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Creative industries in MexiCo: MAtrIx OF tHE sPAnIsH DIGItAL wAvE

MexiCo is at tHe ForeFront oF tHe digital Culture and entertainMent revolution. tHe Country is tHe largest exPorter oF Creative goods and serviCes in latin aMeriCa. tHe need For sPeCialized Content tHat better Caters to tHe sPanisH-sPeaking Market, along witH tHe searCH For strategiC Partners For global Media CoMPanies based PriMarily in nortH aMeriCa and euroPe, Has PlaCed MexiCan Creative industries at a leading Position in tHe region.
by luis archundia ortiz*

atin America is one of the worlds fastest growing media markets and Mexico is leading the digital audiovisual production revitalization in the region. Mexicos creative industries are transforming their business and production models and evolving with the advent of new technologies and new consumer trends. A wide range that comprises cinema, TV production, digital animation, special effects, video game and multimedia development, the national media landscape has experienced a very rapid growth rate in recent years. This places the country at the forefront of the digital culture and entertainment revolution in our own language and is making Mexico the matrix of the Spanish Digital Wave. The need for specialized content that better caters to the Spanish-speaking market, along with the search for strategic partners for global media companies based pri-

marily in North America and Europe, has prompted an increased interest in the region. Due to Mexicos known talent across the board, as well as very competitive costs, international quality standard infrastructure, natural wonders, world renowned hospitality, great local market, proximity to key international markets and generous incentives, the country has become the clear production destination of choice. Spanish-language content is warm, human, relevant, entertaining and is increasingly popular at a global level. Mexico is the content generation leader: Mexican TV productions are viewed by more than 1 billion viewers in over 100 countries around the world; Mexican films are rapidly regaining recognition in the worlds most prestigious festivals; Mexican companies are releasing their video games on the latest platforms and our VFX specialists are creating movie magic effects for Hollywood studio productions.

Media industries have been recognized by the Mexican Government as strategic for the economic development of the country. The government is fully committed to boosting the growth of this industrial sector and has further increased its support in the form of financial incentives, government development programs, specialized service platforms and talent generation. THE MEXICO ADVANTAGE 1. the Filmmaking and audiovisual Production Platform Mexico has been the production destination of choice of many studios that have produced films now regarded as classics. It is one of the most competitive in the world in terms of below-the-line production and labor costs. That allows filmmakers to dream big and build spectacular and impressive sets, making the most imaginative production designs a reality.

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Master filmmakers have found the best production support from Mexican industry workers and artists, creating future and fantasy worlds for such blockbusters and classic cinema as Dune, Total Recall and Elysium or recreating a distant past for Frida, The Wild Bunch, Butch Cassidy and the Sundance Kid, Master and Commander, Pearl Harbor and Titanic or transforming Mexico into another country, making it look like Santiago, Chile in Missing, or Cali, Colombia in Colombiana. Mexico is also very advanced in developing digital media expertise: a new generation of young Mexican visual effects professionals with Digital Imaging Technician (DIT) certification in the production of digital imaging for state-of-the-art video game development, multi-textured 3D animation, multimedia and New Media production, and several post production service houses are becoming part of the Hollywood-approved international quality and security-certified group of international VFX companies outsourced by the major studios to generate digital realities, from set creation and set extensions to digital animatics, among other visual effects wonders, for films like Zodiac, The Social Network, The Curious Case of Benjamin Button, Let Me In, Pirates of the Caribbean, On Stranger Tides and Tron Legacy.

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Mexico goes beyond filmmaking. Its audiovisual and interactive industry is committed to the development of intellectual property for the digital screen on diverse platforms. Its creative industries are transforming their business and production models and evolving with the advent of new technologies and new consumer trends. We are building an ideal business and industrial environment for media production through globally competitive incentives and industry support programs. Strategically located, neighboring the most important market in the world and gateway to the Latin American and Pacific Rim markets; business culture affinity; integral government support platform; quality of life; industry-tailored incentives and highly competitive costs are just some of the elements that total the Mexico advantage. According to KPMGs Competitive Alternatives 2010 report, Mexico offers the greatest cost advantages for the development of software, video games,

Web and multimedia, among 102 countries. KPMGs report considers all competitiveness variables: logistics, labor and transportation costs, as well as net sales, among other factors. 2. industry-tailored incentives Mexico offers attractive industry-tailored incentive schemes, benchmarked against the worlds most aggressive competitors and created to prompt grand scale international productions in Mexico. Its incentives ProAudiovisual Fund (ProAv), EFICINE and FIDECINE are designed to boost local and foreign film and audiovisual productions. Their scope goes beyond filmmaking in order to stimulate investment in digital R&D and IT development, with specific applications in video games, interactive, animation and new media. There is a support program for the highimpact film and audiovisual industry that offers an incentive of up to 17.5% of applicable expenses incurred in Mexico which con-

sists of a cash refund applied on all verifiable production-related expenses and the return of the VAT disbursed from those expenses. Additionally, the program spurred the creation of the Film and Audiovisual Industry Government Service Platform that contemplates a scheme of integral attention to film and audiovisual high-impact productions to offer them the best shooting experience in our country. An industry information web resource called Film Friendly Mexico has been created to attract foreign audiovisual productions and service production companies from around the world. In addition to these funds, Mexico also offers other schemes like the ProSoft Fund, Mexico First, CONACYT (National Council on Science and Technology) Innovation Fund, among other economic incentives, to support important investment required for equipment, licensing, training and R&D for audiovisual enterprises and projects focusing on digital media production.

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3. the talent Beyond the infrastructure and financial advantages, Mexico offers a wealth of talent with a multidisciplinary population trained to become key players in the digital production spectrum, from software developers, to visual artists and designers, to animation and visual effects/ multimedia specialists servicing domestic and international companies. According to ANUIES (Asociacin Nacional de Universidades e Instituciones de Educacin Superior) in Mexico, close to 125,000 students graduate each year from animation, digital design, filmmaking, virtual media communication, image and sound design, interactive design and digital media engineering careers. Mexico is the ninth IT talent hub in the world and the most important tech talent pool in America. Furthermore, Mexico is developing new specialized academic programs for media and interactive industries. There

are more than 900 postgraduate programs related to engineering and technology in Mexican universities. 4. the spanish-speaking Market Mexico is one of the most important consumer markets and the gateway to the highest growing markets in the world. According to several analyses: Mexico exported 5.17 billion usd worth of creative goods and services in 2008 and is the largest exporter in Latin America, followed by Brazils 1.222 billion usd during the same year. In fact, Mexico exports more than Latin America and the Caribbean combined. Over 1 billion people around the world in more than 10 languages are watching Mexicos audiovisual contents. Mexico is the largest film market in Latin America, with 190 million tickets sold during 2010 and the second largest of the Americas after the US.

In 2010 the media and entertainment sector in Mexico registered close to 18 billion usd in sales. That sector includes advertising, free to air broadcast television, pay TV, marketing and cinema. At the close of 2011, Mexicos box office revenues reached 9,766 billion pesos (7.8% more than in 2010). Mexico is ranked among the 15 main video game markets in the world and is the first in Latin America with more than 50% of the regions sales, equivalent to 757 million usd during 2010. The Spanish-speaking population is a segment with continuous and rapid growth worldwide. This trend is especially evident and swift in the US. Mexico is not only a prime market for entertainment products but is also an ideal platform to create Spanish-language content. The country not only serves as a test market but also as a development center for products geared for the increasingly important and influential Spanish-speaking market.

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Photos COurtEsy OF LArvA GAME stuDIOs

The demand for qualiTy SpaniSh conTenT ThroughouT The uS haS been fueled, in parT, by The hiSpanic media markeT exploSion, led by TeleviSion adverTiSing aT a naTional and neTwork level, which haS Seen growTh of nearly 74% in recenT yearS.

That segment comprises a huge community that shares products, services, and culture and supplies businesses and institutions with a truly unique growth opportunity. According to Richard Estevez from the CSN Intelligence for Global Business, some key facts regarding the Spanish language are: It is the official language in 21 countries and is the third most-spoken language in the world, after English and Mandarin. More than 400 million people speak it worldwide. Experts predict that by the year 2050 there will be 530 million Spanish speakers, of which 100 million will live in the US. The demand for quality Spanish content throughout the US has been fueled, in part, by the Hispanic media market explosion, led by television advertising at a national and network level, which has seen growth of nearly 74% in recent years. 5. digital Creative City, Home of the spanish digital wave Government policy has specifically identified

the creative industries as a focus for growth, encouraging the development of a creative cluster model which concentrates talent, skills, learning, employment and facilities. That encourages collaboration and cooperation between experts and pairs complimentary activities and in doing so facilitates the exchange of knowledge and ideas. That is the rationale behind the creation of a world-class media production hub to be built in Guadalajara, which will be known as Digital Creative City (DCC). This urban development, which will be created under the guidance of MITs Media Lab and a multidisciplinary group of Mexican specialists will be the largest purposebuilt media community in Mexico and Latin America and the largest Spanish-content production center in the world. In addition to state-of-the-art studios, DCC will have an unparalleled communications structure, that will increase Mexicos presence and influence in media content production around the world.

DCC is a digital media node that will be developed in several phases and it is projected to have a population of 50,000 inhabitants, including media industries and information technology professionals and diverse global media corporations. Pairing futurist and historic Mexican architecture, DCC will be an environment for the age of knowledge and Ideas, an ideal urban environment to invest, live, create, learn, enjoy, discover and develop the shape of the future in culture and entertainment. It will be home to one of the largest tech hubs in the Spanish-speaking world. It will set a new standard of economic and environmental sustainability coupled with maximum efficiency of resources where the creative community will unite minds and forces to generate the Spanish Digital Wave. n

* Business Intelligence Unit, ProMxico.