One of the most impressive developments in the last twenty years is the phenomenal rise in American financial interest in British, Italian, and, to a smaller degree, French film production. The causes of this can be found here and abroad.
When the American market was able to support film making in Hollywood, the industry gave relatively little attention to Europe. But in the decade after World War II, the situation changed with the lessening of demand for films in the United States, the growth of competitive entertainment and diversion, and the consent decrees which restructured the industry. At the same time, production costs were increasing, due to general economic inflation and to the nature of films being produced.
While these profound changes were occurring in the domestic market, the American industry was being influenced by events abroad. Because of an aggressive American export campaign, foreign markets slowly increased in importance until they were contributing slightly more theatrical revenue to the American industry than was the United States. The economic policies of foreign countries also affected Hollywood. The balance of payments problem forced most European nations to freeze American film companies’ earnings. With the exchange into dollars of pounds, francs, and lire prohibited, companies found themselves with large accounts of foreign revenue. As these earnings could not be taken out of Europe in dollars, the companies felt they could be taken out in the form of goods—motion pictures. The availability of unremittable funds drove companies to shooting abroad, and films were made, partially or entirely, in Europe.1
This initial desertion of the Hollywood lots for the studios and countrysides of Britain, Italy, France, Spain, and other nations was a direct result of blocked earnings and company desires to spend them. True, some films produced in this way were of little merit, hardly more noteworthy than the grade B pictures made in this country. Their claims to fame, it seems, were in unmotivated pans of landscapes and towns, contrived scenes taking place in “native” cafes, and local actors in secondary roles saying a few words (but not too many) in their own languages to add color. Films of this era occasionally are available today for viewing on television.
In producing in Europe, American companies quickly learned that a given film could be made less expensively and often with fewer union problems than in the United States. Moreover, the companies had to keep in mind that revenues and corporate solvency were depending more and more upon foreign audiences. Thus, the American film industry was thinking not only in terms of Denver and Boston but was considering the reaction of audiences in other parts of the world.
The initial wave of runaway production acquainted American companies more thoroughly with European methods of film making. It demonstrated that Hollywood was not the only place in the world where films could be produced, and that foreign studios, technicians, and actors were competent and experienced. In one sense, it proved that multimillion dollar plants and multimillion dollar payrolls were not necessarily the prerequisites for financial success or artistic excellence, nor necessarily the causes of trite plots and make-believe worlds. The new closeness to European production also showed American companies that some American-made films shot on location with foreign actors could have box office appeal in the United States.
Familiarity with European production did not lessen when blocked earnings were spent and remittances liberalized. The original relationships were cemented when American producers and film companies realized that by rearranging their corporate structures and by forming new ones they too could benefit from production subsidies available in Europe. Having introduced themselves to shooting films abroad, American companies saw the next logical step as having these films declared “national” by European countries so they could have access to subsidization. The turning point was around 1950, the year in which a subsidy was initiated in Britain and two years after inauguration of subsidization in France and Italy.
While blocked earnings were responsible for the first wave of runaway production, the availability of subsidization was the cause of its perpetuation and development into a second wave which cannot be attributed to unremittable revenues. One could argue that lower labor costs are the sole cause. While they certainly cannot be dismissed, a moment’s reflection will reveal that the subsidy, as a variable, is of greater importance.
The vast majority of American overseas financial participation is centered in the United Kingdom, Italy, and France, in that order. Each has a subsidy program. Certainly production costs in England are not less than they are in West Germany, which until 1968 had no subsidization and drew little American investment. Nor are production costs in the three countries less than they are in Spain which had no subsidy plan until 1965. Although production costs are rising in Spain, the availability of a subsidy has begun to attract American producers. But even though Spain is still cheaper than Italy, there certainly is more American money in Italian than in Spanish production.
The size of the market and the existence of adequate production facilities also must be considered. Sweden has a subsidy plan and production facilities, the latter not on the same scale as Britain, Italy, or France. Yet Sweden has attracted little American investment, presumably due, among other points, to the smallness of the home market (less than eight million population) and the equally small rebates obtainable. Belgium, with a production subsidy plan equal to that of France and Italy, has drawn no American investment. The lack of extensive studios there and the smallness of the home market constitute barriers, although the wage scale is comparable to that of France. The Netherlands, with no subsidization, without substantial production facilities, and in spite of low wage rates, likewise has drawn no American money.
Considered in these terms, low labor costs may make Europe an attractive place for American production, but the availability of subsidies and sufficiently large markets dictates the countries in which most of the American investment will be made. Certainly production costs are even lower in other parts of the world. Yet American investment gravitates to a handful of western European countries—all with subsidized film production.
It is not surprising that American companies have restructured themselves and added new appendages. As production subsidies are not offered in the United States, it is natural that these companies should want to avail themselves of this extra revenue. By designing new corporate bodies they act in their own self-interest, for to neglect acquiring additional income would hardly make sense in business terms.
Perhaps the situation in Great Britain indicates the simplest form of an American production subsidiary.2 There, an American company which wholly owns a British subsidiary can produce pictures which meet the legal criteria for being designated “British,” and therefore have access to the British Film Production Fund. This is accomplished by subscribing to conditions for the maker of a “British” film as established in the Films Act. According to it, “the maker of the film” must be “either a British subject … or a company [which is] encorporated under the laws of any Commonwealth country [and whose] directors, or the majority of its directors, are British subjects….” The law says nothing about the nationalities of stockholders or where overall control of the company is exercised, nor does it set criteria for the source of production money. In organizing a subsidiary, an American parent can incorporate the company under British laws and appoint a majority of British subjects to the board of directors. This yields a British company whose affairs are conducted by directors predominantly British, but which is owned by, and its overall policies determined by, the American parent. The membership lists of the Federation of British Film Makers and the British Film Producers Association (prior to their merger) included such subsidiaries as Columbia (British) Productions Ltd., Paramount British Pictures Ltd., M.G.M. British Studios Ltd., Twentieth Century-Fox Productions Ltd., United Artists Corporation Ltd., Walt Disney Productions Ltd., and Warner Brothers Productions Ltd.
American majors have not been the only ones active in this field, for independent producers and directors have also established British companies. Carl Foreman, an advocate of a production subsidy in the United States, has been the managing director of Open Road Films Ltd., a British producing company. Open Road, a member of the Federation of British Film Makers, was the producing company for The Key, The Mouse That Roared, Guns of Navarone, and Born Free. In the same way, Sam Spiegel is director of Horizon Pictures (G.B.) Ltd., a company responsible for making Lawrence of Arabia and a number of other films. Horizon was a member of the British Film Producers Association. Stanley Kubrick’s Hawk Films Ltd. And Martin Ritt’s Salem Films Ltd., both FBFM members, are British companies. The former produced Dr. Strangelove, and the latter The Spy Who Came in From the Cold. Between 1958 and 1961, Hecht-Hill-Lancaster Films Ltd. was a member of the FBFM and produced The Devil’s Disciple and Season of Passion. Because these British companies are normally private, details of their capitalization and stock ownership do not have to be reported publicly. As a result, there could well be a number of such producing companies held by Americans which go undetected.
One can ask whether there have been serious efforts to stop American subsidiaries from receiving the subsidy. The answer is illuminated by an event in April, 1959, when the House of Lords was considering problems involving payments from the British Film Production Fund. To clarify the position of films made in Commonwealth nations to the Fund, an amendment was introduced which would have excluded such films from drawing subsidies. The amendment would have limited eligibility to pictures
the maker of which was throughout the time the film was being made, a person ordinarily resident in, or a company registered in, and the central management and control of whose business was exercised in, the United Kingdom.3 (Italics mine)
The implication of this amendment extended beyond Commonwealth films and hit precisely at American subsidiaries which were making “British” pictures. Lord Archibald, president of the FBFM, asked for clarification of the amendment, for he believed it would implicitly endanger the status of “British” films made by such companies as Paramount, Twentieth Century-Fox, or M.G.M. He noted that the phrase “central management and control” could be construed as meaning that British Metro, for example, was a subsidiary of an American company and that management and control were exercised in the United States rather than in the United Kingdom. In answer to Lord Archibald’s question, the Minister speaking for the government gave formal assurance
that the position of LI. K. resident companies which are subsidiaries of American or other companies was not endangered by the amendment. This assurance was repeated when the Draft Regulations came before the House of Commons.4
It is understandable from this vignette that the British government is quite aware of the production activities of American subsidiaries and that their films can qualify for subsidies. That this condition has been permitted to continue and grow is explainable in that American production is a source of employment for British actors and technicians and that American investment is a stimulant to the production industry. Even the National Film Finance Corporation has observed:
The financial support of the US companies to film production in Britain is to be welcomed. Without it indeed there would scarcely be a film production industry here. The Corporation believes that nothing should be done to discourage the continuance of US investment.5
The production subsidy in Britain can be seen as an exchange—employment of British workers and use of British studios in trade for an increment of revenue above that coming from the normal receipts of a picture. That the employment aspect is real can be judged from comments made by Walter Wanger, producer of Cleopatra. The original planning for that film called for it to be made in such a way as to be declared “British” and be eligible for subsidization. In describing the preproduction phase of Cleopatra, Mr. Wanger noted in November, 1959:
[Buddy] Adler [Twentieth Century-Fox studio head] talking about taking advantage of the Eady Plan for Cleopatra, which confirms London as headquarters [for the production].
Under the Eady Plan, it is possible for an American company to get financial aid from the British government [sic] if a certain percentage of cast and crew are British. The idea is to give more employment to British workers.6
By July, 1960, plans for the film had undergone several changes. Mr. Wanger was opposed to shooting in England and preferred to have the whole film done in Italy. He felt that even though a subsidy was involved, shooting interiors in England and exteriors in Italy would not be practical because
… the budget arrived at was 5,200,000 dollars. Consequently, anybody could have figured out, by coming to England where they were shooting a five-day week instead of a six-day week, it must mount up to more. Also, we would be in two location operations—London and Rome—rather than just in Rome, which again would run up expenses, especially under the Eady Plan, where we would have to take a lot of English staff wherever we went.7 (Italics mine)
Cleopatra was started in England, but the work done there was scrapped and the picture never materialized as a “British” film eligible for a subsidy. This is a rather clear case of a film which would have been an American project but, at the same time, legally “British.” The financing for the film was American, the production policy was set by the Fox corporation in the United States, yet it would have received a subsidy in Great Britain (and perhaps have gone on to be hailed as still another example of the rebirth of the British cinema).
A more recent case, and on the other end of the cost scale, is Dutchman, the film version of an off-Broadway play about race relations in New York City. The script has been described as “indigenously American” but the film as “technically British.”8 The main shooting was in Twickenham Studios in England and took only six days (reportedly, three cameras were used). Production costs were about $70,000. Its American producer, Gene Persson, established a British company, Kaidin Productions, to be the maker of the picture. It was directed by Anthony Harvey, who is British, and was registered as a “British” film with the Board of Trade in January, 1968. It will receive payments from the Production Fund.
Given that American subsidiaries do produce “British” pictures, do they draw substantial sums from the Fund? Unfortunately, there are no official public data available revealing the amounts any producer receives from the Fund. The evidence which is obtainable, however, indicates that American subsidiaries have discovered the Eady Plan to be quite lucrative.
According to a report on the Production Fund’s second year of operation from September, 1951, to August, 1952, (before it became statutory), American subsidiaries drew about $154,000 in payments. During the fourth year of operation, 1953 to 1954, American companies drew almost $500,000 from it.9 The substantial rise in payments between the two periods reflects the increase in the number of “British” films made by American companies. But that was some fifteen years ago when runaway production was only beginning, when rental terms had not yet soared to the heights of the 1960’s, and the era of the big budget picture had hardly started.
One recent estimate is that American subsidiaries in Great Britain now receive as much as 80 percent of the subsidy from the Fund.10 For the operating year up to October, 1965, the Fund made total payments of $12,400,000. If the 80 percent estimate is accurate, then in 1965 American companies received close to $10,000,000, a twenty fold increase from the 1953—1954 period before the Fund became statutory. The $10,000,000 estimate does not seem unreasonable as it is reported that Goldfinger, Tom Jones, and Guns of Navarone (all involving American participation) collected among them about $3,500,000 in subsidy payments.11 The lucrative aspect of producing in Britain has led to a situation in which, according to one British film producer, “We have a thriving film production industry in this country which is virtually owned, lock stock and barrel, by Hollywood.”12
The extent of American investment in British production can be illustrated in other ways. The British Film Producers Association conducted a survey during the 1965-1966 year which revealed that about half of all films made by its members were supported by American investment and that in terms of money the proportion was even greater.13 The National Film Finance Corporation has determined, for 1962 to 1966 inclusive, that 57 percent of British first and cofeatures exhibited on the two main theatre circuits were financed wholly or partially by American companies. A trend during those five years was clearly present, as the proportion of American-financed pictures increased steadily from 43 percent in 1962 to 71 percent in 1966. Concerning the magnitude of finance, American sources provided almost 75 percent of the production money for British films in 1965 and 1966. The NFFC predicted that the “corresponding proportions for 1967 and 1968 may exceed 90 percent.”14
It seems there are two major reasons British film makers are willing to accept American backing. First, American companies, in many instances, agree to finance 100 percent of the production cost as opposed to British companies which might finance, say, 70 percent of it. Connected to this is the often-heard comment that British finance today is drier and tighter than in the past.15 In this respect, American money might not only be easier to obtain, but obtainable in larger amounts.
Second, the American industry has the only integrated worldwide film distribution system. Administratively at least, it is easier to deal with such a system. Moreover, access to the wealthy American market is virtually guaranteed if an American company is involved financially in the production. A British producer would obviously give preference to American finance in order to achieve this sort of circulation for his film.
The adage about control of distribution giving one control of the industry bears on the nature of films produced with money from American sources. The British Monopolies Commission noted in its 1966 report on the film industry:
… for most producers the very fact that they rely on distributors for finance inevitably means that they cannot be wholly independent of them, since clearly distributors cannot decide to finance a project or to guarantee it without some assessment of its commercial prospects. Generally therefore the producer is not in a position to determine wholly independently what kind of film shall be made.16
The financier obviously has veto power over a film. This can be exercised in the broadest way by approval or disapproval of the entire project, or in more specific terms by modification of the script, actors, locale, etc.
Nevertheless, there is a considerable body of opinion in the United Kingdom which is not disturbed about American companies’ control of British film production. The basis for this exists in the financial success many American-financed “British” pictures have had. In business terms, the large American investment has been seen as a panacea for the ailments of the British industry. One recent study, which believed the British industry should be judged on “its commercial performance,” rejected the “chauvinism that distrusts American investment in British films.”17 By the same token, the Monopolies Commission felt that “even where there are signs of American influence in a film,… we would not consider this to be a matter affecting the public interest….”18 The Federation of British Film Makers, declaring that the recent successes of British pictures “owe more to American than to British finance,” has asserted that American involvement has meant “an enhanced status for British films throughout the world” and that this cooperation “must be welcomed and encouraged.”19
The British production industry, if one can argue that a substantial national one really does exist today, is little more than a branch of Hollywood, dependent upon American companies for both finance and distribution. In economic terms, and in the short run, there is no question that American finance has been a needed elixir for the British film industry. Most producers and industry experts approve the current state of affairs, for the industry is economically healthier now than in the past. Yet, one is forced to wonder whether the British industry has not lost something in the trade; if it has not exchanged autonomy and the chance to manifest its own culture for the appetizing glory of financial success with many of what are often called mid-Atlantic productions. Indeed, it seems strange that the British industry, which for years pressed for a screen quota, a film production bank, and a subsidy plan to protect itself from extinction at the hands of the American industry and its films, has now become part of the organism it sought to hold at arm’s length—and willingly accepts this position. This certainly has been an extraordinary turning of tables. The screen quota assures American-financed “British” films a place in British theatres at the expense of foreign films; most of the production subsidy now goes to American subsidiaries; and the film bank wonders whether it will be rendered sterile by American largesse. If Britain should become a member of the Common Market, the American film industry will not have to worry about trade obstacles for it is already firmly entrenched.
A survey of American interests in European films must consider Italy and France, the only continental nations which have drawn substantial sums of American money. Together, they attract a conservatively estimated $40,000,000 annually. Perhaps the most interesting and significant development in these countries regarding finance is the modification of those portions of film laws which bear on nationality, and thus implicitly determine which films are eligible for subsidization. In the case of the United Kingdom, its law established no criteria for the ownership of the producing company—that is, who might capitalize it. The film laws of both France and Italy have changed on this point, and in the direction of liberalizing the definition of a national picture. (Perhaps they are competing with Britain for American production dollars?)
In France, the film law of December, 1959, established criteria for the conferral of “French” nationality. In addition to the usual standards relating to actors, technicians, writers, place of shooting, etc., the law dealt with production companies and required that the “capital for these companies must be held in the majority by French citizens.”20 A wholly American-owned subsidiary could not have made a “French” film eligible for subsidy due to the origin of the company’s capital—American. However, this did not prove to be a barrier to American investment. An American party wishing to make a “French” film could establish a legal French company with nominal assets held, in the majority, by French citizens or foreigners with resident quality. The rest of the capital for the company could be supplied directly from American sources. In this way, a paper company could be formed which would be the producer of a film.
Current French film legislation, the amended December, 1959, law, removes the requirement on the producing company’s capital being French in majority and makes it possible for a wholly American-owned subsidiary to produce “French” films. But as in Great Britain, the French film law set no requirements on the source of capital for the production. As before, an American investor could provide a French company (wholly-owned by French citizens) with funds for the making of a film. The consequence of the change is simply that a French paper company no longer need be established.
In Italy, the same modification has been made. Under legislation of July, 1956, one criteria for an “Italian” film was that the capital of the producing company had to be predominantly Italian.21 The November, 1965, law does not refer to the capitalization of the producing company. The change removed a small barrier which had never really prevented American investment; American interests still could have been involved in Italian films (as they were and are) by providing capital for any individual ‘production.
Another change in the Italian film law pertinent to nationality and American investment concerns directors of films and the method of sound recording. The current law declares that the director must be Italian and the sound must be recorded at the time of shooting. The 1956 legislation however, did not refer explicitly to the manner of sound recording. The old law decreed that a film could be declared “Italian” if it were “produced in an original Italian version, or if in several versions, one of which is Italian….” In addition, the director had to be Italian, “at least in the original Italian version.”22 The law said nothing about the nationality of the person credited with directing other language versions of the same film.
The consequence of this requires a brief explanation of a “straw director” and how some films have been shot in Italy. In industry terms, a straw director is someone given credit for directing a picture even though another person did the work. In practice, an American may have directed an “Italian” film, but on the print released in Italy, an Italian is cited as the director. This straw director, in fact, may have been only an assistant. When the film is presented to the board which confers nationality, the credits list an Italian national as director, and the film, therefore, is eligible for being designated “Italian.” When the picture leaves Italy, it no longer need carry the name of the straw director. Because of this, it is not surprising to discover in the 1961 Unitalia catalog of Italian productions that El Cid was directed by Giovanni Paolucci. Elsewhere, Anthony Mann is given credit for it. The catalog also lists Sergio Leone as director of Sodom and Gomorrah, although Robert Aldrich is cited in other sources as the director.
Many Italian films have been shot without the direct sound recording used by Hollywood. Instead, only a guidance dialogue track is recorded. This is particularly true when multi-lingual casts are involved and eliminates the difficulty of having an American, German, or French actor trying to speak his lines in Italian. This track guides the dubbers, who later substitute Italian voices for those of the film’s actors. Essentially, the film is shot almost as a silent, with dialogue and effects put in after it is completed. The reference to sound recording in the 1965 film law points to a tighter definition of an “Italian” film.23
According to sources in Italy, officials are aware that some exceptions to the law exist. Nonetheless, authorities believe the stimulating effect of foreign investment and foreign companies’ use of Italian production facilities far outweigh the possible dangers to Italian films in a cultural sense. If regulations become too stringent, foreign capital and foreign productions could be chased away and this would have an unpleasant economic impact. In many ways, the reaction to American investment has been similar in Italy and Great Britain, and to a lesser extent in France. The choice has been between American money ensuring relative economic health, on the one hand, and no American money and probable economic sickness on the other.
American investment in Europe has not only been tacitly accepted but openly encouraged. As early as the 1948 film agreement between France and the United States, American companies were permitted to spend their blocked earnings by coproducing films with French companies and by purchasing distribution rights of films made in France. More recently, Franco-American cooperation has yielded such “French” films as The Train, Viva Maria, and Is Paris Burning?. The last involved a reported investment by Paramount of more than $6,000,000. Artistically at least, it represents a step downward from René Clément’s less expensive but more impressive La Bataille du Rail, produced twenty years earlier.
In Italy, film agreements between the MPEA and ANICA have permitted blocked American earnings to be invested in Italian production. The 1956-1959 pact stipulated that unremittable revenues of American companies could be used for the financing of Italian production companies, purchase of rights to Italian films for foreign distribution, payment of minimum guarantees for the distribution of Italian films in Italy, and participation in films of Italian nationality.24 The 1959-1962 agreement extended the spending of blocked funds to coproductions with third countries, provided the films involved were predominantly Italian.25 While Italian legislation established criteria to be met by producers of “Italian” pictures, the MPEA-ANICA pacts allowed American money to finance them. Indeed, Eitel Monaco, president of ANICA, recently remarked that between 1957 and 1967 American companies spent about $350,000,000 to acquire and to participate in Italian films and to make their own pictures in Italy.26
The approaches to financing in Great Britain, France, and Italy are brought together in Figure 1 which follows, showing the possibilities for an American company, Magnus Films. While this name is fictional, the opportunities are real, for they represent the methods several American companies have used to produce “national” films in Europe. Through a combination of wholly-owned and partially-owned subsidiaries, paper companies, and production financing, Magnus can have financial interests in “British,” “French,” “Italian,” and coproduced films (and their subsidies). Magnus, of course, would be in a position to distribute these pictures in the United States and other markets.
Recognizing the degree of foreign participation in European films raises the interesting question of their ability to transmit local cultural values. It is questionable whether they do, in fact, reflect domestic themes when the investment in them cuts across national boundaries and when they are made with international audiences in mind. Considered in these terms, the assignment of nationality to a film indicates the fallacy of believing that a given picture represents entirely the characteristics of any one country. Moreover, as these nominally national films circulate around the world, their nationalities change.27
Certainly the most important factor working for internationalization is the American presence in Europe. It cannot be denied that the relationships between American and European producers have resulted in significant changes in the output of European studios. It could not have been otherwise, for the amalgamation of diverse cultural interests generally has a “melting pot” effect.
If one claims that British or Italian films are Americanized, then the reverse also must be acknowledged—that American films are Anglicized and Italianized. Europe is pulling production money from the United States and causing it to be invested in films which are not native American. In contrast to twenty years ago, American companies now find themselves with heavy investments in foreign-made films. The connections established between the two industries are yielding hybrid films, not typical of either the United States or of any European country. Indeed, American presence in Europe has modified European production, but foreign films in which there is an American interest represent a significant change in American production policy.
Siegfried Kracauer has contended that the films of a nation reflect that nation’s mentality for two reasons. First,
films are never the product of an individual…. Since any film production unit embodies a mixture of heterogeneous interests and inclinations, teamwork in this field tends to exclude arbitrary handling of screen material, suppressing individual peculiarities in favor of traits common to many people.
Second, films address themselves, and appeal, to the anonymous multitude. Popular films … can therefore be supposed to satisfy existing mass desires.28
To extend this, one could contend that when a film is the product of peoples of different lands it will reflect their different traits and characteristics and be an homogenization of the ingredients brought to the production. The finished product will reflect universal idioms at the expense of national ones. These social and artistic features are further enhanced by the economic imperatives connected with the production. What is happening is the extension, on an international scale, of industrial production applied to culture. While this can yield products which are technically slick, the range of differences among them is reduced considerably—as among loaves of commercial white bread.
Anthony Asquith, British film director and president of the Association of Cinematograph, Television and Allied Technicians, once observed:
We are neither anti-American nor anti-European, but we have always contended that British films should express our own attitudes and our own beliefs. Mid-Atlantic or mid-Channel productions are no substitute. To take an example from another country, I offer no prize for the answer to the question, which is the better or more typical Italian film—”Bicycle Thieves” [sic] or “Sodom and Gomorrah?”29
In the artistic sense of “better,” Bicycle Thief would be the correct answer. But as far as which film is “more typical,” one has to conclude that both are typical—typical Italian products resulting from different ways of organizing and financing film production in Italy.
One possible, but hopelessly inadequate, solution to the problem of American investment entails some form of balance between it and local autonomy. The matter really becomes one of how to accept, within limits, foreign capital without falling into the power of the giver—a dilemma many nations have had to face in considering American foreign aid. Many Europeans would reject a film industry which was European in name only, a mere facade for American runaway production and runaway investment. Yet American money has not been refused, for in many ways it has stimulated domestic film making.
Certainly the problem can be approached in another way by creating healthy film industries through development of long-range programs and policies within countries or within the framework of the Economic Community. This includes maintenance of import and screen quotas, continuation of production subsidies, as well as initiation of an effective national or supra-national plan providing production financing in greater amounts. More specifically, in conjunction with a redefinition of a national film to include only those produced with national or Community capital, the state could take steps to provide enlarged production financing (100 percent, if necessary) and to create an organization for the international distribution of Community-made pictures.
This would come to grips with the two principal reasons for foreign producer reliance upon American companies. First, a sufficient national source of finance would be available, either from individual countries or an EEC agency. Second, an integrated worldwide distribution system would exist to handle these films. The chain could be a publicly-owned Community corporation or a consortium privately-owned by existing European film distribution companies, with encouragement and, if necessary, financial assistance from the state. It would provide a much needed alternative throughout the world, and inaugurate competition in international distribution.
The redefinition of a national or Community film would mean that financial and trade benefits flowing from nationality would accrue only to Community films made with Community capital (private or public), in contrast to the present system in which national films made with American money are eligible. Of course, this would not bar American investment in foreign-made films, but it would make such films ineligible for subsidization and other advantages.
This could be the basis for solving the problem of third-party (American) investment in EEC production. If the United Kingdom can be cited, the lack of a worldwide British distribution system, the inability of the NFFC to provide for majority or complete film financing, and the tightness of private sources have been prime factors in American domination of production. This has been spurred on (if not caused) by the lucrative subsidies for American-financed “British” films.
The consequences of this plan can be viewed best from the perspective of Canada’s Association Professionnelle des Cinéastes. One need but substitute Britain, France, or Italy in the text:
The most perplexing dilemma with which Canada is faced is the increasing foreign ownership and control of the Canadian economy. It has become apparent that there is a need for a new understanding between the public and private sectors of the economy, as well as some emboldening of government initiative. Private enterprise alone is no longer able to fulfil its obligation toward society’s needs. The State must intervene, and this intervention cannot be seen as an indication that the State is dabbling in totalitarianism. For the actions that government takes are not intended to replace those of private investment but rather to open new fields of action and to increase its efficiency.30
The EEC has recognized that film making cannot be treated in the same way as other industries. For western Europe, film is not only a culture carrier but a commodity faced with local and international competition from the American industry. There is no argument that European film production should be permitted to continue. Moreover, it is agreed that its continuation can be only as a protected industry. To shield it so that it can become an appendage of a foreign country’s industry could hardly be the aim of the EEC members or the EEC itself.
The solution must protect cultural integrity and enhance economic viability of film production. Limited loans and subsidization, as valuable as they have been, are no longer sufficient. Means now must be provided for substantial public financing of films and for international distribution of them.
Governments, the EEC itself, and film industry authorities have been studying the problem of American investment. The response to it will not be painless to develop and put into action for it requires vision and experimentation. At the time of this writing, it would be no exaggeration to say that this is the crucial problem facing the European film industry. Its resolution will have a decided impact on the future of that industry’s development.