Cinema… What The Rate!
In our previous articles “Death of Cinema” and “Cinema Pandemic”, we discussed how movie experience had already been shifting to online platforms prior to the Covid-19 pandemic, and how the movie industry suffered globally throughout 2020 due to the frequent lockdowns and lengthy quarantine times.
Cinemas in Lebanon closed their doors down a little while before the Covid-19 pandemic. In fact, as soon as the Revolution of October 17, 2019 began, the only lasting economic sector at the time; the banking system, shut down and claimed that the revolution had a negative impact causing a collapse in the value of the Lebanese pound exchange rate against the US dollar.
To briefly explain the situation, back in the 80s, when it was clear that market globalization was inevitable, and knowing that Lebanon produces nothing worthy of export to support its economy, the US dollar became an official currency in Lebanon along with the Lebanese pound. With this in mind, there was an unofficial agreement between Lebanon and the United States to fix the US dollar to Lebanese pound exchange rate at $1 USD = 1515 LBP. This equation stabilized the economy for over 30 years, however, it was not supported by anything tangible such as enough gold or products or labor force to back this equation. It was merely the unofficial agreement.
With the rise of the European Union, it was also inevitable that the Euro would also become yet another official currency in Lebanon because Lebanon not only imports products from Europe, but also borrows money from the European Union putting Lebanon under a deficit of the equivalent to over 200 billion US dollars.
Imagine a country that produces nothing, borrows money in currencies other than its native currency, to import products from other countries… Welcome to Lebanon!
So, when the deficit reached an unacceptable level to the international community which knows very well how much corruption and overspending the government of Lebanon practices, international funding stopped. Lo and behold, the Lebanese government decided to throw all the blame for the failure of the banking sector upon the revolution instead of taking responsibility for all the corruption and their own failure to govern.
The situation of course doesn’t stop at that. With the Israeli-Arab conflict that’s been ongoing since 1948, causing Lebanon an 18 years occupation that ended in 2000, then another brutal war with Israel in 2006, as well as the more recent civil war in our neighbor the north and east, Syria which brought in more than one million refugees to Lebanon adding more to the instability of the economy… But these are conflicts that would require their own studies, let alone an article…
So, back to our main topic, Cinema.
Cinemas, when they were still open back in 2019, used to charge an average of 12,000 LBP for a movie ticket. At the time, that was the equivalent of $8 USD.
With the collapse of the Lebanese currency, and a black market exchange rate nowadays of $1 = 8,500 LBP, the old movie ticket price has no more value. So, if movie theatres were to open their doors again, they could not afford to keep their ticket prices at 12,000 and pay for movie licenses in USD to Hollywood, nor could they increase the sale price of a ticket to a margin where it makes sense to cover the overhead.
Meaning, if cinemas were to charge the same value of $8 USD, at the new black market exchange rate that would be $8 USD X 8500 LBP = 68,000 LBP… No Lebanese in his/her right mind would pay that much for a movie ticket. And thus, when the CoronaVirus hit, cinemas in Lebanon kept their doors closed even between quarantines, and even when the government allowed them to reopen, because from a business perspective, it made no sense for them to reopen.
This phenomenon led most Lebanese film producers to either stop new film productions altogether, or to produce and finalize their films if they can afford to wait until the monetary situation is somehow resolved. Other film producers were able to sell their films to Netflix, however, this would not be an easy option for all filmmakers because of the low-budget productions that do not meet the requirements and high production standards of Netflix… So, the alternative to some of these film producers was to shift into producing TV drama which still sells since Lebanese TVs are still operating like before.
All this drives us to reconsider our opinion on Netflix when we accused it in our first article in this series to be the “Death of Cinema”, and one could even go as far as arguing now that Netflix may have saved the film industry since some productions made it to the platform instead of being on a hard drive somewhere awaiting better economic and health situations.
Tags: Lebanese Cinema
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