French regulators maintained or extended many of the entry restrictions for French cinema. Legal rights of exclusion were granted to many unions. The technicians' union, for instance, was able to demand that no one could direct a film unless he had worked as assistant director on at least three previous features. Postwar French cinema was virtually closed to new entrants.
The postwar French government negotiated a quota agreement with the United States in an attempt to protect French filmmakers. The French government required cinemas to show 16 weeks of French movies a year. The Americans, who had feared more stringent restrictions, waived some of France's wartime debts in return for a quota that was perceived as lenient. The French have made these quotas progressively stricter.
Protection from the Protectionists
Protectionist governments are themselves responsible for many of the problems faced by their domestic moviemaking industry. Consider just a few of the burdens that the French government places upon its moviemakers.
Cinema taxes have been a staple throughout the history of French filmmaking, but lawmakers looked to such taxes with new interest after World War II. In the late 1950s, this tax reached as high as 48 percent of gross theatrical receipts. Cinema taxes were lowered in the 1970s with the introduction of the value added tax, but the tax still ranges from 17 percent to 19 percent, on top of the normal VAT rate of 14.5 percent, with an extra 4 percent for X-rated movies.
The French government imposes stringent import quotas on Japanese VCRs. These machines are especially expensive in France, and less common than in America or many other comparable European countries. Unlike their American counterparts, French filmmakers find it difficult to tap into the lucrative home viewing market.
Restrictions on television have hurt French filmmakers even more. As in most countries, French TV funds cinema through the purchase of transmission rights; about 40 percent of French movie funding comes from TV. In 1980, the TV audience for movies exceeded the theatrical audience by a factor of nearly 24.
Despite the importance of TV, the French government has forced the cable TV market to grow slowly. Canal Plus, the French equivalent of HBO, is required to pay 18.5 percent of its pretax revenue to subsidize the movie industry. In return, the channel receives the right to carry French films, but filmmakers receive the money from Canal regardless of whether their films attract viewers.
New technologies are presenting protectionists with a major challenge. European governments have thus far succeeded in regulating the content of network programming and in ensuring that 50 percent is of European origin. But satellite and cable systems, with 100 or more choices, will break down the effectiveness of quotas. Either the quotas or the new technologies will have to go.
Cable systems will bring in even more American television. Even if 51 of 100 channels are of European origin, the other 49 might command most of the viewing attention. National content restrictions can steer viewing habits only when the menu of choice is extremely limited. The French government, well aware of this fact, has prevented many services (including the Cartoon Network) from being carried over French cable. Satellite systems will have an even more subversive effect on national origin quotas: Dish antennas allow viewers to capture television signals from anywhere in the world.
Cultural protectionists are thus faced with a dilemma. If the new technologies are allowed, national origin quotas will rapidly become ineffective and eventually become irrelevant altogether. If the new technologies are kept out, television and movie markets in the regulated country will become even more insulated and even less competitive in world markets. The scope of required protection will increase, and viewers will receive an even weaker product.
The reason is that quotas, like subsidies, often harm filmmaking. Quota arrangements, whenever they have been in place, have encouraged the hasty production of low-quality films to meet the quota. Such "quota quickies" have been produced in Canada, Great Britain, France, and Brazil, whenever those countries embraced film protectionism. Quota quickies employ formulaic, low-budget treatments of sex and violence, and encourage the domestic industry to adopt the worst tendencies of American moviemaking. Ironically, the profits from quota quickies are often reaped by the American financiers who put up the money, sometimes through French subsidiaries.
The criteria for awarding subsidies have harmed film quality. Prior to 1953, French governmental subsidies were based upon receipts from a producer's previous films. This system cemented the position of insiders at the expense of new industry entrants. The growing mediocrity of movies was recognized, which led to reform.
The French now claim to subsidize movies on the grounds of artistic merit, rather than attempting to pick the money-making ventures. In 1953, legislation dictated that the French government could subsidize films based only on quality. While the tremendously successful New Wave movement was probably encouraged by subsidies, the program appears to have resulted in decades of diminishing returns.
The interest-free loans offered by the government also damaged cinematic quality. The loans must be repaid only if and when the project turns a suitable profit. This policy lowers the incentives for making a successful film.
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