European cinema as an industry is not to be seen as a failed version of Hollywood
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It is difficult to see how European cinema can compete with the financial and political mite of Hollywood, with its systems of production and distribution. Freelance talent and the role of status mean that one off deals are often backed by the financial mite of the major studios, leading to its dominance of the global cinema market and thus negating domestic (and international) distribution and exhibition. The spread of American capital in a globalised world is yet another hindrance, with the rise of multiplex cinemas and suburbanisation throughout the developed (and increasingly the developing) world.
These disadvantages represent the weak point of the European film industry. But that is not to say that it is entirely unsuccessful, with some recent successes including 'Life is Beautiful' (1998), 'All about my Mother' (1999), 'Amelie' (2001) and 'Talk to Her' (2002), and some achieving very respectable box office success. Realistically though, these Art House films are no economic match for Hollywood blockbusters, although it is true to say that they have been financially successful in European terms.
European cinema is invariably thought of as more risk taking, giving new actors and directors a chance to prove their talent. Institutions like the British Film Institute often financially and creatively back new talent such as Lindsay Anderson and Stephen Fears to produce creative and more experimental films rather than ones that will guarantee commercial success, in this way partly relieving the financial strains so often associated with film production. However, a tendency towards artistically rich yet financially profitable films can also be seen in the European industry, with films including 'Damage' (1992) and Ken Loach's 'Land and Freedom' (1995) securing box office success without compromise towards the genre of the Hollywood blockbuster.
This is not to say however that a few successes represents a great achievement for European film, nor can one say definitively that a European film industry as an entity actually exists...