CANNES: Europe's top film festival opens in Cannes on Wednesday to its annual show of glitz and popping champagne corks, but for many in the continent's movie business, times are tough and likely to get tougher still.
The financial crisis that erupted in 2008 is now biting hard into state and regional subsidies and TV programming budgets that are a key support for film-making. Added to that in some countries is the problem of rampant piracy, as people snub a trip to the cinema and instead download their films off the Internet.
"There are many clouds over movie funding," said Eric Garandeau, head of France's National Cinema Centre (CNC), which helps the French film industry, the biggest in Europe.
"In some countries, the crisis is widespread -- in some places, long-standing policies are being scrapped."
The 12-day Cannes Film Festival will feature six French, one Italian and one Dutch film in competition. But Spain -- one of the most prolific and quirky producer countries -- will literally be out of the picture.
Laurent Creton, head of the Paris-based Institute for Cinema and Audiovisual Research (IRCAV), says the mood of belt tightening has played an important if indirect role in reducing output. He is especially worried for the long-term impacts.
"You can't make an automatic association between austerity and movie-making capacity," he said in an interview. "But in today's tough economic climate, companies start to go out of business, which is a threat to the skills base."
In debt-wracked Spain, aid to the movie industry slumped from 123 million euros ($160 million) in 2010 to 55 million euros this year -- and cinema admissions have been whacked by a rise in value-added tax from eight percent to 21 percent.
"If we don't find new sources of income, many movie projects will be shelved, and it will be a great loss for cultural creativity in Europe," said the president of the Spanish cinemas federation, Juan Ramon Gomez Fabra.
A leading independent distributor, Alta Films, recently filed for bankruptcy, a development that the French Association of Film Exporters (Adef), which sells French movies to its neighbour, said was a tragedy.
Adef took aim at two perceived causes: what it described as a "lack of Spanish political support" for the cinema, and decisions by state and private TV channels to stop buying "auteur" films, meaning movies that are made by marginal or provocative directors.
Italy is another big film maker where austerity is starting to bite: state aid this year has been cut by four million euros to 72.4 million, unleashing a howl of pain from the national association of cinematographic and audiovisual industries, ANICA.
In Germany, 13 professional groups in the movie industry last month issued a joint appeal to the state channels ARD and ZDF to allocate 3.5 percent of their combined income from TV licences of seven billion euros to making feature-length movies. The trend in financing "points to fewer films being supported, not more," said Bettina Reitz, in charge of programming with the Bavarian network BR.
France, according to Garandeau, "still has the privilege" of strong financing, although the cash-strapped state required CNC to repay 50 million euros last year, followed by 150 million in the 2013 fiscal year. French TV financing in movie-making fell by 5.4 percent last year; the state-run France Televisions, which runs a group of national TV networks, will reduce its movie investment by three million euros this year to 57 million euros.
The big exception is Britain, which last year had a huge success with the James Bond movie "Skyfall," which notched up world box office of more than a billion dollars.
The industry contributes 4.6 billion pounds ($7 billion) to the national economy, employing 117,000 people today, compared with 100,000 in 2009. But it is also an industry that is heavily supported by the state -- and royalty, too, for the Queen hosted a bash for it at Windsor Castle in April, which helped smooth the way to a deal for Pinewood Studios in the making of the seventh episode of "Star Wars."
Despite this success, Britain fails as a nurturing ground of films that are socially or artistically challenging, said leftwing British director Ken Loach.
"American commercial films dominate and monopolise the market so it's very hard, and people struggle as best they can and they try to get this tax relief or that tax break... but it's very meagre and the critical thing is we don't have access to our screens," he said in an interview.
"The screens are dominated by the American industry commercial films and the cartels operate... if you make an independent British film it's very hard to get a screen presence."