Tinsel town eyes Europe's glitter

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The Independent Online
HOLLYWOOD is a good place to gauge reaction to the newly agreed Uruguay Round of global trade talks. In this town of tinsel, make-believe and very big money, only partial gloom prevails.

French and Canadian cries of 'US cultural imperialism' signal difficult times ahead as Hollywood's influence spreads far beyond its Californian borders, but the fact remains that the entertainment industry is already a huge global enterprise.

As Seth Willensen, a US film marketing consultant, said: 'The worldwide trend is that the entertainment business is Gatt-proof and recession-proof. Despite cultural and political differences, overseas markets are now inexorably linked to the American, creating a truly international market.'

This explains the surprisingly quiet reaction of US studios after the Clinton administration failed to gain European quota and subsidy concessions on film distribution in the Gatt talks. In this era of new entertainment frontiers, no one wants public enemies.

As quietly as possible, the huge media companies are busily redesigning the world map, primarily through transatlantic partnerships that can only be expected to grow as Europe's internal barriers fall and quotas remain on 'Made in the USA' products. Industry analysts report that US companies are more active in Europe today than for over a decade. The following are only a few of the recent attempts at international link-ups reported by Variety, the industry's weekly newspaper.

Capital Cities/ABC recently bought a 21 per cent interest in SBA, a Scandinavian satellite and cable company, as part of a wider strategy of investment in German, French and Spanish channels.

NBC paid dollars 40m ( pounds 30m) for a 56 per cent controlling interest in Super Channel, a pan-European cable network.

QVC's chairman, Barry Diller, has been seeking a European partner to supply a minimum of dollars 500m in his bid for Paramount.

Time Warner has been negotiating for months with Bertelsmann, the German publishing and entertainment company, on a series of joint ventures designed to reduce its massive debt.

Home Box Office and Canal +have formed a joint venture to produce a pay-as-you- view TV service in Turkey.

The enormous potential for growth in Europe, fuelled largely by the aggressive internal lobbying for relaxation of cross-media ownership restrictions, is attracting big US companies. They are competing and also entering into joint ventures with European companies such as Springer, Carlton, Pearson, Reed Elsevier and Burda. Stewart Till, president of Manifesto, the sales arm of Polygram, explained the trend in a Variety interview: 'It is dangerous just to be American and difficult to be German, French or English; the maximum mileage is to be achieved only by combination.'

This is especially true for US companies that have seen their European market share shrink, in relative terms, as European organisations have grown stronger. A decade ago, at least five of the top 10 TV programmes in Europe were American produced. Today, programmes made locally are outperforming US offerings in almost every country.

However, this is only relatively speaking. The current European Union rule adopted in 1989 provides that 'wherever practical' no more than 49 per cent of any country's TV time can be devoted to non-European films and TV series. Currently, the US is close to saturation of the French market, which has the most stringent limits on American programming, with more than 40 per cent of total airtime.

Industry analysts estimate that American films command from 70 to 90 per cent of the box office in Europe. It is easy to understand why US companies are fighting to retain and expand in these markets.

Interestingly, the US industry is facing very tough challenges at home from citizens' groups anxious to limit exposure to violence and advertising hype of the sort that has prompted Canada to block US programming at its borders. A large coalition of groups including the American Medical Association and the National Parent-Teacher Association appealed last week to Janet Reno, the Attorney General, to issue a ban on violent TV programming between 6am and 10pm daily.

The citizens' coalition rested its case on numerous substantive studies over the past decade that found a connection between violent behaviour among children and their exposure to violence in the media.

Ms Reno has warned the industry that if it does not act voluntarily to curb violence on television, the government will be forced to act. Last year alone, nine bills were introduced in Congress to ban such programming. One proposed that TV manufacturers be required to install electronic blocking devices so that parents could screen out shows they did not want their children to watch.

The industry has reacted to these and other efforts by pointing out that they could lead to unwarranted censorship and even a new era of prohibition like that which governed alcohol sales in the 1930s.

The moral is that the US industry faces challenges both from within and without, even as technology extends its reach.