For many years Iran has stood high on the list of top film producing countries. Thanks to this quantitative supremacy, Iran has made about 90 films on average per annum except for the first few years following the 1979 Islamic Revolution. Add to this hundreds of short films and documentaries. The statistics have been on the rise while only a few films sell reasonably well and even fewer make a profit. Many films are pulled off the screens with a loss. Many of these even fail to return half of the investment that had been made in them.

However, for a mysterious reason, even the producers with more than a couple of unsuccessful movies tend to venture another production without a promising prospect.

The secret begins to unravel when we realize that nearly over half of the economic activities in the Iranian cinema are dependent to a great extent on the government. The current cinema of Iran is largely dependent on the overt and covert support from government agencies. If this powerful investor withdraws its support, film production and cinema institutions will receive a hard blow. There is no private sector investment risk involved in this structure, but filmmakers and producers see themselves committed to work along the line of state viewpoints and not necessarily those of the general public. Every year, they demand more investment by the government and this vicious circle leads to smaller turnouts at the box-office. That is partly because the government is interested in elite and specific viewers who share its viewpoints.

Who would kill a hen that lays golden eggs? Nobody will do that except someone who is overwhelmed by sentimentality. That is why many Iranian filmmakers and producers do not care for satisfying the needs of general public and have come to believe that basically it is not a good idea to cater to the needs of the public. This approach has created a wide gap between supply and demand. Feedbacks coming from the market are meaningless for producers. Why should they risk their money when they have a generous partner?

One of the most important reasons of the emergence of such a system is that film production in Iran is less costly than many other countries. A comparison between wages in Iran and Europe's film industries reveals that making films in Iran costs less than one tenth of Europe. Average wages are as follows: director 20,000 euros, camera crew 20,000 euros, the cast 50,000 euros, sound crew 7,000 euros, film editing 6,000 euros, musical score and sound mixing 10,000 euros. Renting studio and lab equipment and location facilities are also much cheaper in Iran than Europe. Total cost of producing an average movie in Iran is about 180,000 euros. Meanwhile, the average cost of producing the least expensive film in Europe is, at least, two million euros. In other words, a European producer can make his film in Iran (which is considered an advanced country in terms of filmmaking equipment) on less than 10 percent of the budget he spends in Europe while taking advantage of the best technical and artistic crew.

The Islamic Consultative Assembly allocated 250 million euros to the country's cultural sectors in 2006. One third of this budget was allocated to various cinema activities including building new theaters, equipping filmmaking laboratories and studios and production of different films. So far, five million euros out of this budget has been spent on filmmaking. The amount reveals the extent of the government’s significant role in the Iranian film industry. Every year, the government funds production of 10 to 15 feature films and pays loans to some 30-40 other films. The amount of loans depends on the film's subject and how close it is to the government's idea of a good film.

Any private sector producer would be able to produce his film if he could manage to take 50,000 euros in loan from the government. He is either one of those producers who supply the rest of the capital needed for the film (whose number is quite few) or teams up with other producers. There are producers in Iran who can produce a movie without spending a cent! After securing a loan and making the government their partner as holder of some 20 percent of the box-office yield, they would enter into negotiations with one or two investors and encourage them to become their partner in the hope of winning a 40 percent share in the profit. They start filming with the money they get from their partners and as they get closer to the end of filming, they sell the royalty to television or video networks or a group of theaters that are to screen the film and collect the rest of the budget. 

Although many Iranian films have been failing at the box office for many years, strangely enough, there are always investors who would want to invest on films. Some of them are upstarts who could not care less for some 60,000 or 70,000 euros. Some others are simply looking for cultural reputation while still others see this as an opportunity to mix with actors. They take pride in going on locations to pose for a photo with director and the cast. They enjoy showing off these pictures to others in parties. And there is rivalry among those who can afford to do so. Of course, there are those who are misled by producers and lose their small capital to end up in misery. Nowadays, producers have found a new source for easy investment. The new investors are creditable multinational companies that produce consumer goods whose branches are flourishing in Iran. Recently, an importer of a famous brand of cellphone provided the entire lump sum needed to produce a renowned fundamentalist filmmaker's movie.

In this way, most producers never have to face a loss. Those who have made their films within the frameworks of a partnership will have their share of the box office yield anyway. The more the film sells the better for them. They will start their next project almost immediately. If the film fails, they will not have to be answerable. Their next project might only be delayed for some time. In the past 25 years, only four or five producers have been naïve or ambitious enough to end up behind the bars.

Every now and then, some people who have had little or no share of state facilities voice their protest. They accuse others of rent seeking and taking advantage of public resources. But soon they will join their rivals after they manage to take a loan and become the government's partner in filmmaking. Then the Iranian roulette continues with participation of more players.