Hollywood and the European Film Industry

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US films account for an average 68% of the European market. In return, European movies represent 5% of the North American box office. What are the reasons of such unbalance?  Some authors think that the dominant position of US companies comes from the higher identification of American films with the tastes of the European audience. Others argue that the Hollywood success is mainly due to its control of the distribution system.

European policy-makers have introduced the “quota system” to protect national industries and cultural identities. But such policy is both inefficient and old-fashioned:

– It is increasingly more difficult to identify the ‘nationality’ of a given film, which is often created by people from various countries and which is produced by a company owned by hundreds of small shareholders.

– Producers could pay most of their attention to flatter the agencies (usually controled by governments) which give the subsidies; the risk is to discard the preferences of cinema-goers.

– A strong quota system could be against the viewers’ interest.

Regulators should forbid some activities that distrort free competition like ‘block bookings’. This practice is used by the largest distributors to control the exhibition sector. Such abuse of a dominant position hurts the interests of consumers and exhibitors.

Policy-makers should implement some ways to foster efficiency and creativity of European organizations: grants to young film makers, subsidies for exchange of experiences between companies which can lead towards joint-ventures or joint-projects, financial advantages for investors in film production, or more transparency requirements.

It is time to find efficient substitutes of the “quota system”.

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