2nd article in our series on Film Industry Implosion.
With the world recession going on, it’s forced us all to tighten our purse strings. No country has been safe and it’s hit all areas of commerce. Even though the film industry brings in billions of dollars, Hollywood has had many loses too. Most notable are MGM’s woes. However many smaller studios have come and gone with little to no news. It’s the same with European studios and other foreign markets, even within their own countries. Hollywood dominates while films made in the respective country lag behind.
So how did this happen? The New York Times published an article by Anthony Kaufman on this topic in January 2006, just a year before the Global Financial Crisis began. In it various industry leaders explain why they think the foreign film market is dwindling. The reasons they give are numerous; lack of good films, reduction in how many films are selected, audiences not liking them as much and preferring US indie films, lack of press exposure they get, foreign talent jumping to English speaking films as soon as they gain recognition, money and documentaries as another potential threat.  The writing was on the wall even back then.
With hindsight a few of those reasons the European film market is in trouble. Lack of money and choosing fewer films, (to minimize any potential loss) seems to be at fault which has created a never-ending cycle. US indie films and documentaries are still having the same trouble as foreign films. They are hard to get made and even harder to sell. The talent needed to make the films is also the same. It’s all there but safer films that are known to sell are chosen first, and then are followed by indie films and documentaries. Foreign films are the last chosen and often there is very little space left for them. The lack of money also affects the advertisement. The lack of advertisement means cinemagoers aren’t as aware of the movie, and so they won’t go see it, especially if ticket prices are high to begin with. Then the movie doesn’t bring in as much money as it could. If the movie doesn’t bring in the money, it reinforces to executives that they made the right decision and so the cycle begins again.
So what can be done? One way is to offer tax incentives to entice the US and other countries to bring production to them. This would bring more revenue in that would help boost the country’s film industry. There is also a debate going on about whether or not to apply the free trade pact to cultural industries between the EU and the US. Those who agree think it will open the competition and bring in billions in the areas it is applied too. Those against it say it will destroy the cultural diversity that has developed across Europe. In the last trade pact made in 1993 included “cultural exception” which France introduced to protect its film and TV industry’s cultural diversities. Many other EU member countries have benefited from it. It can be explained better here and here! So when the time came to discuss it again passions ran high! It was a hot topic at this year’s Cannes Film Festival and even has a petition of over 6200 names on it, such as Steven Spielberg, Jane Campion, Ken Loach plus many more well respected industry players from around the world.  At least 15 EU countries support too. So far if all goes well with the campaign, film and TV industries have been kept off the G8 summit meetings. 
So with progress being made to help keep European cinema from being abused, what exactly are the figures for Europe? Well it still has its ups and downs. There has been a decline in of incoming investment. European films are up but documentaries have dropped. EU film circulation has gone up too. While they aren’t massive improvements, they aren’t massive drops either. American and franchise films still take top spots, but there are some EU films that have done well.  It may not be much of a progress but at least it’s a step in the right direction.