Quotes of the Day

There's a moving scene in Blind Spot, the debut feature from Slovenian director Hanna A.W. Slak, in which a young woman nurses her brother through heroin withdrawal, cradling his head in her arms and soothing him with stories of their childhood. The room dissolves into a bright memory of them holding hands on a rooftop, the older brother telling his sister to jump, trust him, everything will be O.K. It's a tender moment in a dark, intimate film about courage in the face of hopelessness. Carried by two engaging leads and bold cinematography that soaks every shot in sweat, Blind Spot is better than most films playing in a theater near you. But you'll probably never get a chance to see it.

With the Academy Awards — Hollywood's annual celebration of global dominance — now come and gone, it's worth considering why trade in so many European films is at a standstill. Only one-third of the films produced in Europe ever make it outside their home borders. Between 1996 and 2003, only about 50 European-made films were distributed in 12 or more E.U. countries. By contrast, around half of the approximately 550 U.S. feature films produced every year hit European screens. Although co-distribution deals between countries are sprouting up everywhere — Italy's state film department is in talks with Britain and France about setting up a reciprocal accord — Europe still has no organized distribution network.

Cinema may have been invented in Europe, but since the advent of talking pictures, Hollywood has reigned supreme. That global domination of the $52 billion cinema industry now relies on a vicious economic cycle: as the cost of filmmaking rises, studios balance the checkbook by casting their nets wider, showing their films in more countries to more paying customers; movies become high-tech spectacles and stars demand higher salaries; and so the cost of filmmaking rises, and the cycle begins anew. Europe's industry — with its dependence on dubbing or subtitling for foreign audiences, its vastly differing cultural tones (what makes the French laugh is often lost on the Germans), and its relatively tiny purse — simply can't compete. And that's why many industry insiders are calling for a revolution in the way films are funded and distributed. In France, Italy and Germany, new laws pledge more support to films with mass appeal. Fresh alliances such as Indie Circle — a consortium of A-Films (the Netherlands), Cinéart (Belgium), Frenetic Films (Switzerland), Haut et Court (France) and Lucky Red (Italy) — have been launched to help get more films into more territories.

Part of the challenge comes from a film culture that has resisted commercialization. In order to grab a bigger slice of Europe's box-office takings (which in 2002 were €5.6 billion), directors and producers need to better understand the business of moviemaking. "It's the perpetual struggle between art and commerce," says Colin Vaines, executive vice president of European production and development at Miramax. "In Europe, where there is such an auteurist culture — the director is king or queen and they drive everything along — it isn't always possible to contemplate the marketplace alongside the art."

It's not as if European cinema lacks funds; on the contrary, many European films are government-subsidized in ways that Hollywood can only envy. France — Europe's largest producer thanks to a bevy of national, regional and European subsidies along with investment from cable TV station Canal Plus — makes an average of 200 films a year. Between 1994 and March 2003, the Italian government spent €340 million on 232 films (although those films grossed a mere €73 million at Italy's box offices). The German Federal Film Board has around €75 million to play with. And in Britain, the U.K. Film Council spends its annual budget of around $110 million on everything from big-budget co-productions to digital projection. After investing some $24 million in 20 films between 2000 and 2003, it saw them bring in $230 million at the box office. It could be a while, though, before Britain enjoys such dynamic numbers again. In February, the Inland Revenue got rid of a tax break that gave relief to film investors — who spent over $2 billion in the country last year — effectively cutting off millions in funding for current projects.

But to date, the bulk of that money has gone into producing films; very little of it goes into international distribution. Now that imbalance is coming into focus. Some of Europe's bigger companies have decided to join hands across the water. This past September, Britain's DNA Films (Trainspotting, 28 Days Later) signed a $50 million deal with America's Fox Searchlight, giving Fox a major British co-production pal and DNA access to worldwide distribution.

Others envision a distribution system without the American dollar. In 2002, the five distributors of Indie Circle came up with a simple idea: if one sees a film that could do well in all five territories, they tell the others. If all of them agree on the film's potential, they pool their resources to buy the film, coordinate marketing campaigns and time releases for best effect. "Every step of the process is taken care of by the whole pool — it's quite a democratic process," says Chris Mercier, head of acquisition and distribution.

The Indie Circle team bought the powerful Spanish domestic-violence drama Take My Eyes before it picked up seven Goya awards in February; the film starts its Europewide run in April, but has already taken in over €4 million in Spain. Indie Circle also bought Osama — the award-winning debut from Afghan director Siddiq Barmak, which has just been released to critical acclaim and grossed €210,000 in its first three weeks. "So far, so good," says Mercier. "They've done as well as we expected."

Previously, the closest Europe got to a Continentwide network was London-based PolyGram, a film studio that built distribution operations in all the major European territories. But in 1998, PolyGram was bought up by Seagram and absorbed into Universal Pictures. Universal kept its focus on the U.S., leaving Europe's distribution system shattered and scattered.

A viable distribution network is a start, but many Culture Ministers recognize that more needs to be done. Three of the biggest players in the cinema stakes — France, Italy and Germany — have come up with three different solutions. In an attempt to stop the hemorrhaging of production cash and talent out of France, the government has upped its funding for national film and TV production by 5.9% to €504 million and created a new tax credit that came into effect at the start of the year, which gives producers a discount of roughly 20% of their film costs. The hope is that filmmakers and investors can be seduced into producing export-quality films from home. And to make sure everyone outside the country knows about these films, France's film-export organization Unifrance is turning attention away from Japan and the U.S. to home in on Europe.

Italy is also trying to steer its industry toward the European marketplace, with a new law that reduces the role of state subsidies, putting more responsibility into the hands of private financiers. In the '60s and '70s, Italy was turning out some of the most acclaimed filmmakers of the century: think Bertolucci (whose latest, The Dreamers, is circling the world, in part through America's Fox Searchlight), Fellini and Visconti. The state — which has had a strong hand in the film industry since the Fascist era — started offering up as much as 90% of a film's budget. The result: coddled directors pumping out obscure pictures few wanted to watch. "The auteur made films for himself, maybe for some critics, maybe for a small circle of friends, and maybe for a circuit of festivals, but not particularly or primarily with the public in mind," says Marco Chimenez, executive vice president of Cattleya, the company behind this year's Italian Oscar entry I'm Not Scared.

Under the old system, most Italian films had trouble getting good distribution in their own country, let alone throughout Europe. Italy only recently lost its place as Europe's second-biggest producer after France (the spot now held by Germany), with 117 films produced in 2003, down from 130 the year before. But of the over €440 million brought in at the local box office in 2003, Italian films only accounted for 16%. The new law, which came into effect in January, allows the state to finance up to half of a film's budget, and only after producers have raised at least half from private investment. And it pushes Italy toward the foreign market by providing new funding for distribution abroad, giving cash prizes to companies whose films do well overseas.

A new bill in Germany also tackles the problem from the inside out. Kicking in at the start of the year, the bill boosts federal funding available to producers up to €65 million and creates new incentives to reward films that win prizes at festivals. "The law is meant to improve film financing and at the same time increase the exports of German films," says Hermann Scharnhoop, head of the film-policy department at the Federal Agency for Culture and Media. To help films get out of the country, many will be co-productions, using multinational casts and filmed in English (increasing the chances that moviegoers will recognize the actors and understand what they're saying). Meanwhile, the German Export Union is being revamped to focus on promoting German films abroad, complete with a budget nudge (from €3.5 million to €5.8 million).

But according to critics like Konrad Pechen, director of the Film Association of North Rhine-Westphalia, the new law will push producers to make art-house movies for international juries instead of more popular crowd pleasers — which could hurt the popularity of German film back home. Last year the market share for local films in local cinemas rose to 17.5% (up from 11.9% in 2002) thanks mainly to the hits Good Bye Lenin! and The Miracle of Bern. "The problem is that we in Europe see film as a cultural product and not as a commercial product," he says. "That limits mass appeal of a film and that's why people don't go to the cinema."

Will these bills make a difference where it counts — at the box office? The answer will depend on whether or not the films they help produce even make it into cinemas. With multiplexes (most American-owned) sprouting up at the rate of over 1,000 screens a year all over Europe and replacing the old art houses, smaller films find themselves jostling for space with blockbusters (and the crappy U.S. flicks that cinemas run to ensure they get their hands on those blockbusters). So far, it has been a losing battle.

But if a viable pan-European market could be created, Europe stands a chance of taking its place beside Hollywood on cinema screens, instead of just sulking in its shadow. If the revolution is coming, however, it is coming slowly. Until it does, Blind Spot director Slak, and others whose talents still go unseen outside their home countries, will keep going in the hope that one day their work will cross the border. "Common sense says there's no point in making films if people don't see them," she says. "Fortunately, most filmmakers don't have common sense."

• JUMANA FAROUKY
• Can Europe's film industry take on Hollywood