The Film Industry in Europe

Mass media as a whole are diversified media technologies that are intended to reach a large audience by mass communication. There are many mass media such as broadcast (radio, television), print media (newspapers, magazines, and books), recorder music, digital media (internet) and outdoor media (billboards). But we will be particularly interested in the media of cinema and films which is one of the most famous.
That’s why at first we will have a look on the film industry in Europe. Thereafter we will interest ourselves on the threats of the European film industry, like principally the US market of films.

The film industry and the film industry in Europe
The film industry is composed by the technological and commercial institutions of filmmaking, i.e., film production companies, film studios or cinematography. The film industry has a complex consumption because the creation of a movie need to take in consideration many features. Indeed, it is required to analyse the time allocation you want; the product characteristics such as actors that you want, the music, the plot, the scenario, the budget; people you attend with, and many other features that you have to take in consideration if you want your movie will become a success. The producer has pressure because the first week of release of his film is a strong indicator of success/failure. It will lead to the decision of whether or not to pull off the film from the circulation.
Unfortunately for the film industry, there are many substitutes for this industry such as television, mass spectator sports, music or video games. This impact is difficult to measure. Moreover, cause of high costs of production, large length of production and high cost of production, there is an extreme degree of riskiness.
After the first screening of the Lumière brothers Cinematograph at the Salon Indien of the Grand Café in Paris in 1895, the operators of the Lumière brothers took to the streets of major European capitals. Film was used to highlight the historical events, literature and theatrical traditions. For this reason, the film industry in Italy and France pointed to the splendour of staging as well as to traditional everyday life. If Hollywood is considered the pioneers of a spectacular cinema, in Europe films became a formal language and a new kind of art, rather than just a technical innovation.
Before the First World War, European film companies produced the great majority of films shown in Europe. Europe was considered as the pioneer of both technological and content innovation in cinema. In 2010, the European film industry was quite dynamic and assembled over 75.000 companies, employed more than 350.000 people and the turnover was around €60 billion. Within the European Union, the Big Five – France, Germany, Italy, Spain and United Kingdom – account for around 80% of releases, industry turnover and persons employed.
It is difficult to get a detailed overview of the number of companies and staff employed in the European film industry. The reasons for this seem to reside in its more volatile nature because a number of European groups such as Pathé (France), Constantin Film (Germany) and Kinepolis (Belgium) are active at various levels of the film value network (e.g. production, distribution, and/or marketing). However, the core of the EU film industry consists of nationally based companies, many of which are relatively small and focused on one segment of the value network. Some of them may be set up to produce only a single project. Due to their lower budgets, some European films remain profitable even with a relatively small number of admissions. However, research shows that the great majority of European films do not recoup their costs, which makes it difficult for EU companies to remain in the industry and grow.

The threats of the European firm industry As I told before, cinema was born in Europe. In the beginning of the 20th century, European film companies dominated international film’s market and had not only the largest market share in Europe but also in the United States of America, reaching at times 60%. European pioneered technological innovations (projection, colour processes, sound films) and content innovations like the weekly newsreel, cartoons, serial and feature film.
However, after the First World War, in 1920, the situation was the reverse and the emerging Hollywood studios started to supply many of movies shown in Europe. Nowadays, it is still the case with the European films landscape characterised by the important presence of Hollywood companies like Walt Disney, Warner Bros and News Corp. Even if American companies have produced around 620 movies in 2013; compared with 1.546 European productions at the same time; they account for more or less 70% of the EU market. Whereas European companies hold only 26%. What drives these majors so powerful is the fact that they are very well integrated because six of the ten media groups worldwide have a film subsidiary which are US majors.

Moreover, European film industry has to face up to American blockbusters (movie production with big advertising budget to produce record profits) like Harry Potter, X-Men or Iron Man. On the table below, you can see the five films which needed the highest costs of production. Each of them were produced in Hollywood.

Place | Title | Costs | Year | 1 | Avatar | 300.000.000$ | 2007 | 2 | Pirates of the Caribbean | 300.000.000$ | 2006 | 3 | Superman returns | 270.000.000$ | 2010 | 4 | Raiponce | 260.000.000$ | 2007 | 5 | Spider-Man 3 | 258.200.000$ | 2009 |

My conclusion To conclude, it is possible to say that European film industry is still working but it has to find solutions in order to “stay alive” against the US industry firm which gain more and more market shares thanks to its big budget movies. I think it’s difficult for European film industry to find adapted solutions because Hollywood’s studios have a greater control on the films’ production.
On the other hand, if we consider that film industry is only used to create blockbusters which generates huge revenues, we can ask ourselves if the cinema is still the seventh art, as described by Ricciotto Canudo, or if it’s becoming only a way to make business.

Sources

* http://one-europe.info/cinema-in-europe

* http://www.jstor.org/discover/10.2307/3698694?uid=3737856&uid=2&uid=4&sid=21106348226911

* http://en.wikipedia.org/wiki/Ricciotto_Canudo

* http://en.wikipedia.org/wiki/Cinema_of_Europe

* Lecture 4 of Culture & Mass Media Economics course