Europe's New Tactic in Media War

Movie and TV producers on the Continent ponder competition, not trade barriers, as best response to Hollywood juggernaut

DECIDING the best defense is a strong offense, the Europeans have come up with up with a new strategy in their cultural war with Hollywood: competition.

That's a radical - and controversial - change from their traditional tactic of quotas and protectionism. The Europeans ac- knowledge that American entertainment is highly popular there. But they argue - especially the French - that an apparently growing wave of Hollywood imports threatens their national culture. American titles, for instance, take up around 80 percent of the screen time in European movie houses.

So at a recent major audiovisual conference in Brussels, the Commission of the European Communities proposed creating a $2.5 billion fund to revitalize European production and to create a Pan-European distribution system that could compete with the efficient American system.

France pushes protections

In the past, led primarily by France, European film and TV producers saw the answer to American competition in protectionist measures to decrease Hollywood imports. Such quotas now do not exist in the movie field. Ironically, in fact, the United States is indirectly helping French films via a tax on French box office proceeds - a large percentage of which come from Hollywood releases - to support French productions.

But quotas are in effect for European television - in theory - at the recommendation of the Commission. Some 51 percent of all television shows on the Continent should originate in the countries of the European Common Market, though it has proven almost impossible to fill local program schedules on that basis.

``The single European audiovisual market exists for operators from across the Atlantic,'' says Joao de Deus Pinheiro, the European Union's commissioner for audiovisual affairs, ``but it does not seem to exist for our own operators.'' Professor de Deus Pinheiro spoke at the conference's final session.

His comment echoes the argument of some that what is needed is a Pan-European distribution organization along the lines of the one in the United States, a notion that is rejected by Hollywood companies who can't see the need for a major change.

Antitrust action weighed

Americans argue that they are becoming increasingly active in distributing European films in Europe's own territories. A handful of these movies, most from France, have turned into big hits. Among them: ``Manon of the Spring,'' ``Babette's Feast,'' and ``Cousin, Cousine'' (all from France), as well as ``Cinema Paradiso'' (Italy) and ``Belle Epoque'' (Spain).

This has not deterred Europeans from threatening antitrust actions against US distributors.

In continental Europe, the immediate target is United International Pictures (UIP), which links MGM, Paramount Pictures, and Universal. UIP is perhaps the most profitable distributor on the scene, marketing member companies' films in some 100 countries. It has functioned since 1989 under a European Union exemption from antitrust rules, with the European Commission accepting the argument that the joint operation is an important money-saver.

Now the Commission is considering lifting that exemption. UIP denies that it is operating in violation of antitrust rules, or that it has a dominant position in Europe. In fact, it argues that in 1993 it had a market share of only 20 percent.

In the United Kingdom, the Monopolies and Merger Commission is also looking into the flow of American films into Britain's movie houses. The charge is that Hollywood controls distribution and that the government should be concerned about this unhealthy concentration of power.

The big problem for the Europeans is production, particularly since their films lack export potential. A comprehensive Green Paper, published earlier this year by the Commission, found that only 20 percent of local European production crosses national borders, and European movies barely penetrate the huge US market.

Hollywood, on the other hand, has come to depend on the international market and prefers the status quo.

``There is a specific European cinema and it is threatened because of the strength of the US industry,'' maintains producer Jeremy Thomas (``Little Buddha''). ``We need a certain edge and help from our government to survive.''

Make better films

Others tend to be self-critical. ``If we made better films in Europe, there'd be no problem,'' Roman Polanski is quoted as saying. And the culture argument still crops up.

``Europeans must avoid Europe's becoming an advance outpost of American civilization,'' warns Leon Schwartzenberg, president of the Intergroupe Cinema of the European Parliament.

And Jacques Toubon, France's Minister of Culture, has pointed out that 92 percent of the foreign fiction on French TV is American, and the vast majority of films in the movie houses comes from the US.

``We are asking the Americans nicely to allow us to reserve some of our TV time for European programs because every country needs its own cultural identity,'' Mr. Toubon says.

But it was British producer David Puttnam who best summed up the new European approach: ``There has been a sea change in our thinking,'' he told the Brussels meeting. ``I, for one, welcome it.''

Europeans' worries about the strength of American films are brushed aside by Jack Valenti, president of the Motion Picture Association of America. He has argued for years that people have a right to see what they want to see, and that governments should not interfere.

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