European Film Industry Bids to Take On Hollywood : Entertainment: Leaders meet in Brussels and back sweeping changes--including a reduction in subsidies.

Using words like “watershed” and “historic turning point,” the leaders of Europe’s beleaguered motion picture and television industry gave their backing Saturday to a series of sweeping changes that they believe will enable them to compete effectively with Hollywood in the next century.

Those changes include a reduction of subsidies, a commitment to restructure the industry to stress marketing and commercial viability, and a new effort to move beyond individual domestic markets and to exploit the European market as a whole--something only the Americans have managed to do so far.

“Strong political will and vision is required--now,” warned Joao de Deus Pinheiro, the European Union’s cultural affairs commissioner.

In one respect, the gathering of about 300 film and television executives for a three-day European Audio Visual Conference here was merely a consultative affair--a meeting that allowed senior EU officials to hear industry views before finalizing a policy for the industry later this year.

But the views expressed and the consensus that seemed to emerge from the meeting reflected the enormous change that has occurred in Europe in the months since bitterly fought world trade talks ended in December.

In those negotiations, the EU managed to override stiff U.S. opposition and win an exclusion of the audiovisual sector from sweeping free trade provisions on grounds the industry was more cultural than commercial.

Since then, however, EU officials have warned that the victory was only temporary and that Europe’s audiovisual sector would die if it continued to ignore market demands, cede its home markets to U.S. imports and rely on a life support of more than $500 million a year in government subsidies.

While there were no votes to convey the exact sentiments of those attending the Brussels conference, industry leaders appeared to abandon the idea that Europe’s audiovisual sector could not survive without long-term subsidies.

“There’s been a sea change in thinking,” said British film producer David Puttnam, former head of Columbia Pictures. “(The audiovisual sector) was always seen as a culturally led industry with commercial dimensions. Now, it is being viewed as a commercially driven industry with cultural dimensions. When you’ve got people like (German filmmaker) Wim Wenders backing this, you know the change is there.”

Former French Minister of Cultural Affairs Jack Lang declared, “This meeting will be seen as a landmark; it is an historical turning point for us.”

Over the past decade, the European audiovisual sector has grown at a brisk 6% per year, but U.S. imports account for virtually all of this growth and movie theater audiences for European films have actually declined in their home markets.

In 1992, the United States exported $3.6 billion worth of film and television programming compared to a little more than $100 million that Europe exported to the United States.

Despite the shift of mood this weekend, few were calling for an immediate end either to government backing or to restrictions imposed on the import of U.S. products.

Indeed, sums ranging from $800 million to $2.2 billion in government money were mentioned as necessary to help the industry restructure.

At a news conference following the convention, Pinheiro said he is firmly against subsidies but indicated that considerable government money could come in the form of matching funds linked to private sector backing.

“If this money is for good projects that have a real chance, then I’m for it, but we are no longer in the game of financing dreams,” Pinheiro said.

It was also apparent that a controversial provision that requires all EU-based broadcasters to reserve at least half their transmission time for European works “where practicable” is likely to be strengthened later this year when legislation governing EU television content comes under review.

Many called for the removal of the “where practicable” loophole and urged that the quota also be strictly applied to prime-time programs.