21/11/2006

According to a study on the economy of culture in Europe, prepared for the European Commission, Europe's film industry is a “a relatively minor sector…outweighed by other cultural industries in terms of generated turnover."

The study, which includes both cultural and creative sectors, highlights the industry's structural deficiencies from the fragmentation along national borders to under-capitalisation of relatively small companies, which find difficulties in marking and promoting local films internationally.

In the production sector, many European companies have a limited output of one to two productions per year. They are usually small size companies, with operating revenues of less than €100m a year. Some of these companies are created for the production of one single film and subsequently dismantled, which explains why turnover tends to scientifically vary from one year to another. Still, no other country matches the number of feature films produced in Europe: the 25 member states produced 761 films in 2004, 150 more than the US and more than the double of the films produced in Japan.

However, a high and diverse level of production is not matched by effective distribution channels. The film distribution market is dominated by US-affiliated companies (which obtained 64.5% of total box office revenue in the five major EU markets in 2004, against the 35.5% obtained by European companies).

When it comes to the market share of European films, France is the only country where local productions enjoy relatively high results (over one third of the market over the last decade), while in Italy, Denmark and Sweden local productions usually account for one quarter of the box office.

In all EU countries US titles often have close to 80-90% of the market share. Most European titles do not cross borders: they are produced, distributed and consumed in one single territory.

The full report is available on the website of the Directorate General of Education and Culture.