IED en Industria Flmica y del Video,“2022.33ECLAC,La Inversin Extranjera Directa en Amrica Latina y el Caribe,2023.34Moti

156、on Picture Association and Yucatan Times,“Netflix is acquiring real estate all over the world(and Mexico is not the exception),”August 2019.35El Pais,“The other nearshoring:film and TV production stands out in Mexico,”15 March 2023.to sites featured in well-known TV and film productions,the AV indus

157、try can be used as a conduit through which Mexican values and culture are shared with a wider audience,while still positively benefitting the economy(e.g.,through the sale of merchandising and tours).Last but not least,international film festivals and other exhibitions further celebrate the Mexican

158、AV industry as they engage growing audiences and expand the sectors economic footprint.As the sector continues to grow,its significance cements its role in the global marketplace.While Mexicos robust AV sector has historically appealed to international production companies due to its lower costs and

159、 its proximity to the US,31 the quality of its workforce has increasingly attracted significant production,further establishing the countrys role as a prime location for production and postproduction activities.As the sector continues to flourish,it will continue to support many broader benefits by

160、keeping resources and talent within the country and enabling the growth of other regions and industries.4.1 ATTRACTING FDI AND RELATED BENEFITSIn addition to the economic impacts described thus far,the audiovisual industry delivers a suite of strategic benefits for Mexico,including stimulating addit

161、ional foreign direct investment(FDI).FDI has numerous benefits,including bringing capital into a country,providing access to new technology and management practices,and creating job opportunities for local residents.The most recent statistics suggest that,in 2022,foreign direct investment in the fil

162、m and video industry in Mexico reached MXN$463 million,some MXN$300 million of which in Mexico City alone.32 Other reported numbers elevate the number of audiovisual FDI inflows to more than MXN$100 billion(15%of total FDI flows in 2022),reflecting the large merger between Grupo Televisa and Univisi

163、on in 2022.33 This merger is yet another reflection of the interest of foreign investors in the Mexican audiovisual industry.Another example includes the sizeable investments made by Netflix in Mexico to produce TV series and movies.During 20192020,Netflix invested MXN$3.9 billion to produce content

164、 followed by another MXN$5.85 billion on content launching in 2021.34The larger installed production capacity supported by foreign investors,coupled with the expertise they bring,has the potential to boost local production and attract additional international projects.In the past two years,ten comme

165、rcials produced for the Super Bowl were made in Mexico,for example,according to the National Chamber of the Cinematographic Industry(Canacine).3525The economic contribution of Mexicos audiovisual industry in 2022Policies such as audiovisual production incentives help to drive foreign investment and

166、develop local jobs and skills,among other outcomes.On Oct.11,2023,Mexico published a decree(the Decree)granting tax benefits to key sectors of the export industry,including the production of cinematographic and audiovisual works.With this Decree,the Mexican federal government aimed to promote compet

167、itiveness,innovation,and investment in technology,and ultimately job creation and direct FDI in those industries.Additionally,the Decree aims to also encourage the 36Olsberg SPI,“An Audiovisual Production Incentive for Mexico,”May 2023.37El Pais,“The other nearshoring:film and TV production stands o

168、ut in Mexico,”15 March 2023.38IMCINE,“Statistical Yearbook of Mexican Cinema,”2022.39IMCINE data only include domestic productions,so do not reflect films and productions made by foreign investors,which may be more represented in certain regions such as Mexico City.development of employees technical

169、 skills by allowing the tax deduction of training expenses,thus encouraging companies to invest in their staff development.Through the further development of Mexicos well-regarded talent base,the audiovisual industry becomes increasingly attractive as a hub for audiovisual production.36Last but not

170、least,infrastructure development and expansion are important benefits of increased investment and are critical in order to extract as much value for the audiovisual industry as possible.There is very strong demand for studio space in established production hubs globally,which creates an opportunity

171、for Mexico.In addition,the emerging trend of nearshoring has created opportunities for Mexican companies across sectors,and the AV industry with its comparatively lower cost base is no exception.High inflation in the United States,geographic proximity,and award-winning Mexican talent are contributin

172、g to making Mexico an attractive destination for film and television production.374.2SUPPORTING REGIONAL DEVELOPMENTThe bulk of the AV production sector is clustered in Mexico City.However,the industry also supports considerable economic impacts in other states.Focusing on the origin of the companie

173、s producing domestic feature films,IMCINE estimates that,in 2022,55%of feature films originated in Mexico City,9%in Jalisco,5%in Baja California,and just over 3%in Chiapas and Oaxaca.38 The states with the lowest percentage of origin of productions were San Luis Potos,Quintana Roo,Durango,Coahuila,B

174、aja California Sur,Tlaxcala and Chihuahua,with 0.4%each.Finally,some 3%of domestic production was carried out in collaboration between two or more states.39The state where the production company is based does not necessarily coincide with where the project is filmed.The location where films were sho

175、t shows a less concentrated distribution across the country.As illustrated in Fig.21,the states where most of Mexicos feature films were shot in 2022 were Mexico City(23%),other countries(14%),Jalisco(8%),Baja California,and the State of Mexico(5%each).The states with the least locations tallied wer

176、e Nayarit and Sonora,with 0.3%each.In an effort to promote the local audiovisual industry,and following the Decree announced in October 2023,the Audiovisual Cluster of the Valley of Mexico(CAVAM)was established as an industry-led initiative.The regional cluster,made up of Mexico City,the State of Me

177、xico and Tlaxcala,enables coordinated public policies and enhanced collaboration amongst local governments in the region.As Mexico City has more established legislative and financing infrastructure to support the film sector,the consolidation of the three areas allows for neighboring areas to access

178、 these resources that 26The economic contribution of Mexicos audiovisual industry in 2022have only previously been available to Mexico City.This supports the growth and development of companies in smaller communities and lesser-known talent outside of Mexico City.Additionally,the consolidation of re

179、sources encourages larger scale projects,and enables the growth of upstream and downstream industries supported by AV production,such as tourism,manufacturing,and other services.40Fiscal incentives would also provide a strong 40Produ,“The first audiovisual cluster was created for the promotion of th

180、e film industry in Mexico,”8 November 2023.41Gobierno del Estado de Jalisco,“Consolidarn a Jalisco como el hub de producciones flmicas,talento,innovacin y alta tecnologa ms importante de Latinoamrica a travs de las polticas pblicas Filma Jalisco y Jalisco Tech Hub Act,”21 February 2023.42Variety,“Gu

181、adalajara Content City Planned by Micelio Media Group as Jalisco Announces New Incentives,”January 2023.encouragement to develop the AV sector in other parts of the country beyond the capital.Currently,inward investment may come into Mexico via Mexico City and then disperse into other regions depend

182、ing on the need of the production.Incentives would encourage individual states to market their own offer more extensively.For example,in March 2023,the Governor of Jalisco announced a first significant state incentive for Mexicoa cash rebate worth 40%of expenses on audiovisual services and up to 20%

183、of the expenses on audiovisual logistics services.41 As part of this,development plans for a Guadalajara Content City have also been announced.This will include four soundstages and will occupy more than 60,000 sq.meters of terrain.It will also feature four warehouses,a post-production center,office

184、s,and a university offering audiovisual related graduate and postgraduate degrees for 2,000 students.42Fig.21:Percentage of Mexican feature films shot by state,2022*Source:adapted from IMCINE(2022)*Values do not sum to 100%as 14%of films were shot outside of Mexico.Feature films,%22.8%0.3%0.31.41.41

185、.42.10.30.722.80.70.71.01.01.02.43.13.13.47.63.42.44.54.82.42.41.40.74.80.70.71.01.01.427The economic contribution of Mexicos audiovisual industry in 20224.3ENCOURAGING FILM-INDUCED TOURISM43Rhse,Viola,“Travel inspiring skeletons in Spectre and Coco,”2021.44Mexicanist,“Coco Route:the new tourist rou

186、te in Mexico that emerged thanks to Disney,”January 2020.45Olsberg SPI,“An Audiovisual Production Incentive for Mexico,”May 2023.46El Sol de Morelia,“Arribaron a Morelia 3.2 millones de turistas,”9 January 2020.47The economic activity supported through film festivals is included in the Film exhibiti

187、on segment presented in section 3.3.48Bauelos,J.,&Olmedo,J.,“A brief study of film festivals in Mexico:Consumption and historical evolution 20102016,”2018.49Arajo Vila,N.,&Domnguez Vila,T.,“Los festivales de cine como elemento potenciador de destinos tursticos.El caso de San Sebastin,”2012.50Flores

188、Ruiz,D.,“Turismo cinematogrfico y desarrollo econmico local.El Festival de Cine de Huelva,”2015.While many well-known TV shows and films have often inspired fans to travel to filming locations,film-induced tourism has many benefits outside of increased visitors,stimulating the service sectors of loc

189、al economies.For example,Dia De Los Muertos festivities held in Mexico City have historically been promoted to encourage tourism;however,its recent inclusion in films such as James Bond film Spectre and Disney-Pixars Coco has played a large role in sharing Mexican culture and customs on a wider scal

190、e.The TV and film industries do more than simply educate and export aspects of Mexican culture;they also play a large role in the countrys global perception and reputation.To counteract the perception of Mexico as an unsafe country to visit(often a result of cinematic content centered around cartels

191、 and violence),content produced in films such as Spectre(2015)and Coco(2017)highlight Mexicos rich history and cultural values,while also exhibiting modern infrastructure in city centers.While it is tricky to attribute improvements in tourism to specific events,international visitors in the year aft

192、er the release of the Bond film were up 9%.To give a sense of scale,the Dia De Los Muertos parade(featured in Spectre)had around 425,000 spectators in 2016,but in only three years it had grown to more than 2 million.According to recent figures,in 2019 the festivities attracted more than 7.5 million

193、international tourists,not just from the nearby US,but also from Canada,France,and China.43Similarly,after the success of Coco,SECTUR(the Mexican government tourism office)publicized a compilation of tourist routes to visit sites inspired by the film,which national and international tourists could f

194、ollow.44 Michoacan,the state which comprises part of the route,appears to be a beneficiary of SECTURs publication.They saw an increase of 425%in the arrival of international tourists between 2018 and 2019.45 The total amount of tourists in Morelia,the capital of Michoacan and the starting point of t

195、he shortest Coco route,saw an increase of 5%in total tourists from 2018 to 2019 with an estimated economic impact of around MXN$4.5 billion.464.4PROMOTING MEXICAN CONTENT THROUGH FILM FESTIVALSThe organization and execution of film festivals generates economic activity through revenue supported,expe

196、nditure with local suppliers,wages paid,and taxes raised.47 IMCINE(2022)estimates that nearly 2,900 people were employed in the operation of film festivals throughout Mexico in 2022.To give a sense of scale,the French Film Tour alone,the largest film festival in Mexico during the period 2010-16,gene

197、rated a total of MXN$24.6 million in income over this period.48 Outside the audiovisual industry itself,film festivals also drive economic development by promoting domestic and international tourism.49,50Film festivals proved particularly important to the Mexican film industry in the late 1990s and

198、early 2000s,when production and exhibition numbers 28The economic contribution of Mexicos audiovisual industry in 2022were at some of the lowest levels the nation had ever known.51 A shortage of trained professional producers during that period meant that few films could be made,and major film festi

199、vals sought to address this weakness by focusing their initiatives on networking and capacity-building for producers,which in turn shaped the field of film production in the years ahead.In 2022,the Mexican Film Institute(IMCINE)recorded 234 film festivals and events(4.5x the amount of 2010)spread th

200、roughout most Mexican states52(Fig.22).51Jean Anne,L.,“Mexican film festivals and industry development:Guanajuato,Guadalajara,and Morelia,and the reemergence of a national film industry,”2016.52IMCINE,“Statistical Yearbook of Mexican Cinema,”2022.From a list of 690 participating films,IMCINE tallied

201、 429 national titles,showcasing how these festivals help promote Mexican cinema to national and international audiences.Overall,IMCINE estimates that attendance to film festivals and events reached 10.5 million people in 2022,with 5%of festivals having over 250,000 attendees.Film festivals take plac

202、e all across the country(Fig.23),with several Mexican cities hosting multiple international film festivals.Some of the leading festivals include the International Film Festival in Guadalajara,a week-long film festival that has been operating since 1986,the Guanajuato International Film Festival,and

203、the Morelia International Film Festival.Above and beyond their immediate economic footprint,Mexican film festivals are an important component of the film industry value chain as they promote domestic content,broadcast it to a wider audience,and attract industry professionals from around the world to

204、 Mexico.They also often help turn the spotlight on small,independent,and new filmmakers.Fig.22:Number of film festivals and events in Mexico,20102022Source:Adapted from IMCINE(2022)250050150100200201020192018202020172021202220162015201420132012201129The economic contribution of Mexicos audiovisual i

205、ndustry in 2022In addition,film festivals offer educational value to their audiences.A review of various film festivals in Spain and Latin America during the period 20052019 identified initiatives aimed at improving film literacy.The results show a proliferation of festivals and parallel activities

206、aimed at training amateurs and professionals during 53Peirano,M.P.,&Vallejo,A.,“Iniciativas de educacin cinematogrfica en los festivales de cine de Iberoamrica,”2021.the period,identifying film festivals as ideal spaces to complement the educational curriculum at various levels.53Mexican filmmakers

207、have also recently received notable recognition at international film festivals.Alejandro Gonzalez Irritu,Guillermo del Toro,and Alfonso Cuarn,three Mexican film directors,have been critically acclaimed at the most renowned international film festivals.The international acknowledgement received has

208、the potential to boost the Mexican audiovisual industry and to position the country as one of the strongest Ibero-American nations in the industry.Fig.23:Number of film festivals and events in 2022 by stateSource:adapted from IMCINE(2022)Number of film festivals49023655514623210712181325342733661224

209、930The economic contribution of Mexicos audiovisual industry in 20225.APPENDIXQUANTIFYING THE DIRECT CONTRIBUTION54National Institute of Statistics and Geography(INEGI),System of National Accounts of Mexico.Symmetric Input Product Matrix,Base 2018.The analysis conducted to produce the estimates in t

210、his report is based on information produced in several different surveys compiled by Mexicos National Institute of Statistics and Geography(INEGI).Our assessments primarily draw from the 2022 Preliminary System of National Accounts,which constitutes the most comprehensive source for many economic an

211、d financial information including production,paid jobs,employee compensation,and intermediate consumption.VOD services revenues were established based on data compiled by Digital TV Research and our own calculations.Employment in the audiovisual sector and all its sub-sectors was estimated based on

212、productivity data from the same source.Tax was analyzed based on our knowledge of the countrys tax system applied to estimated values of industry gross value added contribution to GDP.Income tax,social security contributions,enterprise tax,and VAT were included in the calculations,as were all other

213、compulsory transfers to the central government for public purposes.MODELING THE TOTAL ECONOMIC CONTRIBUTIONBroadly speaking,input-output multipliers measure the relationship between an initial impact(such as spending)and final outcomes across the whole of the economy in terms of GDP and employment.T

214、his study uses“Type II”multipliers,which allow for both the“indirect”supply chain effects(i.e.,the audiovisual industry purchasing from other industries)and“induced”effects(which arise from workers spending their wages on goods and services domestically).In order to estimate the indirect and induced

215、 contributions,we use the official 263-industry symmetric input-output(IO)matrix for the year 2018(the most recent available).54The IO table details economy-wide transactions between sectors in matrix form,quantifying the extent to which different industries sell to and purchase from each other.By a

216、ppropriately manipulating the IO matrix,we estimated the contribution of,for example,film and TV production on the rest of the economy through its supply chain purchases and through the spending of those employed directly and indirectly in film and TV production.ADJUSTMENTS FOR LEAKAGE AND DOUBLE CO

217、UNTINGGenerally,when domestic demand expands,there will also be an increase in the demand for imports.For example,if consumers spend money on the audiovisual industry,some of this spending will flow out of Mexico(e.g.,due to the payment of film royalties or the purchase of imported materials by prod

218、uction companies).This is formally known as“leakage.”Allowing for leakage is important as otherwise the 31The economic contribution of Mexicos audiovisual industry in 2022indirect and induced effects will be overestimated.The IO table allowed us to account for this in our analysis.Downward adjustmen

219、ts to the multiplier contributions were made to avoid double counting of output.This is because,in some cases,part of a particular industrys supply chain includes sub-sectors that have already been classified as part of the(direct)audiovisual sector.For example,film exhibitors purchase goods and ser

220、vices from film distributors(e.g.,film prints and the rights to show the film),so film distribution forms part of the supply chain,or indirect effects,of film exhibition.However,film distribution activity is already included as part of the direct effects of the audiovisual industry and should not be

221、 double counted.This double counting would be captured as a sub-set of the“own-industry”purchases of the“Film and video industry”IO sector(the IO sector chosen to most closely represent the industry in this study).In our example,the exhibitors purchases from film distributors would be captured withi

222、n this“own-industry”figure.We therefore set the own-industry purchases to zero to avoid the double counting issue and lower the multipliers.Note that this is likely to be an over-compensation for the double counting effect,as the adjustment would also exclude legitimate(i.e.,non-double counting)purc

223、hases which should be captured within the multiplier.ESTIMATING GDP,EMPLOYMENT,AND EARNINGSThe gross output totals derived from the above modeling are converted into estimates for GDP using sectoral ratios of value added to gross output taken from the IO table.These were then converted into employme

224、nt estimates using economy average productivity(measured in terms of output per worker)for 2022.This process was repeated for each sub-sector to generate separate estimates for the total GDP and employment contribution,consisting of direct,indirect,and induced effects.From this,one can then calculat

225、e the implied GDP and employment multipliers.32The economic contribution of Mexicos audiovisual industry in 202233The economic contribution of Mexicos audiovisual industry in 2022ABOUT OXFORD ECONOMICSOxford Economics was founded in 1981 as a commercial venture with Oxford Universitys business colle

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231、nd trade associations;and top universities,consultancies,and think tanks.February 2024All data shown in tables and charts are Oxford Economics own data,except where otherwise stated and cited in footnotes,and are copyright Oxford Economics Ltd.This report is confidential to the Motion Picture Associ

232、ation and may not be published or distributed without their prior written permission.The modelling and results presented here are based on information provided by third parties,upon which Oxford Economics has relied in producing its report and forecasts in good faith.Any subsequent revision or updat

233、e of those data will affect the assessments and projections shown.To discuss the report further please contact:Alice Gambarin:Arushi Pasricha:Fabian Juarez:Oxford Economics 5 Hanover Square New York,NY 10004 USAPhoto creditsCover photo:erlucho/SInside-front:Jesus Cervantes/SPage 7:Rosty McFly/SPage

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