New Picture for Hungary’s Filmmakers : Movies: Under the old order, directors developed a satirical style to get their work past the censors. Now they must aim for a mass market.

A snicker of satisfaction momentarily softens director Istvan Szabo’s stern countenance as he recalls how Hungarian filmmakers were once about the best in the world at biting the hand that fed them.

What could not be said about the communist system in print could often be slipped past censors with skillful imagery, and Hungarians took a singular pleasure in poking fun at authorities.

“Hungarian film’s success was that it criticized the system, telling stories about the human face of the dictatorship,” says Szabo, looking the part of a wistful artist with his silver hair and black turtleneck. “Films made fun of the regime and were paid for by the regime, which brought a double satisfaction.”

But the inspiration of repression has evaporated with the dawn of freedom and democracy in Hungary. The nation’s film industry, once one of the most respected in Europe, is now struggling through concurrent crises of identity and finance.

Deprived of both paymaster and punching bag by the collapse of the communist system, the nation’s filmmakers have seen most of their tiny market taken over by Hollywood while they wander in search of new bearings.

“Now, with the political changes, artists don’t know exactly what to say or against whom,” says Szabo. “We need another level of telling stories. The language of symbolism, the importance of satire--it’s over.”

State subsidies for the arts are dwindling throughout Eastern Europe as governments replace culture-coddling communism with market economies. Filmmaking in the region is particularly hard hit because of its high costs and the old East Bloc genre’s preference for style over entertainment.

Production of full-length feature films in Hungary has fallen from more than 20 a year in the 1970s to a spare handful expected this year, and even the few domestic offerings tend to be spurned in favor of the post-revolution invasion of American movies.

The newly created Hungarian Motion Picture Foundation reports that at least 80% of box-office receipts--about $15 million last year--were attributable to Hollywood products.

“Hungarian film is slowly dying,” says Sandor Venczel, financial director of the Hungarian State Opera, who left filmmaking a year ago because he feared it was doomed. “The types of film that distinguish the Hungarian industry are dead. They are not economically viable, and the sociology that inspired them has changed.”

Production costs for Hungarian-made films are well below those in Hollywood, with the average full-length feature running well below $1 million. But even a low-budget blockbuster in a country of 10 million cannot recoup more than 25% of its production costs at the box office, and Hungary’s impenetrable language and idiosyncratic national character limit the appeal of its films abroad.

Predominantly serious and artistic, Hungarian films have never aimed at a mass audience, which is proving their downfall in the new, more competitive age.

Some of the more successful directors are now critical of the elitist approach to filmmaking that was allowed to develop under the old regime.

“There was never any need to face the problem of marketing, or to think about the wishes of the audience,” says Szabo, whose 1991 film “Meeting Venus” was successfully marketed in the United States. “If a production was good enough for the two or three people who decided where the (state) money went, that was all you had to worry about. It was absolutely not important what the audience thought about it.”

Paying attention to what audiences want, and giving it to them, is the only hope for rescuing the industry, says director Gyula Gazdag, who just returned to his homeland after a two-year stint teaching at UCLA and watching the Hollywood experts at work.

“Ninety percent of the films screened in Hungary now are from Hollywood,” says Gazdag. “There are a lot of people in the film industry here who think the solution is to forbid foreign films, like in the old days. But that’s not the solution. This is a challenge. We need to look at the qualities that make these (Hollywood) films successful worldwide.”

Hungarian and other Eastern European filmmakers should be making creative use of the cards history has dealt them, says Gazdag, who has just completed a documentary with French producers chronicling the region’s dramatic burst out of Stalinist oppression two years ago.

“This part of the world provides so many interesting stories, so many appealing stories,” says Gazdag. He is contemplating a post-communist version of Charles Dickens’ “A Christmas Carol,” following the nightmares of a pampered party boss stripped of his privileges.

But in a society mired in pessimism and a transition cutting deep into the standard of living, few are as hopeful as Gazdag about the prospects for making commercially successful films.

“The film industry will never be self-financing in Hungary because of its small population,” says Ferenc Kohalmi, head of the film foundation, which determines where limited state funds will be spent.

Kohalmi says ticket prices--recently doubled to 80 forints, about $1--cannot be raised further without deterring moviegoers in a country where the average monthly income is less than $200.

The film foundation, created last year, managed to wrest more than $11 million from the government to support film production this year, a figure equal to the 1991 state subsidy but one that buys considerably less because of Hungary’s 30% inflation.

Co-production projects with Western filmmakers would be a solution to the Hungarian industry’s current disaster, but the filmmakers concede there is little commercial incentive for foreign partners unless Hungarians reorient their craft to appeal to a larger, international audience.

Directors say that probably means changing their image as the chroniclers of social conflict to embrace the more marketable qualities of American films.

“I’m not so angry about American films as my colleagues. The audiences like American films. This is a reality,” says Szabo. “But maybe this is a tiny bit dangerous. All American film has a solution to the question asked throughout the film. In Europe, I’m not sure it can be so simple.”