Europe's film indies win EU help to go digital fast

Europe's independent movie industry, thriving but under threat from Hollywood majors, on Friday won fresh EU backing to join the digital revolution that keeps box-office costs down and the cameras rolling.

Setting its sights primarily on the continent's small cinemas and indie movies, the European Commission offered more money from EU funds and urged member states to funnel domestic aid across the 27-nation bloc to keep film alive.

"European cinema plays an important role in shaping European identities," said a European Commission proposal released Friday.

"One of the challenges will be to maintain cinemas in spite of the entry barrier represented by the high costs of digital equipment that threatens the existence of a number of European cinemas," it added.

Though the new technology slices distribution and production costs - digital films are 10 times cheaper to make than 35 mm - the initial investment to convert equipment can be enormous, a new digital projector and server amounting to around 75,000 euros (100,000 dollars).

"We have to support this shift," culture chief Androulla Vassiliou said at a news conference.

Cinema-going remains popular across Europe, with box-office receipts up 12 percent to 6.3 billion euros in 2009, in comparison with the previous year.

But Europe's film industry is fragmented and multi-lingual, unlike the situation in the United States where the industry is vertically integrated, highly organised, and boasts a 95 percent market share of domestic films.

In Europe in contrast, three out of four cinemas are tiny one- or two-screen arthouses, and roughly 10 percent are multiplexes compared to 35 percent in the United States.

The figures can jump even higher among the bloc's newer members, where single-screen cinemas account for 60 percent or even 80 percent of theatres.

Europe's quandary lies in its no-one-size-fits-all diversity, "characterised by fragmentation, different language zones and a wide variety of operators."

The commission stressed however that it wants to avoid a dual market, where only multiplexes and box-office movies would benefit from the digital revolution.

"Cultural diversity and renewal of talent depend on maintaining Europe's unique network of cinemas," it said in its proposal.

To this end, the commission will launch a new scheme end-year with four million dollars offered for digitisation for cinemas that screen mostly European films.

The funds follow on a 25-million-euro initiative launched in 2007.

"This is the money we have available for the time being. We hope to have more but we encourage member states to use state aid," Vassiliou said, adding that cinemas could win further support through EU structural funds aimed at helping the continent's disadvantaged regions.

There was no need for help in developing 3D technology, the commission also said, "as audience interest in 3D films enables cinemas to charge premium ticket prices."

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