LAST December, the Canadian Broadcasting Corporation announced it would kick American programs off prime time TV this fall and put money behind Canadian-produced shows.
Whether the Hollywood elephant felt the Canadian mosquito bite is questionable. The CBC buys only a pixel of America's multibillion-dollar dream factory.
But some nations, also inundated by American television and films, took notice. From Brazil to New Zealand, a drive is on to rapidly boost the quality of screenwriting, directing, acting, and visual effects. The idea is to out-Holly Hollywood, win back local audiences, and avoid the Americanization of national cultures.
Countries can beat Hollywood with unique films, analysts say, pointing to New Zealand's ''The Piano'' as a prime example.
Despite such successes, nations with small populations, and thus small domestic markets, generally can barely compete. Going up against Hollywood without comparable resources is seen as foolhardy.
Hundreds of satellite channels are already being beamed directly into homes, breaching borders and all lines of cultural defenses. Governments are realizing that blocking the US onslaught with censorship or broadcast quotas just won't work.
Paradoxically, however, the quick expansion of direct satellite broadcasting has created strong demand from viewers for television programs in local languages. Such broadcasts enable small countries to produce programs on a shoestring.
Nowhere are Hollywood's inroads into culture more keenly felt than in the European Union, where 55 percent to 60 percent of television programming and about 80 percent of films are non-European, the majority English-language productions from Hollywood. Led by France, the European Union voted last November to continue for five years quotas that limit non-European imports to less than 50 percent of TV air time.
France has long been at the forefront of resisting the US cultural invasion. But even in a country that requires 60 percent of movies on television to be European, and 40 percent to be French, there is trouble because satellite television is taking the punch out of quotas.
''I don't know how we're going to stop them,'' says Caroline Benjo, a Paris-based film producer who has studied film industries of other countries for the French government.
''The only thing we can do is try to produce as many programs as we can. The quotas have become obsolete,'' she says.
But some countries are fighting to avoid dropping off a cultural cliff - and they are gradually discovering that, on the silver screen, the best defense may be a good offense.
Brazil: rising from the ashes
ONLY a decade ago, Brazil's film industry made 80 films a year and captured 40 percent of the market. But after Brazil's government eliminated funding for filmmaking in the early 1990s, no home-grown films were made in 1991 or 1992. That left the market wide open to American films, which now dominate even as Brazil's industry tries to find its feet.
''The big film studios are almost empty now,'' says Jose Carlos Avellar, executive director of Rio Film, a distribution company funded partly by the city of Rio de Janeiro.
''Of course we have television. But the idea of Brazilian film was so deep in our people. To [discuss movies and] say, 'I love this one,' or 'I hate this one,' is part of the culture.''
He holds out little hope of recovering all the lost market share from Hollywood. ''The Lion King,'' ''Caspar,'' ''Batman Forever'', and similar fare made up 90 percent of the films seen by Brazilians last year. Yet the cost of not trying to rebuild would be to abandon Brazilian culture, he says.
Following a new model, Brazil's domestic film industry is slowly coming back. In 1993, four films were made; five in 1994. Last year, 20 Brazilian films were made, most with budgets under $1 million.
''We are just beginning to recover,'' Mr. Avellar explains, detailing how the city of Rio de Janeiro has stepped in to provide about $3 million to help fund film making.
''We have now a very different way of making films. There is no more big government involvement. You have many provincial governments involved and also banks from different provinces,'' he says.
Showing the success of this new formula, a film called ''A Marca,'' became the first Brazilian hit in the 1990s. Made for about $800,000, it was considered an expensive film. Its depiction of an army captain who leaves the army and starts a guerrilla movement, Avellar says, ''spoke about Brazilian life in the '60s. People loved it.''
The key to success, Avellar and others say are clear:
r Don't try to imitate Hollywood. Cut a new artistic path, but keep in mind the appeal of a picture to an audience.
r Quotas on television viewership help restrain Hollywood a little, so keep them if possible.
r Low-budget coproductions are the wave of the present and future.
r Start competitive distribution networks. Theaters not controlled by Hollywood are in short supply.
r Use ticket taxes, tax incentives, as well as small government grants to fund film and television - but require a slice of the profits.
r Where possible, require new satellite broadcasters to carry locally produced content.
New Zealand: three hits
ELEMENTS of this new formula have been successful in New Zealand's fledgling film industry, which has secured a foothold on an island nation of only 3.5 million people - a mere dot in the shadow of nearby Australia's film industry and Hollywood.
Even though it spends only about $8 million a year to subsidize production of a half-dozen feature films each year, recent years have seen it outflank Hollywood, at least a little bit.
It has parceled out its limited government film money carefully. Meanwhile, its broadcasting commission collects a licensing fee from every TV set owner, which is used to fund domestic television.
Besides ''The Piano,'' there have been two other recent hits. ''Heavenly Creatures,'' by Peter Jackson, nominated last year for an Academy Award as best screenplay, and ''Once Were Warriors'' both financed in New Zealand.
''Warriors,'' a film about domestic violence among the Maoris in Auckland, is the single most popular home-grown film among New Zealanders. For several months last year, ''Warriors'' was the highest grossing feature film in New Zealand of all time - until ''Forest Gump'' overtook it.
''We've had these three successes in three years, which has given the local industry an incredible boost,'' says Mladen Ivancic, deputy chief of the New Zealand Film Commission in Wellington. ''We know we can compete with the majors [in Hollywood]. But whether our success can be maintained in the medium term is a question.... We're cautiously optimistic.''
Like New Zealand other small countries are learning to avoid competing head on with Hollywood. Instead, they produce films that appeal more strongly to the local market.
India: surviving the onslaught
IN India, which boasts the largest film industry in the world, cranking out 700 to 800 movies a year, ''Jurassic Park'' - dubbed into Hindi - was last year's biggest hit. Hollywood now has its sights set on India and China as huge untapped markets.
But India's robust film industry has so far been able to survive the cultural onslaught - partly because its own film industry - located primarily in Bombay and called ''Bollywood'' - is patterned after Hollywood. Its lavish musicals in Hindi and other regional languages mimic the Hollywood of yesteryear.
Industry analysts predict it will be difficult for Hollywood to dominate in India or across Asia as it has in Europe, North America, and Latin America given the linguistic and cultural complexities.
Some Indian analysts, however, worry that Western satellite programming will over time change the public's taste in favor of Hollywood's approach.
''For many years, we have had a television monopoly, but satellites have opened up skies,'' says Shiv Mukherjee, cultural attache at the Indian Embassy in Washington. ''Some say this is debasing our culture. Others say: 'Rubbish, if they don't like it they can turn off the set.' We have a large, highly segmented market. But Hollywood is coming. We know that.''
Canada: a different twist
A SUCCESS story with a different formula has emerged in Canada, where tight government budgets are crunching the financing of the CBC and funding for the indigenous film industry.
Despite declining government funding, the provincial television broadcaster in Ontario, TVO, has become Canada's leading exporter of children's education programming to 104 countries, including the United States and Asia. Exploiting this specialty niche, TVO expanded its sales of kids shows to Asia and is selling Ontario's educational curriculum concepts on math and science to Japan, China, Korea, Australia, and other countries.
TVO recently sold a video course for training teachers in different curricula to the American Society for Curriculum Development, which represents 200,000 teachers across the US. Overall, TVO is now the second-largest foreign supplier of educational video material to the US market.
Malaysia: fighting back
LAST month, Malaysia, a strongly Islamic nation sensitive to the likes of bikini-laden ''Baywatch'' reruns, further insulated itself from Hollywood by putting its first television satellite in orbit. The government is also pouring millions into television programming to fill up the satellite's channels, thus spurring demand for local shows.
''They really need a lot of stock for that satellite,'' says Sunny Lim, president of Sunny Films, one of more than 300 producers scattered across Malaysia. ''We are producing period dramas for television.''
He and others are making government-supported films mainly for television, but his company also produces a few films made for video into the mix.
The Malaysian government is also using a familiar approach that Hollywood condemns: quotas. The three government-owned stations are subject to a quota of 60 percent local programming, 40 percent imported. But it is moving toward a quota of at least 80 percent local programming for all TV networks. That should boost domestic demand, Mr. Lim says.
''We're going to try to give them [government television] all the shows we can,'' he says. ''We have to do our own thing. Realistically, I don't think anybody can beat Hollywood at their own game.
''Who would want to try?''