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Europe: Film Industry Struggling For Market Share

The European film industry is resurgent. After a bad year in 2000, when its share dropped to only a quarter of the European film market, European films managed to capture more than a third of the home market in 2001. But Hollywood took the lion's share, and could still overrun the Europeans entirely. At the same time, there is good news for the struggling East European film industry.

Prague, 28 May 2002 (RFE/RL) -- The top 10 films in the European Union last year, ranked by audience size, were all American productions or co-productions. And that was a good year for the European film industry: Hollywood took only two-thirds of the EU market.

Well, everything is relative. It was a good year compared to the previous one, 2000, when the Europeans managed to capture only a quarter of their own home market.

Such statistics serve to show the difficulties facing the European film industry, which is in constant danger of being marginalized by the dominant U.S. filmmakers.

The resurgence has continued into this year, and is particularly marked in France, the union's biggest filmmaker. There, the domestic share of French films has reached almost 50 percent. The trend is upwards in other countries too.

Susan Newman, a researcher at the European Audiovisual Observatory in Strasbourg, said: "More films were produced, more people went to the cinema, and more people out of those who went chose to go and see films that were produced in Europe. In Germany, Spain, France, Norway, Poland, and the Czech Republic, the film that most people went to see in the country was a film from the country itself."

Experts point to a number of good European films in explaining the resurgence. One of the most popular films of the year, which contributed to the success, was the Franco-German production "Amelie of Montmartre."

Despite the positive trend, experts say the underlying situation in Europe is worrying. They point to more and more multiplex cinemas being built, often with distribution links to the major Hollywood studios.

With the multiplexes comes increased concentration of ownership, which -- despite the extra number of screens -- cuts down the chances of screening smaller, independent European films. Added to that is the fierce competition among multiplex operators, which makes them even less likely to take risks with their choice of films.

"Smaller distributors have great difficulty in confronting large-scale circuit owners and getting their films to the screen. Quite evidently, offshoots of major American studios have a greater economic clout and possibility of getting their films onto the screen, notably because they can consecrate a much bigger publicity budget than any smaller distributor," Newman said.

One of the most important problems for the European industry is the lack of an overall, pan-European distribution system. At present, distributors work mostly on a fragmented national basis in trying to market and screen their films.

Other difficulties for European film include the language problem and what might be called the cultural-fragmentation issue. As far as language goes, many people in mainstream audiences resist seeing a foreign film that has written subtitles.

In addition, unless they are adventurous, filmgoers in one country may resist seeing a film made in another country on the grounds that it is not relevant to them. At this point, one can raise the issue of whether Hollywood films do better because they are backed by formidable marketing techniques or because they have intrinsically more universal appeal. Partisans on each side argue long and hard about that.

At any rate, the European film industry remains introspective. For example, East European productions can hardly penetrate the West European market.

"It's very hard for an Eastern or Central European film to actually achieve programming in a European Union country. We recently at the observatory decided to have a look at how many films from Eastern and Central Europe had been programmed in the European Community between 1996 and 2001, to see what results those films got, and how many films there were. There were only 42 films in the whole of that period and they obtained a market share of a rather small 0.05 percent of the whole market," Newman said.

But for the easterners, there is some hope on the horizon in the form of financial, technical, and distribution support from the European Union. From January at the latest, nearly all of the 10 Eastern European candidate countries will be eligible for help under the EU's current media program, which runs to 2005 with a total budget of 400 million euros ($368 million). European Commission spokesman Christoph Forax said that budget will be increased to take account of the extra demands imposed by the newcomers.

Hungary and Romania, however, will not be participating. Forax said this is because they have made free-trade commitments in the media sector to the Word Trade Organization or the Organization for Economic Cooperation and Development, which bars them from joining the EU program. Such commitments run counter to what the French call the "cultural exception," meaning the system of government support for the domestic film industries, designed to protect them from overpowering Hollywood competition.

"It is the start of a long process for the industries of candidate countries to get a new start, you might say, including the possibility of circulating [selected] films in all member states of the European Union," Forax said about countries participating in the program. The union does not plan to become the pan-European distribution entity that is needed. Experts say that task is up to the private sector.