Moviemaking: Europe Strikes Back

Hollywood - long the supplier of intrigue for the world's silver screens - suddenly finds itself confronted with a new plot twist. It's got competition.

For the first time in decades, European films are challenging Hollywood's cultural hegemony on their own turf. In Germany, England, Italy, and Spain, American-made movies once generated 85 to 95 percent of the box-office revenues. In 1997, that's dropped to as low as 70 percent.

Moreover, the success of some European films in America, such as the surprise British blockbuster "The Full Monty," is prompting Hollywood execs to take a keener financial interest in the foreign-film market.

The result: The film industry is becoming more global, even as it begins to cater more to individual cultures.

"People want to watch stories that somehow reflect their own culture, and they want to listen to those stories in their own language," says Marcelino Oreja, the European Union's commissioner in charge of audio and visual affairs.

Hollywood continues to dominate the international film market: US exports to Europe are 10 times greater than European exports to the US, creating a $6 billion trade gap. But Hollywood studios like Sony and Miramax have opened their own European-based companies in the past year to produce local films. And others, like Warner Bros. and Buena Vista International, are engaging in a record number of joint ventures with European film companies.

Britain's "The Full Monty" was marketed and distributed by Miramax in the United States, and the German blockbuster "Knocking on Heaven's Door" was financed jointly by Germany's Cinepool and Hollywood's Buena Vista International. The American company actually distributed the film in Germany.

"That type of sharing of costs doesn't know country borders," says Bill Baker, president of the Motion Picture Association, the Hollywood studios' trade association. "Certainly that's a way to take some of the risk out of a very risky venture."

The story behind the European film industry's revival is complicated. First was the construction of a record number of new screens in Britain and on the Continent, most in the American multiplex style. Another 2,000 are slated to be built by the end of the century.

Then, Europe's political leaders turned their angst over Hollywood's cultural dominance into action. They created tax breaks and subsidies to nurture new filmmakers, production companies, and distribution systems.

Next, Europe began developing a US-style celebrity culture with stars such as Germany's Til Schweiger - and a media ready to report on their every move.

Finally, Europeans' simple thirst for entertainment that reflects their own culture, language, and humor dulled their appetite for Hollywood fare, at least to a degree.

"It's like we've figured out what works in Germany," says Jerry Payne of Kinowelt, a German distribution and production company. "Most of these films are unashamedly populist, submainstream German humor."

The successful German films are predominantly comedies and, unlike Hollywood hits, they're made primarily for Germans. "They don't, on the whole, travel very well," says Mr. Payne.

But they've whetted Germans' appetite for German films. Successful comedies like the 1995 hit "Maybe, Maybe Not" prompted other producers to copy the formula. Now, German films are more than 30 percent of the country's box-office revenues.

Til Schweiger's "Knocking on Heaven's Door" gets much of the credit for the box-office boost of 1997. The plot takes off after two strangers with polar personalities suddenly find themselves confronting the same dire crisis. Together they tumble into a chain of fast-paced comic episodes that are at once bawdy and outrageous. There are touches of irony but mostly lots of slapstick gags.

"Films like 'Heaven's Door' have changed the whole thinking in Germany about German movies," says Alexander van Dulmen of Progress Film-Verleigh, a German distribution company. "This new generation wants to make films for the audience, not for themselves, and that was a problem with German movies in the last 10 years."

A similar phenomenon is under way in the United Kingdom. A few years ago, Film Four International was the only major independent British film-production company. All told, British films made up only about 5 percent of box-office returns in the UK.

The success of "The Crying Game" in 1992 changed that. It was soon followed by the hit "Four Weddings and a Funeral" and, now, "The Full Monty."

"It's a cyclical thing and it always has been. We've gone from highs to lows for the last 50 years," says Bill Stephens, Film Four International's sales director. "Right now, this is enough to keep everything riding high."

The commercial successes were aided by the new Labor government. It created a multimillion-dollar lottery fund and a series of tax breaks to encourage film production in the UK.

"Previously it was very tough and very expensive to produce here, and we were losing some of our best personnel to Los Angeles," says Mr. Stephens. "Now they're back and working here."

The new climate was aided by a doubling of the number of screens in the country. The changes then helped attract new cash from American studios anxious to get in on the growing bottom line.

Walt Disney's Miramax co-produced with Film Four several movies, such as "Welcome to Sarajevo" and "Brassed Off." Then, last year, it announced the opening of its own production company in London. France's Pathe and several other European companies also set up shop there.

In Italy, the same forces are at work boosting the Italian film industry. But it got an added lift in January 1997, when the government called for a 40 percent cut in matinee prices. That prompted overall attendance to jump by a third, which in turn spurred production. Italian films made up 27 percent of box-office receipts in Italy last year.

In the 1950s and 1960s, at the height of the Italian neo-realists rage, that was not uncommon. The country was producing about 350 films a year. That dropped to a low of 77 in 1995. Two years later, the industry rebounded. More than 100 films were made in 1997, and more are slated for this year.

Italy and other European countries have looked to France as a model. French films have maintained a 35 percent share of the French market over the past 10 years, despite Hollywood's dominance in neighboring markets.

"Paris is the city in Europe with the most cinemas - there are dozens of them. Movies are part of the French culture," says Laurent Valire of Unifrance, the government's film agency. "It has been a very strong policy of the French government to make sure the French cinema still exists and flourishes."

France's National Center for Cinematography (CNC) has a multimillion-dollar fund from receipts from ticket sales and television revenues that is used to fund the production, distribution, and export of French films around the world. That has kept French cinema alive during the difficult 1990s.

The French have just taken another major risk - one their partners in the European Union are watching carefully. Last year, the French company Gaumont International produced Luc Besson's "Fifth Element" for $90 million. It was shot in English with American star Bruce Willis and turned out to be an international hit.

"When the French decide to play on the American field, this shows that we can do it," says Mr. Valire. "But it's a decision - do you want to make big-vision, high-cost movies in English, or do you keep it on the niche level and produce small, interesting films in French? It's a choice you have to make."